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CU System Archive

CU System

Delinquent borrowers unaware of workout options

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McLEAN, Va. (2/1/08)--Fifty-seven percent of late-paying borrowers in the U.S. still don't know their lenders may offer alternatives to help them avoid foreclosure, reports a new study. However, that is a slight improvement over 61% who were in the same study in 2005. The survey is from Roper Public Affairs and Media, a market research firm, and residential mortgage giant Freddie Mac. Freddie Mac is a CUNA Strategic Services provider in the secondary mortgage area. While the results may reflect some of credit unions' efforts at reaching members and helping them, the survey didn't address credit unions' efforts specifically. However, the results point to the need for financial literacy--a topic dear to credit unions' hearts. And awareness of the national HOPE hotline--which credit unions are involved in promoting--is increasing. The survey also found an increase in the percentages of delinquent borrowers who recall their lenders reaching out to them (86%) and who in turn reached out to their lender (75%) to discuss workout options. And the percentage of delinquent borrowers aware of housing counselors they can talk to about their mortgage increased to 44% from 36%. Awareness rose when specific mortgage-management options were mentioned. When prompted, delinquent borrowers said they knew about repayment plans (63%), modifying an adjustable-rate mortgage into a fixed-rate loan (68%), and paying off their mortgage in a single lump sum (78%). Of those surveyed, 86% were aware of their lender's effort to contact them, compared with 75% in 2005. Borrowers who contacted their lenders also increased, to 75% from 68%. In the 2007 survey, borrowers looking for information about mortgage management and avoiding default shifted where they went for information from traditional sources--financial institutions and mortgage lenders--to the Internet, family or friends. Roughly 25% selected the Internet as their first mortgage-information choice--nearly double the 13% who did so two years earlier. The survey found that the need for borrower education programs cut across racial, ethnic and gender lines, underscoring the need for financial literacy programs. The survey asked about borrowers' awareness of the national public awareness campaign aimed at encouraging borrowers to call the HOPE hotline at 888-995-HOPE. Freddie Mac works with a coalition of organizations on the campaign. Many credit unions are involved in promoting the HOPE campaign. For example, Paul Kundert, president/CEO of UW CU, Madison, Wis., joined the Wisconsin Housing and Economic Development Authority (WHEDA) Tuesday in a press conference to raise the profile of the hotline. The credit union will assess borrowers' circumstances to find if those with high-cost subprime loans qualify for a conventional mortgage under an FHASecure program of the Federal Housing Administration. UW CU doesn't make subprime loans, but as a WHEDA lender, "we thought we should step forward and try to be of value to consumers." Freddie Mac helps an average 1,000 troubled borrowers a week avoid foreclosure through forbearances, which can delay or reduce payments; repayment plans; loan modifications that restructure payment terms; or other workout options. For more information on the survey and for sources credit unions can use to help their members through the mortgage crisis, use the links.

Mexico government funds expansion of WOCCU rural CU program

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Click to view larger image Doroteo Hernandez is president of a 100-person semilla cooperativa group, a World Council of Credit Unions rural credit union program, through Caja Yanga, a credit union in Huatusco, Veracruz in Mexico. Hernandez sought credit union services because lenders had charged exorbitant interest rates on loans. (Photos provided by the World Council of Credit Unions)
MADISON, Wis. (2/1/08)--A Mexican government agency has provided funding for a project that will open new credit union branches and points of service in rural Mexican communities across 16 states. The Rural Microfinance Technical Assistance Project--funded by the Mexican Ministry of Agriculture, Livestock, Rural Development, Fishing and Food (SAGARPA)--is an expansion of two recent World Council of Credit Union (WOCCU) programs that established 48 rural credit union branches and attracted 83,000 members in Veracruz and Michoacan.

Click to view larger image A Caja Popular Mexicana field officer in Coatepec, Veracruz, prepares to visit a semilla cooperativa group in an outlying village.
“Neither the size of the state, difficulty of access to marginalized areas nor diverse credit union needs have been obstacles for WOCCU’s technical team,” said Gabriela Zapata Alvarez, SAGARPA director of financial organization strengthening. WOCCU will employ its semilla cooperativa, or cooperative seed, to extend rural outreach through 72 credit unions. Semilla cooperativa delivery approach provides financial services where field officers bring credit union products to outlying villages. About 32% of Mexico’s economically active population has access to financial services, compared with 80% in developed countries. In Mexico’s rural areas, 5% have access to services. The underserved use other lending sources that often charge high interest rates. WOCCU received the largest amount of the SAGARPA’s grants to four organizations.

CU System briefs (01/31/2008)

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* MADISON, Wis. (2/1/08)--This is the official legal notice to all members of the Credit Union National Association (CUNA's) 74th Annual General Meeting (AGM), scheduled for Monday, March 3, 2008, from 10 a.m. to 11:15 a.m. at the Washington Convention Center in Washington, D.C. It will be held in conjunction with the CUNA Governmental Affairs Conference. The AGM will update member credit unions and leagues on the actions of their association over the past year. Marie Osmond, entertainer and co-founder of Children's Miracle Network, will be a special guest speaker … * DUBLIN, Ohio (2/1/08)--Ohio Gov. Ted Strickland has appointed Gary Soukenick, CEO of Seven Seventeen CU, to the state's Credit Union Council (eLumination Newsletter Jan. 30). His official duties begin at the April 9 meeting. The council is part of the Ohio Division of Financial Institutions and is chaired by Deputy Superintendent for Credit Unions Rose Bartolomucci. Its seven members meet quarterly and provide advice and recommendations on credit union issues to the state regulator and governor … * WATERLOO, Ont. (2/1/08)--The proposed merger of two Canadian credit unions--Your Neighborhood CU, based in Waterloo, Ont., and the Mitchell and District CU, Mitchell, Ont.--has been approved by members and will take effect March 1. The new combined credit union, called Your Neighborhood CU, will have 13 branches, $470 million in assets and 29,100 members. It will be the 11th-largest credit union in Ontario. Kerry Hadad, CEO of Your Neighborhood CU, will remain as CEO. Beth Bruesch, CEO of Mitchell and District, will be senior vice president (The Waterloo Record Jan. 30) … * HARAHAN, La. (2/1/08)--The Louisiana Credit Union League (LCUL) has launched a new website at www.lcul.com in partnership with CUVillage.com. The reorganized structure includes drop down menus for easier navigation and provides access to information on credit union cooperative branching, education, training, government affairs, regulatory compliance, news and publications, products and services, and more. The new site requires current members to create a new account … * GRAND RAPIDS, Mich. (2/1/08)--Eddie Jerome Mills, 28, of Kalamazoo, Mich., was sentenced to 28 years in prison last week for robbing four Kalamazoo banks and credit unions plus a fifth bank in Lafayette, Ind. (US Fed News Jan. 23). The spree included the Feb. 2, 2006, armed robbery of Allegis CU and the March 17, 2006, robbery of the Grand Valley Co-op CU. Co-defendants Marvin Eugene Harris Jr. and Jerome Anthony Barnes are awaiting sentencing. Co-defendant Deandre L. Smith was sentenced to 63 months in prison for the Allegis CU robbery, and co-defendant Rodney Shamon Allen received a 76-month sentence for the Grand Valley Co-op CU robbery. Mills also must serve five years of supervised release and pay more than $216,766 in restitution and special assessments …

CU Aid grant helps members rebuild after wildfires

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SAN DIEGO (2/1/08)--Credit union members who lost their homes in the southern California wildfires are receiving disaster relief grants from CU Aid--and more than $200,000 in grants are still available to help members recover. CUAid.coop is the centralized disaster relief fund-raising system activated most recently by the National Credit Union Foundation (NCUF) and the California Credit Union League during the wildfires last fall (News Now Oct. 25). Since then, credit union employees, volunteers and members from 31 states raised nearly $220,000 to help credit union people in California affected by the fire. First Future CU members Daniel and September Katje, and Jacqui Olmos, a member of Great American CU, which merged into Wescom CU on Dec. 1, received initial grants ranging from $1,000 to $10,000 to help their rebuilding efforts. The checks were presented by NCUF Chairman Mary Cunningham, CEO of USA FCU in San Diego. “This will definitely help in getting on with our lives,” said September Katje. The grant program was made possible by donations to the NCUF Disaster Relief Fund. The Katje family, who lived in a mobile home in Fallbrook, Calif., recalled taking a bag of clothes for each family member, with just a few photos and videos when they received the word to evacuate. They thought they would soon return to their home. However, their home was one of hundreds in the area destroyed. “Everything was completely melted,” Daniel Katje recalled. “It was very shocking.” What was left were a few pieces of silverware, some of their children’s Precious Memories items, and the iron frame of a cradle. One thing that stood out for September Katje was seeing the remains of her daughters’ plastic swing set. “All that was left was the bar that held the swing,” she said. Jacqui Olmos and her 16-year-old daughter, residents of Ramona, Calif., lost their home and everything inside. “Everything was ash. It was all gone,” Olmos recalled. “Ironically, I had a weed-wacker that didn’t work and it was off to the side of the house. That survived.” Olmos called the support she has received--including the grant from CU Aid--a blessing. “I have insurance and there are other organizations that have helped, but it isn’t enough, unfortunately,” she said. “This [grant] is proof that there’s sunshine behind all the shadows.” Living in the affected area, Cunningham said she could personally attest to the devastating aftermath of the fires and the importance of credit union people stepping up to raise money. “It’s a good thing to do and a good thing to be a part of,” she said. “I would like to thank every single member that has given to this fund.” CU Aid was developed by NCUF in cooperation with state credit union foundations, state credit union leagues, and the Credit Union National Association’s Disaster Preparedness Committee. More than $200,000 in grants are still available for credit union employees, volunteers and members who suffered unrecoverable losses from the wildfires. For an application, use the first resource link.

Movement responds to rate cut

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WASHINGTON (2/1/08)--The credit union movement responded to Wednesday’s 50 basis-point cut of the federal funds rate by the Federal Reserve. Bill Hampel, chief economist at the Credit Union National Association, told Reuters Wednesday he believes the fed funds rate may drop further. “If we go into a full-fledged recession, which seems more likely than not, the fed funds rate will go down to 2% by summer,” Hampel said. Brad Stewart, senior vice president and chief investment officer for Mid-Atlantic Corporate FCU, Middletown, Pa., said he expected the Fed to reduce the rate by only 25 basis points. The half-percentage-point reduction indicates that the Fed believes the economy needs a solid thrust to end the reductions (Life is a Highway Jan. 31). “Chances of avoiding an outright recession are greater now than they were two weeks ago,” Stewart said. Despite the continuing housing recession, which should not be ignored, the future outlook is positive, he added, noting that the current fiscal stimulus being discussed in Congress will be helpful to the economy. Credit unions should adhere to their investment philosophy and be cautious about investments, Stewart said. Most overnight investment rates will move accordingly with Wednesday’s Fed announcement, said Brian Turner, manager of advisory services for Southwest Corporate Investment Services. This will widen the differential between overnight yields and loans, as well as many investment security alternatives--especially structured mortgages, he added (Lonestar Leaguer Jan. 31). “Credit spreads appear to be holding on mortgage whole loans, but some tightening is occurring on agency investment securities,” Turner said. “Consumer loan rates should be fairly stable over the next few weeks, and there continues to be beneficial spread built to consumer and mortgage rates.” It also is important to make sure that all share deposit rates are positioned in respect to each other to avoid any transitory shift between products, Turner advised. “Given that many credit unions did not raise share draft or regular share rates very much over the past few years, there might be a propensity to believe that there’s little room to move down--please check anyway,” Turner said. “[Considering] that money market rates have risen significantly over the past few years--and in many cases--are higher than 3.0%, all tiered rates need to be reviewed.” The Federal Reserve continued to meet market expectations on what the cut would be, Terrin Mendivil Griffiths, economist and industry analyst for the California Credit Union League, told News Now. “The Fed is making up for lost time--there was a lack of action previously,” she said. “The Fed wasn’t aggressive enough out of the gate in 2007,” she continued. “Different issues emerged, and inflation was considered a rival concern of economic growth. Now economic growth is taking precedence over inflation as far as the Federal Reserve is concerned.” Balancing economic growth and inflation has always been a concern of the Fed, but in the latter part of 2007, economic growth became more important than inflation, Griffith said. “It took awhile for the Fed to publicly acknowledge that,” she concluded.

Funds missing from Houston Police FCU

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HOUSTON (2/1/08)--More than $300,000 may be missing from the Houston Police Department FCU the credit union discovered Tuesday. A branch manager discovered an undetermined amount of missing funds from the credit union’s vault Tuesday while conducting an audit, police said (Khou.com Jan. 30). Although neither the credit union nor police would say how much money was missing, sources said it was more than $300,000, according to KHOU. The Houston Police Department scheduled polygraph tests at the credit union Tuesday, KHOU said. Houston Police FCU has more than 25,000 members--mostly police, civilian employees of the police force and their families. The credit union has about $300 million in assets.

Tinker offers reward programs You Tube video contest

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OKLAHOMA CITY (2/1/08)--Tinker FCU is offering members a Give Back Rewards program and a YouTube video contest where a high school or college-aged individual can enter to win a $2,000 scholarship. The Give Back Rewards program, effective through Dec. 31, automatically enters members to win rewards. Each month, 10 active Home Branch users will win a $100 gift card, 10 Online BillPay users will be reimbursed up to $500 for a bill paid online, one member using direct deposit will have a deposit doubled up to $2,000, and one member with a loan payment will be reimbursed up to $1,000. Every day, one member using a MoneyPlus Visa check card for a purchase will be reimbursed up to $100. The credit union also approved a new fee structure, effective last August. “We were determined to find ways to give back to our members,” said Tinker President/CEO Michael D. Kloiber. “The revised fee structure and the Give Back drawings are designed to thank our members monetarily for their loyalty.” The YouTube video contest was created to gain perspective on what money means to college and high school students, said Nancy Entz, Tinker FCU vice president and marketing manager. All students in Oklahoma are eligible to upload videos about what money means to them on the contest website, www.whatmoneymeanstome.org, starting today. The deadline for submissions is March 14. The videos will be voted on March 31, and the top eight will be placed in an online bracket where they will be voted on again. The bracket mimics March Madness, Entz said. Winners will be announced in mid-April. All bracket winners will receive $50 iTunes gift cards and a “fan favorite” will receive a $200 iTunes gift card. The idea for the contest was created at a Credit Union National Association marketing conference last year. The scholarship contest fits the credit union’s mission, and is “new and progressive for us. We’re excited,” Entz said. Tinker FCU has more than $1.5 billion in assets.

Dill corrects misconceptions in Norlarco article

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DENVER (2/1/08)--A Jan. 25 newspaper article that described the Denver-based Public Service CU as the "new owner" of troubled Norlarco CU brought a response from the Credit Union Association of Colorado (CUAC) in an editorial written by CUAC President/CEO John Dill. In the Jan. 30 editorial in Coloradoan, Dill corrects two points in the original article: the ownership point, and a statement by a college professor that Norlarco's problems in the Florida construction market would bring implications in the credit unions vs. banks battle and more arguments against credit unions' tax exemption. "First, there are no new 'owners' of Norlarco. The 'owners' of any credit union are the members themselves," wrote Dill, adding credit unions' management "work for the members of the credit union, under the supervision of a volunteer board elected by those same members." The members of Norlarco will now become members of Public Service CU with the same benefits of member ownership as before: better rates on loans and savings, and a focus on people, not profits, he wrote. Dill took exception to opinions expressed by Prof. Ron Phillips at Colorado State University that Norlarco's problems will be evidence bankers will bring up about credit unions' tax structure. "The failure of Norlarco--while tragic--has no big implications in terms of the long-standing animosity between banks and credit unions," said Dill. "Occasionally, a bank or a credit union will make a mistake, necessitating regulatory action. "Norlarco's problems were no mere misstep but resulted in the need to find entirely new management. That is unfortunate, but no more or less of a problem than bank failures, which have occurred more often than with credit unions and with much larger financial implications." Dill noted that from 1984 through 2004, Colorado had 82 bank failures that cost the bank insurance fund almost $5 billion. The overall financial services industry remains strong, he said, with credit unions' system one of the safest in the country. Credit unions "are more highly regulated than any other financial institution. No credit union has ever cost the American taxpayer one thin dime in terms of bailout or subsidy--something that can't be said about the banking industry," he said. "Banks view credit unions as a threat because we keep their rates lower, serve our members and they can't simply buy us to get rid of the competition. It appears the banks as an industry want to own the financial service marketplace, lock, stock and barrel. Credit unions believe that consumer should have the choice to become members… and reap the benefits of that membership." To access Dill's complete editorial and the Coloradoan's original article, use the resource links.

Kansas CUs swoop on Capitol to support CU bill

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TOPEKA, Kan. (2/1/08)--More than 150 Kansas credit union staff and volunteers visited the Kansas State Capitol Wednesday to support a credit union bill that would clarify field-of-membership (FOM) language in the Kansas credit union law. They earned support from Senate Minority Leader Anthony Hensley (D-Kan.). “I will do everything in my power to maintain the status quo,” he said, referring to a rival bill introduced by the Kansas Bankers Association yesterday. Credit union members and 18,069 Kansas consumers also presented a petition asking their legislator to protect their credit union. The FOM statute has been in place since 1929. Banking associations in Kansas have stated that the statute has been interpreted too broadly. “Consumers should have the right to choose where they conduct their financial business,” said Marla Marsh, president/CEO of the Kansas Credit Union Association. “When consumers are facing an economic and credit crisis, would we want to restrict or constrict access to a consumer-friendly alternative?” During the visits, Kansas State University FCU, Manhattan, highlighted its national award-winning financial literacy program, Save@School, by inviting students and members of the credit union to talk with legislators. The South Central Chapter of Credit Unions, which includes Medical Community CU, Central Star CU and Catholic Family FCU, all in Wichita, highlighted their Financial Survival Camp for seventh and eighth graders.

Regulator praises Washington CUs flood efforts

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FEDERAL WAY, Wash. (1/31/08)--The Washington State Department of Financial Institutions (DFI) issued a letter Monday commending the credit union industry for the assistance it is providing to those affected by the severe flooding in December storms in Western Washington. DFI is the state credit union regulator. The examples of local credit unions working with borrowers who are experiencing difficulty confirms that the state’s not-for-profit financial institutions are meeting the critical financial needs of their members and their communities, said DFI Director Scott Jarvis. “The individual outreach and community assistance provided by Washington credit unions in the wake of December flooding is a testament to our commitment to service,” said Washington Credit Union League President John Annaloro. Linda Jekel, state Divisions of Credit Unions director, Tuesday touted credit unions’ post-flooding recovery efforts in testimony to members of the state Senate Financial Institutions and Insurance Committee. Each affected credit union implemented its disaster recovery and business resumption plans and provided help to citizens and communities, she said. “Credit unions provided this help both on the personal service level and on a personal community level,” Jekel said. “We found that credit unions and their employees, who were themselves troubled with floods, were able to provide services.” Jekel also mentioned examples of credit union efforts, including providing unsecured signature loans, allowing some members to reduce or skip scheduled payments, and offering needed home improvement funds to repair flood damaged property.

PCUA Treasurer respond to WSJ payday loan editorial

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HARRISBURG, Pa. (1/3108)--Pennsylvania Credit Union Association (PCUA) President/CEO Jim McCormack and Pennsylvania State Treasurer Robin L. Wiessmann submitted a letter to the editor responding to a Jan. 24 editorial in The Wall Street Journal editorial about payday loans. The letter discusses the collaboration between the PCUA and the Pennsylvania Treasury Department in developing the Credit Union Better Choice program, a payday lending alternative offered by 64 Pennsylvania credit unions. The editorial, “Beyond Payday Loans,” advocated affordable financial services for the unbanked. Credit unions were noted for participating with community groups and other agencies to offer affordable financial services to communities nationwide. The piece was written by former President Bill Clinton and California Gov. Arnold Schwarzenegger.

NASCUS kicks off regional regulator meetings in California

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SAN FRANCISCO (1/31/08)--Regulators from six states gathered in San Francisco Jan. 29 for the first in a series of National Association of State Credit Union Supervisors (NASCUS) Regional Regulator Meetings. Hosted by NASCUS and the California Department of Financial Institutions, the meeting addressed emerging regional and state-specific issues. The states represented at the meeting were California, Idaho, Nevada, Oregon and Utah. Attendees discussed examination and supervision issues, unrelated business income tax (UBIT), interstate branching, member business lending, examiner education and capital reform. “It’s very important for NASCUS to provide opportunities for regulators to exchange information and collaborate on ways to improve examination and supervision in our individual states and collectively across the country,” George Reynolds, NASCUS chairman and Georgia regulator, said. In its fifth year, this year’s series of NASCUS regulator meetings will continue in Boston, Feb. 8; Chicago, June 11; and Nashville, Tenn., Sept. 18. The state agencies in event locations are co-hosting the meetings. “NASCUS places great emphasis on ensuring the state regulatory system is constantly improving through innovation and best practice sharing,” said NASCUS President/CEO Mary Martha Fortney. “The regional regulator meetings and NASCUS’ other networking opportunities help the association achieve this goal and strengthen our focus on enhancing the safety and soundness of the state credit union system.”

State regulators warn against scams tied to economy

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OLYMPIA, Wash., and COLUMBUS, Ohio (1/31/08)--Investors should be wary of economic scams promising high returns with little-to-no risk, the Washington State Department of Financial Institutions (DFI) and the Ohio Department of Commerce’s Division of Securities warned this week. Many investment scammers use negative economic news to coerce investors into high-risk investments, according to DFI Director Scott Jarvis. “Investment scam perpetrators stay current on economic news in order to seem more legitimate and believable to their victims,” Jarvis said. “These predators use investor fears to promote illegitimate schemes with promises of high return with little-to-no risk that often leave investors holding nothing but empty wallets.” Kimberly Zurz, Ohio Department of Commerce director, agreed. “A get-rich quick promise is a common sign of investment fraud,” she said. Both departments supervise state-chartered credit unions. Investment scheme perpetrators who promise high returns especially target those nearing retirement. “We’re concerned that in trying to build a more comfortable cushion for retirement, entire retirement savings built over a lifetime of working could be cleaned out,” Jarvis said. “Hasty decision making could potentially stamp out any chance of retirement for some consumers, or financially ruin a retiree.” Investors should hang up on aggressive cold callers and delete unsolicited e-mails promoting investment opportunities. Legitimate financial professionals generally do not recommend changes to investment portfolios based on short-term economic news, said Brian Misencik, acting securities commissioner at the Ohio Department of Commerce. “Investors should view with great skepticism any recommendation to liquidate a well-structured, well-diversified investment portfolio to purchase an alternative investment product that may expose them to high commissions, high fees and undue risk,” he said. Zurz also warned against high-pressure sales tactics for unregistered securities and non-traditional investments such as foreign currency, oil and gas investments, or offers to send money offshore to “safe havens.” Both the Washington DFI and the Ohio Department of Commerce encouraged investors to contact their DFI’s securities division or the Division Investor Protection hotline to make sure that the investment and seller are licensed and registered, and to see if any enforcement actions have been taken against the seller.

League CU Resources team up to cut CUs energy costs

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FARMERS BRANCH, Texas (1/31/08)--CU Resources, a wholly owned subsidiary of the Texas Credit Union League (TCUL), has partnered with Affiliated Power Purchasers International (APPI) to reduce member credit unions’ energy costs through consulting services. Energy prices have increased annually at 15% for the past 12 years, according to the TCUL. Based on the current market, Texas credit unions should consider fixed-price supply contracts with terms of two-to-five years, the league advised (LoneStar Leaguer Jan. 30). The contracts reduce risks of price volatility, price increases and seasonal changes, with significant savings, the AAPI said. Since the mid-1990s, energy prices have been volatile. Wholesale and retail energy prices change throughout the day as energy commodity contracts are traded on national energy exchanges, the league said.

CUs gear up to help consumers with taxes

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MADISON, Wis. (1/31/08)--With tax season underway, credit unions are helping members and low-income individuals prepare their returns. Texas Gov. Rick Perry has proclaimed today as EITC (Earned Income Tax Credit) Awareness Day (LoneStar Leaguer Jan. 30). “The EITC can be a first step toward financial stability, enabling working families to save for college, develop a small business, or put a down payment on a home,” he said. “Many eligible Texans do not claim almost $1 billion each year in EITC funds due to limited community awareness and lack of access to free tax preparation sites.” Pacific Service CU, Fresno, Calif., is partnering with the United Way of Fresno County to offer free tax preparation assistance for individuals with low-to-moderate incomes. The Fresno branch of the credit union will host United Way volunteers to work with individuals on their returns and applying for EITC. Volunteers will work Saturdays at the credit union from Feb. 2 to April 12. “Working with the United Way will help low-income individuals navigate through the process and they won’t have to pay the fees associated with commercial tax preparers,” said Steve Punch, Pacific Service CU president. AmeriChoice FCU, Mechanicsburg, Pa., also is helping low-income individuals with its “Money in Your Pocket Campaign,” which offers free tax assistance to low-income families. The program, sponsored by the credit union and the Community Action Commission, starts Friday and will end April 11. Participants can have their electronic returns prepared at no cost by United Way and Community Action Commission volunteers (Life is a Highway Jan. 29). Wisconsin credit unions are offering free tax preparation for individuals with low-incomes, the disabled, the elderly, and those with limited English proficiency, according to the Wisconsin Credit Union League. Credit union volunteers will assist individuals at free tax preparation sites around the state that are operated with the Internal Revenue Service, the American Association of Retired Persons (AARP) and the Wisconsin Department of Revenue. Michigan credit unions launched the 2008 Just File It! program. More than $700,000 in tax credits and refunds have been provided to Michigan residents through 140 participating credit unions. The program is available through online software that many credit unions, including United Educational CU, Battle Creek, Mich., have linked to their websites (Michigan Monitor Jan. 28). The Maryland and District of Columbia Credit Union Association announced two fax fairs for those who cannot afford tax services. U.S. Rep. Eleanor Holmes Norton (D) will host her eighth annual Tax and Information Fair Feb. 9, and the Baltimore CASH Campaign Money Power Day 2008 is scheduled for Feb. 16. The Baltimore event provides consumers with money management workshops, credit counseling and free tax preparation, according to the association (Focus Jan. 28).

CEO testifies for Colorado financial literacy bill

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ARVADA, Colo. (1/31/08)--The CEO of Denver Community CU testified Monday before the Colorado State House Education Committee in support of legislation promoting financial literacy in elementary and secondary schools.
Carla Hedrick, CEO of Denver Community CU, speaks to the Colorado State House Education Committee in support of legislation promoting financial literacy in elementary and secondary schools. (Photos provided by the Credit Union Association of Colorado)
House Bill 08-1168 is sponsored by Reps. Rosemary Marshall (D-Denver) and Ken Summers (R-Jefferson), and Sens. Chris Romer (D-Denver) and Josh Penry (R-Mesa). The bill underscores the value of including financial literacy in the curriculum of the state and state board of education, and challenges school districts to add financial literacy standards to the state's mathematics content standards. It pioneers financial literacy standards as an integral part of the state's assessment in math under the Colorado student assessment program, according to the Credit Union Association of Colorado (CUAC). According to Timothy Dore, senior vice president for government affairs at CUAC, "This legislation gets to the heart of the issue and sends a message that financial literacy begins in childhood and continues throughout a person's life all the way to retirement and beyond." He added that the legislation is "an important step to ensuring all children develop and strengthen their financial literacy skills." In her testimony on behalf of CUAC and credit unions, Hedrick said she has heard many people say their parents never taught them about finances and money. Kids are excited to receive tools and knowledge they haven't been exposed to before and can take home to their parents, she said, adding kids become the teachers and share the information.
Representing credit unions at a Colorado State House Education Committee hearing and supporting House Bill 08-1168 were, from left: Peter Kirchhof, lobbyist; Carla Hedrick, CEO, Denver Community CU; and Timothy Dore, senior vice president of government affairs at the Credit Union Association of Colorado.
Kids are the best way--maybe the only way--to break the generational cycle of financial illiteracy, she told the committee. Also testifying were representatives from the banking industry, Colorado Division of Real Estate and others. The committee tabled the bill until today to review some of the issues raised. Denver Community CU's bilingual program, offered through schools and community organizations, is presented internally at the credit union for members and nonmembers, and externally through community partners. It offered more than 100 classes the past year through community organizations. The $206 million asset credit union also provided a financial literacy education program to departments of Denver Health. The credit union said the program was well-received. "The bottom line is that not only do many adults not have a grasp on financial literacy but kids are not learning these vital skills at home or anywhere else," said Hedrick. "It is generational and does not respect income or education levels. We can all help, but the schools reach all of our children and can have the greatest impact." She noted that the program is already developed and is free.

Suspects charged in Bluetooth Bandits robberies

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GREENSBORO, N.C. (1/30/08)--Two suspects were charged Monday with nine North Carolina credit union and bank robberies the past two years that were tied to the "Bluetooth Bandits." Arrested Monday were Christopher Brian Collins, 34, and Sabrina Lynn Phillips, 26. Each is charged with eight counts of robbery with a dangerous weapon, plus robbery counts. A third suspect, Anthony Jermain Payne, 25, was arrested earlier and charged in three of the robberies, including that of a credit union. The Bluetooth Bandits got their name because they wore Bluetooth phone devices in their ears during at least two holdups. They netted more than $500,000 in the combined heists. The North Carolina Credit Union League partnered with the Federal Bureau of Investigation and a number of trade groups and organizations to offer a $20,000 reward for information leading to the arrest and conviction of the robbers. Collins and Phillips are charged in the robberies of seven banks, plus two heists at Piedmont Aviation CU--on Aug. 18, 2006, and Aug. 10, 2007. Payne was charged in the Aug. 10 robbery. The two holdups netted the robbers more than $104,000.

MarylandD.C. co-op ad campaign yields results

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COLUMBIA, Md. (1/30/08)--The Maryland and District of Columbia Credit Union Association (MDDCUA)2007 Cooperative Advertising Campaign exceeded results, according to the MDDCUA. More than 625 radio commercials were broadcast in Baltimore, Washington, D.C. and Western Maryland. The ads targeted youth and women, and drove listener traffic to the “What’s in it for me?” website (Focus Jan. 28). As of Jan. 4, the website received 12,143 visits and 10,447 clicks from search engines. Each time the site appeared in Google or Yahoo search queries, the campaign counted it as an impression--with a total of 6,010,229. On average, users spent three minutes and 10 seconds viewing the pages per visit, the association said. The campaign also exceeded its fundraising goal of $160,000. Sixty-one credit unions out of 140--about 40%--donated a total of $165,108.

Biz Kid webinar promotes CUs national TV series

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FEDERAL WAY, Wash. (1/30/08)--The Washington Credit Union Foundation (WCUF) and the National Credit Union Foundation (NCUF) have posted a Biz Kid$ webinar and toolkit to assist in watching, promoting and supporting the first national public television series sponsored by America’s Credit Unions.
Five of the Biz Kid$ hosts take a break in the futuristic studio set for the first national public television series sponsored by America’s Credit Unions. The series focuses on youth financial education. (Photo provided by the National Credit Union Foundation)
“We decided to make the Biz Kid$ materials available to all credit unions, state credit unions foundations and leagues,” said Biz Kid$ Project Manager and WCUF Executive Director Roxanne Kruger. “Our partners throughout the Credit Union System can help this financial series reach millions of credit union members, as well as students.” More than 86 million households, including nearly 200 million people over the age of two, can watch Biz Kid$ on 279 PBS stations in 43 states (News Now Jan. 8). The stations airing Biz Kid$ represent over 80% of PBS stations nationwide. In February, Kruger expects more stations to commit to broadcast the 26-episode series. In the meantime, “the webinar answers credit unions’ most commonly asked questions, and the toolkit offers options to promote the show in credit unions lobbies, via mail and e-mail,” Kruger explained. Topics addressed on the webinar include:
* What is Biz Kid$?; * National PBS carriage; * National underwriting status; * Local underwriting opportunities; and * Biz Kid$ marketing materials.
Every piece in the marketing toolkit can be customized by credit union organizations to promote Biz Kid$ to their members. The files can be downloaded from NCUF or WCUF websites, with space available to add the specific channel and air time for Biz Kid$ in each viewing market. Underwriting sponsors also can add a line, announcing that they are a national and/or local sponsor of Biz Kid$.

Study Mobile banking success lies in ease security

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NEEDHAM, Mass. (1/30/08)--The most critical driver for the successful evolution of mobile banking and mobile payments will be the ability of financial institutions and mobile operators to balance ease of use with security, according to recent research. During the next five years, mobile banking deployments will develop significantly, says Needham, Mass.-based research firm TowerGroup in its ViewPoint report, "Mobile Banking and Payments Security and Usability: What's in Your Mobile Wallet?" Although initial consumer acceptance has been "surprisingly strong," with nearly one million consumers in the U.S. using mobile banking at the end of 2007, dire consequences may result from security procedures that are either too lax or too stringent, says the report. "If consumers find registration and authentication procedures burdensome, adoption of this channel will slow," warned the report's author George Tubin. "If data security is compromised, negative publicity will quickly sow fears about the safety of banking 'over the air.'" Tubin is research director in TowerGroup's Delivery Channels and Financial Information Security practice. The report warns banks and credit unions to be wary of mobile operators who want to control the emerging mobile payments space and profit from the potential high volume of mobile payments. Consumer banks must be the central player in this burgeoning market because of their deep expertise in payments processing and maintaining trusted consumer relationships, TowerGroup said. Financial institutions will need to align their mobile banking solutions with the expectations and needs of the marketplace and ensure their central role in future deployments.

