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CU Seeks Restitution in Class Action Filed Against Target

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MONTGOMERY, Ala. (1/3/14)--Alabama State Employees CU has filed a class-action suit related to costs associated with the Target data breach.

It is estimated that more than 40 million accounts were compromised in the breach, which occurred on or around Nov. 27, just before Black Friday, and continued through at least Dec. 15.
 
The suit, filed Monday in an Alabama federal court, seeks $5 million in damages for losses suffered by millions of financial institution members and customers whose personal financial information was compromised, as well as costs associated with closing accounts, reissuing new checks, debit cards and credit cards as a result of Target's data breach.
 
On Dec. 20, Target announced that it had been hit by the wide-reaching security breach.
 
The complaint alleges that Alabama State Employees CU, Montgomery, Ala., and other plaintiffs "were required to expend time, energy and expense to address and resolve these financial disruptions and mitigate the consequences by refunding loss deposits; issuing new credit and debit cards; closing compromised or suspected-to-be compromised accounts opening new accounts; and increased costs in monitoring customer and member accounts to determine which transactions are legitimate or fraudulent."
 
The $211 million-asset credit union is represented by the law firm of Beasley, Allen, Crow, Methvin, Portis & Miles, P.C. of Montgomery, Ala.
 
The law firm filed the class-action lawsuit Dec. 30 in the U.S. District Court, Middle District of Alabama, Northern Division.

Brown Named NCUF Director of Development, Donor Relations

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MADISON, Wis. (1/3/14)--The National Credit Union Foundation has named Danielle Brown as director of development and donor relations.
 
In 2011, NCUF named Brown the national coordinator of Biz Kid$, the credit union-sponsored public television series, on a contract basis. She previously served as vice president of the Northwest Credit Union Association and executive director of the Oregon Credit Union Foundation.
 
In her new position, Brown's primary duties will include NCUF development, fundraising, donor relations and serving as NCUF liaison to the State Credit Union Foundation Network. Brown will also continue to be the national coordinator of Biz Kid$, a role in which she is responsible for advancing the funding, use and integration of Biz Kid$ within the credit union movement. 
 
"Danielle brings a wealth of experience and passion to the foundation, and we couldn't be happier to work with her in this new role," said Gigi Hyland, NCUF executive director.
 
Prior to the merger of the Oregon and Washington leagues, Brown was senior vice president of operations for the Credit Union Association of Oregon. 
 
In other NCUF staff development, Jenni Speth has been promoted to the role of administration and meeting coordinator, and Cameron Newfarmer has been hired as finance and administration assistant.

Michigan's First Community FCU Now Advia CU

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PARCHMENT, Mich. (1/3/14)--The merger of two Michigan credit unions resulted in a new name as the new year rolled in.
 
Advia CU is the new name of Parchment, Mich.-based First Community FCU, which officially merged with Port Huron, Mich.-based E&A CU Thursday.
 
"Advia was a coined named that we developed based on the 'advantages' that we offer members 'via' innovative financial solutions," Marketing Manager Nancy Loftis told the Kalamazoo Gazaette (Jan. 2).
 
Cheryl DeBoer, who was president of $705 million-asset First Community FCU, is president/CEO of the new Advia CU. Janice Rose was president of $274 million-asset E&A CU and is now chief community relations officer for Advia.
 
Loftis said the name change better encompasses the credit unions' membership areas. First Community FCU merged with First American CU, Beloit, Wis., in 2010, but the Wisconsin and Illinois operations continued under the First American name. All 21 locations will fall under the new Advia CU moniker.
 
The name change also reflects the charter change to a state charter from a federal charter.

CU System Briefs (01/03/2014)

