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SECU launches life insurance company

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RALEIGH, N.C. (1/22/13)--State Employees CU of North Carolina has opened its own life insurance company to provide members with simplified issue term and whole life policies, single premium deferred and immediate fixed annuities.

SECU, Raleigh, N.C., held a signing ceremony to mark the opening of SECU Life Insurance Co., a new service organization. From left, McKinley Wooten, SECU board chair; Wayne Goodwin, North Carolina insurance commissioner; and Bill Umphlett, SECU senior vice president of financial advisory services. (Photo provided by SECU)
SECU Life Insurance Co. was capitalized with an initial investment of $25 million.

Non-commissioned agents who are also employees of the Raleigh, N.C.-based credit union will assist members with choosing products.

The underwriting process will be simple, with no medical exams or office involvement, SECU said.

The credit union will support the families of its youngest members by providing $1,000 in life insurance coverage to all children and teenage accountholders at no charge. Additional supplemental insurance offered at competitive pricing also will be offered.

The credit union will begin offering insurance products this summer.

CU System briefs (01/22/2013)

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  • MONROE, Mich. (1/22/13)--Sharon Broadway, 62, of Toledo, Ohio, was sentenced Thursday to at least 45 months in prison in the embezzlement of more than $2 million from the now defunct Monroe County's United Catholic CU, Monroe, Mich. Broadway, who was manager and the only employee at the tiny credit union, pleaded guilty in December to racketeering and financial institutions embezzlement. The thefts occurred over a period of 30 years (Toledo Blade Jan. 18). The credit union closed in August after state regulators discovered it was insolvent.  Broadway was sentenced in Monroe County's 38th Circuit Court to 10-240 months on the embezzlement charge and a concurrent 45-240 months on the racketeering charge. She also was ordered to pay nearly $2.6 million in restitution and was barred from working in the financial industry …
  • LAREDO, Texas (1/22/13)--A former employee of Laredo (Texas) FCU pleaded guilty Thursday to armed robbery of the credit union on Jan. 6, 2012 (Associated Press Jan.17).  Thirty-year-old Ansel Cruz faces up to 25 years in prison. Cruz was employed by the credit union through 2011. He allegedly tied up several employees and fled with an undisclosed amount of cash after the credit union closed for the day. He was described by employees as armed and wearing dark clothing with a black face covering. Employees identified Cruz from a surveillance video. He was arrested five days later …
  • SKOWHEGAN, Maine (1/22/13)--Franklin-Somerset FCU in Skowhegan, Maine, announced it has appointed Karen Greenleaf to be its new president/CEO. Greenleaf has served in that capacity for the $72 million asset credit union since the death of Cass Hirschfelt in August. Greenleaf has worked in the credit union industry for 22 years (Weekly Update Jan. 18) ...

Bills to tax CUs, add CRA filed in Oregon legislature

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SALEM, Ore. (1/22/13)--The Northwest Credit Union Association is prepared to defend against three state bills that would impact credit unions. One involves a corporate excise tax and the others specify standards required for meeting community needs.

The bills were among the 1,200 bills introduced in Oregon's House and Senate chambers last week, said NWCUA.

"We are well-positioned to defend the credit union model and our cooperative structure," said Lynn Heider, director of communications at NWCUA. "They have been upheld at every turn every time the banks challenge us," she said, adding that legislators "know the good credit unions provide outweighs the benefits" of restricting credit unions.

House Bill 2484 requires credit unions to file with the director of the Department of Consumer and Business Services periodic reports that: summarize the number and amount of member business loans and certain other loans; describe the services credit unions provide to people with low and moderate incomes; and list total amount of deposits credit unions hold at their main office and at locations where they accept deposits.

H.B. 2485 provides that credit unions have an ongoing obligation to help meet the credit needs of all communities in which a credit union has a physical presence. It would require the director of the state's Department of Consumer and Business Services to adopt rules to specifically govern that obligation and to create certain minimum standards for measurement.

The bill also would add a new examination for credit unions, requiring the director to periodically evaluate whether each credit union meets its obligation. The director may consider the results in determining whether to approve certain applications from the credit union. If passed, the bill would take effect on Jan. 1, 2014, said NWCUA.

H.B. 2486 is the same as a bill introduced during the 2011 session that never reached a hearing, said NWCUA (Anthem Recap Jan. 18). It would impose a corporate excise tax on state-chartered credit unions and any interstate credit unions holding public deposits exceeding $250,000. The excise tax also would apply to those with commercial loans that collectively exceed 10% of a credit union's assets. The bill would apply to tax years beginning on or after Jan. 1, 2013.

Heider told News Now that NWCUA has learned that the banking lobby had e-mailed state legislatures outlining the synopsis of each bill and told legislators they looked forward to discussing the issues.

NWCUA will continue to monitor the progress of each bill. Pamela Leavitt, the association's legislative affairs liaison for Oregon credit unions, works with legislators and credit unions to improve the operating environment and is well-positioned to defend credit unions' tax status, said the association.

NWCUA has not only been able to defend previous banker-backed tax legislation, but it has successfully passed pro-active credit union lesgiation. In 2010, NWCUA spearheaded the passage of legislation that opened up the public deposit market to Oregon credit unions.