CU System briefs (01/29/2008)

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* HARRISBURG, Pa. (1/30/08)--Sasha Zuro, 26, a member service representative with Valley lst Community FCU, Monessan, Pa., was killed, along with a friend, early Sunday in a condominium fire at Seven Springs Mountain Resort. Zuro was employed with the $59 million asset credit union for five years. A memorial service is being held today at 11 a.m. EST (Life is a Highway Jan. 29) … * OREM, Utah(1/30/08)--Family First FCU increased its assets by 24.56% during the past 24 months, the $165 million asset credit union announced. Net loans to members rose 25.93%, membership increased 2.69%, the credit union opened three new branches in Utah County and it celebrated its 60th anniversary. Although the credit union is "pleased with our phenomenal growth," President/CEO Dick Chappell said, "we are not satisfied, and will not allow ourselves to become passive in our success. We believe in the philosophy of putting our members first." (Business Wire Jan. 24) … * HUNTINGTON, W. Va. (1/30/08)--The former manager of the Huntington branch of Charleston-based, $129 million asset Star USA FCU pleaded guilty Monday to embezzling more than $81,000 from the credit union (Charleston Gazette Jan. 29). Susan Kelly, 58, of Barboursville, was employed at the credit union, formerly called the Huntington Veterans Affairs CU, from 1998 to 2006. If convicted, she faces up to 30 years in prison, five years of supervised release, a $1 million fine and restitution. Sentencing is scheduled for April 28 … * TALLAHASSEE, Fla.(1/30/08)--A credit union branch inside a Wal-Mart Store in Tallahassee was robbed Monday morning. While shoppers were in the aisles, the armed man entered the branch of Envision CU at 10:45 a.m., jumped the counter separating employees from members and pulled a gun. He fled with an undetermined amount of money. Both Wal-Mart and the credit union have surveillance cameras, which police are examining (Tallashassee Democrat (Jan. 29) … * DES MOINES, Iowa (1/30/08)--A Des Moines man was convicted of the robberies of two credit unions and a bank during December 2006, according to the U.S. Attorney's Office for the Southern District of Iowa. Michael Carlos Cooper Wiest, 19, was found guilty by a jury of robbing the Affinity CU on Dec. 18, Liberty Bank on Dec. 20 and Financial Plus CU on Dec. 22. He also was convicted on three firearm charges. The charges each carry a penalty of up to 20 years incarceration. The firearm charges carry a minimum prison sentence of seven years for the first firearm conviction and 25 years each for the additional convictions. A sentencing conference was set for March 13 (States News Service Jan. 27) …

Louisiana CUs partner with REAL Solutions

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HARAHAN, La. (1/30/08)--Louisiana credit unions have signed on to a REAL Solutions program to help low-income consumers who have not been able to save or own assets. The program is funded by the National Credit Union Foundation (NCUF). The NCUF and the Louisiana Credit Union League will train credit unions to provide services that low-wealth families can afford. “We are seeing credit unions across the country rescue borrowers who had fallen into the trap of revolving debt at payday lenders who they could not pay off,” said REAL Solutions National Program Director Lois Kitsch. The program also aims to help low-wealth consumers become credit union members, grow savings and accumulate assets. “REAL Solutions is designed to help credit unions effectively reach low-wealth families and make each person a loyal, long-term member,” said NCUF Executive Director Steve Delfin. “This is important because low-wealth families, while at the bottom of the economic pyramid, represent future savers, future car buyers, future homeowners and future generations of credit union members.” The partner credit unions held their first meeting in Baton Rouge and decided to work on three products: a payday loan alternative, services for young adults and a reloadable value debit card. “We will follow the same format that has worked so well in other states when rolling out REAL Solutions,” said Vicki Joyal, field coach and liaison between NCUF and the credit unions. “By combining our resources with the league, Louisiana credit unions and their members will benefit from our shared experiences across the country.”

CUSO study Consumers ready to adopt mobile banking

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ST. PETERSBURG, Fla., and BOSTON (1/30/08)--U.S. consumers are looking for broader uses of mobile commerce applications, according to new research from Dove Consulting. And mobile banking is at the top of their list. The research, sponsored by PSCU Financial Services, a credit union service organization (CUSO), based in St. Petersburg, Fla., was conducted with focus groups in multiple cities (BusinessWire Jan. 29). The research measured consumer interest in, and predicted future use of, three major applications:
* Mobile banking--using a mobile device to access banking information; * Mobile payment at the point-of-sale--using a mobile device to make purchases; and * Mobile person-to-person payments--using a mobile device to send money to another mobile device.
Almost two-thirds of study participants chose mobile banking when asked which of the applications they were the most excited about using. About 30% chose mobile payment at the point-of-sale. Few participants said they were excited about mobile person-to- person payments. Research results indicate that consumers are ready for mobile financial services, with convenience being the compelling feature, said Kent Potterton, director of credit services and new product development at PSCU Financial Services.

California CUs grow amid financial industrys woes

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RANCHO CUCAMONGA, Calif. (1/30/08)--The California credit union industry continues to experience sound growth, even amid the turmoil in the broader financial services sector, according to a recently released report by the California Credit Union League (CCUL). The CCUL’s Westscan Update--its 2007 third-quarter economic activity report for the state’s 518 credit unions--is authored by Terrin Mendivil and Daniel Penrod, industry analysts in the league’s Research and Information Department. Though the state’s credit unions are maintaining their solid financial footing, they are not completely insulated from the overall economy, which continues to feel the heavy drag from the housing and credit crunch, the report said. Among the report’s major findings:
* Total asset growth continued for California’s credit unions with a year-to-date gain of 3.28%, for an annualized 4.39% increase; * Investment growth increased with California credit unions growing their portfolio by 2.96% year-to-date, for an annualized gain of 3.97%; and * California credit unions reversed a four-year trend of declining membership growth, signing up 150,225 new members through the end of September 2007.
The league is monitoring national economic situations that will affect credit unions. The report predicts:
* Credit unions will experience more loan losses, but the recent easing by the Federal Reserve should take some pressure off borrowers with home equity lines and credit card debt. They will still realize losses from foreclosure or job loss; * With lending standards tighter in the marketplace, credit unions are well-positioned to attract new members. Competition for shares, though, should remain fierce. Visibility will be critical in 2008. * Economic activity is on track to decelerate in 2008 and pick up modestly in 2009; * Modest job gains are anticipated in some sectors, but housing-related industries along with the manufacturing, finance and retail sectors, will shed even more employees; and * Long-term interest rates should decline in 2008 as short-term rates move lower. The league anticipates the return of a steeper yield curve, which should help earnings. The weakness in the dollar could generate inflationary concern.

Treasury Department FCU testifies for fin-lit efforts

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WASHINGTON (1/30/08)--Treasury Department FCU Vice President Lynette Smith testified in favor of the Financial Literacy Council Establishment Act last week before the District of Columbia’s city council. The financial literacy council created by the act would advise Washington, D.C.’s mayor and city council to promote financial education and awareness in the District of Columbia. The legislation also would require public school systems to have mandatory financial literacy education in high schools (Focus Newsletter Jan. 28). The Maryland and District of Columbia Credit Union Association board has voted in to support the legislation. Credit union officials hope to be a part of the financial literacy council if the legislation is approved, the association said. Area credit unions offer financial literacy training to members. One example is the Hope Inside Program, which will launch this week with Operation Hope, Smith said at the hearing.

U.S. Centrals IDR rating affirmed Fitch adjusts outlook

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NEW YORK and LENEXA, Kan. (1/29/08)--U.S. Central FCU's long-term issuer default rating (IDR) has been affirmed at AAA, Fitch Rating announced Friday. Fitch also adjusted the "outlook" rating from stable to negative, a move that comes as no surprise in today's economy. “U.S. Central is pleased by the reaffirmation of ‘AAA’ by Fitch Ratings, especially given the severity of the dislocation of today’s fixed income markets, and the fact that a significant majority of major financial institutions in the U.S. are on watch or have already been downgraded by rating agencies," Francis Lee, U.S. Central president/CEO, told News Now. "The 'negative' outlook that accompanied the reaffirmed Fitch rating does not come as a surprise to U.S. Central, in light of the trend in market events," Lee said. Lee noted that "U.S. Central continues to be a strong, healthy institution with $2.4 billion in capital and access to significant funding sources of liquidity.” Fitch said the AAA rating reflects U.S. Central's "solid credit fundamentals, as well as its franchise strength and its important role within the credit union industry." It added that U.S. Central's balance sheet "has a low risk profile, and its funding and liquidity positions remain quite strong." It also affirmed the short-term IDR at F1+. Fitch, in adjusting the outlook, said U.S. Central has "exposure to the troubled mortgage market, particularly non-prime mortgage-backed securities." It noted that losses have been absorbed through earnings, and management has taken steps to reduce its mortgage exposure. "Aided by its strong liquidity position, should USC manage through current market pressures without incurring meaningful additional losses and continue to reduce incremental risk in the investment book, Fitch would likely revise USC's Rating Outlook to Stable," Fitch said.

PCUA regulator banks agree on apps procedures

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HARRISBURG, Pa. (1/29/08)--The Pennsylvania Credit Union Association (PCUA), the state's Department of Banking, and state banking trade associations have negotiated language for an amendment that would address administrative procedures during the applications process for credit unions and banks. "Pennsylvania law has always had a 'notice and comment' process on applications and other laundry list type items" where credit unions and banks can comment during the other's applications process, said Rick Wargo, PCUA executive vice president and general counsel. During recent field of membership litigation involving the three parties, however, the parties disagreed over procedures about what proprietary documents could be made available, Wargo said. The amendment, which has not been finalized yet, would be in one of four bills designated under the state regulator's mortgage reform package. The state regulator had opened up its administrative code to solidify its powers against licensed lenders to make it easier for licensed lenders to become part of a national database. Since Thanksgiving of 2007, PCUA, the regulator and the banking trade groups have been negotiating the language so that the final amendment would be fair to all parties while still protecting proprietary information, Wargo told News Now. "The banks had wanted to beef up the notice and comment procedure and codify the scenarios where, if a party submits information to the department, the department would designate proprietary information as confidential. It also would codify procedures to request confidential documents," Wargo said. Before, it was left to the state's regulator's discretion. Late last week, PCUA, the regulator and the banking trade groups came to an agreement on possible language for the amendment. They will have informal meetings with the chair of the Senate Banking Committee to move the amendment. The mortgage reform package, Senate Bill 484, was introduced in March 2007.

Al Franken tours US FCU talks CU issues

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ST. PAUL, Minn. (1/29/08)--Minnesota credit union representatives met with U.S. Senate candidate Al Franken Friday as he toured the St. Paul branch of US FCU with more than 20 people and took part in discussion about current credit union issues.
U.S. Senate candidate Al Franken, left, discusses the Credit Union Regulatory Improvements Act and other credit union issues with Minnesota credit union representatives, including Bob Stowell, senior vice president/chief operations officer for US FCU, at a tour of the credit union Friday. (Photo provided by the Minnesota Credit Union Network)
The group included representatives from seven credit unions, the Minnesota Credit Union Network (MnCUN), and organizations partnering with US FCU, a $735.2 million asset, Burnsville, Minn.-based credit union. The credit union’s new St. Paul branch is part of the Eastside Financial Center--a partnership among US FCU, Thrivent Financial for Lutherans, and Lutheran Social Services. The goal of the center is to serve members of the community who are not currently served by traditional banks. The center offers products and services such as cash checking, salary advance loans, and a savings development program. Franken strengthened his knowledge and understanding of credit union issues through a group discussion that followed the tour. Franken asked questions about the Credit Union Regulatory Improvements Act of 2007 (H.R. 1537), known as CURIA. Credit union representatives responded by outlining various provisions of the bill and illustrated how CURIA would allow them to better serve their members. Franken expressed his desire to learn more about credit unions. “I admire what you’re doing because its community-based, which we’ve lost in this country, and it’s allowing people to get credit for their homes and businesses,” Franken said. He said he would look “forward to working in partnership with you and helping you serve the people of your community.” Mark D. Cummins, MnCUN president/CEO, said the meeting with Franken was productive. “Our meeting allowed us to share with him the difference that credit unions make in our communities, and he seems very supportive of our mission,” Cummins said. “I am pleased that he understands the importance of credit unions to his campaign.” Franken is one of four Democratic candidates challenging freshman incumbent Sen. Norm Coleman (R-Minn.). Franken is an author, radio talk show host, comedian and 20-year writer/actor on the TV show “Saturday Night Live.”

CUs outline IT priorities in new study

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BOSTON (1/29/08)--Credit unions are early adopters of technology and tend to be more technologically savvy than banks of similar size, according to a new research report. The report, “The Information Technology Priorities of U.S. Credit Unions,” by Aite Group, indicates that during the next year, 35% of credit unions surveyed plan to deploy business lending solutions. Other technologies to be adopted include: member analytics, 33%; online cash management solutions, 27%; core banking systems, 27%; and customer relationship management, 27%. “Credit unions’ attitudes toward technology place them at an advantage over many banks, especially community banks, which tend to be more cautious technology adapters,” said Christine Barry, report author. “In today’s environment, where technology can help to level the playing field, an aggressive technology strategy is key to survival.” The study also indicated that online account opening, online member service tools, and customer analytics are top priorities. Only 8% of credit unions surveyed said they will offer remote deposit. Aite surveyed 101 credit unions with more than $100 million in assets.

CU System briefs (01/28/2008)

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* NEWPORT NEWS, Va. (1/29/08)--Members and nonmembers of Langley FCU with Hampton Roads, Va., cell phone prefixes were targeted in a text-message phishing scam attempt Friday afternoon (Daily Press Jan. 26). The scam attempted to get recipients to divulge personal financial information on a fake website. The credit union received 100 to 200 phone calls between 3:30 p.m. and 5 p.m. Friday from people who received the messages. The credit union, working with the Federal Bureau of Investigation, shut down the fraudulent site by 5 p.m. Langley emphasized to its 160,000 members to never give out personal information when asked to do so in an e-mail or text message … * WESTBROOK, Maine (1/29/09)--Credit unions were recognized for their success in raising the most funds ever for the Maine Credit Unions' Campaign for Ending Hunger during 2007. They raised more than $366,575, a 15% increase over 2006 fundraising. On hand to acknowledge the accomplishment at the January Thaw to End Hunger Celebration Event was Maine First Lady Karen Baldacci, shown with Luke Labbe, president/CEO of PeoplesChoice CU and chair of the Maine Credit Union league's Social Responsibility Committee. Baldacci assisted in distributing the checks to representatives from credit unions across the state. They will present the checks to their local area food pantries and hunger organizations. Since 1990, Maine credit unions have raised more than $2.7 million to end hunger in the state (Photo provided by the Maine Credit Union League) … * HARRISBURG, Pa. (1/29/08)--A letter to the editor of The Patriot-News (Jan. 27) from Pennsylvania Credit Union Association President/CEO Jim McCormack responds to a Jan. 13 article, "Do You Pay for Cash," and touts the CU$ selective surcharge-free alliance for credit union members. The alliance is through a joint effort between PCUA and Pennsylvania State employees CU (Life is a Highway Jan. 28) … * HARRISBURG, Pa. (1/29/08)--The Pennsylvania Credit Union Foundation awarded its 300th grant to Money Management International through CTCE FCU in Reading, Pa. (Life is a Highway Jan. 28). The grant will provide financial education and counseling to more than 600 underserved people in three Pennsylvania counties. Accepting the $6,760 check from Joe Wambach, foundation executive director, is Carolyn Tarrant, director of communications and education at Money Management International. The foundation has awarded grants valued at nearly $1.3 million since its inception in 1996. (Photo provided by the Pennsylvania Credit Union Association) … * STAFFORD SPRINGS, Conn. (1/29/08)--A Hartford, Conn., man charged in Wednesday's holdup of Workers' FCU, Stafford, served five years in prison for a similar heist at a bank in Manchester in 1998, police said (The Hartford Courant Jan. 26). In the 1998 robbery, Antwan Byrd, 32, fled the scene and led a state trooper on a car chase to Hartford before crashing the getaway car. In Wednesday's heist, a state trooper spotted the stolen getaway truck and gave chase to Hartford, where Byrd was arrested. An accomplice escaped. Byrd also has served five years in prison for two other robberies in Hartford. He was released last August … * NORTHVILLE TOWNSHIP, Mich. (1/29/08)--Dick Francis, former commissioner of the Michigan Financial Institutions Bureau, the predecessor of today's Office of Financial and Insurance Services, died Jan. 14. He was 75. Francis helped spearhead electronic banking legislation in Michigan in the 1970s, according to the Michigan Credit Union League (Michigan Monitor Jan. 28). He served as commissioner from 1973 until 1980. During his tenure, he promoted legislation on ATMs that became a model for the nation and helped lead efforts against redlining of poor and urban residents. He was also general counsel to the Michigan Life Insurance Co. Most recently he served as a consultant to Royal Oak Community CU and on the Sterling Bank board …

Wisconsin CUs back personal data security bill

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PEWAUKEE, Wis. (1/29/08)--Wisconsin credit unions are supporting a state bill that would allow for the safekeeping personal information stored on debit and credit cards. The legislation has been introduced by State Rep. Brett Davis (R-Oregon) and State Sen. Bob Wirch (D-Pleasant Prairie). The bill would prohibit merchants from retaining personal identification numbers or security codes after processing debit or credit card transactions. If a merchant were to ignore the law and collect and keep that information, and if the information were lost, the party responsible for losing the information would be required to pay for the costs to close the consumers’ accounts and re-issue cards. The party responsible for the loss also would be required to pay for steps to prevent fraudulent use of a consumer’s personal information and cover certain costs to continue financial services to the card holder. Costs include notifying customers or crediting accounts for fraudulent transactions. “Due to recent breaches of consumers’ personal identification involving payment cards, legislators and consumers have a heightened awareness of the extremely important matter of data security,” said Brett Thompson, president/CEO of the Wisconsin Credit Union League. “We hope this common sense proposal will win bi-partisan support and be signed into law this session.” About 75% of Wisconsin consumers surveyed in a January telephone poll conducted by the league supported measures that require the party responsible for a data breach to bear restorative costs. Consumers may spend up to 60 hours to fix damage caused by a breach and fraud attempts, Thompson said. Credit unions have a more difficult time offering attractive rates on savings and loans to members when they must bear the costs related to breaches of personal information, Thompson said.

CUNA Mutuals revenue up for 2006

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MADISON, Wis. (1/29/08)--CUNA Mutual Group (CMG), which provides financial services for credit unions nationwide, has seen its revenue go up for 2006. In 2006, CMG’s revenue was $2.85 billion, up from $2.42 billion in 2003, the year before new President/CEO Jeff Post arrived, according to figures provided by the company (The Wisconsin State Journal Jan. 26). Financial results from 2007 are not yet available. Fitch Ratings, which rates the financial strength of insurance companies, gave CMG another AA- (very strong) rating for 2007. CMG has made several fundamental changes that will reap benefits in the long-term, Bruce Cox, a Fitch Ratings analyst who tracks the company, told the newspaper. Another ratings service--A.M. Best--described the company as “stable” and confirmed CMG’s A (excellent) rating, the newspaper said. CMG has become more competitive in the pricing of its insurance services, Paul Kundert, president//CEO of Madison, Wis.-based UW CU, said in the article. Post, who previously worked at Novato, Calif.-based Fireman’s Fund, told the newspaper he had two major goals when he became CEO: to improve financial performance, and to change the culture. Regarding the latter goal, he has removed barriers between company divisions and streamlined operations, although more work needs to be done, Post added. The streamlining has worked and results in a credit union dealing with just one CMG sales representative, instead of one for each product, Kim Sponem, Madison, Wis.-based Great Wisconsin CU CEO, told the newspaper. While the number of credit unions nationwide it serves has declined at a rate of about 500 per year, CMG has grown, Post told the newspaper. Citing company officials, the newspaper said that nationally CMG has a 95% share of the credit union bond market, an 88% share for casualty and property insurance coverage, 65% of the credit insurance market, and 55% of the retirement fund market. Post outlined several items on CMG’s 2008 to-do list:
* Continue to focus on a crop insurance program started last year, which generated $130 million in revenue in its first year; * Develop a program to initiate student loans and sell the first 20 years of payments to credit unions; * Offer CUNA Mutual’s 401(k) retirement plan this year to small businesses that aren’t credit unions; and * Consider a program that would provide auto loans to people who don’t qualify for conventional auto credit loans.

Filene addresses P2P lending in IWall Street JournalI

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NEW YORK (1/29/08)--Some comments by the Filene Research Institute, a Madison, Wis.-based research firm for the credit union industry, on peer-to-peer (P2P) lending were mentioned in the Sunday edition of The Wall Street Journal. People need to understand the P2P models being used because each model has its own nuances and differences, Mark Meyer, director of the Filene Research Institute, told the newspaper. The most distinct feature of all P2P sites is that the traditional financial institution is removed in the lending process. Because of this, overhead is reduced, which results in better rates for borrowers and lenders, the sites claim, according to the article. Zopa, which is affiliated with credit unions nationwide, requires a 640 FICO score--a proprietary credit scoring formula created and used by Fair Isaac Corporation--and a credit union membership to apply for the loan, according to the article. With Lending Club, a consumer seeking a loan needs a FICO score of 640 to apply for a loan. A borrower’s debt-to-income ratio cannot exceed 30%. Conversely, Prosper--another P2P lender--allows the market to determine which borrowers can obtain funds regardless of credit score, the article said. Virgin Money facilitates loans between friends and family members, so participants know each other, the newspaper said.

Maryland lawmakers introduce two CU-backed bills

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ANNAPOLIS (1/29/08)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) has introduced two pieces of legislation in the Maryland Senate and House of Delegates involving credit union-backed municipal deposits and financial education. The first bill is SB-79, “Deposits of State and Local Government Money,” introduced by State Sen. Delores Kelly Jan. 14. State Del. Michael Vaughan is introducing the bill in the State House. The legislation would allow credit unions to accept and hold unexpected or surplus funds from local governments and allow credit unions to act as depositories for state funds (FOCUS Newsletter Jan. 28). The Maryland Bankers Association is opposing the legislation. A committee hearing for the bill is slated for Jan. 30. The second bill proposes a task force to study mandatory financial literacy education in Maryland schools. It is in the drafting process and will be introduced by State. Sen. C. Anthony Muse and State Del. Dan Stein. The proposed task force would include representatives from various community groups, educational agencies and groups, and financial institutions. MDDCCUA CEO Mike Beall and Chief Administrative Officer Jennifer Porter Gore will meet this week with legislators to discuss the bills and other credit union initiatives.

Hackers steal former CUs account data

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FORT WORTH, Texas (1/28/08)--Cybercriminals hacked into former credit union OmniAmerican Bank's records and stole account numbers, created new personal identification numbers (PINs), fabricated debit cards, then withdrew cash from ATMs in Eastern Europe, including Russian and the Ukraine, and Britain, Canada and New York. The Fort Worth-based bank said last week that fewer than 100 accounts, including some dormant accounts, were compromised. All had daily ATM withdrawal limits of less than $1,000, President Tim Carter told Star-Telegram (Jan. 23 and 24). He said the amount stolen was minimal, and no depositors will lose money. The fraudulent activity was discovered Jan. 18 from three sources: customers asking about unusual activity in their accounts; internal monitoring; and a law enforcement agency. OmniAmerican immediately placed temporary limits on some ATM and debit card transactions and suspended some electronic banking services. The services were restored on Jan. 20. The $1 billion asset bank has mailed letters notifying check-card holders. It will issue about 40,000 new debit cards, each with a revised PIN, as a precaution. OmniAmerican, once the second-largest credit union in the area, changed its name from OmniAmerican CU on Jan. 1, 2006, after members voted 3-to-1 in July 2005 to convert to bank charter (News Now Feb. 13, 2007).

Brazil CUs have growth aspirations cooperation

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RIO DE JANEIRO, Brazil (1/28/08)--Growth and cooperation are the keynotes of the UNICRED Brazilian credit union system, said a member of the small group of U.S. credit union executives taking part in the World Council of Credit Unions (WOCCU) Brazilian Engagement Program last week.
Dr. Denise Damian, UNICRED Brazilian credit union system president/CEO, taught a course Friday on financial management to credit union members as part of the World Council of Credit Unions Brazil Engagement Program conducted last week for a small group of U.S. credit union executives. (Photo provided by the World Council of Credit Unions)
UNICRED is a credit union system serving Brazil’s healthcare sector. It has roughly 140 member credit unions, serving more than 153,000 members through 396 points of service in Brazil’s 27 states. Growing membership wisely is UNICRED’s main goal, Rod Staatz, president/CEO of State Employees CU, Baltimore, told News Now. One credit union in Rio de Janeiro seeks to grow from its current 20,000 member-level to 50,000 members, Staatz said. “Credit unions in Brazil and the U.S. both are interested in growth,” Staatz said. “They also have the same challenges in several respects. Brazilian credit unions have to keep up with the services that banks are offering and also need to raise sufficient capital to do so, which is similar to the situation that U.S. credit unions face.” As for differences between the countries’ systems, the U.S. can learn from the higher level of cooperation among Brazil’s credit unions, Staatz said. UNICRED has 140 credit unions banded into nine groups trying to standardize products and back-office procedures, he added. “This paves the way for reduced costs and a standard brand,” Staatz explained. “UNICRED is basically working toward offering the same products and services--the same brand--for all 140 of its member credit unions.”

Member donates dividend to family near foreclosure

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HIGH POINT, N.C. (1/28/08)--What do members do with the dividends and rebates they receive from the credit union? For one member of North State Telco CU, it was a no-brainer. He donated his entire dividend to members of a struggling family in danger of losing their home.
North State Telco CU Assistant Manager Sarah Allen noted members' generosity in helping others. She says Perry Widemon Sr., shown here with her, "is one of the best at it--this isn't the first time he's helped someone out." (Photo provided by the North Carolina Credit Union League)
The $8.3 million assets credit union based in High Point, N.C., paid its members a year-end rebate--something it's done for more than 25 years, since 1983. This year's rebate was 9% on the interest earned on member deposits and 9% of the interest they paid during the year, according to the North Carolina Credit Union League's Weekly Update (Jan. 14 and 25). Perry Widemon Sr., a member since 1986 when he became a cable splicer for North State Communications, received a $250 rebate. He could have put it to good use for his own family--his wife, four children and 15 grandchildren. Instead, Widemon, a pastor at Hallelujah Baptist Church, thought about the members of the struggling family who are members are the church. "They were way behind on their mortgage payments, and they didn't think they could catch up," he said. Church members decided to give on their own to help out. He dropped by the credit union to see what he could give. "We saw that rebate had made it into the account." He was shocked at the amount, but without hesitation he donated the entire amount to the family. His donation, combined with others, helped the family catch up on its house payments. North State Telco Assistant Manager Sarah Allen, who has known Widemon since he joined the credit union, said he is typical of the credit union's membership. "They'll do anything to help people out. Perry is one of the best at it--this isn't the first time he's helped someone out." Widemon says his generosity and commitment to the credit union come from his deep faith. "I've been in some real storms over the years, but this house [North State] has brought me through them. I've learned over the years that if I just stand still, God will take care of me." While his rebate amount reflects a healthy financial situation, he is mindful of what it is to struggle. "I've stood here and cried before, and these folks have always been here for me," he said of the credit union.

More CUs declare dividends

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MADISON, Wis. (1/28/08)--More credit unions nationwide have declared year-end dividends returned to their members. David Adams, president/CEO of the Michigan Credit Union League, referring to Dearborn FCU’s special dividend, said: “When is the last time that a bank sent their customers a little extra after a profitable year? As an industry, we can tout this special dividend as the credit union difference in action. This dividend represents the hard dollar differences between credit unions and banks.” The following credit unions have announced dividends:
* Dearborn FCU, Dearborn, Mich., declared a special dividend for more than 125,000 members, ranging from $50 to more than $10,000; * Clark County CU, Las Vegas, gave members their respective portions of a $6.96 million dividend payment, deposited directly into their savings accounts Jan. 8. The money is distributed, based on the amount of interest paid or earned by each of the credit union’s 38,700 members in the past year (PR Newswire Jan. 8); * Financial Plus CU, Des Moines, Iowa, gave its 12,000-plus members a bonus dividend payment, averaging $32.20, with the highest single payment totaling over $1,300; * The People’s FCU, Amarillo, Texas, paid more than $225,000 back to its members in the form of a bonus year-end dividend--the first bonus dividend in the credit union’s 55-year history (The Amarillo Globe-News Online Jan. 12); * Hanscom FCU, Hanscom AFB, Mass., gave its members more than $1 million in loyalty dividends, representing a 3% bonus on dividends earned and consumer loan finance charges paid in 2007 (Business Wire Jan. 9); * Scott CU, Collinsville, Ill., issued about $240,000 to its members in bonus dividends and, for the first time, loan interest rebates (Belleville News-Democrat Jan. 8); * Capital Educators FCU, Meridian, Idaho, declared an extraordinary dividend of 0.50% for its members, improving the fourth-quarter yield to 2.16% annual percentage yield (APY) from the usual rate earned on share accounts, which is currently 1.66% APY; * GPO FCU, New Hartford, N.Y., declared a 5% dividend bonus and a 4% interest rebate for 2007, totaling $300,733 paid back to its members (UticaOD.com Jan. 13); * Glatco CU, Spring Grove, Pa., offered members a 5% bonus dividend, and a 2% interest rebate on Dec. 31 (Life is a Highway Jan. 9); * Patriot FCU, Chambersburg, Pa., issued another bonus for the fourth quarter of 2007, bringing the total distribution back to members at more than $1 million. On Dec. 31, members received a 3% bonus on checking and savings interest earned between Oct. 1 and Dec. 31. Members also received a 3% rebate on interest paid for qualifying loans during the same period (Life is a Highway Jan. 9); and * Riverfront CU, Reading, Pa., declared an interest refund equal to 3% of interest paid on qualifying consumer loans for 2007, and declared a bonus dividend equal to 3.4% of dividends paid in 2007 (Life is a Highway Jan. 22).

CU System briefs (01/25/2008)

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* MADISON, Wis. (1/28/08)--A group of northwest Wisconsin credit union activists help State Rep. Gary Tauchen, in the driver's seat, (R-Bonduel), push his car out of a snowbank during the Wisconsin Credit Union League's Governmental Affairs Conference Tuesday, after he ran late for their meeting. The group hiked two blocks to help him, then rushed back to the Capitol for another legislative visit. At a reception that evening, Tauchen thanked them and shared a few laughs over the situation. "These credit union representatives did an above-and-beyond job of exemplifying credit unions' People Helping People philosophy," said Chad Helminak, league public relations specialist. In the group were Allan Jamir, Horizon Community CU; Cathy Becks, Dan Wollin, and Lesley Enz, all of P.C.M. Employees CU; James Zimmer, Pioneer CU; and Laura Schenkoski, Leland Nicholas, Lois Nicholas, and Mary Anderson, all of N.E.W. CU. (Photo provided by the Wisconsin Credit Union League … * LENEXA, Kan. (1/28/08)--Thieves tried to steal an entire ATM Thursday morning from CommunityAmerica CU, but didn't get far. Police said thieves used either a bulldozer or a heavy chain to pry ATM from its concrete foundation. The ATM was recovered near its base and it wasn't clear whether any money was taken, police said. The incident was reported at 5:30 a.m. (The Kansas City Star Jan. 24) … * TAMPA, Fla. (1/28/08)--GTE FCU has launched CU2GO, a mobile account access service, for members enrolled in its CU@Home online account access program. CU2GO was created to give members access via the credit union's secure mobile access website, https://m.gtefcu.org. Members can use the new service via their cell phone to view account balances and transaction histories, transfer funds and pay bills online. About 2,000 members beta-tested the service before its official rollout … * NEEDHAM, Mass. (1/28/08)--Direct FCU member John Bilos, shown with his new 2008 Toyota Prius Hybrid, was the grand prize winner of the $740 million asset credit union's "Go Green" sweepstakes, an online web-banking promotion. During the sweepstakes, which ran throughout September, new and current Bill Pay users automatically were entered each time they paid a bill online. Bilos, a member since 1987, was randomly selected from more than a million sweepstakes entries. (Photo provided by Direct FCU) … * GARFIELD HEIGHTS, Ohio (1/28/08)--The Ohio Catholic FCU (OCFCU) has named Randall Trimm as CEO, effectively immediately. Trimm has been in the financial services industry since 1983. Most recently he was wealth manager at the Beachwood office of UBS (United Bank of Switzerland). He also directed consumer lending operations for Charter One Bank in Cleveland and headed retail for Huntington National Bank's east region. Trimm also served in leadership positions with Metropolitan Bank & Trust and Bank One. OCFCU is the largest faith-based credit union in Ohio, with $125 million in assets, six branches and 18,000 members …

Thousands of members rise to Financial Fitness Challenge

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MADISON, Wis. (1/28/08)--More than 3,000 participants registered in the 2007 Home & Family Finance Financial Fitness Challenge. The Credit Union National Association's (CUNA) Center for Personal Finance conducted the year-long challenge on the Home & Family Finance Resource Center, a Web content site for credit unions. Each month highlighted a different set of tasks--from using direct deposit to requesting free credit reports--that consumers should fulfill to make the most of their financial resources. "I definitely think that my financial habits have improved, and I am striving to make them better all the time," said one participant, Anji. Registered participants became eligible for drawings that awarded 10 $50 Visa cards each month. Many more consumers followed the challenge without registering. Dallas-based American Airlines FCU alone enrolled 812 members, or 25% of the total registrants. Its members also pulled down about a fourth of the prize money. American Airlines webmaster Pedro Noda made it his goal to swamp all other competitors by featuring the challenge in member e-mails throughout the year. The challenge also was featured monthly on Home & Family Finance Radio. The 2008 Finance Fitness Challenge takes a new tack. "We ask credit union members--and staff--to share their best money-management ideas," says Jim Hanson, vice president of the center for personal finance. Those submitting their ideas will be eligible for monthly prices of $50 Visa gift cards and a grand prize of $1,000 for a "reader favorite" chosen at the end of the year. "The challenge is one more solid way you can show members and potential members that credit unions are different," says Susan Tiffany, CUNA's director of personal finance information for adults. For 2008 challenge rules and where to send money-management ideas, use the H&FF Radio link.

On the CU Tube Touting the CU difference

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MADISON, Wis. (1/28/08)--Each week, News Now will feature an online video that involves the credit union movement. This week’s video was created by a 19-year-old spokesman from Young and Free at Commonwealth CU in Alberta, Canada, and seeks to show the difference between banks and credit unions.

CEOs Another small rate cut in members best interests

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KEY WEST, Fla. (1/28/08)--Attendees at last week’s 2008 CEO Summit were asked to act as if they were members of the Federal Open Market Committee and determine whether another federal interest rate cut should be made this week. Steve Rick, senior economist at the Credit Union National Association, asked credit union CEOs attending the question and got a consensus response. After CEOs reviewed various economic indicators, they agreed another small rate cut would be in the best interests of members, credit unions and the overall economy (Life is a Highway Jan. 25). Another cut would help the economy make a “soft landing” of slower growth but not a deep recession, the CEOs reasoned, the Pennsylvania Credit Union Association reported. Economists expect an increase in deposits as members leave the equity markets for the safety and stability of credit union share certificates, Rick told attendees. Loan growth will not be as steep, although a decrease in long-term rates may drive some growth in mortgages, he added. The interest-rate margin is not expected to improve significantly, and credit unions will continue to need non-interest income to fully cover expenses, Rick said.