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  • GALVESTON, Texas (1/3/14)--George Ballis, longtime president/CEO of AMOCO FCU, Texas City, Texas, died Dec. 25. He was 85. Ballis started working for the credit union in 1962 by traveling to Amoco refinery and chemical plants to take deposits and make loans, said the credit union. He was promoted to CEO in 1973--a position he held for 25 years. His obituary noted his leadership and enthusiasm were "fueled by his altruistic belief that every American should have access to a credit union." Ballis' credit union involvement included organizing the National Association of Amoco Credit Unions and serving as president of the Galveston County Chapter of Credit Unions. "He will be more remembered for the family environment he created and his commitment to serve the members and employees of the credit union," said Shawn Bailey, current president/CEO of the $622 million-asset credit union ...
  • ALBANY, N.Y. (1/3/14)--A body piercing shop in Albany, N.Y., won the Sunmark FCU Business Grant Contest for 2013. Will and Kimberly Eck, owners of Classy Body Art, won $1,000 in a business savings account at the credit union and a seat in the Albany-Colonie Regional Chamber's Entrepreneur Boot Camp.  "Will and Kimberly's business plan was in great shape and showed a lot of initiative," said Frank DeGraw, executive vice president of the $395 million-asset credit union. Sunmark FCU and the Albany-Colonie Regional Chamber sponsor the contest for new businesses and entrepreneurs (Times Union Dec. 31) ...
  • DENVER (1/3/14)--Denver police are looking for a bank robbery suspect who wears an oxygen tank and mask during his heists. Dubbed "the O2 Bandit," the suspect has struck three financial institutions, including branches of Westerra CU, Denver, and Partner Colorado CU, Arvada. Investigators aren't sure if the supplemental oxygen is a medical necessity or a disguise (The Denver Post Dec. 31) ...

Tech Trends for '14: Consumers Continue to Drive Change

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MADISON, Wis. (1/3/14)--For credit unions, the biggest drivers of technology trends are not  tech giants such as Apple and Google, but credit union members. Consumer acceptance--or better put, demand--has driven the almost ubiquitous presence of smartphones, tablets and their accompanying applications.
 
In financial services, consumers have driven the growth of mobile banking and virtual, anywhere, anytime service. For credit unions, that trend will continue in 2014, with technology and financial providers trying to meet consumer demands for convenience, mobility and customization.
 
A few of the technology trends that will shape the technological landscape in 2014 include:
  • Strategic mobile services. After establishing a mobile banking presence in 2014, credit unions must take a more strategic approach, experts say. They must find ways to add value to member relationships, help differentiate the institution and create a strategic advantage, said Ron Shevlin of Aite Group. The increasing development of mobile applications that place financial institutions where their members and customers are making financial decisions will drive mobile banking's growth, according to Bank Innovation.
  • "Omnichannel" financial services. For nearly 20 years, credit unions have developed digital touch points to provide more convenience for their members, and to drive down operational costs. But many members still show a strong preference for having convenient access to brick-and-mortar locations, especially when seeking out financial advice or performing more complex, emotionally involved transactions, (eMarketer Sept. 4). "An omnichannel approach--serving and engaging with [consumers] in an 'anytime, anywhere' fashion--is being touted as a way to give [financial institutions] of all types and sizes more flexibility to meet consumers' constantly evolving preferences," said an eMarketer report, "Digital Banking Trends: With Consumer Preferences in Flux, Is Omnichannel the Answer?"
  • Repurposing the branch. The many options offered by the omnichannel will be accompanied by a repurposing of the branch, driven by self-service. "Whereever you go--the airport, Home Depot, Lowe's, the grocery store--basic transactions are being pushed toward self-service," said Robert Reh, chief information officer at Nassau Financial FCU, Westbury, N.J., and a member of the CUNA Technology Council's executive committee. "That trend will change the face of basic branch transactions in the next couple years." As basic transactions move towards automation, added-value services such as lending and financial advice will maintain the personal approach, Reh said.

    Some credit unions have already begun rethinking their branches through technology. Vantage West CU recently opened a tellerless branch in Tucson, Ariz. The branch is largely driven by deposit-automation Opteva ATMs from Diebold Inc. In one of its branches, Coastal CU in Raleigh, N.C., has implemented personal teller machines (PTMs), a video-based technology that does everything a traditional teller would do--dispense cash, create images of checks and answer questions (News Now July 3).
  • Cardless ATM transactions. Consumers will soon be able to make ATM transactions with their smartphones. Diebold and mobile wallet provider Paydiant have already created the technology. To complete a cardless withdrawal, the credit union members scans the ATM's QR code using a smartphone. When the devices sync via the cloud, a transaction screen appears on the smartphone, allowing the user to select the withdrawal amount. The cloud server then sends a one-time code to the smartphone, which the customer enters on the ATM screen to authenticate the transaction and receive cash.
  • Digital wallets. In the 1990s, Paul Fiore started up Digital Insight, betting that credit union members would log on to credit union web sites and do their online banking through his company's online financial management software, rather than Microsoft Money or Quicken. Digital Insight became one of the largest providers of online financial providers in the credit union sector.