League has busy month with multiple media opps

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PORTLAND, Maine (1/22/13)--The Maine Credit Union League has provided the credit union perspective this month in multiple media interviews on topics germane to credit unions.

League comments to the media ranged from credit union efforts on financial elder abuse and new mortgage rules, to new technology, to changes and policies, to dress codes in the wake of a rash of robberies (Weekly Update Jan. 18).

The week of Jan. 7-11, Maine Public Radio reached out to the league to get credit unions' perspective on new mortgage rules issued by the Consumer Financial Protection Bureau.

"A lender isn't helping a borrower by granting a loan they can't afford," said league President John Murphy in response. "Although I think the intent of the new regulations are spot on, the million dollar question is, and it's too early to know the answer, what about these unique circumstances where people have seasonal income? Is that threshold of 43% the magic number? We will wait and see."

On Jan. 15, the league's ef­forts resulted credit unions' participation in discussion on elder financial abuse on Maine Public Radio's Maine Calling Show. Gail Richardson, president/CEO of Midcoast FCU in Bath, who is active on a task force to combat the financial exploitation of the elderly, highlighted what credit unions do to help.

The league also responded to a Bangor Daily News (BDN) inquiry for the credit union viewpoint regarding members wearing hoods into the branch. The BDN spoke with several credit unions and other financial institutions and told what steps financial institutions and other stores are taking to reduce the threat of robberies.

In De­cember, the league helped to coordinate a story for Mainebiz's Banking & Finance Issue. The story highlighted new technology credit unions are implementing, including the use of video tellers at Five County CU in Bath, and Portland-based cPort CU's adoption of new apps that allow remote deposit of checks.

Also, credit unions again were part of a special section, titled "The Big Bank Theory," in the December Portland Magazine. The section highlighted credit unions and many of their strengths.

Actor Bain of Diff'rent Strokes organized, led CU

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MADISON, Wis. (1/22/13)--Diff'rent Strokes actor Conrad Bain, who died last week, was an organizer and the first president of the Actors FCU.

Bain played Phillip Drummond in the sitcom Diff'rent Strokes. As Drummond, Bain was the straight man to the diminutive, wisecracking Gary Coleman, who played Arnold, the younger of Drummond's two adopted boys (The Guardian Jan. 18).

Bain helped found Actors FCU in New York City in 1962 to help members of his profession secure credit.

Bain outlived two of his three screen children from Diff'rent Strokes. Coleman, who faced charges of assault and disorderly conduct, died of a brain hemorrhage at age 42; Dana Plato, who played Bain's daughter died of a drug overdose at age 34.

Bain also also co-starred in the series Maude (1972-78) as Dr. Arthur Harmon, the stuffy, conservative neighbor of the title character, played by Bea Arthur.

Bain's films included Coogan's Bluff (1968), starring Clint Eastwood; Woody Allen's Bananas (1971); The Anderson Tapes (1971); and Postcards from the Edge (1990).

Today, Actors FCU has $164 million in assets.

New commissioner named at Vermont DFR

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MONTPELIER, Vt. (1/22/13)--Vermont Gov. Peter Shumlin has appointed Susan L. Donegan as commissioner of the Vermont Department of Financial Regulation (DFR), succeeding Steve Kimbell.

The department regulates state-chartered credit unions.

Donegan has been deputy commissioner of insurance since 2011, said the Association of Vermont Credit Unions (Newslines Express Jan. 18). She worked at the department from 1985 to 1990 and was the department's first director of securities regulation.

Donegan also has served as counsel to the commissioner and hearing officer at the Massachusetts Division of Insurance from 2008 to 2011. She represents Vermont at the National Association of Insurance Commissioners.

Former Commissioner Kimbell was at the center of national attention last summer when he threatened a cease and desist order against Montpelier-based Vermont State Employees FCU for using the word "bank" in marketing and advertising materials. The credit union and the commissioner eventually reached an agreement in October on the matter.

Mich governor creates new department to regulate FIs

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EAST LANSING, Mich. (1/22/13)--Michigan Gov. Rick Snyder has created a new department to increase assistance to, and regulation of, Michigan credit unions, banks, insurance and mortgage companies.

Snyder announced Wednesday that he established the Department of Insurance and Financial Services (DIFS) in an executive order that goes into effect in 60 days ( Jan. 17). Snyder signed the order Thursday, the Michigan Credit Union League told News Now.

"We're hopeful that creation of a new, independent department places a strong emphasis on the importance of credit unions and the other covered industries, as important players in the economic recovery and continued progress of our state," David Adams, league CEO, told News Now. "We look forward to continuing to work with Director [Kevin] Clinton and the staff of the Credit Union Division in this new capacity." 

DIFS will take over the functions that have been handled by the Office of Financial and Insurance Regulation, which is part of the Michigan Department of Licensing and Regulatory Affairs, said. 

Credit unions and the other industries regulated by the new DIFS learned of the move in advance of Snyder's State of the State address, but it was for the most part unexpected by the department's covered industries, Adams said.