Poetic justice New phish kits target wannabee scammers

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FRAMINGHAM, Mass. (1/25/08)--A new group of hackers is targeting aspiring scammers by offering them free phishing kits on the Web. A group from Morocco, called “Mr. Brain,” offers the kits from a site hosted in France. The kits show potential scammers how to set up fraudulent websites and how to trick users into giving out personal financial information. Spam e-mail templates are included, with brands such as eBay, PayPal and Bank of America targeted (ComputerWorld Jan. 23). But the information collected with the kits is sent back to e-mail accounts controlled by the group, Paul Mutton, an Internet services developer with Netcraft, told the magazine. Phish toolkits contributed to a larger number of phishing attacks during December 2007, according to RSA, the security division of EMC Corp. U.S.-based financial services institutions accounted for 62% of phishing attacks (InfoWorld Jan. 16). Credit unions continue to be attacked by phishers. Monterey County Employees CU in Salinas, Calif., reported its members received e-mails sent by scammers purporting to be from the credit union regarding tax refunds. When the users respond by clicking on the links in the e-mail, their personal information is collected (The Californian Jan. 8). The credit union’s members also were targeted by a phishing scam in July. Scammers sent e-mails claiming that the recipients would receive a $20 gift card for taking a survey. When the credit union found out about the e-mails, it contacted members and told them not to give out their personal information, the newspaper said. Vishers, who attempt to solicit personal information by phone, also continue to target credit union members. Martinsville (Va.) Dupont CU members were called last week by scammers who claimed that their credit union accounts had been suspended. To lift the suspension, scammers told the members that they needed to give out their account information (Fox 8 Jan. 15). Listerhill CU, Sheffield, Ala., also reported a vishing scam. Dorothy Keeton of Sheffield said she received a phone call from a visher who claimed her Listerhill account was overdue--but she wasn’t a member of the credit union. She called Listerhill to report the scam (WAFF Jan. 15). Listerhill officials called the police, but before they could figure out where the calls were coming from, the number was disconnected. Like many vishing scams, the phone number the vishers used showed up as Listerhill CU on caller identification, according to news reports.

Wisconsin leagues GAC breaks record

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MADISON, Wis. (1/25/08)--The Wisconsin Credit Union League's state Governmental Affairs Conference this week in Madison brought record attendance of more than 260 activists, reports the league. The GAC's Tuesday evening reception also was well-attended by lawmakers. State Rep. Jim Kreuser (D) told the group about a start-up bank in the Kenosha area that had several hundred investors, who were subsequently forcibly bought out by the top shareholders so that the bank could declare itself a Subchapter S entity. A Subchapter S exempts it from income tax under Internal Revenue Service rules. The bank needed fewer shareholders to qualify. He congratulated credit unions for making each one of their members a valued part of doing business. Sen. Jim Sullivan (D) thanked credit unions for sharing stories with him that alerted him to the need for a bill that would prohibit predators from trying to scam people out of the equity in their homes. The bill passed the Senate 33-0 and is headed for the Assembly, where he said he thinks it also will have strong support from both parties. Since he took office as a new state senator in the last election, credit unions have been instrumental in keeping him informed and in the know about how issues affect financial services, Sullivan said. Wisconsin Department of Administration Secretary Michael L. Morgan cited credit unions’ near-zero rate of mortgage delinquency and applauded credit unions for sticking to safe, traditional forms of lending. Morgan attributed that directly to credit unions' member-ownership structure as cooperatives. Several lawmakers praised credit unions for their collective sponsorship of the brass student financial education program and reinforced the importance of financial education. John McKechnie, director of public and congressional affairs at the National Credit Union Administration, reminded credit union activists to always speak to lawmakers in terms of legislation that will be good for members, not good for CUs. If the lawmakers lose the connection to the member, they may see credit unions only as yet another institution walking in and asking for something, he said. It is credit unions' member focus that gets them remembered and appreciated, he added. Wisconsin league staff shared a preview of the league's 1 With The League Resource Center--a web-based tool allowing credit unions to access information, news and events about REAL Solutions, activism and the credit union difference.

Integration social networking key to Brazil CUs

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PORTO ALEGRE, Brazil (1/25/08)--Integration of systems and operations, a cooperative structure, and attention to social networking are the keys to Brazil’s credit union system growth, according to a U.S. credit union executive currently visiting the country.
Pete Crear, left, World Council of Credit Unions (WOCCU) president/CEO, and Dick Ensweiler, president/CEO of the Texas Credit Union League, answer questions Thursday from Brazilian SICREDI credit union system staff, regarding the U.S. credit union movement’s youth and marketing efforts, as part of the WOCCU Brazilian Engagement Program. (Photo provided by the World Council of Credit Unions)
Dick Ensweiler, president/CEO of the Texas Credit Union League, is a participant in the World Council of Credit Unions Brazil Engagement Program--which gives an overview of Brazilian credit unions to a small group of U.S. credit union executives. The group spent Thursday at a national credit union system headquarters in Porto Alegre learning about and discussing personal management issues, including recruitment, human resources and growth strategies. One of Brazil’s current major credit union systems--SICREDI--is only about 11 years old, so it is experiencing exponential growth, which often typifies a young system, Ensweiler said. “In Brazil, there is total integration--all credit union branches are part of one system,” Ensweiler told News Now. “They all have common back-room solutions, marketing, identification, and human resources through a central source that results in standardization. This is opposite of what you find now in the U.S. where credit unions not only differentiate themselves from banks, but also from other credit unions.” Going forward, U.S. credit unions should re-emphasize a cooperative structure, which they have drifted away from over time, Ensweiler said. The fact that credit unions are owned by their members, should receive more focus in the public arena, along with a re-emphasis of the idea of cooperative ownership, he added. “In Brazil, membership recruitment is done by making sure that credit union members are available to talk to other people in the community,” he explained. “Credit unions in Brazil pay attention to social networking. In the U.S., credit unions don’t use social networking--such as MySpace and Facebook--enough.”

Brazil movement grows rapidly shares success

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PORTO ALEGRE, Brazil (1/25/08)--The World Council of Credit Unions (WOCCU) is helping leaders from global credit union movements challenged by slow membership growth explore the successful growth strategies of the Brazilian credit union movement. The Confederação Interestadual das Cooperativas Ligadas ao SICREDI, better known as SICREDI, one of the country’s largest credit union systems, has averaged 15% membership growth and 30% asset growth annually for the past five years.
Brian Branch, center, World Council of Credit Unions executive vice president and chief operating officer, and Rod Staatz, president/CEO, State Employees’ CU, Baltimore, talk with Evelyn Haddad, executive Assistant to SICREDI President Alcenor Pagnussatt, in front of SICREDI’s Ouro Branco Cooperative in Teutonia, Brazil, as part of WOCCU’s Brazil Engagement Program this week. (Photo provided by the World Council of Credit Unions)
“The remarkable and sound growth of the SICREDI credit union system merits study by other national systems,” said Brian Branch, WOCCU’s executive vice president and chief operating officer. “The success of SICREDI’s centralized system of staff incentives, which are based on each credit union maintaining financial performance while hitting aggressive growth targets, has lessons for us all.“ Branch is leading an international delegation studying how SICREDI maintains its growth rates. WOCCU director Alcenor Pagnussatt, president of the SICREDI confederation, is hosting the delegation. Participating credit union leaders from the U.S. include Bill DeMare, CEO of Bay Gulf CU, Tampa, Fla.; Dick Ensweiler, president/CEO of the Texas Credit Union League; Lucy Ito, vice president of research, communications and public affairs for the California and Nevada Credit Union Leagues; and Rod Staatz, president/CEO of State Employees’ CU, Baltimore. WOCCU directors and officers Dan Burns, chair of Credit Union Central of British Columbia; John Gilbert, CEO of Cuscal, Ltd. of Australia; and Pete Crear, WOCCU president/CEO also are participating in the tour. SICREDI has established a branded image of financial soundness, service quality and community outreach enables its credit unions to outpace the banks’ growth in Brazil. Participants began their tour with a briefing on the vision and structure of the SICREDI system, its use of information technology and its governance structure. SICREDI has 129 member credit unions serving 1.2 million members through 1,013 points of service in 10 Brazilian states. The system holds $6 billion in assets and has five state-level corporate credit unions. SICREDI members have access to more than 100 products and services, including savings, credit, utility bill payment services, insurance, currency exchange and credit cards.

Georgias first Latino CU one step closer to reality

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ATLANTA (1/25/08)--The proposed Georgia Family CU, a credit union marketed to Latinos, could open in Atlanta this year. The proposed credit union’s board met with a federal regulator Wednesday to discuss plans for forming the credit union(Atlanta Journal-Constitution Jan. 24). The credit union will reach out to help immigrants who came to the U.S. to work, organizer Paola Diaz-Torres told the newspaper. Banks often earn a lot of fee income from Latinos, said Rafael Morales, communications officer for the National Federation of Community Development Credit Unions. The banks don’t have products and services that are suitable for low-income people who live paycheck-to-paycheck, he told the newspaper. Aside from teaching financial basics to Latinos, the proposed Georgia Family CU aims to help small businesses, Diaz-Torres said. The proposed credit union is unique, said Anita Paul, spokesman for Georgia Credit Union Affiliates. Many of the state’s credit unions serve Hispanics but have not created a marketing strategy that targets them directly, she said. Diaz-Torres and associate Yahnia Rodriguez said they hope the credit union will have 1,500 members in three years. Diaz-Torres proposed creating the credit union in 2006 with money from IDEAS, a non-profit based in Decatur that promotes services to help the poor. Since then, she has raised $700,000, or three years of financing, but needs more financing from the community, the newspaper stated. The credit union also must be approved by the National Credit Union Administration.

NCUF names Decker social impact director

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MADISON, Wis. (1/25/08)--Consultant Tom Decker joined the National Credit Union Foundation (NCUF) staff this week as national program director for the Credit Union Center for Social Impact Management. The Credit Union Center for Social Impact Management houses NCUF’s cooperative education and related programs. Decker will continue to be responsible for the Credit Union Development Education program and the Social Impact Management program. Decker also will partner with REAL Solutions National Program Director Lois Kitsch to aggregate information, drive the program’s Web presence, and facilitate the growing demand for information, training, and expanded programs and services emerging from REAL Solutions to help credit unions serve low-income and modest means households. Decker will be located in the NCUF office in Madison. He has been an NCUF consultant for two years. He helped launch the Social Impact Management Institute and expanded the NCUF-sponsored Credit Union Development Education program. Prior to joining NCUF, Decker was president/CEO of his own consulting firm, Hickory Creek Consulting. From 2000 to 2005, he served as Credit Union National Association (CUNA) director of the Center of Executive Development, working with the Leadership Development Institute, the Community Development Credit Union Institute and the Certified Executive Program. Decker was the director of the CUNA Management School for seven years.

Texas league seeks subprime success stories

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FARMERS BRANCH, Texas (1/25/08)--The Texas Credit Union League (TCUL) is seeking success stories to help position credit unions as responsible partners helping with the U.S. economic stimulus. TCUL hopes to favorably position credit unions in the minds of consumers, the media, public opinion-makers and lawmakers as part of its advocacy efforts (LoneStar Leaguer Jan. 24). The league seeks stories about members stuck in bad loans who were able to refinance with more favorable terms and conditions through the credit union. Other stories being sought include: a member struggling with a loan payment--auto, mortgage, signature--who prevented a default by working with a credit union; or a credit union that offers member business loans and helped a small community business obtain capital when no other lender would. Texas credit unions can e-mail their members’ stories to wrprosapio@tcul.coop by Jan. 30.

Youth Week Saving Challenge site now live

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MADISON, Wis. (1/25/08)--The website for this year’s Credit Union National Association (CUNA) National Credit Union Youth Week Saving Challenge is now live. This year, registered credit unions will receive a free, customizable web page. CUNA is offering credit unions a Web page because youth are credit unions’ future, and youth go online, according to Joanne Sepich, youth week coordinator. With the Web page, youth will have access to games, activities, videos and stories in Googolplex, an online magazine about personal finance for youth. Links to the pages will be provided at registration. Registration for affiliated credit unions is free. The saving challenge will be held during National Credit Union Youth Week, April 20-26. CUNA will offer $100 in cash prizes to random youth at 10 participating credit unions. Credit unions are encouraged to set savings goals and report their results by noon CST May 1. For more information, use the link.

CEO of CU in UBIT lawsuit gets standing ovation

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MADISON, Wis. (1/25/08)--The CEO of the credit union that filed the lawsuit challenging the Internal Revenue Service's (IRS) unrelated business income tax (UBIT) received a standing ovation from her peers at the Wisconsin Credit Union League's annual Governmental Affairs Conference Tuesday. Cathie Tierney, CEO of Appleton, Wis.-based Community First CU, talked about the events that led up to the lawsuit before a record 260 credit union activists.
Wisconsin credit unions gave Community First CU CEO Cathie Tierney a standing ovation for filing a lawsuit against the Internal Revenue Service seeking clarification of the unrelated business income tax at the Wisconsin Credit Union League's Governmental Affairs Conference. (Photos provided by the Wisconsin Credit Union League).
When her board first made the decision to sue, Tierney said the thought of suing the IRS was intimidating. However, she was inspired when the group re-read the credit union's mission statement: Do the Right Thing. "We knew we had to go through with it--for our members and for the credit union movement"--because it was the right thing to do, she told the group. The $916 million asset credit union seeks a refund of $54,000 that IRS said it owed, based on the sale of credit life and credit disability insurance and guaranteed auto protection (GAP) insurance. The suit seeks a legal clarification about what may be subject to IRS' UBIT rule. The suit has the support of the league, the Credit Union National Association, CUNA Mutual Group and the National Association of State Credit Union Supervisors (News Now Jan. 23).

CU System briefs (01/24/2008)

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* RICHARDSON, Texas (1/25/08)--More than 245 employees at Texans CU raised $225,000 for United Way during its weeklong 2007 campaign, with 33 individuals investing a minimum of $1,000 donation each. The credit union matched all employee contributions dollar for dollar and member contributions by 50 cents to the dollar. During the past 10 years, Texans has given nearly $800,000 to United Way. Texans President/CEO David Addison is active with the campaign cabinet. The marketing team--from left, Lisa Krenek, Erin Ortiz, Jill Rasmussen and Melissa Wegner--pose while hosting a "thank you" pizza party for staff. (Photo provided by Texans CU) … * HARAHAN, La. (1/25/08)--The Louisiana Credit Union League has promoted Jennifer Green to assistant vice president. In her new position, Green will work with the league's education and technology departments. Also, she will assist credit unions with research and information on compliance, regulatory, technical and operational issues. Green, who has been with the league since 2002, previously served as director of education and communication (eNews Jan. 23) … * FAIRBORN, Ohio (1/25/08)--A routine traffic stopped resulted in the arrest of two men charged with robbing Wright-Patt CU Tuesday afternoon (WHIOTV.com Jan. 23). Jeffrey Mays, 36, was arrested after allegedly fleeing the car with police giving chase. Later, police apprehended Rondell Lynch, 20, hiding in a basement of a home. Police recovered money and drugs at that scene. Two masked men waving guns had entered the credit union shortly after noon. No one was hurt in the robbery (News Now Jan. 24) … * HARAHAN, La. (1/25/08)-- Peggy Clemens, former manager of Firestone Lake Charles FCU, Sulphur, La., died Jan. 16, reports the Louisiana Credit Union League (eNews Jan. 23). Clemens began working in the credit union movement in 1972, working half days at CSE FCU and the other half for Firestone. She became manager of the latter in 1992 and retired in March 1997 … * VIRGINIA BEACH, Va. (1/25/08)--Myron Boyd Jones, Ph.D., former board member of Norfolk Teachers Association FCU, Norfolk, Va., died Jan. 19. He was 98. From 1947 to 1951, Jones was principal of Robert Moton High School, Farmville, Va., but was terminated in 1951 when students staged a walkout to protest the school's conditions. The event resulted in the NAACP filing a lawsuit, Davis v. Prince Edward County, which became a part of Brown v. Board of Education, which resulted in the landmark U.S. Supreme Court desegregation decision. Dr. Jones later taught mathematics and physics at Alabama State College, Maryland State College, St. Paul's College, and Norfolk State University, serving as department head of the last three. He is survived by his wife, a daughter, three sons and nine grandchildren (The Virginian-Pilot Jan. 24) … * OAK GROVE, Ky. (1/25/08)--Susan Laney, 46, an employee of Fort Campbell FCU, Clarksville, Tenn., died Jan. 14 after a month-long illness (The Leaf Chronicle Jan. 17). She was a 2003 graduate of the Southeastern Regional Credit Union School. In 1999, she was named "Supervisor of the Year" at the credit union. She is survived by two daughters. The credit union has set up a memorial fund for the family …

Brazil schools CUs teach cooperative spirit

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RIO GRANDE, Brazil (1/24/08)--A small group of U.S credit union executives participating in the World Council of Credit Unions (WOCCU)--sponsored Brazil Engagement Program this week visited a credit union and a school Wednesday.
Children at a rural Brazilian school perform a dance Wednesday that exemplifies cooperative ideals inherent in the credit union philosophy. The children performed for a small group of U.S. credit union executives, who are visiting the country this week as part of the World Council of Credit Unions' Brazilian Engagement Program. (Photo provided by World Council of Credit Unions)
At the credit union, in a rural part of the Brazilian state of Rio Grande, the group learned how Brazilian credit unions work with schools to attract students who may eventually become members of the credit union, Bill DeMare, president/CEO of Bay Gulf CU and a trip participant, told News Now. Bay Gulf CU is located in Tampa, Fla. “In the U.S., many of the schools put credit unions in the school and they are run by students,” DeMare said. “In Brazil, they are teaching the philosophy of the credit union.” The Rio Grande School focuses on ecology, culture and the arts, and the students “showed off” their garden and the crops they grew, he added. “The credit union is supporting these endeavors, so students in grades one through eight learn about the cooperative philosophy,” DeMare explained. “So then, when they are old enough to become a member, they will want to go to a credit union or a cooperative to become a member because they understand the philosophy of a cooperative. “It’s a unique way of attracting people into a credit union,” he concluded. The most impressive aspect of Wednesday’s excursion was how well-integrated the Brazilian credit union system makes the credit union in the lives of its members, said Lucy Ito, vice president of research, communication and public affairs for the California and Nevada Credit Union Leagues. Ito also is a trip participant. “The credit union system actually is forecasting what it needs to do for credit unions and the country--not just now--but 25 years from now,” Ito said. “It’s a very ambitious educational program. They are teaching citizenship, social responsibility and cooperativism. “The schools are educating kids about responsible citizenship and the cooperative spirit,” she added. Watch for further reports this week from News Now on the Brazil Engagement Program.

62 of CUs banks surveyed offer HSAs

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MINNEAPOLIS (1/24/08)--The majority of nearly 1,200 financial institutions, including credit unions, surveyed said they are offering Health Savings Accounts (HSAs) to their members/customers. Customer demand is the top reason that financial institutions are offering HSAs, according to a Wolters Kluwer Financial Services survey (PR Newswire Jan. 23). Of the survey’s respondents, most of whom were credit unions and community banks, 62% said they offer HSAs. More than one third who said they didn’t, plan to offer HSAs in the next three months. The top reason for institutions to offer HSAs was customer demand (80%). HSAs ability to give financial institutions a way to generate new accounts was second (58%). Other significant reasons were: increasing cross-selling opportunities (51%), and growing revenue (51%). About 24% of the total respondents said they had no plans to offer HSAs or were not sure, citing lack of understanding of HSAs, lack of management interest in offering HSAs, and lack of customer demand. “Banks and credit unions know HSAs present them with a significant business opportunity and additional way to better serve their customers,” said Dave Roy, vice president and general manger of banking at Wolters Kluwer Financial Services. “But it also is evident that this market is still relatively untapped, and the greatest potential lies ahead, especially as healthcare costs continue to climb, and consumers look for more effective ways to save and finance those costs.”

Calif. league letter on T-report defends tax status

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RANCHO CUCAMONGA, Calif. (1/24/08)--California Credit Union League President/CEO Bill Cheney defended credit unions' tax-exempt status in a letter to the editor of a California business publication. The letter responded to an article about a recent U.S. Department of Treasury report on corporate tax reform. Cheney's letter appeared in the Jan. 18 issue of Silicon Valley/San Jose Business Journal and referred to a Jan. 11 article, "Credit union leaders' patience taxed by report recommendation." Credit unions "continue to seek clarification of statements from a recent U.S. Department of Treasury report on corporate tax reform about our well-deserved exemption from federal income taxes," Cheney wrote. The department "is right to require that a tax exemption granted to any organization or industry is good public policy and has value for consumers," Cheney said. "It is wrong to look to credit unions as an income stream, and Treasury should pay less attention to the hollow complaints from the banking industry about unfair competition." He outlined the history of the tax-exemption in Congress, starting with the decision in 1937 to exempt credit unions "because of our unique structure and role in the financial services industry." Congress confirmed the exemption in 1951 and 1998, he said, adding that every President in modern times has supported it. "Credit unions were created to 'promote thrift and provide loans for provident purposes,' and despite statements to the contrary by the banking industry, credit unions continue to provide these essential services to working Americans even as we evolve to meet growing consumer financial services needs," Cheney wrote. "The banking industry refuses to recognize that the credit union tax exemption is based on structure--not size," he said. "Their argument otherwise is laughable in the face of record-breaking banking industry growth year after year, and as more than 2,300 banks now operate under Subchapter S of the IRS Code and thus do not pay corporate taxes--a fact Treasury overlooked," he said. Credit unions provide healthy competition and encourage other financial institutions to work harder to keep customers satisfied. Otherwise, "banks could charge higher fees, pay lower interest on savings and increase loan rates," Cheney said. He cited the Credit Union National Association's studies indicating bank customers nationally save more than $4 billion annually because of credit union competition that forces banks to keep rates competitive. "That's good news for consumers, communities and businesses alike," he added. He also discussed the differences in how banks and credit unions generate capital. "Nothing stops banks from adopting the credit union model, yet not one bank ever has," Cheney said. "Maybe it's because bank directors are paid while credit union board members serve as volunteers.

Nations oldest CU celebrates 100 years

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MANCHESTER, N.H. (1/24/08)--The nation’s oldest credit union will celebrate 100 years of operations in 2008. St. Mary’s Bank, a $615 million asset, Manchester-based institution, will unveil a new television ad that honors the credit union’s first century as a long-standing member of Manchester and New Hampshire. The new ad, which will feature people and images of the city, will premiere during Sunday’s television broadcast of “Extreme Makeover: Home Edition,” which was filmed in Manchester late last year. “We’re proud and excited to have our 100th anniversary ad air for the first time during a program featuring the city of Manchester,” said Ronald J. Rioux, St. Mary’s Bank president/CEO. “This really is the kickoff of our 100th birthday party.” When St. Mary’s opened it doors in 1908, it became the first credit union in the nation. The credit union’s purpose was to provide banking services to Manchester’s growing working-class populations. Today, St. Mary’s bank is still a member-owned, not-for-profit credit union dedicated to helping New Hampshire’s families and businesses. The credit union will host public events to commemorate the milestone throughout 2008, Rioux said.

CUNA Boards Streifel testifies for data breach bill

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FEDERAL WAY, Wash (1/24/08)--Credit Union National Association (CUNA) Board member Susan Streifel testified Tuesday for Washington state legislation that would make the costs associated with data breaches like the massive TJX Cos. breach the responsibility of the data breacher. Streifel is president/CEO of Woodstone CU, Federal Way. She told Washington state House and Senate committees that the credit union incurs significant costs to protect its members as a result of data breaches, even when there is no actual fraud. “Taking these aggressive steps to protect our members comes at a cost,” said Streifel. “If someone’s careless actions result in a financial loss, they should have to pay for it.” The hard cost of reissuing a plastic card is estimated at about $20; however, the cost of reissuance, member/customer care and maintenance, including soft costs, is estimated to be up to $100 and $180 per account. Two bills, SB 6425 and HB 2838, were introduced Jan. 8, during the opening days of the 2008 state legislative session. They are sponsored by Rep. Brendan Williams (D-22) in the House and Sen. Rosa Franklin (D-29) in the Senate. Written by the Washington Credit Union League (WCUL), the proposed legislation requires negligent data breachers to reimburse card-issuing financial institutions for costs associated with protecting their members or customers after a data breach. The bill would also deter financial fraud and identity theft in three ways:
* By requiring businesses accepting plastic cards to encrypt or dispose of sensitive consumer data promptly; * By making businesses that store sensitive consumer data but fail to meet basic security standards responsible for the costs of consumer notification and card replacement; and * By establishing a safe harbor for businesses that meet basic security standards.
“The league was delighted to have someone as passionate as Susan testify on behalf of this bill,” says WCUL President/CEO John Annaloro. “As a point of sound public policy, this proposed legislation provides a powerful financial incentive for data custodians to live up to generally accepted security standards.” SB 6425 and HB 2838 encourage all financial institutions to take steps to quickly re-issue compromised cards and monitor accounts, helping protect consumers from financial fraud and identity theft before then can occur. Washington state has enacted several statutes the past five years that help consumers protect themselves from identity theft and financial fraud. In 2005 the state legislature was one of the first to require data breachers to notify those affected by the breach. In 2007, the state passed credit freeze legislation allowing consumers to lock down their credit reports. Both bills were supported by WCUL. Bills similar to SB 6425 and HB 2838 were introduced in Minnesota, Massachusetts, Texas and California in 2007. However, the Minnesota bill was the only one enacted into law. Stacy Augustine, WCUL senior vice president and general counsel says that despite the uphill battle, the Data Breach Reimbursement Bill is showing promise of advancing in both the House and Senate. “We have some work to do as we move towards a compromise bill that will be accepted by all stakeholders,” says Augustine. “Nobody likes the idea of more liability, so we’ll do the best we can to make the bill as palatable as possible for retailers and small business. In the end though, we’re simply not going to agree on who should bear the burden for this type of negligence.” At least one more hearing in each house will need to take place before either bill makes it through the legislative process.

Missouri regulator OKs first FOM app under new law

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JEFFERSON CITY, Mo. (1/24/08)--The Missouri Division of Credit Unions has approved its first field-of-membership (FOM) expansion application since the state General Assembly passed a new FOM bill in 2007. The regulator approved an application Jan. 18 for Alliance CU in Fenton. The approval will allow the credit union to serve individuals who live or work in Jefferson County (CourierNet Jan. 23). Alliance’s application comes after the state passed a credit union FOM bill in August to allow state-chartered credit unions to expand geographically. “The Missouri Division of Credit Unions quickly and efficiently developed the necessary procedures to implement the new law,” said Rosie Holub, Missouri Credit Union Association president/CEO. “The statute clarified procedural requirements and we applaud the division’s diligence in developing procedures that take unnecessary burden off credit unions. Missouri credit unions can now get back to the business of serving members and reaching out to provide credit union service to the state’s consumers,” Holub added. Jefferson County is underserved by credit unions, according to Alliance President/CEO Dennis Sommer. “We can now move forward with our expansion plans, reaching out to potential members located in northern Jefferson County near our Fenton headquarters,” he said. The FOM bill is necessary to prevent state-chartered credit unions from converting to federal charters, said bill sponsor State Sen. Delbert Scott (R) during a hearing April 11. He estimated that the state would lose hundreds of thousands of dollars if state-chartered credit unions converted to a federal charter (News Now April 17).

Filenes Blueprints for Innovators released

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MADISON, Wis. (1/24/08)--The Filene Research Institute has released its latest edition of Key Findings: Blueprints for Innovation, which summarizes seven innovations that credit unions can use to help members simplify their finances and overcome financial obstacles. The edition, written by Denise R. Gabel, Filene chief innovation officer, presents ideas on: providing members with stress-free financial experiences, addressing credit union competition, using technology and media to deliver services to members, and allowing adaptation by individual credit unions or communities. The seven innovations, introduced by Filene’s Ideas, Innovation and Implementation (i3), include:
* Auto Savings, which outlines a new set of products to make saving easy and attractive by bundling consumption and savings. * The Savings Revolution, which takes saving one step further by tapping into the power of support, with support groups. This socially driven innovation uses reality television, online interaction and individual planning to help members reduce debt, increase savings, and get control of their financial lives. * Virtual Finance, which addresses the changes in ways generations interact with their financial institutions. It aims to provide young Internet users with financial education and information about credit unions. * LOT$A MOT$A, an interactive money laboratory intended to help make learning about finances fun for children. Its classes and exercises can help children develop money-management skills and stress the importance of developing a relationship with a credit union. * Women: A Strategy for Success, which aims to help women credit union members simplify their financial lives. * Community Impact Center, a centralized resource to help credit unions approach community economic development in underserved markets to create jobs, provide affordable housing, elevate the quality of medical care, and enhance educational opportunities. This innovation navigates the process of establishing the necessary legal entities; identifies funding sources; writes grant proposals; and accesses community impact consulting, foundation services, and public relations assistance. * Auto Resource Center, which helps members make auto purchases and manage vehicle-related tasks over the entire life of their auto with a set of Web-based tools.
For each innovation, the report provides marketplace opportunities; solutions credit unions can provide; target markets; marketing tactics; operational and other considerations; proof of concept; reports on the status of each; pilot tests; and how to get started.

Michigan league praises state action on foreclosures

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LANSING, Mich. (1/24/08)--Michigan Credit Union League President/CEO David Adams praised Michigan’s governor for publishing a document to help consumers avoid foreclosures. Adams wrote a letter to Gov. Jennifer Granholm pledging credit unions’ support, and also expressed a desire to find ways for credit unions and other depository institutions to become more active in programs implemented by state government (Michigan Monitor Jan. 22). Granholm and her administration published a document that explains eight ways to help consumers during the mortgage crisis. “The Michigan Protocol to Assist Homeowners Facing Potential Foreclosure” was issued after the governor and members of her administration met with some of the nation’s leading mortgage servicers “The Granholm administration has worked with urgency to find innovative ways to help homeowners facing possible foreclosure,” Adams said. “Most of the measures laid out in this protocol are a large part of the credit union mission, but we urge credit unions leaders to take a serious look at them to see how they fit into their own practices.”

CU System briefs (01/23/2008)

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* (1/24/08)--Sarah Snell Cooke has been named editor-in-chief of CU Times, the newspaper announced Wednesday. Cooke joined the weekly newspaper's staff on Sept. 1, 2000, as a Washington reporter and became senior Washington reporter in October 2004. She has served as interim editor since December, when former editor/publisher Paul Gentile left for a position as president/CEO of the New Jersey Credit Union League. Tom Greve is serving in the publisher role. Before joining the Times, Cooke wrote for a weekly newspaper, Credit Union Regulatory Insider … * KALAMAZOO, Mich. (1/24/08)--Bronson Methodist Hospital's newly renovated North Pavilion and the Neonatal Intensive Care Unit will soon have a room named for the Kalamazoo Chapter of Credit Unions. The chapter donated funds the past two years from its annual charity golf outing for the project. Chapter members at a recent visit to the unit included, from left: Front row, Tammie Birdsall, First Community FCU; Cris Lytle, Kalsee CU; Lindsay Smith, Allegis CU; Amy Remmert, Citizens CU; and Carolyn Miller, Michigan Credit Union League; Back row, Jan Evenhouse, Allegis CU; Mike Bridges, Michigan league; Pat O'Connor, Consumers CU; Rudy Callen, Kalsee CU; John Sink, Allegis CU; and Ron Bigelow, Citizens CU (Photo provided by the Michigan Credit Union League) ... * PHOENIX (1/24/08)--Desert Schools FCU, based in Phoenix, has donated $300,000 to One Darn Cool School at Phoenix Children's Hospital, a $90,000 increase over last year's donation. The $3.092 billion asset credit union raised the funds in events such as change drives, a bowl-a-thon, employee barbecues and a golf tournament. The tournament raised $175,000 in a single day for the hospital (The Arizona Republic Jan. 19) … * WATERLOO, Iowa (1/24/08)--Christina Marie Anderson, 29, was sentenced Jan. 17 to probation for taking $20,500 while she was employed at Midwest Utilities CU, Waterloo. The former employee pleaded guilty to a single count of first-degree theft and was sentenced to 10 years in prison suspended to probation. According to court records, Anderson was accused of taking the amount between August 2005 and September 2006 by falsifying her daily ledger and pocketing the difference 17 times. She was arrested in August 2007. The credit union has $2.9 million in assets (Waterloo/Cedar Falls Courier Jan. 22) … * PEORIA, Ill. (1/24/08)--Adelle F. Herron, a former assistant manager at Peoria Hiway CU, pleaded guilty Friday to embezzling at least $525,000 from the credit union between 2004 and 2006. Herron, 30, admitted falsifying accounts and teller entries to make unauthorized loans, deposits, check disbursements and transfers for her own use. She also admitted destroying records to conceal the theft. Herron faces up to 30 years in prison and/or a fine of up to $1 million. Sentencing is scheduled for May 2. (YouNewsTV at Week.com Jan. 18) … * DAYTON, Ohio (1/24/08)--Two armed men robbed a branch of Wright-Patt CU shortly after noon Tuesday (Dayton Daily News Jan. 23). One man held a semiautomatic handgun on those inside the $1.2 billion asset credit union while the other jumped the counter and took cash from teller drawers, said Dayton police. They fled with an undetermined amount. No shots were fired and no one was hurt …

League chides bankers for distorting UBIT lawsuit facts

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PEWAUKEE, Wis. (1/23/08)--"There they go again, distorting the facts to promote their anti-consumer, tax-increase agenda." Brett Thompson, president/CEO of the Wisconsin Credit Union League, is referring to a press release from the Wisconsin Bankers Association (WBA) (see link). The release says Appleton, Wis.-based Community First CU's lawsuit against the Internal Revenue Service (IRS) for overpayment of taxes represents a larger attempt by Wisconsin credit unions to avoid paying taxes. "That's simply not true," says Thompson. "Wisconsin credit unions pay millions in taxes annually. The lawsuit isn't about money, but serving members." The lawsuit seeks a refund of $54,000 that IRS said the $916.2 million asset credit union owed, based on the sale of credit life and credit disability insurance and guaranteed auto protection (GAP) insurance. The lawsuit seeks a legal clarification about what may be subject to IRS' unrelated business income tax (UBIT) rule. The IRS erred in apply UBIT to these services because they are financial services that help mitigate losses to the credit union, enable it to grant loans and further credit unions' mission to serve members, Thompson says. The suit has the support of the league, the Credit Union National Association, CUNA Mutual Group and the National Association of State Credit Union Supervisors. They support the suit because it is essentially an effort based on principle, Thompson says. "Like all credit unions, Community First exists to offer financial products that contribute to the financial well-being of its member-owners. The services for which Community First paid the unrelated business income tax are in fact central to that mission--and to the mission of all credit unions who offer them," Thompson says. WBA misses the point, failing to address the UBIT issue entirely and instead continuing to refer to its own flawed, self-funded study of credit unions to push for a tax increase agenda. WBA's assertion that Wisconsin credit unions deny the state millions in tax revenue further jumps the tracks, said Thompson. The lawsuit, filed in the Eastern District Federal Court, is a federal tax issue--not a state tax issue--he said. Thompson noted that Wisconsin banks are in the hot seat on state taxes. More than 87 Wisconsin banks challenged the state Department of Revenue the past few years when the agency said they used subsidiaries with no purpose other than to avoid state taxes. Banks reached settlements with the agency. "Some of the state's largest banks paid no taxes at all," he said. "The WBA would do well to heed the adage to refrain from throwing stones when you live in a glass house."