    Now Fiore and his partners are betting that credit union members will reach for a credit union-branded digital wallet rather than one with one from Google or another big tech provider. The startup has already signed 39 credit unions representing 4.64 billion members and 54 billion in assets. As CUWallet begins to create scale it will focus on signing more merchants, Fiore said. "Credit unions are betting on themselves," Fiore said. "We will soon see the day when we represent 10 million members."
  • Big data. In the upcoming year, organizations that are able to define which datasets will have the most impact on crafting a great consumer experience will succeed have a competitive edge. "We have a wealth of information available to us, Reh said. " Most credit unions have a marketing customer information system. Many have [customer relationship management system]. They certainly have core system. We need to utilize that information with our member to make them offers that they might not even realize the need." Social media provides a vehicle to provide even more highly targeted messages, Reh said.

Top 10 Hottest News Now Articles for December

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MADISON, Wis. (1/3/14)--The Target data breach demanded News Now readers' attention in December, with three articles making the month's Top 10 list.
 
The Top 10 articles for the month:
 
10. NCUA Prohibits Three From Future CU Work

ALEXANDRIA, Va. (12/2/13)--The National Credit Union Administration has banned three former credit union employees from participating in the affairs of any federally insured financial institution.
 
9. Patent Trolls' 'Growing Threat' Described to Lawmakers by CUNA

WASHINGTON (12/17/13)--Demand letters from "patent trolls" represent a great and growing threat to credit unions and other end-users of technology, John Dwyer,  president/CEO of New England FCU, Williston, Vt., told the Senate Judiciary Committee this morning.
 
8. NCUA Approves Final Charitable Donation Account Rule

ALEXANDRIA, Va. (12/12/13)--A final rule on charitable donation accounts has been approved at this morning's just-concluded National Credit Union Administration open board meeting.
 
7. Final Charitable Donation Rule Leads Dec. NCUA Agenda

ALEXANDRIA, Va. (12/6/13)--A final rule on charitable donation accounts will lead the day when the National Credit Union Administration holds its final open meeting of 2013 on Dec. 12.
 
6. Obama to Nominate McWatters for NCUA Board

WASHINGTON (12/18/13)--Mark McWatters will be President Barack Obama's pick to fill a National Credit Union Administration board seat when it is vacated by board member Michael Fryzel, whose term ended Aug. 2 this year.
 
 
5. CUNA Urges CUs to Collect Data on Costs of Breach

WASHINGTON and MADISON, Wis. (12/27/13)--Credit unions should keep a tally of the costs incurred from fraud and replacement of the debit and credit cards compromised in the recent Target data breach so they can report it later, said the Credit Union National Association. CUNA plans to open a data collection website next week and will provide further details as soon as it becomes available.
 
4. NCUA TCCUSF Oversight Budget Is $4.5M

ALEXANDRIA, Va. (12/12/13)--The 2014 Temporary Corporate Credit Union Stabilization Fund Oversight Budget will be just over $4.5 million, the National Credit Union Administration said at this morning's open board meeting.
 
3. CUNA Unveils Major Speaker for GAC 2014

WASHINGTON (12/17/13)--The Credit Union National Association is making a major announcement about a speaker of international renown slated for the 2014 Governmental Affairs Conference.
 
2. CUNA Working to Determine Impact of Target Breach on CUs

WASHINGTON (12/20/13)--The Credit Union National Association's regulatory staff is working with CO-OP Financial Services, CUNA Mutual Group and others, including PSCU, Financial Services Information Sharing (FS-ISAC), Visa and MasterCard, to determine the potential impact on credit unions and their members related to the massive data breach confirmed Thursday at retail giant Target.

1. CUs Impacted in Target Breach Get Risk Mitigation Tips

MADISON, Wis. (12/23/13)--As the Credit Union National Association works with other entities in the industry to monitor new developments in the widespread Target stores data breach and provide up-to-date information to help mitigate the risks to credit unions, new information has shed light on what credit unions will need to do--both for themselves and their members.