However, the formation of the new department is a positive change that provides more direct interaction with the governor, places greater emphasis on the importance of the industries it covers--including credit unions--and perhaps streamlines any regulatory and rulemaking processes, he added. 

The credit union industry has a very strong working relationship with its state regulators in Michigan, and would expect that relationship and the services they provide to continue unhindered, Adams concluded.

Fla regulator bans five tellers in tax refund scheme

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JACKSONVILLE, Fla. (1/22/13)--Five former VyStar CU tellers have been banned from working at any Florida state-chartered financial institution for their alleged role in an income tax scheme in which they allegedly cashed $500,000 in fraudulent checks.

The Florida Office of Financial Regulation issued the ban after a seven-month investigation by the State Attorney's Office, the U.S. Secret Service, the Internal Revenue Service and the Jacksonville Sheriff's Office (Jacksonville Business Journal Jan. 18)

Employees of the Jacksonville, Fla. credit union helped uncover the operation in early 2012 when they reported irregular activity involving refund checks from the Internal Revenue Service. People who were not listed as the recipient of checks were trying to cash them.

The investigation led to the arrest of 17 people in Florida and New York. Some perpetrators stole identities used to create the fraudulent tax returns. Others prepared the fake returns or posed as members attempting to cash IRS checks.

The tellers from VyStar allegedly cashed the checks and gave the money to other members of the ring, even though it was against the credit union's policy. The tellers were paid $1,000 for each transaction they completed.

The scheme did not impact VyStar's financials or its members' accounts, said the credit union.

Laida Garcia elected NCUF board chairman

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Laida Garcia (right), president/CEO of Floridacentral CU in Tampa, Fla., and newly elected chairman of the National Credit Union Foundation, presents past Chairman Gary Oakland with a glass gavel at NCUF's board meeting in September. Oakland has been on the board since 2005 and recently retired as president/CEO of BECU in Tukwila, Wash. (Photo provided by the National Credit Union Foundation)
MADISON, Wis. (1/22/13)--Laida Garcia, president/CEO of Floridacentral CU in Tampa, Fla., was elected chairman of the National Credit Union Foundation at NCUF's board meeting Jan.14 in Anaheim, Calif.

Other NCUF elected officers were:

  • Vice Chairman--John Radebaugh, president/CEO of the North Carolina Credit Union League;
  • Treasurer--Lee Butke, president/CEO, Corporate One FCU, Columbus, Ohio; and
  • Secretary--Winona Nava, president/ CEO, Guadalupe CU, Santa Fe, N.M.
Angela McCathran, president/CEO of People's Trust FCU in Houston, Texas, was elected to fill the seat of past NCUF Chairman Gary Oakland. Oakland, who retired as president/CEO of BECU in Seattle, Wash., left the NCUF board late last year.

Edwin Williams, president/CEO of Discovery FCU in Wyomissing, Pa., joined the NCUF board as a Credit Union National Association Board representative, occupying the seat previously held by Paul Gentile, former president/CEO of the New Jersey Credit Union League. Gentile now is CUNA executive vice president, strategic communications and engagement.  

The additional members of the NCUF board  include:

  • President--Bill Cheney, CUNA president/CEO;
  • John Graham, president/CEO,  Kentucky Employees CU, Frankfort, Ky.;
  • John Gregoire, president, The ProCon Group,  Madison, Wis.;
  • Joe Guilfoy, executive director, Indiana Credit Union Foundation, and vice president of consulting & education, Indiana Credit Union League;
  • Rudy Hanley, president/CEO, SchoolsFirst FCU, Santa Ana, Calif.;
  • Stan Hollen, president/CEO, CO-OP Financial Services, Rancho Cucamonga, Calif.;
  • Christopher Roe, senior vice president, corporate and legislative affairs, CUNA Mutual Group, Madison, Wis.; and
  • Mark Twisdale, senior vice president, human resources, State Employees' CU, Raleigh, N.C.

Cohenour takes Missouri CU Association helm

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ST. LOUIS, Mo. (1/22/13)--Don Cohenour will take the helm as president/CEO of the Missouri Credit Union Association, effective immediately, announced MCUA's Board of Directors Friday.

Cohenour, who was named interim president in November, succeeds Mike Beall. Beall left then to become president/CEO of the National Cooperative Business Association.

"Don Cohenour is the ideal candidate to continue driving the strategic direction of the organization," said Dennis Pierce, MCUA's board chairman. "Don's knowledge of credit unions combined with the strength of relationships built throughout his tenure will ensure MCUA maintains a strong connection with its membership."

Cohenour is an 18-year veteran of MCUA. He leaves his position as chief membership officer. In that role, he managed field representatives within the state, served as an executive field representative with all member credit unions and provided overall responsibility for credit union relationships. He also was responsible for credit union staff and volunteer development, consulting services, professional development, and all product and service sales in the state.

Cohenour also served as credit union CEO  and consultant with the Kansas Department of Credit Unions.

"I am looking forward to my new role with MCUA and my continued work with credit union advocates throughout the state," said Cohenour. "The initiatives we set in motion make this an exciting time to lead the organization and make the credit unions of Missouri grow."