Robbery suspect killed in shootout identified

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NILES, Mich. (1/23/08)--Devarence Damon Kimbrough, 22, of Elkhart, Ind., has been identified as the suspect who was shot and later died in an attempted armed robbery of Berrien Teachers CU Friday (Niles Daily Star Jan. 21). Kimbrough was allegedly shot during the attempted robbery Friday morning by a security guard. Two men entered the credit union at 10 a.m. and exchanged gunfire with the guard, both inside and outside of the credit union. At least five shots were fired, police told the (Tribune Jan. 18). After the shooting, the two suspects fled the credit union in a car driven by a third suspect. They dropped off Kimbrough at South Bend Memorial Hospital. Kimbrough later died during surgery, police told the newspaper. Authorities are still seeking two suspects in connection with the attempted robbery of the $219 million asset, St. Joseph, Mich.-based credit union.

Washington CUs flood state Capitol for data breach bill

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FEDERAL WAY, Wash. (1/23/08)--More than 100 credit union representatives met with Washington state legislators Thursday to encourage them to pass proposed data breach reimbursement legislation written by the Washington Credit Union League. The proposed bills, Senate Bill 6425 and House Bill 2838, were introduced Jan. 15. The bills would make the costs associated with data breaches, such as the TJX Cos. breach, a responsibility of the merchant. The legislation is sponsored by State Rep. Brendan Williams (D) in the House and State Sen. Rosa Franklin (D) in the Senate. Thursday’s visits provided an opportunity for Washington’s credit union industry to become familiar with the importance of legislative advocacy. “Approximately half of the people participating were first-timers,” said Washington league president/CEO John Annaloro. “This gives our 2008 legislative efforts a great start and shows the wide interest among Washington credit unions in becoming active in the lawmaking process.” In addition to the proposed legislation, credit unions also discussed Biz Kid$ and why credit unions support the children’s financial literacy television program. Prior to the visits, Stacy Augustine, league senior vice president and general counsel; and Mark Minickiello, vice president of legislative affairs, helped the attendees improve their lobbying skills. The league staff provided background on the bill and other bills of interest. “Our goal for the state Governmental Affairs Conference is to build and solidify relationships with our elected officials,” Augustine said. “And not just for our current session, but for legislative sessions 20 or 30 years from now.”

CU survey addresses challenges growth issues

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BOSTON (1/23/08)--About 36% of credit unions surveyed say their biggest challenge is lower profit margins, while 34% say they struggle to identify ways to attract new members, according to a report released Monday on the evolution of credit unions. The report, “The Evolution of the U.S. Credit Union Market,” by Aite Group, analyzes the current credit union market, and credit unions’ changing strategies and product offerings. Aite Group surveyed 101 credit unions with more than $100 million in assets. While credit unions reported their challenges, 33% of those surveyed also indicated that they are planning charter conversions to savings institutions, thrifts or banks. Head-to-head competition with banks, increasing demand for more sophisticated portfolios from members and other factors have caused credit unions to change their strategies, the report noted. More than half of credit unions surveyed said they believe that offering superior member service has been the most successful strategy for attracting new members, and 63% said they consider the branch to the be the most importance member-service channel. New market conditions are forcing credit unions to abandon their strict membership guidelines and competitive strategies based primarily on price. Surviving today’s competitive marketplace requires flexibility and “in the case of credit unions, it also sometimes means expanding well beyond their roots,” said survey author Christine Barry. Technologically, credit unions continue to offer new products and enhance online capabilities by focusing attention on the user experience, the survey stated. Credit unions are often more advanced than banks of similar sizes in regard to online capabilities and online adoption--about 57% reported that they achieved online adoption rates between 30% and 49%. The survey is part of a larger study, in which Aite studied 201 U.S. credit unions.

More scams reported in two states

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PLYMOUTH, Mich., and HARRISBURG, Pa. (1/23/08)--Credit unions in Michigan and Pennsylvania have reported that their members have been targeted by vishing scams and fraudulent e-mails purporting to be from the U.S. Department of Justice (DOJ). Monroe Community CU and Monroe Area FCU, both in Monroe, Mich., reported that vishers have contacted their members, asking for personal financial information. Vishers contact victims by an automated phone dialer, with the intention of soliciting personal financial information from them by telling them that their credit cards have been used illegally or suspended (Michigan Monitor Jan. 22). Some vishers have “spoof” caller identification, so members may see the name of their credit union on the identification, but there is no guarantee that the call is legitimate, said Todd Mason, CU Village president and chief operating officer. Credit unions with broad fields of membership, such as Monroe, are targeted because the odds of finding a real credit union member when making random phone calls are high. Credit unions need to reinforce and repeat the message to their members that they should not share personal account information over the phone or online, Mason said. The Pennsylvania Credit Union Association (PCUA) also received calls from credit unions saying their members had received e-mails from the DOJ. The e-mails tell recipients they have been the subject of complaints filed with the DOJ and forwarded to the Internal Revenue Service. The e-mails contain an attachment with the alleged complaint, according to the association (Life is a Highway Jan. 22). The DOJ is urging recipients not to open attachments because they may contain malicious software. The agency also has placed an alert on its website stating that the e-mail messages are fraudulent and should be deleted. Credit unions receiving the messages should contact the DOJ or PCUA, said PCUA.

WOCCU leads group-study of Brazil CU growth

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PORTO ALEGRE, Brazil (1/23/08)--The World Council of Credit Unions (WOCCU) is leading a small group of credit union executives on a tour this week of Brazil’s credit union system growth as part of the WOCCU-sponsored Brazil Engagement Program.
From left: Lucy Ito, vice president of research, communication and public affairs for the California and Nevada Credit Union Leagues; Pete Crear, CEO of the World Council of Credit Unions (WOCCU); and Bill DeMare, president/CEO of Bay Gulf CU, Tampa, Fla., listen to a speaker talking about Brazil's credit union governance system Tuesday in Porto Alegre, Brazil, as part of the WOCCU-sponsored Brazil Engagement Program going on this week. (Photo provided by World Council of Credit Unions)
“We’ve had inquiries from the U.S., Canadian and Australian credit unions about learning lessons from around the world to achieve higher membership growth that doesn’t undermine safety and soundness,” Brian Branch, WOCCU executive vice president and chief operating officer, and tour leader, told News Now. There generally are three engagement programs per year--small groups from the U.S. and usually Canada who go to a country to examine credit unions issues, he added. In 2007, programs included China and Peru. In 2008, there will be three: the present one in Brazil, and programs in Poland and Chile. Brazil’s credit union industry has seen 15% membership growth over the past five years, as well as 30% asset growth, while holding capital-to-asset ratios steady, Branch said. The purpose of the trip is to “learn how Brazil credit unions maintain safety and soundness” while achieving solid growth, Branch said. In Brazil, the centralized federated credit union system has 103 credit unions, with the policies for the country’s credit unions set by the central Federation. “The Federation designs the credit unions’ products and helps them to manage their growth,” Branch explained. “Today we spent quite a bit of time examining the centralized credit union system in Brazil and how it works,” Branch said about Tuesday’s agenda. In Porto Alegre, the group was at Federation headquarters. The Federation is an umbrella organization for Brazil credit unions--similar to the manner in which the Credit Union National Association serves U.S. credit unions, Branch explained. The group learned about the tradeoffs between creativity versus soundness, and individual credit union liberty versus efficiency. “These tradeoffs define Brazil’s branding strategy for its credit unions, and it is the framework for its growth strategy,” Branch said. “The branding strategy is how Brazil sells credit unions on the need for a consistent, quality image. This is part of the credit union’s branding strategy, which in turn leads to growth.” Watch for further reports this week from News Now on the Brazil Engagement Program.

CU System briefs (01/22/2008)

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* MUSKEGO, Wis. (1/23/08)--Corporate Central CU has promoted Jesse Kohl to director, business development, the corporate announced Tuesday. He will oversee the business development efforts for the corporate's Midwest market growth. Kohl joined the corporate's staff in 2002, assisting member credit unions with their correspondent service needs and securing new members throughout the Midwest as a relationship development officer … * MEDFORD, N.Y. (1/23/08)--William J. O'Brien has been named president/CEO of Suffolk FCU, announced Martin Haley, the credit union's chairman of the board. O'Brien previously served as the chief operations officer of NuVision FCU, Huntington Beach, Calif., where he managed the credit union's retail branches, lending, call center, marketing and investment services. He also oversaw the execution of a new brand and image campaign, and the development of the credit union's commercial lending division at Kinecta FCU, Manhattan Beach, Calif. … * BELLEVILLE, Ill. (1/23/08)--Montez Fuller, 26, of Madison, Ill., was sentenced to 47 years in prison for the armed robberies of two Madison County credit unions. He was convicted in August of being one of four men who robbed Granite City Steel FCU on June 5, 2006, and the Olin Community CU in Alton on June 16, 2006 (Belleville News-Democrat Jan. 19). Fuller also was sentenced to five years of supervised release and ordered to pay $400 mandatory special assessment, plus $26,802 in restitution to Granite City Steel and $31,514 to the Olin Community CU. During the robberies, Fuller waved a firearm. He fired shots during the Alton robbery, prosecutors said … * ALBANY, N.Y. (1/23/08)--A man convicted of submitting a false application for an $800,000 mortgage loan at Sunmark FCU was arrested Thursday in Missouri after skipping two sentencing hearings. Robert Bove, 38, was arrested at a hotel in Booneville, Mo., and returned to Albany for a hearing this week. In October he pleaded guilty to one count of attempted grand larceny in the second degree and one count of criminal possession of a forged instrument in the second degree. He faces two to five years in prison per count (Times Union Jan. 19) … * Irondequoit, N.Y. (1/23/08)--Police arrested Gary Beshures Thursday in connection with a robbery at ESL CU, Irondequoit, and a subsequent car-jacking of a woman at a nearby Delta Sonic restaurant. The car was abandoned, and Beshures is accused of stealing another vehicle before his arrest in Greece, N.Y. He is charged with criminal possession of stolen property, first-degree robbery and petit larceny related to the credit union incident, and second-degree robbery and grand larceny for the car-jacking (Inergize Digital and Democrat and Chronicle Jan. 18) …

A year later TJX breach implications widespread

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BOSTON (1/22/08)--It was one year ago last Thursday that the TJX Cos. disclosed the largest credit and debit card data breach in history. The implications of that breach are widespread. That breach set off a chain of lawsuits from consumers and financial institutions, including credit unions who footed the bill for notifying members and replacing their compromised cards. It instigated a number of bills in state and federal legislatures to protect consumers' data and make merchants more responsible for the data they handle. The event, coupled with a significant increase in sophisticated attempts to phish personal information from consumers, also changed the way credit unions and their members deal with security issues. More credit unions are taking precautions by offering credit monitoring identity theft services and security solutions. The Framingham, Mass.-based retail company, which owns T.J. Maxx and Marshall's, figures the intrusions began in mid-2005 at two Marshall's stores in Miami that had wireless Local Area Networks (LANs). Eventually at least 45.6 million card numbers were compromised and card companies such as Visa and MasterCard estimate that as many as 94 million cards were exposed. Computerworld, looking at the one-year anniversary of the breach, said security managers have five take-aways from the incident (Jan. 17):
* Breach disclosures don't always affect a company's revenue or stock prices. Customer and investor confidence in TJX was "largely unshaken." When the breach was disclosed its stock was worth about $30 per share. Its closing price on Thursday was just over $29 per share. Its sales for the 48-week ending Jan. 5 increased 4% from the same period a year ago. * Breach disclosures are still costly. TJX spent or set aside in the past year about $250 million for costs related to the breach. * The Payment Card Industry (PCI) Data Security Standard remains a work in flux. The industry's rules require merchants to implement 12 broad security controls for protecting customer data. However, many companies still aren't in compliance. Court documents indicated TJX wasn't compliant with nine of the controls. * The breach exposed card-payment issues that exist between merchants and their financial institutions and credit card companies. Credit unions and smaller banks have lobbied several state legislatures to pass new laws requiring merchants to reimburse them for the costs involved in notifying member/customers and reissuing cards. Retailers are fighting these bills. * The perpetrators of the breach are still out there. Only a few people have been arrested for using card numbers stolen during the breach. The hackers are still free and likely will strike again.

Judge signs off on Centrix Chapter 11 plan

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DENVER (1/22/08)--A U.S. Bankruptcy Court judge Thursday approved the outline of auto lender Centrix Financial LLC's plan to exit Chapter 11 bankruptcy and repay its creditors. The ruling by Judge Elizabeth E. Brown in the U.S. Bankruptcy Court in Colorado means the liquidation plan can be sent to creditors for a vote (Associated Press via chron.com Jan. 18). The Centennial, Colo.-based Centrix, which financed subprime auto loans for credit unions, proposes to pay creditors with proceeds from any successful litigation and from the remaining proceeds from selling its assets to Kendrick CF Acquisition Inc, now known as Peak 5. That sale closed on Feb. 23, 2007, at roughly $30 million. Unsecured creditors' recovery will likely depends on whether Centrix can pursue claims against its CEO, Robert E. Sutton, who helped establish Kendrick, said AP. The company said the claims against Sutton and other non-debtor insiders and entities are critical assets of the debtors' estates and likely will be the key source of any meaningful recovery. Centrix and its creditors committee identified potential claims of more than $100 million against Sutton for fraud and breach of duty to the company and its creditors, according to AP. It proposes to repay all administrative claims, including fees charged by professionals it retained during the case, in full and estimates these at $3.3 million. Centrix and its seven affiliates under bankruptcy protection plan to consolidate into a single entity, with Centrix assuming the affiliates' assets and liabilities. It will pool assets to repay each affiliate's creditors. The company and its committee of unsecured creditors supported the plan because the affiliates have intertwined, dependent relationships and operated together as a single business enterprise. Creditors can vote on the plan through March 4. Brown will conduct a hearing 10 days later to consider whether to confirm the plan Centrix was placed under involuntary Chapter 11 protection on Sept. 15, 2006 by creditors IFC Credit Corp., Suntrust Leasing and Wells Fargo Equipment Finance Inc. It owed them a combined $4.6 million in lease payments. Several days later it and its affiliates filed voluntary petitions for Chapter 11. According to News Now (Jan. 23, 2007), more than two-thirds of Centrix's portfolio is owned by about 230 credit unions across the nation. It has partnered with more than 300 financial institutions and underwrote more than 250,000 loans totaling $4 billion (News Now Sept. 6, 2006).

Ohio CU modernization moves forward

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COLUMBUS, Ohio (1/22/08)--The Ohio Credit Union League (OCUL) presented testimony in support of a bill to modernize the administration, operation and governance of Ohio’s state-chartered credit unions. John Kozlowski, OCUL general counsel, testified Jan. 15 before the Ohio Senate Finance and Financial Institutions Committee in favor of Ohio Senate Bill 247. The legislation’s new provisions were not in the 2006 Credit Union Member Service Powers Bill (HB 81). SB 247 provisions relate to operational issues, such as ballots, merger requirements, payable-on-death accounts, record keeping and representation requirements for the Ohio Credit Union Council (eLumination Newsletter Jan. 16). The bill sets forth time limits on how long certain records should be kept by a credit union, eliminates the written ballot approval and proxy process by the Superintendent of Credit Unions each time a ballot is used for voting--provided the ballot format complies with guidelines from the superintendent--and sets criteria when an election is not necessary, Kozlowksi testified. The bill also provides additional protections for credit unions on payable-on-death accounts and the use of safes, vaults, safe deposit boxes and night depositories by limiting liability on handling and releasing funds or other assets, Kozlowski said. Among other provisions in the bill are merger requirements modified to allow member approval based on a majority vote--not a two-thirds vote--and reasons for when the superintendent can waive a member vote. “We believe that the purpose of this bill before you today continues to address the needs of credit unions that will help them continue to operate more effectively and efficiently now and in the future,” Kozlowski concluded in his testimony. Also testifying on behalf of credit unions was KEMBA Financial CU CEO Jerry Guy.

CU System briefs (01/18/2008)

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* COLUMBIA, S.C. (1/22/08)--Timothy Wayne Eddington, Fort Mill, S.C., was convicted Wednesday of multiple charges related to planning a pipe-bomb diversion at a school to divert police from a planned robbery of Founders FCU. He was arrested at a vacant house with three other men on Aug. 23 after police received a tip about the plans. Also arrested were his son, Steven Michael Eddington, then 18; his nephew, William Christopher Puckett, then 19; and Edgar Scott Williams IV, then 19. Authorities discovered two pipe bombs in the house. Eddington, who was 35 at the time of the arrest, faces a minimum 40 years in federal prison. He will be sentenced in about 90 days (The Herald Jan. 18) … * SYDNEY (1/22/08)--Australian Central CU announced it will raise its variable rates on home loans by 17 basis points. The increase went into effect on Thursday. The credit union said the raise was in response to cost pressures related to the subprime mortgage situation in the U.S. (Herald Sun Jan. 16) … * ALBANY, N.Y. (1/22/08)--Tony Schilling had joined the New York Credit Union Foundation as financial education specialist. He will be responsible for managing the foundation's youth financial education programs, including outreach to stakeholders in the field of education and community organizations. Schilling previously was an associate in instructional services for the New York State Education Department. He also has served as adjunct lecturer at the State University of New York in Albany and as a high school teacher-coordinator at two high schools … * NAPLES, Fla. (1/22/08)--Anthony Joseph Cianfero Jr., 41, was charged with grand theft and uttering a forged instrument after allegedly bouncing a $50,000 check stolen from his grandmother's house. The Collier County Sheriff's Office said he deposited the check into his account at the Naples branch of Tampa-based Suncoast Schools FCU on July 25, 2007. The check was drawn on the account of his grandmother, Yolanda Cianfero, and aunt, Marirose Stewart. During the transaction he obtained a cashier's check for $44,372 made payable to a Naples law firm and withdrew $3,500 in cash. The check was returned on Aug. 1 for insufficient funds. He was arrested earlier this month (News-Press Jan. 16) …

Consolidated FCU to close S. Carolina branch

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PORTLAND, Ore. (1/22/08)--Consolidated FCU, a Portland, Ore.-based credit union, announced it will close its Seneca, S.C., branch Feb. 29. In 1974, the Seneca office opened as a branch of Jantzen FCU to serve Jantzen employees working in Seneca and Westminster, S.C. After the Jantzen sewing and distribution center closed, the credit union applied for, and was granted, a local community charter in Oconee County, S.C., after regulators determined the area to be an underserved area (UpstateToday.com Jan. 18). In 1996, Jantzen FCU merged with Consolidated FCU. Recently, Consolidated FCU was granted the authority to serve people in the Portland tri-county metropolitan area. As a condition for expanding the credit union’s field of membership, the National Credit Union Administration (NCUA) mandated that Consolidated FCU stop enrolling new members at its Seneca location. The NCUA requirement stems from a lawsuit filed by an out-of-state bankers group, which challenged the NCUA’s authority to approve a community chartered credit union in one state to operate an underserved community in a different state. The closing of the Seneca branch is unrelated to its finances, which are sound, Ed Baldwin, Consolidated president/CEO, told the newspaper.

League backs Massachusetts lawmakers fin lit efforts

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BOSTON (1/22/08)--The Massachusetts Credit Union League is supporting legislation that would require the Massachusetts Department of Education to include all aspects of personal finance as a major component of the existing math curriculum in state public schools. State Rep. Stephen LeDuc (D-Marlborough) introduced the legislation earlier this month. The bill was favorably reviewed by the state legislature’s Education Committee, and is waiting to be heard before the full legislature, according to LeDuc (Marlborough Enterprise Jan. 16). He hopes the bill will be passed before the current legislative session ends, LeDuc wrote in the newspaper. The bill is geared to help students learn personal finance math skills to help them succeed in life, LeDuc wrote, noting that the need for financial literacy cuts across all socio-economic segments of the population. Financial education will afford students knowledge of personal economics that will carry into their adult lives, he wrote. The personal finance curriculum would provide instruction in the following areas:
* Personal budgeting; * Savings; * Compound interest rates; * Taxation; * Residential real estate planning; * Consumer spending; * Retirement planning; * Educational savings; * Personal insurance needs; * Estate planning; * Stock and bonds; and * Understanding borrowing.

Suspect dies after shootout at CU

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NILES, Mich. (1/22/08)--A suspect involved with an attempted armed robbery and shootout at the Niles, Mich., branch of Berrien Teachers CU died in surgery at a local hospital Friday. The suspect was allegedly shot during the attempted robbery Friday morning by a security guard. Two men entered the credit union at 10 a.m. and exchanged gunfire, both inside and outside of the credit union, with the guard. At least five shots were fired, police told the Tribune (Jan. 18). After the shooting, the two suspects fled the credit union in a car driven by a third suspect. They dropped off the injured suspect at a local hospital, police told the newspaper. Some members were at the credit union during the shooting. Police are not sure how much money was taken. Police may have found the car the suspects were driving. The vehicle was described as a grey four-door sedan, the newspaper said. Berrien Teachers CU, based in St. Joseph, Mich., has $219 million in assets.

J.C. Penney card processor owned by GECC

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PLANO, Texas (1/22/08)--A credit card processor for J.C. Penney and other retailers whose customer information on a computer backup tape has been missing since October is owned by General Electric Capital Corp. (GECC)--the company that almost bought credit union mortgage/vehicle fleet management company PHH Corp. earlier this month. The backup tape with the personal information of about 650,000 customers of J.C. Penney and nearly 100 other unidentified retailers was discovered missing from a data storage warehouse run by Iron Mountain Inc. The tape was not checked out of the warehouse, said a spokesman for GE Money, the processor owned by GECC (Associated Press Jan. 18). The information could be compromised, although so far, no indication of theft or fraud has occurred, said GE Money. It took GE Money two months to reconstruct the information on the missing tape and identify consumers whose information was lost. The company has notified customers in batches since December and it expects to complete the notification this week. The notification letter, from GE Money President Brent P. Wallace, instructs customers to phone a call center set up to deal with the breach. GE Money said it will pay for 12 months of credit-monitoring for customers whose Social Security Numbers were on the tape. Wallace's letter said the information on the missing tape isn't enough to open a new account in the customer's name, but the company is monitoring the account for misuse. On Jan. 1, PHH Corp. announced it had terminated plans for its purchase by GECC and the Blackstone Group because Blackstone could not finance the deal (News Now Jan. 3). The agreement had planned for a wholly owned subsidiary of GECC to merge with and into PHH Corp. Then GECC was to sell the company's mortgage business to Pearl Mortgage Acquisition 2 LLC, a Blackstone affiliate. PHH Corp. purchased CUNA Mutual Mortgage in 2005.

Southwest Corporate partners with Belize league

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MADISON, Wis. (1/22/08)--Representatives from Southwest Corporate FCU in Plano, Texas, traveled to Belize two weeks ago to form an international partnership with the Belize Credit Union League, the first relationship between an international association and a corporate credit union in the U.S. The partnership is the most recent of 25 partnerships established
From left: Southwest Corporate FCU Senior Vice President of Sales and Marketing Bob Rehm; President of Southwest Corporate’s Northwest Regional Office Kathy Garner; Belize Prime Minister Said Wilbert Musa and his wife Joan; and Southwest Corporate Product Manager Lisa Thomas met in Belize to form a partnership between the Belize Credit Union League and the corporate. (Photo provided by the World Council of Credit Unions)
through the World Council of Credit Unions’ (WOCCU) International Partnerships program. By sharing information, the two organizations will establish a relationship based on technical areas. “Most of the services that Southwest Corporate offers are applicable in the league,” said Natalie Goff, the Belize league’s executive director. “The credit unions in Belize also can transfer a lot of knowledge to U.S. credit unions, especially in community outreach.” In such partnerships, credit union leagues play a bigger role in advocacy efforts on the part of their affiliated partner organizations, said Victor Miguel Corro, WOCCU’s International Partnerships manager. Southwest Corporate delegates who traveled with Corro to Belize Jan. 9 included Kathy Garner, president of its northwest regional office; Lisa Thomas, product manager; and Bob Rehm, senior vice president of sales and marketing. Delegates visited 12 of Belize’s 13 credit unions to familiarize themselves with the institutions’ technical needs. The league also organized a social gathering that included Belize Prime Minister Said Wilbert Musa and his wife, Joan, and representatives from the country’s credit unions. A reciprocal visit to the U.S. by the Belize league is planned for this summer.

Online registration opens for World CU Conference

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MADISON, Wis. (1/18/08)--The World Council of Credit Unions (WOCCU) has opened online registration for the 2008 World Credit Union Conference in Hong Kong July 13-16. It is the first time WOCCU has brought the conference to Asia. Participants can register online and reserve hotel accommodations by using the resource link. The conference--co-hosted by the Credit Union League of Hong Kong in cooperation with the Association of Asian Confederation of Credit Unions--will be at Hong Kong Convention and Exhibition Center overlooking Victoria Harbor. WOCCU expects a large contingent from nearby mainland China, where steps are underway to help reignite China's cooperative movement, and will offer sessions in Mandarin for the first time. China has more than 25,000 rural credit cooperatives similar to credit unions and its blossoming movement has the potential to more than double the number of credit unions worldwide. Attendees also can participate in visits to local credit unions. Educational breakout sessions will follow four professional tracks: strategy and leadership, technology issues, developing credit union movements, and marketing and business development. Several sessions will feature a new interactive format, promoting participant discussions with a wider perspective on credit union issues around the globe. The conference will also include WOCCU's Young Credit Union People Program (WYCUP), which offers events for attendees under the age of 35. Also available are an optional pre-conference tour to Beijing, China, on July 9-12 and post-conference tour to Bangkok, Thailand, July 17-20. Companion tours include day trips to Macau and Shenzhen on mainland China. The deadline for a discounted early registration rate is May 9. Use the resource links for more details.

UT FCU to serve five-county area

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KNOXVILLE, Tenn. (1/18/08)--UT FCU has received approval to serve the five-county Knoxville area. The $144 million asset credit union was granted a community charter by the National Credit Union Administration to serve members who live, work, regularly conduct business, worship or attend schools in Knox, Anderson, Blount, Loudon and Union counties (The Knoxville News Sentinel Jan. 17). UT FCU was chartered 38 years ago to serve employees of the University of Tennessee school system and their families. It operates three branches in the Knoxville area, and will open a fourth branch Farragut. It also has branches in Memphis and Martin.

CU System briefs (01/17/2008)

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* PICKENS, S.C. (1/18/08)--Pickens FCU purchased 2,500 Shasta Daisy seed packets from the Credit Union National Association to hand out from its booth at the 2008 Pickens Azalea Festival. The festival takes place April 18 and 19, the weekend leading up to the National Credit Union Youth Week running April 20-26. Youth Week coincides with the annual April 22 Earth Day event in 2008. The theme, corresponding artwork, and a handful of promotional products concentrate on saving the "green" … * THORNDALE, Pa. (1/18/08)--Citadel FCU announced that it received more than 2,800 nominations for the Citadel Heart of Learning Awards. The award program was created by Citadel and the Chester County Intermediate Unit to recognize and honor teachers in the county. Fifteen finalists, one from each of the 13 public school districts, one from the intermediate unit, and one from a non-public school, will be chosen as finalists. Each will receive $500 to use in the classrooms, and three winners will receive an additional $1,500 for their classrooms. A list of all nominated teachers will be published on www.citadelheartoflearning.com ... * ST. LOUIS (1/18/08)--Dack Daugherty, 38, of St. Louis, was sentenced to 44 months in jail after pleading guilty in September 2007 to defrauding more than $500,000 from leaders and scamming 21 financial institutions, including credit unions (St. Louis Post-Dispatch Jan. 17). Daugherty falsified credit applications to borrow money for motorcycles, a Porsche, a grand piano and a jacuzzi. The items have been repossessed and Daugherty has been ordered to pay back the $576,390 ... * SALT LAKE CITY (1/18/08)--Four robberies, including Beehive CU in St. George and Utah First FCU in Salt Lake City, may be related, according to the Federal Bureau of Investigation (KCSG Jan. 16). Photographs of the suspect suggest similarities. The St. George Police Department and the FBI are working on leads. Beehive CU was robbed Monday, and Utah First was robbed Tuesday. The other two financial institutions were robbed Monday and Wednesday ... * ALBANY, N.Y. (1/18/08)--A bench warrant was issued for Robert Bove, 38, of Albany, who failed to show up for sentencing after he pleaded guilty to submitting a false mortgage loan application for $800,000 at Sunmark FCU in Colonie (CBS 6 Jan. 16). Bove allegedly said the money was for properties that he did not own. He was charged with second-degree attempted grand larceny and second-degree criminal possession of a forged instrument. He faces up to two-and-a-half years in prison for each charge ... * URBANA, Ill. (1/18/08)--A man accused of robbing Credit Union 1, Rantoul, Ill., is in jail on charges of robbery and burglary. Virgil Richmond, 19, is scheduled to return to court for a pretrial hearing Feb. 26 (News-Gazette Jan. 11). Another man was with Richmond in a taxi before he was arrested, and was originally thought to be involved with the theft. The man has claimed innocence and has not been taken into custody. The two men were going to buy a car before Richmond was arrested ...

CUNA closed for holiday no INews NowI Monday

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WASHINGTON and MADISON, Wis. (1/18/08)--In observance of the Martin Luther King Jr. holiday, the Credit Union National Association's Washington and Madison, Wis., offices will be closed Monday. News Now will not publish a Monday edition but will resume regular publication with Tuesday's issue.

Payday loan CUSO saves CU members 103000

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LENEXA, Kan. (1/18/08)--XtraCash LLC saved credit union members more than $103,000 in average fees charged in Kansas and Missouri for 14-day term loans, announced the credit union service organization (CUSO). Since its March 2007 launch, XtraCash served 13 credit union branches in Kansas and Missouri. It processed more than 2,500 loans with a volume amount of more than $920,000. “XtraCash was created to fill a void in the payday lending services available to credit unions,” said Lisa Renner, CEO of CU Holding, a parent company of XtraCash. About 15% to 30% of credit union members and employees use payday lenders, Renner said. The payday lending alternative owns the loans and assumes all risk. It also works as an alliance for credit union partners, she added. “We want to help credit union members get out of the payday lending cycle and into mainstream credit union products and services,” Renner said. CU Holding Company was founded in May 2005 and is a wholly-owned subsidiary of Mazuma CU in Kansas City, Mo.

Report CUs face ID theft challenges

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MADISON, Wis. (1/18/08)--Credit unions are unable to completely prevent leakage of personal information that can result in identity fraud because too many parts of the custody chain are beyond their control, according to a recent report commissioned by credit union industry leaders. The report, “Combating Identity Theft: Leading Practices for Credit Unions,” clarifies the nature of identity theft and classifies countermeasures in the credit union environment. Research was conducted by the University of Wisconsin E-Business Consortium (UWEBC) and sponsored by CUNA Mutual Group, the Credit Union National Association (CUNA) and the Credit Union Information Security Professionals Association. Consumers are often concerned with identity theft and the potential fraud that follows, but financial institutions currently absorb most of the effects of fraud, the report stated. In the U.S., $56.6 billion was stolen in 2006 through identity theft, with an average fraud cost per victim of $6,278. Much of these losses are covered by businesses. In 2004, businesses reported average losses of $49,254. Because of the challenges that credit unions face in battling identity theft, the credit union consortium and UWEBC commissioned the study to:
* Define clearly identity theft and the types of identity theft; * Characterize how sensitive personal information is usually compromised; * Determine how much sensitive personal information lost via each route is actually used to commit fraud; * Describe threats and defenses using “attack tree” diagrams; and * Use these results to recommend where identity theft prevention efforts should focus.
The survey builds on a series of annual research projects conducted collaboratively by CUNA Mutual, CUNA and other credit union groups, and the UWEBC. “This type of collaboration among credit union industry leaders, in conjunction with academia, is beneficial to helping credit unions compete in today’s fast-moving business environment,” said Gary Pate, director of insurance compliance and risk management for CUNA Mutual.

Reverse inquiries double says Southwest Corporate

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PLANO, Texas (1/18/08)--Credit unions’ interest in customizable certificates--also known as reverse inquiries--rose to 62 requests in 2007 from 41 in 2006 and accounted for nearly double the dollar amount invested, according to Southwest Corporate FCU. The Plano, Texas-based corporate regularly creates structured investments and advertises them through e-mail and the Internet (eFacts Jan. 15). Because not all structured certificates fit exactly into credit unions’ needs, a customizable reverse inquiry can be an attractive offer, said Cynthia Shi, Southwest Corporate director of portfolio management. Credit unions with as little as $3 million to invest can take their inquiry to Southwest Corporate. It will structure their investments to their needs, Shi said, noting that most agencies require a $25 million minimum to invest. For more information, use the link.

Economists advice goes international

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MADISON, Wis. (1/18/08)--Credit Union National Association (CUNA) Senior Economist Mike Schenk has been featured by more than 15 national and international media outlets for his recent comments on the economy with CNBC. Schenk was interviewed by CNBC Wednesday about the likelihood of a recession. The story has been picked up by media outlets such as Reuters and Forbes. He also has been quoted in international publications, including Guardian Unlimited, based in the United Kingdom, Yahoo News Asia, The International Herald-Tribune and Terra.com, a Brazilian news site. Recent reports show that consumer prices shot up last year at the fastest rate in 17 years, which “underlines our view that we’re on the razor’s edge here, that we could be headed into a recession,” Schenk said (Reuters Jan. 17).

N. Hampshire House approves 36 payday-loan cap

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CONCORD, N.H. (1/18/08)--Supporters of a 36% cap on payday loans approved Wednesday by New Hampshire's House say consumers can turn to credit unions, among others, when they can't repay their loans. New Hampshire has no limit on payday interest rates. If passed, the cap bill may force payday loan companies out of New Hampshire, say payday lending supporters and New Hampshire's banking commissioner (Associated Press Newswires Jan. 16). The cap, which would apply to payday loans and vehicle title loans, would translate into $2.96 in interest per $100 borrowed on a 30-day title loan and $1.38 per $100, or 10 cents a day, on a $100 payday loan for 14 days. Payday lenders said the money earned at such a rate wouldn't cover staffing, rent and the bills. The bill's supporters, including New Hampshire Legal Assistance and the state's welfare administrators, said consumers caught in the payday loan debt trap could instead turn to credit unions, banks, churches, friends and town welfare officers for help. The House vote was 207 to 124 to send the bill to the state Senate, which is considering a similar bill. In 1999, the state repealed an interest cap on small loans after lenders complained about the credit card industry's entry into the market.

CU VP launches Hispanic Leadership Council

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SAN BERNARDINO, Calif. (1/18/08)--A credit union vice president is heading up the public launch of an organization designed to bring more Hispanics into leaderships roles in California. A substantial Hispanic community exists, but does not have a voice in regional business affairs, said Maurice Calderon, vice president for minority development at the $1.072 billion asset, San Bernardino-based Arrowhead CU. The Empire Hispanic Leadership Council began meeting in May and is ready to begin operations to influence discussions of economic, education, health and transportation issues and to help mold policy (The Press Enterprise Jan. 16). The council--having already helped organize business expos and workshops--also will develop and maintain a database of Latino-owned businesses. San Bernardino and Riverside counties have a 44% Hispanic population, according to 2006 U.S. Census estimates--up from 38% in 2000. Despite being a significant segment of the population, few Latino’s are part of influential business and civic groups, Calderon said. The problem has been that leaders of business and civic groups tend to select people who most look like them, Calderon said, adding that not enough Latinos have attempted to get involved.

Banking trends study Proceed with caution

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NEEDHAM, Mass. (1/17/08)--The subprime mortgage crisis has forced the retail banking industry to enter 2008 in a reactive mode, according to new research from Needham, Mass.-based TowerGroup. Credit unions may want to monitor several trends. Retail financial institutions are anxious about two fronts--the unseen threats that may not yet have surfaced in their credit portfolios and how their institutions can compete in the volatile days ahead, said Towergroup. They will return to proactively approaching their markets only after the extent and expected duration of the credit crisis is understood, said the report. Although many institutions have reallocated some management and technical resources, they continue to focus on longer-term business drivers and technology investments, such as the re-engineering of payments processing. "The key issue for retail banks will be managing growth and profitability while adapting to an ever-changing economic climate," said Kathleen Khirallah, TowerGroup managing director and practice leader of Retail Banking. In 2008, financial institutions will focus information technology (IT) spending on initiatives to reduce risks as concerns over consumer data disclosure and attempted fraud force them to pay more attention to information security and fraud prevention. "Many banks have embarked on multi-year strategic technology initiatives that are already well under way," said Robert Hunt, research director of TowerGroup's Retail Banking practice and co-author of the report. "In many cases, it would simply not be economical or strategically sound to put these large-scale projects on hiatus." Other findings of the research:
* Sustaining organic growth (not related to mergers or acquisitions) will continue as a top challenge for most retail financial institutions. * Concerns over disclosure of consumers' information will lead management to focus on creating enterprise centers of excellence for information security. * As electronic payments volume increases and institutions introduce new delivery channels, they won't be able to afford operational silos for each type of payment. This pressure will help drive a continued focus on streamlining payments processing. * Heightened consumer awareness of Internet fraud and ID theft will motivate institutions to develop new offerings that combine conventional products with ID theft and fraud protection services.

CU System briefs (01/16/2008)

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* HARAHAN, La. (1/17/08)--Louisiana Gov.-elect Bobby Jindal announced that John Ducrest will continue as Louisiana Commissioner of Financial Institutions. Ducrest has served in the position since 2004, overseeing the regulation and supervision of all state-chartered institutions, including credit unions (e-News Jan. 16) … * NEW YORK (1/17/08)--Fitch Ratings has withdrawn the "insurer financial strength (IFS) AA- ratings for CUNA Mutual Life Insurance Co. (CMLIC) due to its Dec. 31 merger with CUNA Mutual Insurance Society (CMIS). CMLIC's ratings, now obligations of CMIS, continue outstanding and are affirmed. All other ratings are unaffected and the rating outlook remains "stable," said Fitch. Previously, Fitch rated three companies--CMIS, CMLIC and CUMIS Insurance Society Inc.--on a combined basis … * GRAND RAPIDS, Mich. (1/17/08)--West Michigan CU was robbed twice in less than a week, with the latest incident occurring at 10 a.m. Tuesday. Police were looking for a man wearing a puffy coat, blue jeans and a black dress hat. On Jan. 9, a man carrying a briefcase robbed the credit union, then drove away in a minivan with the license plates removed (Grand Rapids Press Jan. 15) … * BUCKSPORT, Maine (1/17/08)--Seaboard FCU has teamed up with Bucksport officials to lure shoppers to town by offering discount gas prices. In the program, funded by the credit union and the town, merchants will offer coupons for discounted gasoline at two stations on Main Street. The discounts will be based on the amount of merchandise purchased at each store. The funds contributed by the town and the $82.2 million asset credit union will be used for printing the coupons and for marketing the program. A recent survey of local residents indicated that more people leave town to shop than come into town. Gas prices were cited as a factor (Bangor Daily News Jan. 16) …

Hundreds of FI websites hit by admin error

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CALABASAS, Calif. (1/17/08)--A number of credit unions were among the 200 to 250 financial institutions impacted Tuesday by an administrative error that left their online banking sites inaccessible. The shutdown resulted from an administrative error between Digital Insight and its Web hosting server, Network Solutions. The server was interrupted for a few hours, Tobin Lee, spokesman for Digital Insight, told News Now. The error has since been resolved, and all sites were up and running within a few hours, he said. Some financial institutions’ sites may have been affected longer, depending on their internet service providers (ISPs). Some ISPs rapidly reset their servers, while others may have taken longer, Lee added. Lee emphasized that there is nothing wrong with the sites, and their security and integrity are intact. “There is no risk for customers,” he said. “We apologize for the inconvenience.” The outage was spread across the nation. The number of credit unions affected is not available, although Digital Insights’ overall client base is 50% credit unions, Lee said. University of Virginia Community CU in Charlottesville was affected by the error, spokesman Janine Williams told News Now. A significant portion of the credit union’s membership is able to access the website, according to a press release on the credit union’s website. Some members were not affected by the issue, while others’ ISPs have been slower to refresh, Williams said. The credit union has more than 50,000 members.

Minnesota opens 20th shared-branch location

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ST. PAUL, Minn. (1/17/08)--Minnesota added two City-County FCU branches to its list of shared-branch service centers last week, bringing the total service centers in Minnesota to 20, with 18 in the Twin Cities area. During the past year, a merger of shared-branching networks Credit Union Service Corp. and CO-OP Financial Services resulted in 3,000 locations nationwide. "This is an exciting time for the shared-branching business," said Pete Skaalen, executive vice president of the Minnesota Credit Union Network. In addition to City-County Federal's new service centers, four other sites will open soon, he said. By mid-2008, Minnesota will have 24 service centers, with 22 in the Twin Cities. "The shared branching network exemplifies the credit union difference," Skaalen added. "It puts into action the cooperative philosophy of credit unions and demonstrates how they are constantly working to find ways to better serve their members."

Mennonite CUs growth focus of article

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LANCASTER, Pa. (1/17/08)--The growth of Mennonite Financial FCU in recent years was the focus of a Jan. 11 article in the Central Penn Business Journal. The $80.2 million asset, Lancaster, Pa.-based credit union has entered into a partnership with Mennonite Mutual Aid--a Goshen, Ind.-based insurance and investment provider with connections to Mennonite Church USA--to offer investment and insurance services and to continue growing, according to the article. The partnership makes sense because members were telling the credit union they wanted access to additional services, and Mennonite Mutual was considering how to offer banking services, Kent Hartzler, Mennonite Financial president/CEO, told the journal. In the past six years, the credit union has more than doubled its assets to about $80 million, and Hartzler said he expects to see--at a minimum--that same rate of growth continue. Mennonite Financial also grew its membership for that same period to 10,000 members from 6,700. In the next five to 10 years, the credit union intends to open 10 to 20 branches while sharing employment expenses with Mennonite Mutual, Hartzler told the journal. Mennonite Mutual would subsidize the cost of branch space, he added, noting that this arrangement would free up capital for Mennonite Financial to grow its loan business. Although the details have not been ironed out, the two organizations intend to offer each other’s products and services to members, the article said. Mennonite Financial’s efforts in this partnership are similar to what other midsize credit unions are attempting, Mike Wishnow, executive vice president of communications and public relations for the Pennsylvania Credit Union Association, said in the article. Some credit unions go through their cooperative networks, while others form a partnership with nonprofit or for-profit organizations to deliver these services, he added. However, there is one difference that separates Mennonite Financial’s efforts from others, Wishnow told the journal. “They’ve found an interesting way to weave Mennonite principles into a business model that works for that community,” he concluded.

CUAO board officers named

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BEAVERTON, Ore. (1/17/08)--Gene Pelham, president/CEO of Rogue FCU in Medford, Ore was re-elected to a three-year term on the Credit Union Association of Oregon (CUAO) board of directors and elected as vice chair. Pelham has served on the CUAO board of directors since 2001. He also served on the Governmental Affairs Committee since 2001 and serves as chair of the Oregon Credit Union Foundation. The search committee will select a new CUAO president to succeed Gene Poitras who retired Nov. 30. “Gene will continue to play a vital role in the leadership search over the next six months and will be involved in the transition phase when the new leadership is chosen,” said Shirley Cate, chair of the CUAO board. Other CUAO board members are:
* Chair: Cate, Providence Health Systems FCU, Milwaukie; * Treasurer: Bill Anderson, Mid Oregon FCU, Bend; * Secretary: Cameron Dickey, Advantis CU, Milwaukie; * Director: Kevin Cole, Oregon Employees FCU, Salem; * Director: Bob Corwin, First Tech CU, Beaverton; * Director: Doug Mountain, Legacy FCU, Portland; * Director: Bob Newcomb, SELCO Community CU, Eugene; * Director: Debra Riggle, OSU FCU, Corvalis; and * Director: Mark Zook, Marion & Polk Schools CU, Salem.

California DFI OKs CU Visa stock investments

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RANCHO CUCAMONGA, Calif. (1/17/08)--The California Department of Financial Institutions (DFI) has given approval for state-chartered credit unions to hold investments in the restricted stock of Visa Inc. The California Credit Union League worked with state DFI officials for several months to encourage the blanket approval instead of having each credit union solicit a separate opinion. “This issue has been a top priority for us, and our lobbying team worked tirelessly with DFI [staffers] to give them the information they needed to provide guidance and approval, said league President/CEO Bill Cheney. When Visa USA becomes a public company later this year, it will change its name to Visa Inc. Then it will convert member ownership positions into restricted stock on a pro rata basis. State-chartered credit unions receiving such stock will be allowed to hold the stock under the terms of the ownership restrictions. Several other states have provided similar guidance to their state-chartered credit unions in recent weeks. The National Credit Union Administration (NCUA) has also provided similar guidance to federally chartered credit unions. Use the resource link to access Visa stock accounting tips provided by the Credit Union National Association's (CUNA's) Accounting Task Force. In October of 2006, Visa Inc. announced plans to restructure its non-European operations into a global corporation and offer a majority of its stock to the public. As a part of the restructuring, Visa U.S.A. will become a subsidiary of Visa Inc., and its members will receive stock in Visa Inc. calculated on the basis of fees a member has generated in the past. Visa member financial institutions, including credit unions, will not compensate Visa Inc. for the stock, nor will they receive the stock without taking any further action. No cash or other rewards to members are available in lieu of the stock. As part of the transaction, financial institutions will be prohibited from selling their shares for three years. Generally, the Federal Credit Union Act does not authorize federal credit unions to invest in the stock of companies other than credit union service organizations, said the league. However, on Nov. 1, 2007, the NCUA issued a legal opinion stating that federal credit unions may accept and hold Visa stock. The agency views the transaction not as an investment (since no tangible consideration will be paid, and federal credit unions are receiving it as the result of the business decisions of a third party), but as a by-product of lending, which is permissible. NCUA also cautioned that a federal credit union may not receive and retain the stock if its examiner determines holding the stock is a safety and soundness problem for that credit union. Unlike the NCUA, California's DFI views the receipt of Visa stock by credit unions as an investment requiring approval of the Commissioner (California Financial Code §14653.5). On Jan. 11, DFI issued a legal opinion letter granting blanket approval for state-licensed credit unions to hold the stock. According to the league, the DFI advises credit unions that this approval is only for the ownership of restricted stock resulting from the conversion of Visa, U.S.A., and for any other investment, including (but not limited to) common stock that will be issued in the Visa initial public offering.

PCUA names Go Green task force

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HARRISBURG, Pa. (1/17/08)--The Pennsylvania Credit Union Association (PCUA) has announced the formation of a “Go Green” task force to discuss ways that credit unions can be eco-friendly. The task force, which will meet via teleconference, also will discuss ways to offer services to members interested in protecting the environment (Life is a Highway Jan. 16). The task force is co-chaired by Joe Wambach, executive director of the Pennsylvania Credit Union Foundation; and Bret Davis, PCUA vice president, information systems and technology. Task force members include:
* Flora Caranci, American Heritage FCU, Philadelphia; * Carla Fastrich-Aranos, AmeriChoice FCU, Mechanicsburg; * Janelle Battle, Belco Community CU, Harrisburg; * Joshua Mountz, Bellco FCU, Wyomissing; * Bruce Wappman, Blue Chip FCU, Harrisburg; * Tara McQuillen, Discovery FCU, Wyomissing; * Liz Butler, Erie General Electric FCU, Erie; * Barbara Fortney, LANCO FCU, Lancaster; * Tina Hartman, Mennonite Financial FCU, Lancaster; * Sheryl Snider, Patriot FCU, Chambersburg; * Dan Moon, Pittsburgh Central FCU, Sewickley; * Trenton Mason, Riverset CU, Pittsburgh; and * Myra Fick, Tri County Area FCU, Pottstown.
PCUA staff who are working on the initiative are: Lori Plasic, card services operations/training supervisor, and Monika Scott, account executive. “As this project moves forward, you will certainly see and hear more about individual credit union ‘go green’ initiatives in this and other PCUA publications,” said Jim McCormack, PCUA president/CEO.

Indiana foundation elects officers

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INDIANAPOLIS (1/17/08)--The Indiana Credit Union Foundation elected four table officers for 2007-2008. Those elected at a December board meeting are:
* Chairman: Barbara Berghoff, PROFED CU, Fort Wayne; * Vice Chairman: Karla Salisbury, KEMBA CU, Indianapolis; * Secretary: Sandy Heller, Northern Indiana FCU, Merrillville; and * Treasurer: Emily Everett, Community Spirit CU, Lawrenceburg.
Others on the foundation board are:
* Ron Budzinski, First Trust FCU, Michigan City; * Jenny Budreau, FORUM CU, Fishers; and * Lamoura Munse, Indiana Members CU, Indianapolis.
Heller also is chairman of the Indiana Credit Union League Board. Munse serves as league board secretary, and Budreau is immediate past league chairman. Berghoff and Budzinski were re-elected to the board in October, each to a three-year term. “Our board looks forward to continuing to put credit unions’ best interests first,” Berghoff said. “The ongoing financial support the foundation has received from individuals, credit unions and vendors has allowed us to fund a number of initiatives that are important to the Credit Union System. These include assisting with disaster relief efforts, focusing on financial literacy initiatives and providing scholarships to representatives of Indiana credit unions.”

Washington league proposes data breach bill

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FEDERAL WAY, Wash. (1/16/08)--A new league-backed bill in the Washington State legislature would make costs associated with data breaches--such as the massive TJX Cos. breach--a responsibility of the merchant. According to Washington Credit Union League President/CEO John Annaloro, "the league supports SB 6425 because the massive monetary costs associated with data insecurity continue to be a plague on the card payment system, costing the state's financial institutions millions of dollars each year." The league wrote the bill, which is sponsored by Rep. Brendan Williams (D-22) in the House and Sen. Rosa Franklin (D-29) in the Senate. The bill was "dropped" or introduced in the opening days of the 2008 state legislative session, said the league. The bill requires merchants accepting plastic to reimburse card-issuing financial institutions for the costs associated with care reissuance after a data breach. The bill also would deter financial fraud and identity theft in three ways:
* By requiring businesses accepting plastic cards to encrypt or dispose of sensitive consumer data promptly; * By making businesses that store sensitive consumer data and fail to meet basic security standards responsible for the costs of consumer notification and card replacement; and * By establishing a safe harbor for businesses that meet basic security standards.
According to Stacy Augustine, league senior vice president and general counsel, SB 6425 represents good public policy because it provides a powerful financial incentive for data custodians to take the steps necessary to prevent security breaches. It also encourages all financial institutions to take steps to quickly reissue compromised cards and monitor accounts to avoid fraud and identity theft, she said. The hard cost of reissuing a plastic card is estimated at about $20. However, the cost of reissuance, customer care and maintenance, including soft costs, is estimated at $00 to $180 per account. "What the bill does not do is prohibit businesses from retaining encrypted information or certain unencrypted elements needed for on-going marketing," said Augustine. "The league feels that this data-breach-reimbursement legislation proposes reasonable information security standards and needed encouragement to financial institutions to take extraordinary measures to protect consumers from identity theft and fraud." If enacted, SB 6425 would be the second state data bill in the nation to make its way into law. Similar bills were introduced in Minnesota, Massachusetts, Texas and California in 2007. The Minnesota bill was enacted. The Massachusetts and Texas bills ran out of time during their legislative sessions. The California bill was vetoed by Gov. Arnold Schwarzenegger. Washington has enacted several consumer protection laws during the past five years. In 2007, it enacted a "credit freeze" bill to enable consumers to block access to new lines of credit for any reason. The league supported that bill also.

CUNA experts offer advice in media

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MADISON, Wis. (1/16/08)--Experts from the Credit Union National Association (CUNA) were recently quoted in U.S. and international media about the importance of credit unions. Most everyone is eligible for a credit union membership, said Pat Keefe, CUNA vice president of communications and media outreach in an article about choosing a credit union. Eligibility requirements differ at each credit union, based on community, employer and association, he told Columbus Business First (Jan. 11). When choosing a credit union, potential members should check with their employers because credit unions affiliated with a specific industry or employer will understand the needs of a company or its employees, Keefe told the newspaper. The credit union also will look at those needs when members apply for loans or credit, he said. CUNA statistics were quoted in an article on repairing a busted budget (Poughkeepsie Journal Jan. 14). Credit unions help their members save by offering opportunities such as Christmas Club accounts. According to CUNA, three-quarters of the nation’s 8,300 credit unions have accounts that allow members to automatically deduct money from their paychecks and set it aside for holiday spending. In an article about best banking moves to make in 2008, Susan Tiffany, CUNA director of personal finance information for adults, advises that developing good checking and savings habits will help money management challenges fall into place. Tiffany was quoted prominently in a Jan. 10 Bankrate article that was recently picked up by Yahoo Finance in Canada.

CU System briefs (01/15/2008)

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* MIAMI, Fla. (1/16/08)--The Southernmost Chapter of the Florida Credit Union League established The Guy Hood College Scholarship bearing the name of FCUL President/CEO Guy Hood, left. The scholarship will be awarded each year to a student in the National Academy Foundation's Academy of Finance program in Miami Dade County Public Schools. "The chapter board felt that the best way for us to show Guy our appreciation for his years of service to credit unions was to encourage a young person to consider a career in credit unions through a scholarship given in Guy's name," said Michael Raley, chapter president, right, shown presenting the Certificate of Appreciation announcing the scholarship to Hood. Hood, who will retire in January 2009, has been league president/CEO for 20 years. (Photo provided by the Florida Credit Union League) … * SCHENECTADY, N.Y. (1/16/08)--Sunmark FCU and New York State Assemblyman George Amedore (R-C-Rotterdam) announced Monday a joint financial education initiative in Schenectady County. "It is extremely important that people have the tools they need to successfully manage their finances, and I applaud the efforts of Sunmark FCU to assist Schenectady County residents," said Amedore. Sunmark is working with the Schnectady Municipal Housing Authority (SMHA) to provide financial education to low- and moderate-income families who are SMHA tenants … * HARRISBURG, Pa. (1/16/08)--Mid-Atlantic Corporate FCU has announced a realignment of its senior management. Jay Murray, who will become president/CEO in August, has been appointed president/chief operating officer. Edward Fox will retain the CEO title until his retirement July 31 (Life is a Highway Jan. 15). All current vice presidents were promoted to senior vice presidents (SVP). SVPs include: James E. Burns, chief financial officer; Bob T. Frank, information systems; Lori A. Gall, administration; Janice A. Goodling, human resources; Drew J. Kishbaugh, payment services; Rodney A. May, member services; Leigh E. Philibosian, marketing; Brad C. Stewart, chief investment officer; and Jeffrey M. Stoner, product strategy …

NYC CUs coalition to target underserved

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NEW YORK (1/16/08)--Three New York City credit unions joined other groups last week to discuss serving the underserved, according to the National Federation of Community Development Credit Unions.
From left: Rob Nemeroff, vice president of marketing, Melrose CU; Linda Levy, CEO, Lower East Side People’s FCU; New York State Rep. Jose Peralta; Pablo DeFilippi, associate director of membership development, National Federation of Community Development Credit Unions; John Lewis, general counsel, United Nations; Zoe Sullivan and Alexis Iwanisziw, Queens Community House; U.S. Rep. Joseph Crowley; Shan Rehman, Chhaya CDC; Ralph Pagan, vice president of marketing and business development, Municipal CU; Melva Miller, Office of the Queens Borough President; and Shams Tarek, Office of New York State Sen. John Sabini. (Photo provided by the National Federation of Community Development Credit Unions)
The three credit unions, some of the largest in New York City, are: United Nations FCU, Municipal CU and Melrose CU. The three joined the largest community development credit union (CDCU) in the city, the Lower East Side People’s FCU, for a roundtable meeting to discuss plans to expand credit union service to underserved communities in Jackson Heights and Corona, Queens. The special meeting, organized by the federation and the Queens Community House, brought together credit unions, local community-based nonprofits, and several New York policymakers. Zoe Sullivan of the Queens Community House highlighted the “incredible need for more transparent and affordable alternatives to the banks and check cashiers who are so common in these [low-income] communities.” “CDCUs provide an effective and proven mechanism for underserved communities to gain control over their financial resources,” Sullivan said. “This results in the direct empowerment and improvement of their communities.” U.S. Rep. Joseph Crowley (D-N.Y.) who attended and expressed his support for the new collaboration. “It is by building assets that families and communities become economically self-sustaining. And having access to affordable and equitable financial products and services is a critical component toward achieving this goal,” Crowley said. New York State Sen. John Sabine, who represents Jackson Heights and Corona, also supports these efforts. “Community-based credit unions give people from all walks of life access to the American dream in a financially secure and responsible way,” he said.

Three CUs warn of new phish scams

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MADISON, Wis. (1/16/08)--Three credit unions--in Tennessee, Washington and Florida--reported in the past week attempts to get members to divulge their financial information through e-mails and phone calls. In Chattanooga, Tenn., Tennessee Valley FCU told WDEF News 12 (Jan. 11) that a member reported a message left on her answering machine, saying: "Dear Tennessee Valley FCU member: We are calling to inform you that your online (banking) service has expired." The message leaves a web address and requires the member to renew personal information to continue getting service. In Richland, Wash., phone calls from an automated machine claimed to be from Gesa CU and instructed recipients to call a 509 area code number to leave credit card information, police said (KNDO.com Jan. 12). At least two people fell victim to the scam. In Tampa, Fla., bogus e-mails with the subject line, "Regularly scheduled account maintenance," claimed to be from Suncoast Schools FCU. They informed recipients the credit union was providing greater protection against fraudulent attacks and told them to use a link. The link was to a bogus site, which tried to obtain personal information (News-Press Jan. 12). The credit unions warned consumers they never collect such information over the phone and through e-mails.

HELOC thefts grow--6.5 million 18 CUs

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MADISON, Wis. (1/16/08)--CUNA Mutual Group is warning credit unions that a sophisticated fraud scheme involving home equity line of credit loans (HELOCs) is spreading. So far, 18 credit unions have reported losses or fraud attempts totaling more than $6.5 million. More losses are expected, said Gary Pate, CUNA Mutual director of insurance compliance and risk management. The scheme results in a large number of high-dollar funds transfer losses involving HELOCs. Perpetrators target members who have been granted large lines of credit via the HELOCs, said Pate. The perpetrator sends a fax or e-mail requesting the credit union process a funds/wire transfer. Usually, the transfer requests are received at credit unions with call centers, he said. The requests frequently are for amounts exceeding $100,000 and are sent to different banks in the U.S., China and Japan. Often, wires are sent to accounts with the word "Title" or "Construction" in the account name, said Pate. Fraud has successfully occurred in credit unions that have strong security procedures, said CUNA Mutual. In some cases, staff followed their credit union's written procedures to include call-backs to a member's secure telephone number. However, fraudsters apparently have arranged, presumably with telephone providers, to forward the calls to their phones and confound credit unions' call-back procedures, the insurer said. "What's making these scams even more insidious is that the credit union's caller ID indicates the call is going to the member's number of record," Pate said. "In addition, the fraudsters have detailed member information, which is enabling them to answer additional challenge questions from credit union staff." CUNA Mutual is assisting the Federal Bureau of Investigation and Secret Service in the investigation. On Jan. 3, it also sent policyholder credit unions a risk alert advising them of their responsibilities and offering these loss-prevention recommendations:
* Establish a password system for members prior to accepting funds transfer requests by telephone, fax or e-mail. Also have a written agreement with the member for the use of these passwords. Credit unions are allowed to pass liability to the member for any negligent use of their funds transfer password. * If there is any doubt as to the authenticity of the funds transfer request, credit unions are reminded they do not have to perform a wire transfer. * Beware of large dollar requests for wire transfers that draw against a HELOC, particularly HELOCs that have large available balances and little previous activity. * Limit the amount of wire transfer that can be completed by a call center employee. The wire transfer request should be approved by a manager. * Record conversations during the call-back and compare it to previously recorded conversations. * Listen to the caller. Does he or she have an accent that is inconsistent with your membership? * Perform an additional verification to the member's work and/or cell phone number. * If the credit union has the information, send an e-mail to the member at home or at work.
CUNA Mutual encouraged policyholders with a loss to contact its Credit Union Protection Response Center at 1-800-637-2676.

Court dismisses loss-liability case vs. CMG

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SAN FRANCISCO (1/16/08)--The U.S. District Court for the Northern District of California, ruling it lacked jurisdiction over loss-liability claims, last week dismissed a lawsuit brought by 13 credit unions against CUNA Mutual Group (CMG). The federal court said the case should be brought before state court. CMG verified this development, but cannot provide any additional information at this time because the matter is still under litigation, Rick Uhlmann, CMG senior manager of media relations, told News Now. The credit unions claimed the bond should have covered the $4 million in losses they said they sustained when San Francisco-based LoriMac, the mortgage company that the credit unions used to issue home loans, filed for bankruptcy last year. The credit unions contend that LoriMac misappropriated the credit unions loan funds, making the credit union insurer--CMG--liable for fraud coverage on their bonds. LoriMac provided the people and the facilities for a company that provides mortgage origination services to small banks, savings and loans, and credit unions. In return for its services, LoriMac received fees from the originating institutions and serviced the loans created. LoriMac did not warehouse or close the loans for its own account or its own name (EDGAROnline). The 13 credit unions are:
* Cessna Employees CU, Wichita, Kan.; * Advantage Plus FCU, Pocatello, Idaho; * East Idaho CU, Idaho Falls, Idaho; * Health Services CU, Dubuque, Iowa; * Idaho Falls Teacher CU, Idaho Falls, Idaho; * Les Bois FCU, Garden City, Idaho; * Clearwater CU, Lewiston, Idaho; * Scenic Falls FCU, Idaho Falls, Idaho; * Simcoe CU, Heyburn, Idaho; * St. Alphonsus Medical CU, Boise, Idaho; * Pocatello Railroad FCU, Pocatello, Idaho; * Racom Community CU, Dyersville, Iowa; and * Transit Employees FCU, Washington, D.C.

Seventeen FIs targeted in high-dollar wiretapping scam

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FEDERAL WAY, Wash. (1/15/07)--At least 17 financial institutions--including several credit unions in Washington State and elsewhere--have seen a sophisticated, high-dollar scam involving wiretapping to steal hundreds of thousands of dollars from home equity lines of credit (HELOCs). The actions have occurred in the past 30 days, said the Washington Credit Union League, and are similar to what happened to a member at Woodstone CU, based in Federal Way, when someone transferred $665,000 from a HELOC (News Now Jan. 14). "All of the thefts are in the high-dollar amounts, some with as much as seven figures," said David Bennett, director of public relations at the league. "The cases are very similar and involve transferring credit to the Far East, namely China, Korea and Japan." The league issued a fraud alert to its member credit unions Friday, he told News Now. The fraud involves telephone, fax or e-mail requests made to the credit union for large-dollar advances on HELOCs. The fraudster then requests the money be wire transferred, often to a foreign country. "What makes this fraud even more unique is that the fraudsters have extensive personal information about the members, such as the information to answer many authentication or challenge questions, transaction history and account information," says the league's fraud alert. The fraudsters "have found ways to circumvent the credit unions' 'call back' procedures, which are used to verify the identity of non-in person requests for wire transfers." They either request phone-line forwarding from the phone company, or--more than 30 days prior to the request to advance the funds--call the credit union to change the member's phone number. "Thus, when the credit union calls back the phone number it has on file for the member, the call goes directly to the fraudster," said the alert. In the Woodstone case, the credit union and member are cooperating fully with law enforcement authorities. The member "is protected and isn't out of a single penny," Bennett said. The fraud alert has six suggestions for credit unions:
* Inform staff of the scam, especially those processing HELOC loan advances and wire transfers; * Rigorously scrutinize large-dollar requests for HELOC advances made over the phone, fax or e-mail; * Rigorously scrutinize requests to wire transfer HELOC advances, especially if the request is to a foreign country; * Review change of phone number or address requests made on accounts that are requesting HELOC advances by phone, fax or e-mail; * Review large dollar requests for HELOC advances to see if this is the type of activity generally performed by the member and further scrutinize out-of-the-ordinary transactions; and * Alert call center and member service employees to be wary of persons calling to request information that is not otherwise publicly available.
"Because of obvious concerns about terrorism and the high dollar amount, the police, Secret Service and Federal Bureau of Investigation are all involved. The Secret Service has about 20 agents just on this basket of cases. It's definitely an international incident," said Bennett.

Ohio CUs step up mortgage loans to meet demand

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COLUMBUS, Ohio (1/15/08)--Credit unions in Ohio are marketing more home lending products to their members and potential members, according to Rob Bachman, mortgage manager at Kemba FCU in West Chester. Mortgage lending was considered a “niche” product in the past. Most credit unions had been stereotyped as doing only car and note loans, Bachman said (Columbus Business First Jan. 11). Kemba offers prioritized adjustable-rate loans and traditional 15- to 30-year terms, plus the 10-year fixed-rate term. Anything with a fixed-rate term sells, with a seven-year adjustable-rate mortgage being the most popular, Bachman told the newspaper. Those who join the credit union for its mortgage programs often become active members, he added. BMI FCU, Columbus, also is actively engaging in mortgage lending. The credit union reported that the number of its mortgage products has tripled during the first four years, to $136 million, said Sharon Custer, president/CEO. The credit union made its first mortgages in the 1970s, and mortgages have always been a “core” business for the credit union. Like Bachman, Custer said credit unions were not always associated with mortgage lending, though it’s a primary service they should provide, she told Business First. Credit unions’ personal service also extends to mortgage lending. BMI has never entered “exotic” programs that have led some lenders into trouble, Custer told the newspaper. To prevent members from being hit with escalating interest rates, Kemba offers a refinancing program, Bachman told the newspaper. Kemba has $354 million in assets. BMI has $281 million in assets.

Virginia CUs in forefront of payday loan alternatives

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RICHMOND, Va. (1/15/08)--Several Virginia credit unions are in the forefront in offering payday loan alternatives to the state’s consumers. Virginia legislators have filed more than a dozen bills to either repeal the 2002 law that allowed payday lending in Virginia, reform it, or place a cap on the annual interest rate on the loans at 36% (washingtontimes.com Jan. 14). Langley FCU, a $1.2 billion asset, Newport News, Va.-based institution, is providing low-cost cash advances to members, mirroring similar advances offered by nonprofit organizations and churches in several states to help alleviate the burden of high debt inflicted by the payday loan industry. One of the first credit unions to offer payday loan alternatives in the state, Langley has seen its cash advances surge to 600 to 800 a month now, from 100 to 200 a month in 2004. Queen of Peace Arlington FCU, a $1.3 million asset, Arlington-based credit union, doesn’t have the financial capability--nor do many alternative lenders--to advertise its services as frequently and widely as payday lenders do, said Daniel Morrisey, manager for Queen of Peace. The Jubilee Assistance Fund was created by two Richmond-area United Methodist churches who partnered with Virginia United Methodist CU, a $21.3 million asset, Glen Allen-based institution. The churches raise money and then put it into a savings account at the credit union. The account can be used as collateral to back small loans to church members. The Jubilee Assistance Fund also requires borrowers to obtain financial counseling from the credit union. Jubilee organizers hope that some day the program can serve as a model for churches nationwide. The Virginia Credit Union League has not taken a stance on the payday lending issue and has no plans to do so because the dispute over the issue doesn’t affect credit unions, Lewis Wood, league spokesman, told The Washington Times.

Mortgage crisis has silver lining for CUs says MCUL

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PLYMOUTH, Mich. (1/15/08)--The mortgage foreclosure crisis has a “silver lining for credit unions,” said Michigan Credit Union League (MCUL) President/CEO David Adams during the MCUL Mortgage Crisis Summit Thursday.
Michigan Credit Union League (MCUL) President/CEO David Adams welcomes 40 on-site and 100 remote-access participants to the MCUL Mortgage Crisis Summit Thursday. (Photo provided by the Michigan Credit Union League)
Adams discussed the impact of foreclosures on the state’s economy and on credit unions to 140 participants (Michigan Monitor Jan. 14). But the crisis is also an opportunity for credit unions, he said. “When the going gets tough, credit unions become more relevant,” Adams said. He also cited the state’s history of success in dealing with economic crises, and said he is confident that the state’s residents and leaders will be able to conquer the foreclosure challenge. During the summit, MCUL Executive Vice President Patrick La Pine provided an overview of the response by Washington D.C. and Lansing, Mich. to the crisis. The league and the Credit Union National Association are working to ensure that mortgage relief legislation approved by the state legislature or by Congress will not harm credit unions, he said. Adams also discussed several credit union industry responses to the crisis, including the Home Saver Loan Program, which would make $1.5 billion available to assist consumers facing foreclosure. The mortgage crisis emphasizes the need for financial institution regulatory relief through safe and appropriate relaxation of regulation requirements to reduce the costs associated with loan defaults and foreclosures, he said. The summit was a “very helpful starting point” for credit unions to help those facing foreclosures, Adams said. “This is the time for credit unions to think outside of the box while remaining true to their principles,” he added. A video clip of the summit is available on the MCUL’s website.

Utah CUs considering financial freedom ballot initiative

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SALT LAKE CITY (1/15/08)--Credit unions in Utah are considering a “financial freedom” ballot initiative that would ease state legislature-imposed lending restrictions on state-chartered credit unions. The initiative also would contain several consumer-friendly provisions. After years of battling with a bank-dominated state legislature, the credit union industry is contemplating taking its case right to the people with the initiative (The Salt Lake Tribune Jan. 12). To get a law changed, you can either get the legislature to do it or have the people do it, Scott Simpson, president of the Utah League of Credit Unions, said. The proposed initiative also would put caps on returned-check fees, ATM surcharges, and payday loan companies’ interest rates. It also would prohibit financial institutions from refusing to honor gift cards not used within a year of purchase, he added. By placing these consumer-friendly provisions in the ballot initiative, the voters would be reminded that the legislators rejected these provisions in the first place, Simpson told the newspaper. “We are looking for any opportunity to roll back the punitive measure of our state charter,” Simpson told News Now. “We are optimistic that the state legislature will help with that. But at the end of the day, if it doesn’t help, the only other option is the people.” Simpson said the ballot initiative is just “speculative at this point,” and no timetable has been set to introduce it.

CU System briefs (01/14/2008)

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* LATHAM, N.Y. (1/15/08)--The nomination of John C. Gibardi to the New Jersey Credit Union Advisory Council has been confirmed by New Jersey's Senate Judiciary Committee and full Senate. Gibardi is president/CEO of Entertainment Industries FCU, which is based in New York City and has a presence in Elizabeth and Lyndhurst, N.J. The committee advises and makes recommendations to the state Commissioner of the Department of Banking and Insurance on matters related to New Jersey credit unions. Gibardi, who served as chairman of the New York State Credit Union League from 2003 to 2007, is a league board member … * LIMA, Ohio (1/15/08)--U.S. Rep. Jim Jordan (R-Ohio) addresses students at Lima West Middle School on the importance of learning about personal finance during the Ohio Credit Union League's (OCUL) kickoff of its financial education initiative, MoneyAndStuff, in Lima. OCUL President Paul Mercer said Ohio credit unions are taking action to protect Ohio's future by teaching students to make smart financial decisions, understand the difference between wants and needs, and manage debt. The program targets grades four and five, and ll and 12, the most impressionable ages. Credit unions have educated more than 20,000 students in nearly 200 schools in the state, said Phil Buell, CEO of Superior FCU (Photo provided by the Ohio Credit Union League) … * ST. GEORGE, Utah (1/15/08)--Beehive FCU was robbed Monday morning by a white male wearing a baseball cap, said St. George police. The robber gave a note demanding money to a teller and left the credit union with an undisclosed sum (The Spectrum Jan. 14). It is not known if the suspect carried a weapon ... * YORK, Pa. (1/15/08)--Robert Coulson Lavery, 56, was convicted Wednesday of robbing New Cumberland FCU on Nov. 24 (Deseret Morning News Jan. 14). After Lavery robbed the credit union, he got into a getaway car with Robert Steven Miller, 53. Miller’s car had a NASCAR license plate holder on the front. A tip regarding the license plate led the police to Miller, who confessed his involvement with the crime ... * QUEENS, N.Y. (1/15/08)--A Queens woman was arrested and charged Sunday with grand larceny in connection with allegedly depositing 22 fraudulent checks in her savings and checking accounts at Municipal CU, a $1.3 billion asset, New York-based credit union. Ogretta Hannibal, 47, allegedly deposited bad checks totaling more than $41,000 between December 2006 and December 2007 (Newsday Jan. 14). After a fraud investigator reported the incident to police, Hannibal's accounts were frozen to prevent her from withdrawing any more funds, police said … * MIDDLETOWN and BRISTOL, Conn. (1/15/08)--Two Connecticut credit unions were robbed within hours of each other Friday, with detectives investigating whether they are a part of a similar crime wave in central Connecticut. Three men robbed the $103 million asset, Middletown, Conn.-based Seasons FCU. A few hours later, three men held up the $77.1 million asset Bristol, Conn.-based First Bristol CU (The Hartford Courant Jan. 12). At least five other times since mid-October, two or three robbers have hit credit unions in East Hartford, Hartford, Newington and Plainville … * HONOLULU (1/15/08)--Ron Ogata, former president/CEO of HawaiiUSA FCU, died Dec. 22. He was employed nearly 40 years in financial services and was president/CEO of the credit union from 1988 to 2002. For the past two years, he was on the board of directors. During his tenure at the credit union, assets more than doubled and membership tripled, making HawaiiUSA the state's largest credit union. In 1999, his vision of a Hawaii Shared Branching Network was realized. Ogata also served as director of the Hawaii Credit Union League, received the league's "Executive of the Year" award in 2000, and was president of the Oahu Chapter of Credit Unions. In 2001, he was inducted into the Credit Union Executives Society Hall of Fame. Ogata's memorial service will be Jan. 20 in Honolulu … * LATHAM, N.Y. (1/15/08)--Anthony P. Bax, a 45-year credit union veteran, died Saturday at home in Lewiston, N.Y. He is credited with saving a credit union. In 1986, when sponsor Carbon Products shut down, regulators suggested that Greater Niagara FCU find a merger partner or liquidate. Bax, the credit union's volunteer treasurer/manager, recommended that the credit union try to survive on its own. Today, the credit union has more than 5,000 members and more than $18 million in assets. He served in several positions on the Niagara Chapter Council, and on the New York State Credit Union League's board and committees. He was inducted into the state's Credit Union Hall of Fame in 2003. He is survived by his wife Anne, daughter Sharon, four grandchildren and seven great-grandchildren …

Beehive CU members begin voting this week on conversion to bank

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SALT LAKE CITY (1/15/08)--Voting by members is scheduled to begin this week to determine if Utah’s Beehive CU will convert to a bank. Beehive began sending out ballots Monday. Members can return them by mail, deposit them in lock boxes at the credit union’s branches, or vote at a special meeting Feb. 13. Because the $185 million asset, Salt Lake City-credit union has a state charter, its operations--particularly in regard to opening new branches and adding new members-- are significantly restricted, said Scott Jorgensen, Beehive’s chief executive. Meanwhile, the credit union’s costs continue to increase every year, he added (The Salt Lake Tribune Jan. 12). There are no plans to take Beehive public after it is converted to a mutual savings bank, Jorgenson told the newspaper. The biggest concern the credit union industry has in Utah is that members need to have all the information required to make an informed conversion decision, Scott Simpson, president of the Utah League of Credit Unions, told the newspaper. A dispute arose late last year when two long-time members sought to present a mailer outlining their opposition to the merger. When the two asked Beehive to distribute some information to members, the credit union management challenged much of the information and asked the National Credit Union Administration (NCUA) to intervene. The NCUA rejected the challenge and ruled that the information be included for members to review before they voted.

CU has network outage in Vancouver tornado

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FEDERAL WAY, Wash. (1/14/08)--Only one credit union--iQ CU--was affected by the tornado that touched down in the Hazel Dell neighborhood of Vancouver Thursday, says the Washington Credit Union League. The league and the Washington Credit Union Foundation received updates Friday from two credit unions with facilities in the area--Columbia CU and iQ CU, David Bennett, league director of publications, told News Now Friday. "The funnel cloud passed directly over iQ CU's Operations Center," he said. "It didn't lose power, and there was no physical damage to any of its facilities." However, the credit union reported that "something zapped our network and we were down for a couple of hours," he said. "The operations at Columbia CU were unaffected, although some chaos in the area had the credit union on edge," Bennett said. "We should be thankful that there were no serious injuries," he told News Now, noting that people reported the tornado "came out of nowhere." He noted that a tornado in January "is extremely rare." Columbia CU has $771.7 million assets, and iQ CU has $374.2 million. It was not known whether employees or members' homes were directly affected by the rare twister.

December CU CEO Confidence Index drops

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FARMERS BRANCH, Texas (1/14/08)--Credit union CEOs are not as confident as they once were regarding their members’ and institutions’ financial futures, according to a recent survey based on Southwest Corporate FCU’s quarterly CU CEO Confidence Index for December 2007. CEOs’ perspectives of their members’ current financial conditions dropped to 13.14 in December from 23.88 in September 2007, and expectations for the future decreased to 11.08, from 31.08 during the same period. Overall confidence dropped to 23.80 in December, from 34.27 in September. While the marker for credit union’s current financial condition fell about 8 points, to 49.48, the drop was twice that amount for credit union’s financial condition in six months. Loan growth anticipation also dropped to 9.54 from 23.51, and share growth 13.92 from 15.30. “Even though CEOs previously had concern over their members’ situations, it didn’t translate into outlook for their institutions,” said Brian Turner, manager of advisory services. “The unrelenting doom-speak about the housing slowdown, impairment exposure and slower job growth apparently is finding its way to CEOs.” The survey’s results also demonstrate a “domino effect” on CEO outlooks. Concern for members translates into lower loan and share growth expectations, and “throw into the mix anticipation for lower market rates, and CEOs worry about the impact lower asset yields and stagnant share rates will have on gross margins,” Turner said. Despite lower confidence levels, share growth at credit unions will increase in the first quarter, stabilizing in the second quarter, Turner said. Loan growth, slow in the first quarter, will improve during the second quarter. Surplus liquidity also will change, and credit unions will see that revenue from investment portfolios will increase as home and vehicle sales remain dormant, Turner added. The yield curve has a traditional shape, which is good for asset yields. Credit unions have room to lower non-term share rates to help support margins, although rising term certificate demands could offset benefits. During the next six months, credit union managers should re-employ monthly loan maturities to the market’s relative value profile and manage the growth in term of share certificates, Turner advised. The Confidence Index survey had a 23% response rate. The number of respondents, 194, was the largest in the survey’s four-year history.

New Jersey New York groups hope to form CUs

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MILLVILLE, N.J., and QUEENS, N.Y. (1/14/08)--Community-based nonprofit groups in New Jersey and New York are looking to bring more credit unions to those states in 2008. In New Jersey, Tri-County Community Action Partnership, a Bridgeton-based nonprofit, announced at a news conference Thursday it is combining its efforts with local financial institutions and has requested approval from the state to start a credit union (TheDaily Journal.com Jan. 11). The credit union would provide services such as check cashing, mortgage lending and other fundamental banking services. Colonial Bank was the first contributor with a check for $100,000, said Millville Mayor James Quinn, who also is a bank director. The reason for the contribution is that it is often hard for people with poor credit histories to obtain loans from a regular bank, Quinn added. In New York, Queens Community House, a borough-wide nonprofit group, hopes to open a credit union sometime this year to serve the communities of Corona, Elmhurst, East Elmhurst and Jackson Heights, according to Zoe Sullivan, director of employment and community development for Queens Community House (Queens Chronicle Jan. 10). Rather than draw customers away from banks, the purpose of the credit union would be to provide an alternative for people such as low-income residents and immigrants, who may not have access to financial services, Sullivan said. Currently, Queens Community House is conducting research to determine area residents’ financial needs and how a credit union might help them. The goal of collecting 1,000 surveys almost has been reached--with 845 already collected--Sullivan said.

CUs test results in lead-paint recall of coin banks

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RALEIGH, N.C. (1/14/08)--About 1,300 fish coin banks issued by Coastal FCU are being recalled after the credit union had the banks tested and found excessive levels of lead. TJ Promotions of South El Monte, Calif., in cooperation with the U.S. Consumer Product Safety Commission, is recalling the plaster banks, which are shaped like a fish and are orange with white stripes (consumeraffairs.com and product-rviews.net Jan. 11). The $1.747 billion asset, Raleigh-based Coastal FCU provided the coin banks--which were manufactured in China--as gifts to members in North Carolina from February 2006 through September 2007. The fish coin banks contain excessive lead paint levels, violating lead safety standards. Coastal FCU informed the U.S. Product Safety Commission about the problem in September after it had the fish coin bank independently tested with a state agency, Joe Mecca, Coastal FCU community relations director, told News Now. “We had the product tested for our own soundness of mind, due to all the prevalent concerns about lead paint in children’s products,” Mecca said. “The agency told us that there was lead content, and that we should notify the distributor and the Product Safety Commission. The commission told us it was a problem to be handled by the distributor--TJ Promotions--which is the standard policy in cases such as these.” To inform members about the problem, Coastal FCU put posters in all of its branches, placed a notice in its quarterly newsletter in October, and had all employees inform members to whom they remember giving the bank, Mecca said. Because the banks were a free gift, the credit union is not certain who received them, he added. Most of the banks available were not handed out, so they were recalled before they could be issued, Mecca explained. Replacement banks are being custom-designed by a U.S. manufacturer and will be given out to members, he added. There have been no reports of illness or injury from the product. Members should immediately take recalled coin banks away from children and return them to the location from which they were obtained. Members will receive free replacement banks as soon as they are available, according to TJ Promotions. For more information, use the links.

Vermont papers look at the state of co-ops

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BURLINGTON, Vt. (1/14/08)--Although the number of credit unions has declined for years due to mergers, the number of members of credit unions has grown dramatically, author Stephen Morris pointed out in Vermont newspapers about the current state of cooperatives. Morris’ article published in the Barre Times-Argus and the Rutland Herald (Jan. 6) focused on the many co-ops doing business in Vermont and mentioned credit unions to exemplify the importance of co-ops. Vermont currently has 31 credit unions, in addition to business cooperatives such as Mad River, Hunger Mountain and Cabot Creamery. The cooperatives “dot the state’s economic landscape,” he said. Yvonne Garand, Vermont State Employees CU business development director, also was interviewed for Morris’ article. She articulated Vermont credit unions’ mission. “We’re not serving our customer base for the benefit of our outside shareholders, but for the common benefit of our members. They are the recipients of any benefits we create,” she stated in the article.

More green projects bloom among CUs

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MADISON, Wis. (1/14/08)--More credit unions are engaging in green practices and projects to help the environment. Credit Union Resources Inc., the wholly-owned service corporation of the Texas Credit Union League (TCUL), announced that it partnered with Affiliated Power Purchasers International (APPI) in October. The AAPI Savings Solution program assists TCUL members in reducing electricity and natural gas costs (LoneStar Leaguer Jan. 9). The program will provide cost-savings benefits to credit unions, said Tom Doge, senior vice president and chief sales officer for Credit Union Resources. “Anything that reduces the operational expenses of a credit union is good for the members too.” The Pennsylvania Credit Union Association (PCUA) announced it is looking for volunteers to serve on a green advisory committee. Members will discuss how credit unions can be leaders in going green and protecting the environment (Life is a Highway Jan. 3). The latest segment of Pennsylvania Newsmakers, sponsored by the PCUA, featured PCUA President/CEO Jim McCormack and the Pennsylvania Credit Union Foundation Executive Director Joe Wambach discussing the PCUA’s “go green” initiative (Life is a Highway Jan. 4). Redwood CU in Santa Rosa, Calif., recently earned a Top Commercial Real Estate Projects of 2007 award from the North Bay Business Journal. The award recognized the credit union for “Green Reuse,” or taking an existing commercial building and remodeling it to be environmentally responsible.

ID thief steals 665000 from HELOC

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FEDERAL WAY, Wash. (1/14/08)--Using a combination of forgery and a phone tap, an identity thief stole $665,000 from the credit union account of a Madrona, Wash., couple. A representative of Woodstone CU, an $86.2 million asset, Federal Way-based institution, phoned the couple Friday to inform them that $450,000 had been transferred from their home equity line of credit (Seattle Post-Intelligencer Jan. 10). Shortly thereafter, another caller contacted the couple, explaining that the amount transferred was actually $215,000 more--$665,000. Woodstone and the Secret Service began an investigation after the theft had been discovered. One of the victims told Seattle police that the money had been transferred to a New York bank and then out of the country. Investigators informed the man that an identity thief had mimicked his signature, and when representatives phoned to verify authorization of the transfer, the thief intercepted the credit union’s phone call--through a phone tap. The case is currently being reviewed by the Secret Service, Seattle police said.

CU System briefs (01/11/2008)

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* JACKSONVILLE, N.C. (1/14/08)--The ATM card of a murdered pregnant Marine, whose disappearance last month received national attention, was used at a Marine FCU ATM by a man who attempted to cover the surveillance camera with a rag while withdrawing funds from her account, said police working on the case (CNN.com Jan. 11). Investigators announced Friday they had discovered the buried body of Marine Lance Cpl. Maria Lauterbach, 20, who had been missing since Dec. 14. Someone withdrew funds from her account on Dec. 14, and the suspicious activity at the ATM occurred on Dec. 24 … * ROSEVILLE, Minn. (1/14/08)--An employee was ambushed and pistol whipped during a robbery attempt by two masked men at Teacher FCU in Roseville Thursday morning. The two men hid in the parking lot and when the unidentified employee arrived to open the credit union, they attacked the victim. One suspect took the employee inside while the other entered the employee's car and waited. When the armed robber inside learned the employee wasn't authorized to open the vault, he struck the employee in the head several times with the barrel of the gun. The victim's head injury required medical attention. The robbers left in the stolen getaway car without any money. The hijacked car was found abandoned about 20 minutes later Star Tribune and TwinCities.com Jan. 10) … * PALM BEACH GARDENS, Fla. (1/14/08)--Florida Aircraft FCU announced it will ground its name and become Velocity Community CU, effective Jan. 28. Florida Aircraft FCU was founded in 1958 to serve employees and family members of Pratt & Whitney Aircraft. It has grown to 24,500 members and more than $230 million in assets. The Velocity logo is a stylized V-Wing, emphasizing looking forward approach while recalling its aviation heritage … * RANTOUL, Ill. (1/14/08)--Credit Union 1 was held up Wednesday morning by one of two men who took a taxi to the robbery, then tried to use the loot to buy a new car. The taxi driver waited while one man robbed the credit union. After the heist, the taxi took the two to a nearby car dealership. Police arrested the men while they were trying to buy a car. Virgil D. Richmond, 19, will be charged for felony robbery and burglary. An unidentified 51-year-old man living at the same address as Richmond was detained but released without being charged. The cab driver said he received an unusually large fare for the cab drive (The News-Gazette Jan. 10) … * UTICA, N.Y. (1/14/08)--The Federal Bureau of Investigation is offering a $5,000 reward for information leading to the arrest and indictment of the suspect in a lunch-hour robbery of the Utica branch of New Hartford, N.Y.-based GPO FCU Thursday morning. The suspect, a heavyset man carrying a dark-colored handgun, fled the scene on foot or in a vehicle. No one was hurt. An undetermined amount was taken (UticaOD.com Jan. 10) …

Wash. league contacting CUs in Vancouver tornado

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FEDERAL WAY, Wash. (1/11/08)--The Washington Credit Union League was busy trying to contact credit unions with branches in a neighborhood of Vancouver, Wash., where a rare tornado touched down early Thursday afternoon. "The Washington league is currently phoning credit unions with branches in the Hazel Dell neighborhood," David Bennett, director of public relations, told News Now Thursday night. Vancouver has 17 credit unions, some of them with more than one branch. Bennett noted there were no reported deaths, but added there was "extensive damage. At least 1,200 homes are without power." The league and the Washington Credit Union Foundation "are assessing the need and working with all affected credit unions to make sure operations are running as smoothly as possible, he said. "The league/foundation will work with local credit unions to provide support where needed." According to the National Weather Service, the southwest Washington and northwest Oregon area sees about one or two tornadoes a year, usually in sparsely populated areas (KIRO.TV.com Jan. 10). Thursday's tornado downed power lines, uprooted trees, tossed shopping carts into cars and blew people across the street, according to the local news report.

Baby boomer retirements will impact CUs

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MENLO PARK, Calif. (1/11/08)--Baby boomer retirements will have the greatest impact on the work force over the next decade, according to a survey of 150 senior executives with the 1,000 largest U.S. companies. Credit unions will want to take steps soon to address the issue. About 47% of senior executives surveyed viewed pending retirements as the biggest factor affecting their businesses going forward, according to a survey by Robert Half International, a staffing services firm specializing in accounting and finance (PRNewswire Jan. 10). “The looming retirement of baby boomers has captured the attention of business leaders who are concerned about retaining the expertise of their most tenured employees,” said Max Messmer, chairman/CEO of the firm and author of Human Resources Kit for Dummies. “Fortunately, many baby boomers are considering working past the traditional retirement age to stay active and continue earning. “Businesses that accommodate valued staff members who are not ready for retirements but seek new work arrangements, such as flexible or part-time schedules, are best able to keep top performers,” he added. “Consulting arrangements allow experienced individuals to remain challenged professionally, while maintaining the flexibility to pursue outside interests.” The 2007-2008 Credit Union Environmental Scan for Strategic Planning (E-scan), published by the Credit Union National Association, also notes that fears of a labor shortage are being fueled by pending retirements of baby boomers. “The obvious near-term solution is to take steps to retain those who you want to keep working,” the E-scan said. “But nearly 80% of companies surveyed haven’t taken any steps to accommodate older workers, even though more than one third of the companies agree that the aging workforce will have a significant impact on them, according to a MetLife study. “Whether credit unions will face labor shortages in coming years will depend on how well they groom employees for management and key positions,” the E-scan continued. “We’re living in a knowledge economy in which employees’ experience and skills determine whether a company succeeds or fails.” Ongoing training and development are crucial to keeping a credit union competitive, the E-scan concluded.

WSJ columnist shops for HELOC remains with CU

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NEW YORK (1/11/08)--A Wall Street Journal columnist who was looking to refinance a home equity line of credit (HELOC) found--after thorough price shopping--that her credit union offered the best financing rates. Columnist Terri Cullen, who writes a weekly “Fiscally Fit” personal finance column for the paper, told her readers that she and her husband opened a five-year, $100,000 HELOC in 2003 to fund home improvements. With the end of the term approaching, they needed to refinance. After comparison shopping, they decided on their credit union (The Wall Street Journal Jan. 10). Cullen said her credit union offered a five-year credit line at 6.24%, and unlike her current line of credit, this one offered a fixed rate. She then checked with financial companies--bank and lenders--that she had conducted business with in the past, as well as her primary mortgage company--which would only go as low as 6.49% on the interest rate. Her bank said it would match the credit union’s 6.24% rate, but there were several caveats. Among them: she would have sign up for automatic monthly payments and transfer a minimum of $25,000 to the credit line; and she discovered--after examining the fine print--that there was an upfront interest-only period on the loan’s term, where the loan balance would not decline unless she made additional principal payments. Cullen’s last move was to check a financial information website--Bankrate.com--to do more comparison shopping. The lowest offer she found was a $100,000 line of credit with a 6.25% interest rate, but it was an adjustable-rate credit line. Satisfied that they had the best deal, she and her husband chose to refinance with her credit union.

CU System briefs (01/10/2008)

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* BATON ROUGE, La. (1/11/08)--Pelican State CU has bolstered its educational youth accounts to offer rewards for academic excellence, as well as $5,000 in youth scholarships to its youngest members (Louisiana Credit Union League's eNews Jan. 9). The Pelican youth accounts are broken into three clubs that charge no monthly fee and earn high dividends. These accounts are based in financial education and emphasize the importance of savings and schoolwork … * CAMP PENDLETON, Calif. (1/11/08)--A federal grand Jury in Las Vegas indicted a 24-year-old Marine Wednesday for allegedly stealing $39,000 from the share accounts of 15 enlisted Marines, while they were deployed in Iraq (Los Angeles Times Jan. 10). Edgar Alejandro Hermosillo allegedly obtained access to the account numbers at Pacific Marine CU while on active duty in Camp Pendleton. Hermosillo is charged with arranging for money to be sent to accounts in New Mexico, Nevada and Texas, using the illegally obtained account numbers, authorities said … * MACON, Ga. (1/11/08)--Police arrested two suspects Wednesday wanted for a Dec. 28 armed robbery at Park Community FCU's Macon, Ga., branch. Authorities arrested the two suspects at a motel in Pensacola, Fla. (The Macon Telegraph Jan. 10). Merkuri Stanback and Camilla Davis face charges of armed robbery, kidnapping and possession of a firearm during the commission of a felony. The two suspects, along with Frederic Clay, who was previously arrested in Macon, Ga., are accused of taking about $200,000 from the credit union. The robbers tied up credit union employees and customers, keeping them in a room during the robbery … * WINFIELD, Ind. (1/11/08)--Members Advantage CU, Michigan City, Ind., was robbed by two armed men shortly before the credit union closed on Friday. The men entered the credit union wearing ski masks and jumped over a counter toward a teller, according to the credit union’s manager (Post-Tribune Jan. 9). The manager activated a panic alarm and locked herself in a bathroom. The men took an undetermined amount of money from the drawer and vault, and forced the teller into another bathroom until they left. No one was injured. Members Advantage has $60 million in assets ... * CLOQUET, Minn. (1/11/08)--The Members Cooperative CU Board of Directors has named Tammy Heikkinen as president/CEO. She began her position Jan. 1, replacing Del Prevost, who retired in October (Pine Journal Jan. 10). Heikkinen has worked for Members Cooperative for 25 years and currently serves as vice president of operations. She also served as interim CEO during Prevost’s medical leave. Members Cooperative has $237 million in assets ... * LATHAM, N.Y. (1/11/08)--Albert D'Orazio, 74, former board chair of the New York State Credit Union League, died Tuesday in Cheektowaga, N.Y. He was a director from the Buffalo chapter and served as league chair from 1999 to 2001. He was past chairman of the league's Government Affairs and Bylaws Ad-Hoc Committees and a board member of CUC Mortgage Corp. and CUC Management Inc. D'Orazio joined Shredded Wheat FCU in 1952, as a new employee of National Biscuit Co., to get a car loan, and began volunteering at the credit union. In 1963, he helped organize Local 36 AFGM FCU, Cheektowaga, and served as secretary and then treasurer for more than 30 years. "Al was always ready and able to represent the credit unions of New York State when he served as league director and chairman of the board," said league President/CEO William J. Mellin. "He continued that commitment to the credit union movement until he passed." D'Orazio is survived by his wife, Dorothy; sons, Thomas, Daniel and Nicholas; daughter, Tina; nine grandchildren and six great-grandchildren …

CO-OP Financial Services donates 100000 to Biz Kid

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RANCHO CUCAMONGA, Calif. (1/11/08)--CO-OP Financial Services has donated $100,000 for the second consecutive year to Biz Kid$, a PBS television series designed to teach students about managing money. Biz Kid$ is in its second season of production and began airing on 279 PBS stations in 43 states last week. “Solid educational programs are crucial to build thriving communities, and CO-OP will continue to work in conjunction with our credit union partners to support these types of endeavors,” said CO-OP President/CEO Stan Hollen. Biz Kid$ is a joint project between Junior Achievement and the creators of “Bill Nye the Science Guy.” CO-OP, a credit union service organization, also supports Children’s Miracle Network and Credit Unions for Kids. CO-OP recently created a $1 million matching funds project for the Children’s Miracle Network to encourage credit union charitable activities.

WOCCU CUs come closest to meeting Islamic Sharia compliance

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MADISON, Wis. (1/11/08)--Credit unions come the closest among Western financial institutions to meeting Islamic Shari'a compliance for financial services, indicates a new technical report from the World Council of Credit Unions (WOCCU).
World Council of Credit Unions' new report shows challenges from Islamic law in establishing credit unions in Afghanistan. Here, members meet at Balkh Investment and Finance Cooperative in Mazr-i-Sharif. (Photo provided by the World Council of Credit Unions)
Interest paid to depositors on savings by western banks is considered a loan with interest and is not allowed under Islamic financial principles. However, financial cooperatives' mutual ownership and equal distribution of dividends may mitigate some of the law's restrictions and make credit unions attractive to Islamic savers and borrowers in developing countries and in the U.S., says the report. The report, "Supporting Credit Union Development in Afghanistan: An Overview of Issues Important to the Development of Shari'a-Compliant Cooperative Finance," outlines the challenges WOCCU confronts in establishing credit unions in the war-torn Islamic country. Robert Wieland, the author and researcher with Main Street Economics, looks at ways Islamic jurisprudence evaluates financial services and concludes credit unions may have the best chance to meet the needs of Muslim borrowers in the terms of their religion. Under Islamic law's Shari'a compliance, lenders may not charge riba (translated as "interest" or "usury") on money lent, nor pay interest on deposits held without truly sharing in gharar ("risk" or "uncertainty"), writes Wieland. Shari'a refers to financial transactions allowed by the Koran. Credit unions' mutuality, which distributes dividends, aligns more closely with Islamic law, Weiland said. "A truly mutualist institution would minimize the costs of achieving Shari'a compliance for its beneficiaries and, to the extent that profits were generated, these would accrue fully to the member-participants. This reading of Islamic jurisprudence should interest supporters of credit unions," he said. The report also discusses the types of financial products--including savings, investments and loans--and the way they may be developed for Shari'a compliance. Among the Koran's strategies for conducting financial business without violating the laws is a characteristic of generosity and forgiveness without penalty for loans and investments that go bad. Western financial practices run afoul of those laws in most cases. Complimentary copies of the 21-page report, funded by WOCCU's U.S. Agency for International Development Cooperative Development Program are available on WOCCU's website or through e'mailing research@woccu.org.

EDS printed states Social Security numbers on mailed labels

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PLANO, Texas, and MADISON, Wis. (1/11/08)--Electronic Data Systems Corp. (EDS) has seen no theft of data so far after Wisconsin officials disclosed Tuesday the company printed Social Security numbers on the address labels of a state agency's information brochures mailed to 260,000 people. The Plano, Texas-based information technology company, which provides information technology services to many credit unions, was hired by the Wisconsin Department of Health and Family Services to send 260,000 brochures to members of Medicaid, SeniorCare and BadgerCare services (The Wisconsin State Journal Jan. 9 and 10, and Computerworld Jan. 10). Credit unions serving members using the services may need to monitor accounts of members whose numbers were divulged for possible identity theft. The news adds another concern for credit unions and financial institutions facing issues related to data loss stemming from actions by or against third-party vendors--human error. Most data losses experienced so far stemmed from theft--cybercriminals capturing information from web sites, databases, stolen laptops, and mail. Bill Ritz, spokesman for EDS, told The Wisconsin State Journal that there were no reports of illegal activity involving the information so far and that people were getting unnecessarily alarmed. The error was an isolated incident that occurred when the address file was created for mailing and was a human error, not a system error, he told Computerworld. EDS identified the source and took appropriate action to ensure it doesn't happen again, he said. The company set up a hotline and planned to mail letters to inform affected individuals next week that would outline details about free credit monitoring EDS would pay for over the next year. Wisconsin Deputy Secretary Karen Timberlake said EDS has been a vendor for state Medicaid services for the past 30 years. It has sent out similar mailings often, and this is the first time something like this has happened, she said. (Computerworld). The mailing was supposed to go to 485,000 of about 800,000 members enrolled in the state programs, but EDS caught the error midway through the mailing process. This is the second time within a year that an agency in the state has mailed out Social Security numbers on address labels. In December of 2006, about 171,000 taxpayers received a mailing from the state Department of Revenue with their Social Security numbers displayed on address labels. Wisconsin Gov. Jim Doyle ordered all state agencies to review their procedures for protecting personal information.

PHH Corp. receives 50 million break-up fee

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BALTIMORE (1/11/08)--Blackstone Capital Partners has given PHH Corp. a $50 million termination fee after a planned merger between PHH and General Electric Capital Corp.(GECC), along with the sale of PHH’s mortgage to Blackstone, fizzled last week (Baltimore Sun Jan. 10). PHH Corp. called off the $1.8 billion merger because Blackstone could not finance the deal. The merger was to be completed Dec. 31. Under the merger agreement, a wholly-owned subsidiary of GECC would have merged into PHH. GECC was to sell the company’s mortgage business to Pearl Mortgage Acquisition 2 LLC, a Blackstone affiliate (News Now Jan. 2). PHH is a provider of mortgage and vehicle fleet management services with many credit unions of clients. PHH purchased CUNA Mutual Mortgage in 2005, and 18 former employees of CUNA Mutual have since founded Greystone Residential Funding Inc. (News Now Aug. 8, 2007).

Montana CU Network trains candidates on getting elected

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GREAT FALLS, Mont. (1/10/08)--The Montana Credit Union Network (MCUN) has partnered with two other organizations to hold day-long classes to help potential political candidates run for office.
Credit Union National Association Political Director Trey Hawkins addresses the issue of campaign fundraising during the 2006 Campaign Academy held in Billings, Mont.
The Campaign Academy is based on a national curriculum, covering a range of issues from demographics to campaign finance rules. The nonpartisan event is held every other year (Great Falls Tribune Jan. 8). “The Montana Credit Union Network's participation goes far beyond simple sponsorship,” Beth Satre, MCUN director of communications and public relations, told News Now. “We do put in some money, but we also work closely with our other two partner organizations--the Montana Rural Electric Cooperative Association and the Montana Chamber of Commerce to plan, organize, and help publicize the campaign academies.” While the bulk of the training is provided by people from the National Rural Electric Cooperative Association and the Credit Union National Association, MCUN works to balance that focus by recruiting local experts in communications, Get Out The Vote, state election and reporting laws, as well as elected officials to give participants information from a Montana-based perspective, Satre said.
Kathy Holte (left) and Alice Kranzler, both of Plentywood, Mont., compare notes at the 2006 Campaign Academy in Billings. Holte subsequently ran a successful campaign and was elected County Treasurer in Montana's Sheridan County in November 2006. (Photos provided by the Montana Credit Union Network)
Spreading the word about the campaign academies is another area that MCUN works on--it can offer sound training, but it also needs to get people there, she added. “We help organize these one-day, nonpartisan campaign academies because we believe they're a great value for Montana as well as the people who attend,” Satre said. “They provide a good forum for participants to gain nuts-and-bolts information, explore their options, and get a realistic idea of what it means to run effective campaigns. We need to encourage Montanans who are interested in public service to run for public office, whether it be for a local, county, or state office. “And, as one academy graduate who went on to be elected to the Montana Supreme Court said, ‘The program opens the door to the political process for the average Montanan,’” Satre concluded.

Record giving marks Washington foundations year

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FEDERAL WAY, Wash. (1/10/08)--The Washington Credit Union Foundation (WCUF) disbursed a record amount of nearly $230,000 in grants and scholarships to credit unions and their community partners during 2007. Grant dollars from the 501(c) 3 organization supported national and state-level financial literacy projects, small credit union development needs, broad community outreach efforts, professional development needs and disaster relief. In addition to contributing $75,000 in national underwriting toward the financial literacy television series Biz Kid$, WCUF has dedicated in-kind resources to provide long-term national management to the project. Biz Kid$ began airing this month on PBS stations nationwide. “A key goal of our foundation is to help Washington’s credit unions better consumers’ lives through innovative community outreach and consumer financial education programs, along with operational grants for small credit unions,” said Roxanne Kruger, WCUF executive director. “Projects related to these areas received $127,515 in grant funds.” Nearly 100 credit union employees, volunteers and management staff were awarded a combined $91,500 by WCUF for professional enrichment, including $31,000 for credit union professionals to attend CUNA Management schools. Also, $10,000 in disaster relief grants that were awarded by WCUF supported recovery efforts after the Peruvian earthquake and the Southern California wildfires last year.

Minnesota CUs learn importance of caucusing

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ST. PAUL, Minn. (1/10/08)--About 45 attendees learned the basis of precinct caucusing during a Minnesota Credit Union Network (MnCUN) political caucus training seminar Tuesday.
James Patrick Barone, chair of Minnesota’s 4th Congressional District DFL, leads caucus training during a Minnesota Credit Union Network political caucus training seminar Tuesday. (Photo provided by the Minnesota Credit Union Network)
James Patrick Barone, chair of Minnesota’s 4th Congressional District DFL Party, led the training. He provided an overview of what happens at Minnesota caucuses and how people can get involved. Topics included: when and where caucuses are held; what is on a caucus agenda; and how credit unions can caucus to push their issues forward. “Caucuses are a powerful tool for credit unions because they center around a group of people coming together and pushing their ideals forward,” said Mara Humphrey, MnCUN’s vice president of governmental affairs. “We held this training to teach credit unions about the importance of caucusing and to provide them with the understanding they need to effectively caucus in February.” MnCUN President/CEO Mark Cummins encouraged attendees to be more involved politically. Minnesota credit unions can join MnCUN’s GrassRoots Education and Action Team (GREAT), take part in political fundraising, run Project Zip Code at their credit union, or participate in the Political and Grassroots Network. “Credit union professionals and volunteers have a wide variety of channels through which they can become more involved on a grassroots level, and I challenge them to do so,” Cummins said.

Gateway Metro switches to fed charter

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ST. LOUIS (1/10/08)--Gateway Metro CU, a state-chartered credit union since 1935, received approval for a federal charter from the National Credit Union Administration, the credit union announced. David Barton, president/CEO of Gateway Metro, attributed the switch to a new 2007 state law that restricts state-chartered credit unions from expanding beyond the counties contiguous to their main office. Prior to the passage last April of that field-of-membership law--SB 591--credit unions were unable to expand at all--due to a stream of lawsuits against FOM expansions filed by banks and a 2006 Circuit Court decision that ruled geographic-based state-chartered credit unions could not expand. When the law was passed, the Missouri Credit Union Association (MCUA) said the measure was the result of six months of negotiations between credit unions and the banking industry. Its purpose was to stop the field-of-membership lawsuits bankers had filed against credit union expansions since 2001 and to clarify "geographic area" in regards to field of membership. At the time, MCUA President/CEO Rosie Holub noted that the legislation will help credit unions move forward. "Although this compromise piece of legislation does not contain all the provisions we would have wished, it clearly provides an opportunity for credit unions to grow and provides a more stringent legal threshold to thwart lawsuits going forward." Barton considers the law as "pretty restrictive." "We have St. Louis County on one side and the Mississippi River on the other. We're already in St. Louis County, and not too many Mississippi River inhabitants are interested in joining our financial cooperative," Barton said. A federal charter, he says, would allow more flexibility to grow. Gateway Metro was Missouri's fastest-growing credit union from 1999 through 2004, says the credit union. It is the eighth-largest credit union in the state, with $180 million in assets and 24,000 members. Gateway's new name will be Gateway Metro FCU. Out of the 152 credit unions in the state, only 15 have federal charters.

North Island CUs interactive brand displays create buzz

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SAN DIEGO (1/10/08)--North Island CU recently unveiled a new interactive advertising strategy targeting members of all ages. Known as “Island Paradise,” the original and interactive artwork can be seen throughout San Diego at numerous venues (Business Wire Jan. 8). Produced by Reactrix, Island Paradise involves branding displays in malls, theatres and other spaces that respond to the physical movements of the audience. The design reportedly has produced the highest advertising effectiveness score across all types of media, and is popular with major brands such as Coca-Cola. The original artwork, known as “Polymorphous Paradise,” was created in 1992 and has been used in the $1.5 billion asset, Chula Vista, Calif.-based credit union’s advertising and marketing programs. Earlier this year, North Island updated its signature mural artwork to include 20 new landmarks and sites from San Diego to Riverside, Calif. The interactive mural is featured on the credit union’s website under the Island Extras Sections. Use the link.

CU System briefs (01/09/2008)

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* WASHINGTON (1/10/08)--Counterfeit checks bearing the name of Paducah, Ky.-based C-Plant FCU are reported in circulation, says the Federal Deposit Insurance Corp. (FDIC) in a special alert Tuesday. The counterfeit items display the credit union's routing number, 283980031 and the words "CASHIER'S CHECK" in the top center area. They have a light blue background and bright royal blue borders, with the credit union's name printed in royal blue. Authentic cashier's checks have a light gray-blue background with dull dark blue borders, with the name printed in black ink. Anyone receiving the counterfeit items should contact C-Plant FCU Compliance Officer Carrie Childers at 270-450-7055 or cchilders@cplant.com … * SALINAS, Calif. (1/10/08)--Monterey County Employees CU Monday warned members not to fall for the latest e-mail phish attempts targeting the credit union. The e-mails, claiming to be from the credit union and telling county residents they would receive a tax refund, began on Saturday. A second wave, warning recipients their accounts had been compromised, followed. An earlier scam in June offered consumers $20 for participating in a survey. The credit union took measures to shut down the June scam's link and has contacted a website that tracks scams to shut down the links on the new scams. It's online alert to members says it never asks them to provide information such as passwords or personal identification numbers through e-mail (The Salinas Californian Jan. 8 and The Californian.com Jan. 7) … * NORCROSS, Ga. (1/10/08)--Associated CU has promoted C. Lin Hodges to president/CEO, announced Timothy F. Kercheval, board chairman, Tuesday. Hodges succeeds George M. Clarke, who retired Dec. 31 after 29 years with the credit union. Hodges joined the $875.4 million asset credit union in 1979 and served as executive vice president and chief financial officer (CFO). He formally was with Exchange Bank in Milledgeville. In accepting the position, Hodges announced that Timothy G. Bridges has joined the credit union as senior vice president/CFO. Bridges previously served as senior vice president and CFO of Georgia Credit Union Affiliates … *
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WALNUT CREEK, Calif. (1/10/08)--Pacific Service CU has provided PCs, printers, software and supplies to THE BREAD PROJECT, a nonprofit organization that trains low-income and unemployed people in skills needed for entry-level commercial baking and cooking positions. Students of the project, shown here, will use the equipment to create resumes and conduct employment searches in the food industry. Steve Punch, president of the more-than-$1-billion asset credit union, noted the project helps "educate individuals so they have the ability to earn a living wage." (Photo provided by Pacific Service CU) …

Article Missouri CUs a solution for small businesses

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ST. LOUIS (1/10/08)--An article in the January issue of the St. Louis Small Business Monthly touts the financial solutions that credit unions offer small businesses. The article is authored by Kelley Tyson, marketing coordinator at 1st Financial FCU, a $164 million asset, St. Charles, Mo.-based credit union. Many small businesses are unaware that they have another choice besides banks for financial services, the article points out. To keep up with members’ needs, 1st Financial began offering business banking accounts. “Many of our business accounts came directly from members conducting their business through personal accounts,” Joe Elder, director business service at 1st Financial, told the journal. “They were happy with the level of service they received from us, and they didn’t want to add another financial institution to their busy lives.” Many of the St. Louis area credit unions that offer business banking cater to small businesses, startups and home offices, while many local banks continue to accommodate medium-sized businesses. The result is that some small business owners are left with few financing options, the article said. “As more banks merge, the small-business owner has been getting lost in the shuffle,” said Andrew Dodge, associate vice president of business development at the $112 million asset Arsenal CU in Arnold, Mo., in the article. “We’re here, we listen, we’re rooted in the community, and the success of the local businesses is of paramount importance to us. Without a healthy, thriving business community, our neighborhoods suffer, and we suffer. We live here, we work here; this is our life.” Kathryn Chillson-Strinic, branch manager of Electro Savings CU’s Wildwood, Mo., branch, added: “We’re not limited in our decision-making. We don’t turn down small-business requests simply because they don’t meet a list of predetermined criteria.”

20 named to Indiana ignite working groups

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INDIANAPOLIS (1/10/08)--Twenty credit union professionals from 17 Indiana credit unions were selected to participate in ignite working groups. The first meeting is scheduled for Jan. 30. The ignite initiative is a joint venture with the Indiana Credit Union League and three Indiana credit union representatives associated with Filene Research Institute’s i3 program. The individuals are: Doug True, senior vice president of Technovation, FORUM CU, Indianapolis; Bob Falk, president/COO, Purdue EFCU, Lafayette; and Nan Morrow, vice president of corporate development, Centra CU, Columbus. The groups will create new ideas and implement existing ideas presented by the i3 group. The league will host education sessions open to all affiliates on topics such as innovation and creative thinking. Members of the working groups include:
* Kevin Sparks, vice president/chief financial officer, Crane FCU, Odon; * Jan Chronic, senior vice president of marketing, Eli Lilly FCU, Indianapolis; * Joe Hasto, chief financial officer, Eli Lilly FCU; * Tony Meier, associate vice president/business development officer, Evansville Teachers FCU, Evansville; * Michael Hostetler, marketing coordinator, Finance Center FCU, Indianapolis; * Blake Dearing, mortgage sales manager, FORUM CU, Indianapolis; * Debby Blake, manager, Contact Center, FORUM CU; * Tim Lukomski, chief financial officer, vice president of support services, Heritage FCU, Lafayette; * Charles King, corporate attorney, Hoosier Hills CU, Bedford; * Marie "Sam" Shanks, executive vice president, Indiana State University FCU, Terre Haute; * Brian Wilkerson, vice president/chief operating officer, KEMBA CU, Indianapolis; * Michelle Peterson, marketing manager, Marion School ECU, Marion; * Carolyn Probasco, manager/CEO, Members United FCU, La Porte; * Lora Davison, chief financial officer, Northern Indiana FCU, Merrillville; * Gary Icenogle, vice president of marketing and business development, NorthPark Community CU, Indianapolis; * Evelyn Royer, vice president of risk management/support services, Purdue EFCU; * Kevin Kosek, director, business development, Regional FCU, Hammond; * Becky Summers, vice president, Teachers CU, South Bend; * Chad Gramling, product manager, Three Rivers FCU, Fort Wayne; and * Jim Johnson, vice president, member services, Three Rivers FCU.

100000 earmarked to support CUs Indiana foundation

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INDIANAPOLIS (1/10/08)--Representatives from 19 Indiana credit unions can attend the Credit Union National Association’s (CUNA) Governmental Affairs Conference (GAC) in Washington, D.C., this year through assistance from the Indiana Credit Union League’s Servicecorp. “This is the third consecutive year we have been in a position to help underwrite the cost of attendance for some of our credit unions,” said league President John McKenzie. More than $100,000 will be put toward political involvement and supporting the Indiana Credit Union Foundation as a result of league and Servicecorp efforts. Through Servicecorp, the league granted $52,900 to assist affiliates in attending the conference. The foundation presented its Millie Cox Scholarship to Robert Stowers, board member at Allegius FCU in Burns Harbor, to attend the GAC, but Stowers redirected the funds to Herb Singleton, president/CEO of Union Baptist Church FCU in Fort Wayne. Union Baptist, the state’s newest credit union, began operations last year. Other conference attendees were selected, based on political involvement, representation of small and medium-sized credit unions, and whether they are Servicecorp clients. The foundation also received $50,000 in 2007 for financial literacy programs, scholarships, a Habitat House and the Biz Kid$ television series.

WOCCU calls for DSA WYCUP nominations

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MADISON, Wis. (1/10/08)--The World Council of Credit Unions (WOCCU) is seeking nominations for two awards programs--the Distinguished Service Award (DSA) and the WOCCU Young Credit Union People (WYCUP) Scholarship Program. The DSA is presented to individuals and institutions that have offered exemplary service to the credit union movement and its practices. Nominations must be made by a WOCCU member organization and are due May 1. The DSA award will be presented at the World Credit Union Conference in Hong Kong July 13-16. The WYCUP scholarship seeks individuals who have made significant contributions to the development of their own credit unions, regional or national credit union systems, and who have demonstrated the potential to employ their talents at the international level. WOCCU is encouraging its credit unions and credit union organizations to nominate credit union leaders. To be eligible for the scholarship, nominees must be sponsored by their credit union or credit union organization to attend WOCCU’s 2008 World Credit Union Conference; be 35 years of age or younger as of Jan. 1; and submit a completed nomination form to WOCCU by June 2. The scholarship consists of an all-expenses-paid trip to the 2009 World Credit Union Conference. It will be awarded to five recipients at the 2008 conference. The top two winners also will be able to visit a WOCCU project as part of a Cooperative Learning Tour development program. For more information, use the links.

Coosa Pines FCU supporting unit in Iraq

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CHILDERSBURG, Ala. (1/10/08)--Four branches of Coosa Pines FCU have joined in Operation Troop Support to support the National Guard 621st Troop Support Command Unit, stationed in Taji, Iraq. The branches at Sylacauga, Childersburg, Pell City and Chelsea, Ala., have been sending care packages full of snacks, candy, personal hygiene products, phone cards, games, puzzles, movies and other items to troops since November (The Daily Home Jan. 9). "We really want to do more than business in our community," said Aimee Morris, Pell City branch manager, told the newspaper. "We want to be of service to our community, seeking out and filling needs wherever we can." A soldier in the unit, Sgt. 1st Class John McDaniel of Childersburg, said the unit is thankful to get the donations. "The care packages have a great impact. A lot of times the care packages are the only way we can get these types of items," he said. The credit union staff and members of the community have donated enough to send a care package to the soldiers twice a month. Morris said the program will continue until the 30-member unit returns home. The $150.1 million asset credit union hopes to have a community-wide welcome home party when they return.

Florida league President Guy Hood to retire

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TALLAHASSEE, Fla. (1/10/08)--Florida Credit Union League (FCUL) President/CEO Guy M. Hood has announced plans to retire from the league in January 2009 after serving more than 20 years in that position. Hood began his tenure as president/CEO in 1988. During his career, he has seen significant transitions in the credit union movement, including the passage of the Credit Union Membership Access Act (H.R. 1151). Under his leadership the league has received many awards and recognitions from national organizations for leadership and accomplishments in advocacy, grassroots organization and communications. Most recently Hood received the National Credit Union Foundation "Anchor Award" for responsive actions in disaster response. Hood began his credit union career on April 1, 1970 as a field representative for the Alabama Credit Union League. He moved up the ranks to senior vice president of technical services before joining the Florida league. John Hirabayashi, FCUL board chairman, termed Hood "an outstanding leader" who is "at the top of his game." Under Hood's direction, the league "has become one of the premier leagues in the country. I know he will do an outstanding job his final year leading the league and setting the stage for a smooth transition." Although he will miss being part of the league daily, Hood said he was excited about the possibilities ahead for the league. "I am very confident my successor will have an equally rewarding experience as FCUL continues its mission to be the top resource for Florida credit unions." The FCUL Board of Directors has retained Credit Union Employment Resources (CUER) to perform the search for a successor. CUER is a service of Credit Union Resources Inc., an affiliated company of the Texas Credit Union League.

No CUs affected by Midwest tornados

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MADISON, Wis. (1/9/08)--No credit unions have reported damages from a rare series of January tornados that hit the Midwest Monday and Tuesday, according to CUNA Mutual Group (CMG). "There have been no reports of damages to any credit unions from Oklahoma to Wisconsin," Mike Retelle, CMG's disaster team response coordinator and Credit Union Protection claims manager, told News Now Tuesday evening. Tuesday morning, he had reported that CMG Regional Sales Vice President David Griffiths and the Wisconsin and Illinois Credit Union Leagues had no reports of credit unions with damages. "We're currently cautiously optimistic we will see very few, if any losses, from last night's weather event. However, we will continue to monitor the situation throughout the day," Retelle said Tuesday morning. Unseasonably warm weather for January spawned about 30 tornados from southwest Missouri to southeast Wisconsin Monday. On Tuesday another tornado was reported in central Arkansas, and tornado watches were in effect for Arkansas, Missouri, Kentucky, Tennessee and Mississippi Tuesday afternoon. The tornados killed one person in eastern Arkansas Tuesday and two people in Missouri's Webster and Greene counties on Monday. The storms demolished houses, knocked a railroad locomotive off its tracks and shut down a courthouse (CNN.com and Kansas City.com (Jan. 8). Kenosha County, Wis., Sheriff's Office spent Tuesday assessing the damage to homes in the area from Monday's storms. Hardest hit was a subdivision in Wheatland, about 50 miles southwest of Milwaukee and just north of the Illinois border. At least 55 homes were damaged or destroyed there by a tornado that cut a 10.8 mile swath through the area. Thirteen people in that county were injured. Gov. Jim Doyle ordered a state of emergency for that area.

CU CEO tells Sacramento what to expect in 2008

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SACRAMENTO (1/9/08)--Lenders should be doing everything they can to help their borrowers in today’s economy, a California credit union CEO recently told the Sacramento Bee. Carol Hauck, president/CEO of First U.S. Community CU in Sacramento, said that traditional solutions may not be enough to ward off foreclosures amidst the real estate slowdown. Hauck was interviewed for a Jan. 6 article about what consumers can expect in 2008. Hauck was interviewed for the financial institutions section. Housing values continue to drop, which makes financing challenging for financial institutions, she told the newspaper. Foreclosures and losses will mount, and there may not be enough capital available for new financing. Refinancing to pay other debts has slowed because many borrowers do not have enough equity. Homeowners who financed at the top of the market may also owe more than the value of their homes, she noted. To solve these problems, traditional solutions may not be enough and new ideas are needed to help both borrowers and their financial institutions, Hauck said.

NACUSO receives 50000 for innovation center

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NEWPORT BEACH, Calif. (1/9/08)--PSCU Financial Services has contributed $50,000 to fund the National Association of Credit Union Service Organization’s (NACUSO) 2008 plans for its National Center for Collaboration and Innovation, NACUSO announced. The donation was delivered by NACUSO Board Member Dave Serlo, president of PSCU Financial Services in St. Petersburg, Fla. “NACUSO has created an important resource--NACUSOMatch--that helps members communicate service offerings and build partnerships,” Serlo said. “We believe this kind of information sharing will help create new growth in this industry and build upon the cooperative spirit that we have embraced for decades. “Our motivation at PSCU is to continue supporting the value we see in NACUSO-generated solutions, designed to foster the collaborations and innovation needed to reverse down-trends in the industry as quickly as possible,” he added. Tom Davis, president/CEO of NACUSO, noted that PSCU is a NACUSO Platinum Partner and that Dave Serlo steadfastly championed the center’s development. “We feel strongly that PSCU’s support will ensure timely solutions, through NACUSO, to help credit unions grow and survive in 2008 and the years ahead.” An initial contribution by PSCU provided the start-up “seed capital” for the National Center for Collaboration and Innovation, created to serve as a unifying source for collaboration and innovation efforts, and as a clearinghouse for “who’s doing what” in the industry, NACUSO said. NACUSO officially launched the National Center on May 1, during its 2007 annual conference. From there, NACUSO continued to build and establish the NACUSOMatch Directory, a collaborative Web-based networking tool where NACUSO members can communicate service offerings and investment opportunities for credit unions seeking strategic partnerships.

Pennsylvania surveying fin ed at workplace

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HARRISBURG, Pa. (1/9/08)--Pennsylvania's Office of Financial Education is surveying workplaces in the state to learn more about employers offering financial education. The results will also help the office act as a resource for businesses that want to get information about financial education or start their own program, according to the Pennsylvania Credit Union Association (Life is a Highway Jan. 8). According to Secretary of Banking Steve Kaplan, businesses in the state could achieve higher productivity, lower health care costs, and reduced absenteeism by providing financial education for their employees. "Money problems at home can have a negative effect on an employee's work performance and that affects the company's bottom line," said Kaplan. "By investing in financial education, businesses can help foster a healthier and more productive workforce." The survey is available until March 14 at www.moneysbestfriend.com. Many Pennsylvania credit unions offer financial education to members and conduct public seminars on financial education topics.

Biz Kid featured in IDetroit NewsI

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DETROIT (1/9/08)--Biz Kid$, a new TV series exclusively underwritten by America's Credit Unions to teach kids about money was mentioned Tuesday in an article by a Detroit News television writer. The new show will be seen on 279 PBS television stations in 43 states starting this month. The article said the show aims to provide money management tips to young people during a time when the importance of financial literacy is being discussed by state legislatures nationwide and the U.S. Congress. The 30-minute PBS production debuted Thursday on WTVS-TV in Detroit. The first installment features guests--including a rap producer, a skateboard designer and a philanthropist who began a fund-raiser for a hospital--giving advice on money and entrepreneurship, the article said.

Iowa Foundation provides nine grants to small CUs

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DES MOINES, Iowa (1/9/08)--The Iowa Credit Union Foundation provided grants to nine small Iowa credit unions through its annual small credit union grant program. Funding for small credit unions grants is provided to the foundation annually by Veridian CU, a $1.214 billion asset credit union based in Waterloo, Iowa. Two grants are available to small credit unions: one for up to $1,000 for technology and planning needs; and the second for up to $2,500 for a credit union manager or board member to attend the annual Governmental Affairs Conference, sponsored by the Credit Union National Association (CUNA). The 2007 Small Credit Union Technology Grant recipients include:
* Dapako CU, Clinton; * Dubuque Teachers CU, Dubuque; * Frontier CU, Fort Dodge; * Polk County Employees CU, Des Moines; * Postal Employees CU, Fort Dodge; * Power Co-Op Employees CU, Humboldt; * Quaker Oats CU, Cedar Rapids; * Von Maur Employees CU, Davenport; and * Waterloo Police CU, Cedar Rapids.
The Governmental Affairs Conference Grant recipient for 2007 is Leitha Aten of the UNI CU in Cedar Falls. “Thanks to the generous support of the Veridian CU Board of Directors, the Iowa Credit Union Foundation is able to provide crucial support to small credit unions to help them meet their technology needs,” said Marybeth Foster, foundation executive director. “The Governmental Affairs Conference Grant allows credit union board members or managers to attend a national conference so that they in turn can better educate elected officials about issues important to small credit unions in Iowa.”

California bill would require monthly loan report

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RANCHO CUCAMONGA, Calif. (1/9/08)--A bill was introduced in the California Assembly Monday that would require lenders in California to provide monthly reports on loan modifications. The California Credit Union League (CCUL) is aware of the bill’s introduction and is monitoring the situation. “Yesterday (Monday) was the first day of the California legislative session,” said Henry Kertman, CCUL public relations director Tuesday. “It is on our radar screen, but the league has no official position at this time.” League staff is studying the bill and will be reviewing it with the league’s Government Relations Committee within the next few weeks to determine a position, Kertman said. The bill, authored by California Assembly Banking and Finance Committee Chairman Ted Lieu, would require lenders to detail the loans they have originated and serviced, including hybrid adjustable-rate mortgages (ARMs), fixed-rate products, fully-amortized ARMs, or loans with negative amortization or interest-only features (American Banker Jan. 8). Lenders would also have to provide information on all modifications within the last two months, modification type, the number of loans nearing foreclosure and amount of loans past due (American Banker). A hearing on the bill is scheduled for next week.

CU System briefs (01/08/2008)

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* TACOMA, Wash.(1/9/08)--Tacoma-based Sound CU came out looking good when a couple's blog compared the final loan payment processes on two car loans--one at the credit union, the other at Rainier Pacific Bank across the street. The husband and wife split up for their respective institutions to pay off their loans and then regrouped. For their side-by-side comparison use the link. The credit union loan took fewer people to process, fewer checks written, and was completed 15 minutes before the bank loan … * RANCHO CUCAMONGA, Calif. (1/9/08)--Tuesday's USA Today featured a letter written by California Credit Union League staffer Melia (Meichelbock) Keller, manager of communications and marketing. The letter addressed an article from last week's issue titled "Mental toll of war hitting female service members." Keller wrote about her experiences in Iraq as a civil affairs sergeant in the U.S. Army Reserve Special Operations Command. She received the Combat Action Badge, the Army Commendation Medal, the Iraqi Campaign Medal and the Global War on Terrorism Expeditionary Medal for her service. Her experiences are detailed in her online journal and book … * AUSTIN, Texas (1/9/08)--An employee of LCRA CU, Austin, Texas, has been charged with robbery by threat after allegedly faking a robbery and bomb threat at the credit union Monday morning. Nathaniel Hamilton had told police that while in a restroom, a robber passed him a note saying he had a bomb and wanted a certain amount of money delivered to the restroom. A silent alarm was activated and the building evacuated. Police say Hamilton admitted staging the event and stealing money from the credit union (KVUE.com Jan. 8) … * NEWPORT NEWS, Va. (1/9/08)--Jacquelin Florentin Jr. of Newport News was scheduled to be sentenced Tuesday on bank fraud and aggravated identity theft charges stemming from using other people's Social Security numbers to open accounts at four financial institutions. The accounts were at lst Advantage CU, Newport News Shipbuilding Employees CU, Citizens and Farmers Bank and Langley FCU. The scheme ran between July 2006 and March 2007, said the U.S. Attorney's office. He allegedly cashed $2,400 in checks and used one of the accounts to back his purchase of a car. He agreed in October to plead guilty and faces up to 32 years in prison with fines of up to $1,250,000 (Daily Press Jan. 7) … * PHILADELPHIA (1/9/08)--Police are resorting to nicknames to help people identify serial robbers, says the Philadelphia Daily News (Jan. 8). The "Scarf-Face Bandit" covers his face with a scarf during each holdup. He held up Sun East FCU on Dec. 26 after pointing a gun at tellers and handing over a demand note. He fled with an undisclosed amount by jumping into the trunk of a waiting car. The Scarf-Face Bandit also held up the Earth Star Bank last Thursday … * HUNTINGTON, W. Va. (1/9/08)--A former employee of a credit union that merged in 2004 with Star USA FCU has been charged with embezzling at least $81,000 from both institutions. Susan Kelley was employed by Huntington Veterans Affairs FCU and then Star USA from November 1998 to March 2006. Money first was discovered missing in November 1998. According to court documents, the embezzlement occurred from November 1998 to March 2006. Prosecutors bypassed the grand jury and filed an information document on Dec. 27, which indicates a pre-indictment guilty plea (The Herald-Dispatch Jan. 2) …

Youth Week art and savings challenge signup ready

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MADISON, Wis. (1/9/08)--Credit unions can get Youth Week artwork and sign up for savings challenges now, the Credit Union National Association (CUNA) announced this week.
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Youth Week, with a theme of, "Got Green? Grow It at Your Credit Union," will coincide with Earth Day, taking place April 20-26, 2008. This year’s corresponding Youth Week artwork will concentrate on going and saving the "green." Participants will be encouraged to build good saving habits and change current habits to protect the environment. Small, simple changes will be highlighted, including: replacing an incandescent light bulb when it burns out with a compact fluorescent light bulb, biking or walking instead of riding in a car, donating a used toy instead of throwing it away, putting the computer monitor to "sleep" when not in use, and eating more fresh fruits and vegetables instead of processed foods. The theme was selected from ideas sent by staff from more than 50 credit unions. "Got Green" is a variation of "Save the Green," a theme suggested by Jennifer Millard from Desert Energy CU in Tucson, Ariz., in 2006. Themes were voted on by nearly 500 credit union employees. The top themes were then presented to 26 youth, who chose "Got Green?" as their favorite. Along with National Credit Union Youth Week is the fifth annual National Youth Saving Challenge, where credit unions can bring youth to the credit union to open new accounts or make deposits in existing ones. Credit unions can participate by registering for free on the CUNA website, and setting saving goals. They then tally the total amount of deposits, the number of new accounts opened, and the total number of deposits made by young members during Youth Week and report their results to CUNA to determine figures on a national level. CUNA’s website also contains educational and promotional materials for Youth Week and free planning resources for credit unions. The site includes celebration suggestions from fellow credit unions, success stories, general newsletter articles, media tips to alert local media about this event, and more. For more information, use the link.

A number of CUs announce dividends

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MADISON, Wis. (1/8/08)--Credit union members nationwide are starting the new year with dividends and bonus earnings from their credit unions. “Remember that credit unions are not for profit, and member-owned financial institutions,” said Charles Emerick, HealthNet FCU board chairman. “We are glad to be in a position to return excess revenues to our members.” HealthNet FCU, based in Memphis, Tenn., voted to return 15% of interest paid on certain loans and a bonus dividend of 15% on selected savings accounts to members (NetEffect January 2008). Other credit unions reporting dividends include:
* Mazuma CU, which issued more than $720,000 to its members Dec. 21. They received 3% of the interest earned on deposits and 3% interest paid on loans during 2007. Missouri Corporate CU in St. Louis also gave a $100,000 dividend to its members on Dec. 31 (CourierNet Jan. 4); * Blue Chip FCU in Harrisburg, Pa., which gave members a 2% bonus. Borrowers received 0.75% refund on interest paid during the year. Postmark CU, Harrisburg, voted to give its members 5% of the total dividends earned on deposit accounts and 5% of loan interest paid in 2007 (Life is a Highway Jan. 3); * Postmark CU, Harrisburg, Pa., which gave 5% of dividends earned on deposit accounts and 5% of loan interest paid in 2007 to members. The payout exceeded $65,000; * Fort Campbell CU, Clarksville, Tenn., which approved a $2 million dividend for its members. The money was posted to their accounts Dec. 13 (Leaf Chronicle Jan. 3); * MECU, Baltimore, which gave a dividend of $4.25 million to members. Loan interest rebates were deposited into members’ share accounts Dec. 3, and extraordinary dividends were deposited into their accounts Dec. 31. The amount that members received depended on the amount of interest they paid on loans in 2007; * Houston Police FCU, which reported a dividend of $2.9 million. The bonus dividend and interest refund was 15% of the dividends members earned on their credit union deposit accounts or 15% of the interest members paid on their loans and credit cards (LoneStar Leaguer Jan. 4); and * New Mexico Educators FCU, Albuquerque, N.M., which estimated its 2007 dividends, or “Member Rewards,” at $1.4 million. Members earned bonus dividends on the dividends they earned last year, based on interest paid on loans during the select time period.

Wescom CU pulls out of wholesale mortgage lending

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PASADENA, Calif. (1/8/08)--Wescom CU has elected to exit the wholesale lending business for residential real estate loans, effective immediately. The $3.853 billion credit union made that statement in a letter to its mortgage brokers on Dec. 12, noting that it made the decision "after careful consideration." Wescom told brokers that rate locks would no longer be accepted but that the credit union "will honor existing loans in our pipeline. Loans that have been locked will continue to be processed and underwritten according to our normal procedures. Approved loans will be funded as usual." The letter was posted on The Mortgage Lender Implode-O-Meter website. Several credit unions have said that losses related to the subprime mortgage lending crisis have affected traditional loan portfolios. Some credit union members who took out subprime loans elsewhere are now going delinquent on their other loans. According to Credit Union National Association statistics based on National Credit Union Administration Call Report data, the credit union had more than $1.175 billion in mortgage loans and more than $1.928 billion in other loans, with a delinquency ratio of 0.8. News Now contacted the credit union with questions about trade press reports regarding a number of layoffs, including the wholesale mortgage department. The credit union did not reply.

Hanson named CEO of Mass. CU Share Insurance Group

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WESTBOROUGH, Mass. (1/8/08)--Michael Hanson, the Massachusetts Credit Union Share Insurance Group’s (MSIC) corporate counsel, will become its president/CEO. Hanson will replace John Buddle, who will retire March 1 after serving 14 years as CEO. Hanson has practiced as a banking attorney for the past 22 years, and has served as MSIC’s counsel for 12 years. From 1991 to 1992, he served as Massachusetts Commissioner of Banks. From 1976 to 1981, Hanson was a member of the New Hampshire House of Representatives, where he served as chairman of the House Appropriations Committee.

Former CUNA chairman Ken Marin dies

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CHELSEA, Mich. (1/8/08)--Educator and credit union leader Kenneth J. Marin, a former Credit Union National Association (CUNA) chairman, has died, the Michigan Credit Union League (MCUL) has learned. Marin, who served as league chairman from 1960 to 1963 and CUNA chairman during 1964 to 1966, died at his home in Chelsea, Mich., Sept. 1. A memorial service was held Nov. 19. He was a member of the Michigan Credit Union Hall of Fame (Michigan Monitor Jan 7). His service to the credit union movement also included terms as Grand Rapids Chapter chairman and MCUL director. In 1966, he was part of a U.S. State Department evaluation team designed to review operations in six South American countries. In 1968, he moved with his family to East Africa where he served as an advisor to the United Republic of Tanzania on capital mobilization and utilization. Marin also was appointed by President Lyndon B. Johnson as a member of the White House Consumer Advisory Council.

IAmerican ExecutiveI magazine features MCT FCU

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ROCKVILLE, Md. (1/8/08)--American Executive magazine recently featured Rockville-based MCT FCU as a credit union undergoing growth and organizational improvement. The article highlights the $400 million asset MCT’s improved service delivery, streamlined processes, and strong community ties, said the Maryland and District of Columbia Credit Union Association (FOCUS Newsletter Jan. 7). MCT and its CEO Thomas Beck both have a clear strategic vision for the organization, and have analyzed and improved most MCT processes since Beck’s arrival in June 2006, the article said. As an organization with ties to the Montgomery County Public School System, MCT can serve its community through an in-school branch program (ISB), the article said. “It is one way of educating the kids, by bringing some financial literacy to high schools,” Beck said of the ISB program. “A lot of these kids and teachers are members of ours, so we’re actually taking branches right to them.”

Filene seeks CUs input on the mortgage crisis

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MADISON, Wis. (1/8/08)--Credit unions can share their thoughts on a possible solution to the mortgage crisis on the Filene Research Institute’s website. Filene has posted a Dec. 26 New York Times op-ed piece regarding a “one-size-fits-all” mortgage solution and a forum for users to comment and discuss. The article was written by Michael S. Barr, a professor of law at the University of Michigan; Sendhil Mullainathan, a professor of economics at Harvard; and Eldar Shafir, a professor of psychology at Princeton. Under the Times’ solution, lenders would be encouraged to provide better disclosures to borrowers who choose to opt out. “If default occurs when a borrower opts out, the borrower could raise the lack of reasonable disclosure as a defense to the bankruptcy or foreclosure,” the article stated. The approach would still permit lenders to create new types of mortgages, but would make it harder for lenders to place borrowers in situations where they are vulnerable, according to the Times. For more information, use the link.

43 states airing CU-sponsored TV show

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FEDERAL WAY, Wash. (1/8/08)--Starting this month, 279 PBS television stations in 43 states have committed to broadcast the Biz Kids$ TV series, exclusively underwritten by America’s Credit Unions to teach kids about money. “As Biz Kid$ began airing this past weekend, it will be seen on 81% of all PBS stations,” said Steve Bosack, deputy director of the National Credit Union Foundation (NCUF). “This is more than twice as many stations than we had committed in mid-December, and nearly seven times as many stations than the producers had lined up to air the debut of Bill Nye the Science Guy.” The 26-episode series will be aired in the nation’s top three public television markets: Los Angeles, New York City and Chicago. Broadcast commitments now cover 43 states, including the entire states of Alabama, Indiana, Kentucky, Montana, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Rhode Island, South Dakota and Vermont. Credit unions can download and customize Biz Kid$ brochures, flyers, postcards, posters and statement stuffers to encourage their members to watch. Promotional materials are available on the websites of the NCUF and the Washington Credit Union Foundation (WCUF). Use the resource links. Biz Kid$ also will air on all high definition (HD) Channel PBS stations--about 100--on Sundays at 5 p.m., beginning Jan. 27. PBS stations with HD channels will air Biz Kid$ at the same designated daytime slot nationwide. Biz Kid$ already is airing in the United Kingdom and Ireland on a national business channel. The NCUF is the largest funder of the America’s Credit Unions underwriting group. NCUF committed $2 million over three years from a special sub-fund of its Community Investment Fund. “The NCUF is proud to be Biz Kid$ largest sponsor,” said NCUF Executive Director Steve Delfin. “This TV series, together with the teaching curriculum being produced in partnership with Junior Achievement, will fulfill a key part of our mission to bring financial education and literacy to our nation’s youth. BizKid$ has the potential to be the most visible youth financial literacy program that our nation has ever seen.” The first 13 episodes of Biz Kid$ are produced and paid for. “National underwriting dollars are needed now for the second 13 episodes in production,” said RoxAnne Kruger, Biz Kid$ project manager at the WCUF. To keep Biz Kid$ on the air with credit unions’ funding, supporters can contact their state credit union league.

CU System briefs (01/07/2008)

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* WATERLOO, Iowa (1/8/08)--Veridian CU has made $35,000 available for Inclusive Community Grant programs, which work to integrate and serve traditional excluded groups or cultures in the community. Here, Brittney Diercks, left, branch supervisor at Veridian, presents a $7,200 grant check to Barbara Sanders, Julie Pitzen and Chantelle Sanders, all of Family & Children's Council of Black Hawk County, for the council's healthy babies program. The credit union also awarded $7,000 to Advisory for a Better Future Fund for its ABF-Bus Shelter project, led by Waterloo East High School Students. Lesser grants went to NAMI Black Hawk County, North Star Community Services, Seeds of Hope, Young Parents Network of Cedar Rapids, Children & Families, Citizens for Community Improvement of Des Moines, and Iowa Legal Aid (Photo provided by Veridian CU) … * BURNSVILLE, Minn.(1/8/08)--US FCU volunteered its time to support local youth in the Shakopee, Minn., area through the non-partisan, grassroots organization 'Kids Voting Minnesota." On election day in November more than 60 children in grades 3-12 visited Precinct 7, where they voted for candidates and current issues. Previous to voting day, they studied the candidates and were informed how to make an educated decision when voting. In the photo, Maranda Knutson of Shakopee takes her son Reed Knutson to the voting booth to fill out his ballot. (Photo provided by US FCU) … * LATHAM, N.Y. (1/8/08)--Sen. Catherine M. Young, left, (R-Jamestown/Rochester) visited Olean Area FCU during the holidays to tour the credit union and meet with staff and CEO Dan Rourke, right. They were accompanied by senior staffers Brian Snyder, vice president/lending; Lee Ann Dineen, vice president/human resources and operations; and Mary Palumbo, vice president, finance and information technology. The credit union told Young about its history and people helping people philosophy, its services to members of modest means, and issues important to the credit union industry (Photo provided by the New York State Credit Union League) … * BALTIMORE, Md. (1/8/08)--Aaron Glaser has been appointed director of legislative affairs at the Maryland and District of Columbia Credit Union Association (MDDCCUA). Glaser has political experience with the campaigns of Gov. Martin O'Malley and the 2004 Kerry-Edwards presidential campaign. He most recently served as legislative director to Baltimore City Councilman Robert W. Curran and was instrumental in gaining passage of Baltimore's smoking ban (FOCUS Newsletter Jan. 7) … * NORTHVILLE TOWNSHIP, Mich. (1/8/08)--Former Michigan Credit Union League regulatory specialist Cylenthia La Toye Miller has been appointed judge of the 36th Judicial District Court by Gov. Jennifer Granholm. She will preside over cases from all of the court's dockets, including real estate, traffic and ordinance, general civil claims under $25,000, criminal misdemeanor and felony examinations (Michigan Monitor Jan. 7) … * NEW YORK (1/8/08)--Marcel Bristol of Elmont, N.Y., was arrested Friday on multiple charges of grand larceny and forgery related to using stolen IDs and personal data to obtain bank loans totaling $86,000. Bristol, who was arrested Friday, allegedly opened accounts and lines of credit at Bethpage (N.Y.) FCU, Nassau Financial FCU in Garden City, and Nassau Educators FCU in Valley Stream between June 12 and Sept. 1, 2007 (Newsday Jan. 6) … * PENSACOLA, Fla. (1/8/08)--A man with a hood covering his face and wielding a crowbar Friday robbed a branch of the West Florida Medical CU, located inside West Florida Hospital (Pensacola News Journal Jan. 5). He walked behind the teller counter, stole an unidentified amount of money and ran out. Four employees were at the credit union during the robbery …

Texas foundation awards in 2007 top 360423

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FARMERS BRANCH, Texas (1/8/08)--The Texas Credit Union Foundation (TCUF) announced that it has given $360,423 in grants for 2007. The grants included programs to benefit all Texans, and core programs like credit union grants, disaster relief and Southwest CUNA Management School (SCMS) scholarships (LoneStar Leaguer Jan. 7). “The foundation’s mission includes enabling credit unions to better serve their members, as well as financial education outreach across Texas and our other partners, as well as disaster relief for credit union communities,” said Jill Pharr, TCUF executive director. “We accomplished these things, and much more, with the financial support of our many contributors.” Fifty-eight general grants, totaling $243,423, included:
* $27,000 for the Texas Credit Union League’s (TCUL) REAL Solutions initiative; * $25,000 for BizKid$ Financial Education Series on PBS; * $28,000 for six Junior Achievement partnerships with credit unions in Abilene, Dallas, Fort Worth, Houston, Longview and Tyler; * $25,000 to the El Paso Affordable Housing CUSO; * $17,500 in disaster grants for the Solomon Islands tsunami, Jamaica hurricane, Peru earthquake and California wildfire disasters; * $17,000 for eight chapter grants; * Twenty-nine training and conference scholarships for credit union staff and volunteers; and * Sponsorship of the Texas Council on Economic Education Teacher of the Year Awards.
Nine financial literacy grants, totaling $60,000, included:
* Newspapers in Education programs on financial education in El Paso, Fort Worth and Harlingen; * Sponsorship of the Statewide 4-H Consumer Education Contest for high school students; *Nineteen scholarships for credit union member teachers to attend a national economics conference; and * Printing of the National Endowment for Financial Education (NEFE) materials in Spanish, for use in Texas as needed.
The foundation also gave $57,000 to credit union professionals to attend SCMS.

Ohio CUs offer five financial resolutions

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DUBLIN, Ohio (1/7/08)--Ohio's credit unions and the Ohio Credit Union League are offering five financial resolutions to consumers for 2008. "Reviewing your finances and looking at ways to improve your financial stability should be at least an every year occurrence," said Paul Mercer, league president, in a press release. He advised consumers to take their time reviewing their financial goals "both long and short-term. Credit unions are here to serve you, and they offer financial counseling, budgeting, financial education and numerous other services and programs to help you achieve your financial goals," he added. Among the resolutions offered:
* Pay off a credit card. * Have a monthly budget and stick to it. * Know your credit score so you know what you can afford. * Review your mortgage and refinance your home if you have adjustable rates. * Save each week or month and talk to a credit union about saving for both short-term and long-term.
A recent Experian/Gallup poll indicates that most U.S. adults will begin the year planning to attack their debt burden and about half plan to check their credit scores and cut back on entertainment expenses (LoneStar Leaguer Jan. 4). However, other personal finance goals such as consolidating loans and managing credit cards aren't on the to-do list for 2008.

News Nows top stories for 2007

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MADISON, Wis. (1/7/08)--Data breaches, phishing and security; the Bank Secrecy Act; the unrelated business income tax (UBIT) and other tax regulations; and the economy's effect on credit unions--including conservatorships--dominated the list of stories requested the most during 2007 by News Now's readers. The list is based on the number of viewers requesting each item, according to the Credit Union National Association's (CUNA) web services department. Overall, data breaches and phishing attempts appeared most often on the top 10 list. That isn't a surprise, since 2007 brought to light the largest data breach in history affecting credit unions and their members. Phishing attempts have been steady against financial institutions and their organizations throughout the year, as cybercriminals employed more sophisticated methods to capture consumers' personal data. Three stories on the list involved the Bank Secrecy Act. The economy, with the subprime industry's worries, was of prime interest, as were stories about credit unions taken into conservatorship, such as Cal State 9 and Norlarco CU, both in the top 20 news stories of 2007. In 2006, the top stories were phish tales and conversions of credit unions. Conversions were largely absent from the 2007 list. Here are highlights of the different topics on the upper part of the list. 15. NCUA confirms control of large Colo. CU WASHINGTON (8/24/07)—The National Credit Union Administration (NCUA) Thursday confirmed that it has placed Colorado's eighth largest credit union, Norlarco CU, of Fort Collins, into conservatorship and taken control of its operations. 14. Suspicious Activity Report guidance issued by FinCEN WASHINGTON (6/15/07)—The Financial Crimes Enforcement Network (FinCEN) this week issued, in apparent response to questions fielded by its Financial Institutions Hotline, two sets of guidance: one addressing Suspicious Activity Report (SAR) filings, the other law enforcement requests to maintain an account. 13. Former Nationwide FCU CEO: 'I did the only thing I could do' UNCASVILLE, Conn. (10/19/07)—In 2005, Paula Edwards, the former CEO of the now-defunct Nationwide FCU in Columbus, Ohio, received a phone call from her board chairman to meet her in the park of Nationwide's business complex for a chat. 12. Records retention guidelines approved for CUs ALEXANDRIA, Va. (7/27/07)—Credit unions will have some flexibility under new guidelines to the National Credit Union Administration 's (NCUA) rule on catastrophic act reporting and records preservation, according to Mary Dunn, deputy general counsel for the Credit Union National Association (CUNA). 11. Debit cards too risky for online shopping MADISON, Wis. (12/10/07)--Use the wrong payment method or the wrong piece of plastic when shopping online and someone you don't know could zero out your checking account balance in a matter of minutes. Remember some simple cyber rules to avoid becoming a statistic (Credit Union National Association center for personal finance). 10. NCUA becomes conservator of $388 million asset CU WASHINGTON (11/5/07)--The National Credit Union Administration (NCUA) said on Friday it assumed control of the operations of Cal State 9 CU, a state-chartered, federally insured, community-based credit union in Concord, Calif. 9. Overdraft protection bill heads for vote WASHINGTON (9/25/07)—The House Financial Services Committee is scheduled to vote this week on a bill aimed at adding consumer protections to overdraft protection plans, but which could have the unintended effect of shredding credit unions' ability to offer the service to members. 8. CUNA shuts down new card-activation phish attempt MADISON, Wis. (10/29/07)--A new phishing-scam attempt using the Credit Union National Association's name informs recipients about "irregular check card activity" and advises them to call a toll-free number to get any restrictions removed. 7. IRS releases UBIT guidance for two CUs WASHINGTON (3/6/07)--In Technical Advice Memoranda (TAMs) made public this week, the Internal Revenue Service (IRS) said several financial products sold by two unidentified state-chartered credit unions should be subject to the unrelated business income tax (UBIT). 6. BSA 'problems' result in NCUA cease and desist ALEXANDRIA, Va. (4/4/07)--The National Credit Union Administration (NCUA) yesterday issued a cease and desist order against Dover N.J. Spanish American FCU to correct what the agency called "substantial Bank Secrecy Act compliance problems." 5. Call-forwarding scheme latest ruse by phishes MADISON, Wis. (4/26/07)--A new phishing scheme that uses a "call forwarding" component enables phishers to portray themselves as the victim when a financial institution calls to verify a bank transaction. 4. What the Fed rate cut means for CUs MADISON, Wis. (9/19/07)--Credit unions can expect the Federal Open Market Committee (FOMC) to cut the target for the federal funds rate another 0.50% again in 2007 and another 0.50% in the first half of 2008--bringing the interest rate down to 3.75% by next summer, say economists for the Credit Union National Association (CUNA). 3. CUNA looks into new data breach WASHINGTON (1/18/07)—The Credit Union National Association (CUNA) said Wednesday that a recent breach of credit card information reported by TJX Companies, Inc. underscores the need for Congress to act quickly and reasonably on data security issues. 2. Worker steals 2.3 million account records from Certegy JACKSONVILLE, Fla. (7/5/07)--A senior-level database administrator was fired after taking data for 2.3 million consumer accounts from Certegy Check Services--a company with credit union ties--and selling the information to a data broker, announced Fidelity National Information Services Inc.. 1. 2006 IRA contribution deadline extended WASHINGTON (1/26/07)--Taxpayers throughout the country now have an extra day, until April 17, 2007, to file their 2006 returns and pay any taxes due.

Pennsylvania court to rule within 90 days on FOM case

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HARRISBURG, Pa. (1/7/08)--A federal judge in U.S. District Court for the Middle District of Pennsylvania said Friday she will render a decision within 90 days on the banking industry’s challenge to the National Credit Union Administration’s (NCUA) field-of-membership decision involving three Pennsylvania credit unions. Several credit union entities, including the Credit Union National Association (CUNA), were in Harrisburg, Pa., for the federal court hearing. The arguments on the credit union side of the case were made by the U.S. Justice Department on behalf of NCUA, and by Paul Lambert, counsel from the Bingham McCutcheon law firm. Lambert is representing CUNA, the Pennsylvania Credit Union Association (PCUA), the three affected credit unions and the National Association of Federal Credit Unions. Chief Judge Yvette Kane said there is the possibility that she may call for more briefs, Eric Richard, CUNA general counsel who attended the hearing, told News Now. The proceedings lasted about 90 minutes with the bankers, who are the plaintiffs, presenting their argument first, which is standard procedure, Richard said. Eric Womack, from the U.S. Department of Justice Civil Division, representing the NCUA, followed with his remarks. Finally, Lambert argued on behalf of CUNA, PCUA, the three credit unions, and the National Association of Federal Credit Unions. “Lambert argued that the U.S. Congress wants NCUA to grant community charters big enough for credit unions to be viable,” Richard said. “The bankers tried to challenge the validity of NCUA’s regulations on community charters. Our counsel said that, in a previous case in Washington D.C, the NCUA regulations were already upheld. So it was not appropriate to bring that issue up here.” A recent motion by banking plaintiffs seeks a summary judgment against the NCUA. Such a judgment would invalidate the agency's decision to grant community charters to the three Pennsylvania credit unions: Members 1st FCU, New Cumberland FCU, and Americhoice FCU (News Now Dec. 5). The first of the community charters was approved by the NCUA on April 24, 2003, Richard said. The bankers' case was filed in 2007 by the American Bankers Association and a group calling itself the Credit Union Task Force of Pennsylvania. The litigation challenges NCUA's determination that a six-county area in south central Pennsylvania constitutes a "well-defined local community" under the Federal Credit Union Act. A key issue to be decided in the case is whether the record shows sufficient interaction among people in the field-of-membership area to justify NCUA’s finding that there is a well-defined community in this area in Pennsylvania, Richard said. One other salient issue brought up was whether the court would disregard additional factual information that the bankers wanted to submit that is not in the NCUA record, Richard added, saying the bankers abandoned that argument.

Matz named interim CEO of Andrews FCU

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SUITLAND, Md. (1/7/08)--Deborah Matz, former National Credit Union Administration board member, has been named interim CEO of Andrews FCU in Suitland, Md. Matz replaces Michael Hale, who resigned from his position as president/CEO. Matz served as chief operating officer at Andrews FCU since April 2006. Hale had been CEO since 1996. Andrews FCU, based on the Andrews Air Force Base, has $810 million in assets.

CU System briefs (01/04/2008)

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* HARTFORD, Conn. (1/7/08)--Connecticut State Employees’ CU in Hartford has reported to the Federal Deposit Insurance Corp. that counterfeit teller checks bearing the credit union’s name are circulating. The checks are associated with a secret shopper scam. The counterfeit items have a routing number of 011900445, which is assigned to Bank of America. The checks have red and blue borders and change from red to blue in color. A rounded rectangle is displayed across the top of the checks containing the bank’s name, location, slogan and check number. Anyone who has information about the counterfeit checks is encouraged to contact the credit union ... * ST. LOUIS (1/7/08)--The Missouri Credit Union Association (MCUA) has completed transferring the ownership of the South and West St. Louis County shared branches to Electro Savings CU, St. Louis, effective Jan. 1. The branches operated as stand-alone locations since 1994 and 1999, respectively, and are now credit union-owned and operated outlets, said MCUA (CourierNet Jan. 4). Electro Savings retained all staff and the branches kept the same hours as before, and changes will be transparent for members. Mark Hohenstein, vice president of the Credit Union Shared Branch Network, is now based out of MCUA's St. Louis office … * DAYTON, Ohio (1/7/08)--Universal 1 CU member Kippie Reichelderfer happily took the wheel of the 2007 Ford Mustang GT Convertible she won during Universal 1 CU's 70th anniversary celebration. When she received the credit union's call at her workplace, she worried it was a scam. A visit to her local Chillicothe branch confirmed that her name had been drawn from 17,262 entries gathered during the credit union's year-long "Win With Us" campaign. Shown with the winner is her husband, Tim Reichelderfer. (Photo provided by Universal 1 CU) … * RALEIGH, N.C. (1/7/08)--State Employees' CU (SECU) announced the final round of winners in its year-long Million Dollar Sweepstakes to encourage use of electronic statements. Eleven drawings from February through December resulted in $1 million awarded to members, with 20 members winning $25,000 each and 100 members winning $5,000 each. Pictured are $25,000 winner Donna Tennyson of Charlotte and her daughter. Tennyson said she chose e-statements because she was concerned about fraud and believed e-statements was a more secure way to get her information. (Photo provided by State Employees' CU) … * ST. LOUIS (1/7/08)--Doug Macias has joined the staff of the Missouri Credit Union Association (MCUA) as a field representative, effective Jan. 2. Macias will work primarily with smaller credit unions on the eastern side of the state. He most recently served as CEO of the $11 million asset Atlas Community CU, Wood River, Ill. He also has worked in state, federal, select employee group-based and community-chartered credit unions, said MCUA (CourierNet Jan. 4) …

SECU tellers aid kidnap victim suspect caught

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CHARLOTTE, N.C. (1/7/08)--State Employees CU tellers helped police rescue a woman who said she was kidnapped by a man who robbed her. The woman escaped and told tellers she was robbed and then kidnapped by a man who forced her to go inside the credit union to get money (Charlotte Observer Jan. 4). Credit union staff called the police, who confronted the man as he waited in the woman’s car in the credit union parking lot. The suspect, James Smith, 51, would not surrender to police, so they shocked him with a Taser. He was later taken into custody and charged with first-degree kidnapping (News14.com Jan. 4). The woman was not injured during the kidnapping, which lasted 30 hours. State Employees CU, based in Raleigh, has $14.9 billion in assets.

Subprime woes wont cut FIs tech spending

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MILWAUKEE (1/7/08)--Problems in the subprime market will not affect how much credit unions spend on technology this year, a Robert W. Baird and Co. survey indicated. Survey respondents indicated that they would continue spending on core processing because many of them are under five-to-seven year contracts, David Koning, an analyst with Robert W. Baird, said (Milwaukee Journal-Sentinel Dec. 30). And as small financial institutions compete with big banks, they’ll need to invest in new products like security, bill pay, online banking and compliance, Koning told the newspaper. Robert W. Baird surveyed 153 small financial institutions, including credit unions. Another survey by RingCentral Inc., a communications provider, indicated that about 60% of small businesses plan to increase their technology spending this year. News Now reported only 6% planned to decrease their spending, while 31% planned to maintain current spending (Dec. 26). The spending would focus on personal computers (57%), e-mail (81%), mobile phones (77%), business phones (69%), and websites (61%), according to the survey. Financial institutions were looking at a 3% annual growth rate for technology spending in 2007, according to the 2007-2008 Credit Union Environmental Scan (E-scan) Report. Regulatory compliance and market forces were expected to drive most spending.

Pennsylvania CUs membership climbs to 3.4 million

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HARRISBURG, Pa. (1/7/08)--Pennsylvania credit union membership grew to more than 3.4 million during the third quarter of 2007, according to the Pennsylvania Profile Third Quarter Economic Summary. The summary indicates that membership is at 3,410,000, up from 3,387,000 in September 2006 (Life is a Highway Jan. 4). Pennsylvania credit union savings balances fell $257 million in the third quarter of 2007, nearly 1% more than for credit unions nationwide. However, for the 12-month period ending September 2007, savings balances overall increased 7.4%, faster than the national average of 5.8%. Pennsylvania credit union loan delinquencies were 0.84%, nearly equal to the 0.82% national average and down from 0.88% in 2006. This compares with an American Bankers Association study that indicates the percentage of loans at least 30 days past due at banks rose to 2.44% in the July-to-September period, from 2.27% in the previous quarter, according to the Pennsylvania Credit Union Association.

CU Fleet Auto changing name to Donald Driver Motors

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WEST ALLIS, Wis. (1/7/08)--CU Fleet Auto, the largest U.S. credit-union owned leasing company, announced Thursday that it will change its name to Donald Driver Motors. The West Allis, Wis.-based dealership, a division of Central States Mortgage, reached an agreement on the name change with Green Bay Packers receiver Donald Driver, who opened his new Chevrolet Buick Dealership in Campbellsport, Wis. (Milwaukee Journal Sentinel Jan. 3). Driver’s Campbellsport dealership was acquired by a partnership of Driver, Central States Mortgage CEO Richard Jungen, and CU Fleet Auto President Tom Burns. Burns will manage both dealerships. Donald Driver Motors will feature more than 200 certified use vehicles for sale, along with new Buick and Chevrolet cars and trucks. CU Fleet Auto partners with 14 Wisconsin-based credit unions.

N.H. editorial notes CUs payday loan efforts

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CONCORD, N.H. (1/7/08)--A Friday editorial in the Concord Monitor notes that New Hampshire credit unions offer alternatives for consumers to standard payday loans. The editorial said that the New Hampshire banking department has urged credit unions and other lenders to do more to meet the needs of consumers by offering alternatives to payday lenders. Payday lenders charge high interest rates that can plunge people into long-term or even permanent debt. Credit unions and others lender have responded, although there are not enough alternatives to meet the demand for easy-to-get unsecured credit, the editorial stated. Credit unions in the state tend to set minimum loan amounts of about $1,000, and some limit membership to select employee groups such as government workers or employees of participating companies. However, other credit unions can serve any New Hampshire resident, the editorial pointed out. It directed readers to the New Hampshire Credit Union League’s website for a list of credit unions. The editorial also urges quick passage of New Hampshire House Bill 267, which would cap the interest charged on payday and auto title loans at 36%.

Maintaining loan growth will be the challenge for 2008

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MADISON, Wis. (1/4/08)--Credit unions during November saw significant pickups in growth of credit card lending, delinquencies, and mortgage lending, and will face the issue of how to maintain their loan growth during 2008.
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Savings growth in credit unions outpaced their loan growth during November, according to the Monthly Credit Union Estimates from the Credit Union National Association (CUNA). The overall loan-to-savings ratio--83.6%--was down a percentage point from October's 84.6%. Credit union loans totaled $545.8 billion in November 2007, compared with $508.9 billion for the same period in 2006. Loans outstanding increased 0.4% from October and grew 7.3% over the past 12 months.
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Leading the monthly loan growth were credit cards--up 2.2% in November. "This is significantly above the national average," said Steve Rick, CUNA senior economist, told News Now. November's growth brings the year-to-year growth for credit cards to 15.2%, "which is really strong, when compared with last year's year-to-year growth of 11.1%." While credit cards were the fastest-growing loans, they are also the most worrisome. Borrowers are piling up unsecured debt, which can be dangerous to both the lender and the borrower, Rick said. He attributed the higher card growth to falling home prices' impact on home equity loan growth, which fell -0.3% for the month and are down 13.3% for year-to-year growth. Overall delinquencies are up 20 basis points--to 0.89% growth in November from 0.69% in June. "Delinquencies are up across the board," Rick said, citing rises in card, mortgage and business lending delinquencies. Business lending delinquencies grew 1.66% in September, compared with 0.5% at year-end in December 2006. For the same period, mortgage delinquencies grew to 0.57% from 0.34%. "The good news is that credit unions have extremely low delinquencies, but they are trending upward," Rick said. Credit card delinquency growth rose to 1.20% from 1.05% in November, and December likely will be worse. CUNA economists are forecasting the delinquency growth rate to be 1% this year, which is still very low, he said. Other good news: mortgage lending in credit unions is still strong, with a year-to-year growth at 14.3% for fixed-rate mortgages and at 11.1% for adjustable-rate mortgages. "Mortgages are for large amounts and there's not a lot of risk attached because credit unions aren't seeing the problems associated with subprime mortgages," he added. As for auto lending, "the new-auto lending picture is difficult, with negative growth. The market will be in used-auto loans. The slowdown in the new-auto market means dealers will offer incentive financing and will be very competitive," Rick said. More people are buying used cars likely because of the "wealth effect" from falling home prices. "Dealers will get incentives to move the new autos, which will be tough for credit unions. The used-auto lending is the auto loan market for 2008." The big concern for 2008 for credit unions will be the slowing loan growth and how to maintain their loan growth. "We're forecasting loan growth at 5% this year and savings growth at 9%, Rick told News Now. Credit unions can mitigate the loan growth problem by being more aggressive in their lending. "Banks are tightening their lending standards so this is an opportunity for credit unions. They can be more aggressive and make more loans," Rick said. Credit union savings balances grew 1.6% in November and 6.3% the past 12 months. Savings totaled $652.9 billion in November, compared with $614.3 billion in November 2006. The liquidity ratio was 18% during November, up 1.4 percentage points from October. While the movement's overall capital-to-asset ratio dropped slightly to 11.5% in November from 11.6% in October, the total dollar amount of capital increased to $89.2 billion from $83.8 billion a year ago.

New small business CUSO reaches profitability

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TALLAHASSEE, Fla. (1/4/08)--Member Business Solutions (MBS), a credit union service organization owned by Southeast Corporate FCU and Georgia Central CU, announced that it has underwritten more than $350 million in credit union small business loans in its first three years. “The best loans for credit unions tend to be for $500,000 or less, not multi-million dollar development loans,” said Jim Gallagher, MBS president. “We’ve encouraged our credit union partners to focus on small-business members, rather than looking elsewhere to make bigger loans.” Small businesses continue to thrive, according to an Aite Group survey. About 69% of large banks surveyed said they consider small businesses important to their success, and 80% of community bankers have placed a stronger emphasis on small businesses than they did three years ago. “Credit unions have the edge if they stick to what has made them unique all long--lending to people they know,” Gallagher said. MBS serves 45 credit union partners in 12 states.

Ohios struggling economy impacted CUs during third quarter

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DUBLIN, Ohio (1/4/08)--Ohio credit unions were affected by the state’s troubled economy, but weren’t hit hard by the subprime mortgage crisis, according to data from the Ohio Credit Union League’s 2007 Third Quarter Performance Report. Mortgage delinquencies remained at 0.83%. Ohio credit unions added capital, and their net worth increased 12.6%, said the league (eLumination Newsletter Jan. 2). Share draft penetration rose 6.9%, and non-interest income increased to 19.1%. Foreclosures, unemployment and a sluggish auto industry impacted credit unions according to Dave Shoup, league director of regulatory advocacy and compliance. Total income growth slowed to 7.3% annually, and membership fell 2.8% over the past 12 months. Loan demand was weak 75.1%, compared with 82.6% nationally. Mergers and liquidations slowed to nine in the third quarter, from 35 in 2006. Mortgage originations grew 11.5%.

Jeffco CU restores online banking site

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LAKEWOOD, Colo. (1/4/08)--Jeffco CU has restored its online banking site after shutting it down last week to protect members from a phishing scam. No member data were compromised, according to Paula Felten, Jeffco vice president of marketing. Scammers sent e-mails to Jeffco members telling them that their accounts had been suspended. The members were told to use a link, which led them to a website where they could enter their personal account information. The fake site looked similar to Jeffco CU’s main site (News Now Jan. 2). The credit union shut down its online banking site because it “wasn’t sure what members were giving out” to the scammers, Felten said. Jeffco CU has $145 million in assets.

Pennsylvania court to hear FOM arguments today

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HARRISBURG, Pa. (1/4/08)--Several credit unions entities, including the Credit Union National Association (CUNA), will be in Harrisburg, Pa., today for a federal court hearing on the banking industry’s challenge to the National Credit Union Administration’s (NCUA) field-of-membership decision involving three Pennsylvania credit unions. The case is before the U.S. District Court for the Middle District of Pennsylvania. The arguments on the credit union side of the case will be made by the U.S. Justice Department on behalf of NCUA, and by Paul Lambert, counsel from the Bingham McCutcheon law firm. Lambert is representing CUNA, the Pennsylvania Credit Union Association (PCUA), the three affected credit unions and the National Association of Federal Credit Unions, Eric Richard, CUNA general counsel, told News Now. “The credit union parties, as well as NCUA, have prepared an extremely strong case,” said Rick Wargo, PCUA executive vice president/general counsel. “We look forward to making the presentation and having the opportunity to address any questions that the judge may have.” A recent motion by banking plaintiffs seeks a summary judgment against the NCUA. That action would invalidate the agency's decision to grant community charters to the three Pennsylvania credit unions: Members 1st FCU, New Cumberland FCU, and Americhoice FCU (News Now Dec. 5). The first of the community charters was approved by the NCUA on Aril 24, 2003, Richard said. The bankers' case was filed in 2007 by the American Bankers Association and a group calling itself the Credit Union Task Force of Pennsylvania. The litigation challenges NCUA's determination that a six-county area in south central Pennsylvania constitutes a "well-defined local community" under the Federal Credit Union Act.

CU System briefs (01/03/2008)

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* FORT BRAGG, N.C. (1/4/08)--A car crashed into the rear entrance of Fort Bragg FCU Wednesday afternoon, destroying the $268.8 million asset credit union's two outer glass doors. An unidentified 52-year-old woman drove the car, said an emergency communications report, which attributed the crash to a medical condition (The Fayetteville Observer Jan. 3). The car had extensive front-end damage and was towed from the scene … * NAPERVILLE, Ill. (1/4/08)--During 2007, the Illinois Credit Union Foundation awarded nearly $220,000 in scholarships and grants. Small Credit Union Development grants, totaling $96,220, were awarded to 51 credit unions; $132,000 in community service grants went to 11 credit unions; marketing and business development grants totaling $61,780 went to 20 credit unions; and one credit union--Cornerstone CU, Freeport-- received a $10,000 Financial Independence and Revitalization Effort grant. For 2008, grant application review deadlines will be March 31, July 31, and Oct. 31, with the main scholarship application due March 31. Downloadable grant request forms are available via the Illinois Credit Union League's website … * RANCHO CUCAMONGA, Calif. (1/4/08)--Dianne Harding, retired CEO of Pomona Valley CU--now Inland Empire CU--Pomona, Calif., has received the "Unsung Hero" award from the California Credit Union League's Historical Preservation Committee. She was the credit union's CEO from 1972 until her retirement in 2004. Harding served at various levels with the league, including member of its policy making body, as director of the California League Services Corp., and member of various committees. She also was a trustee of what is now the Richard Myles Johnson Foundation. Harding was active in two credit union chapters. In 1984, she was named Mt. Baldy Chapter's Volunteer of the Year. The unsung hero award honors individuals with at least 20 years of service … * HARAHAN, La. (1/4/08)--The Louisiana Credit Union League has hired Jim Phillips as its sales/marketing consultant for credit unions in the Baton Rouge, Lafayette and Lake Charles areas, announced the league Thursday. Phillips previously was employed by the Louisiana Corporate CU. Phillips also was employed for more than 20 years by CUNA Mutual Group, the league said … * HARRISBURG, Pa. (1/4/08)--Harrisburg-based Belco Community CU teamed up with Harrisburg and Hanover Hospitals to welcome the area's first baby of the New Year, according to the Pennsylvania Credit Union Association (Life is a Highway Jan. 3). The $257.7 million asset credit union provided each hospital with a certificate for a $100 savings bond, a new baby account, and a bag full of baby essentials and BELCO-related goodies for the family …

Dakota CUs looking at small-dollar loans

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SIOUX FALLS, S.D. (1/4/08)--Three Sioux Falls credit unions are emphasizing small-dollar loans to compete against payday lenders. In light of the prevalence of payday loans, credit unions need to market small-dollar short-term loans--which have traditionally been an earmark of credit unions--and also educate underserved segments of the population about the loans, said Tony Richards, president/CEO of the Mid-America Credit Union Association, the association for credit unions in North Dakota and South Dakota (Sioux Falls Business Journal Jan. 2). The $107.3 million asset Sioux Falls FCU informs it members about the availability of small-dollar loans, but needs to increase its education of nonmembers, Kevin Kavanaugh, vice president of marketing at Sioux Falls FCU, told the newspaper. While discussing ways to better reach nonmembers, Kavanaugh said it’s difficult to compete with payday lending vendors who seem to be on almost every street corner, because convenience is paramount to many consumers. In the past 18 months more members of Sioux Empire FCU--a $53.7 million asset institution--have obtained small-dollar loans and lines of credit, according to Tim Ingalls, Sioux Empire vice president. Although the amount members can borrow is largely determined by their needs, the credit union requires a $75 minimum monthly repayment term. Also, if Sioux Empire members successfully complete the Sioux Empire Housing Partnership’s Credit When Credit Is Due program, which teaches finance and credit basics, they are refunded the cost of the class. The $26.3 million asset Sioux Falls Bell FCU recently launched its Fresh Start program, which allows members to recover from their financial missteps. The program is a better way of handling finances for young and old members in the long term, as opposed to a quick fix such as a payday loan, said Sioux Falls Bell President Barb Erb.

Filene report Allow CUs access to alternative capital

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MADISON, Wis. (1/3/08)--It is in the public interest to permit U.S credit unions greater access to alternative capital sources, says a recent Filene Research Institute report. In “Alternative Capital for U.S. Credit Unions? A Review and Extension of Evidence Regarding Public Policy Reform” author Robert F. Hoel explores the reasons why credit unions need alternative sources of capital, even though many credit union executives and economists believe credit unions are “overcapitalized.” Currently credit unions have only one source of capital--or sustenance--Hoel explains, and that is retained earnings. So credit unions tend to hoard retained earnings out of fear of a shortage. With alternative sources of capital, credit unions may be more efficient with their capital, Hoel said. After reviewing existing literature in the fields of credit unions, capital formation and public policy, Hoel provides other key research conclusions:
* Though many credit unions may not seek alternative capital now, having the power to do so would allow them to conduct business with confidence that they could build capital in a variety of ways beyond the slow retained-earnings approach, if necessary. * Federal and state laws and regulations should be amended to permit credit unions to obtain alternative capital. * Credit unions can expand their capital bases by using alternative capital in ways that will not dilute their cooperative ownership, value and governance structure. * Several different mechanisms for raising alternative capital are appropriate and feasible. Among them are obtaining capital from outside investors and acquiring special long-term deposits from credit union members. * A broad menu of alternative capital options would best serve credit unions, their members and the general public. There is no single method that is best for all credit unions seeking alternative capital. * It would be appropriate for credit union regulators to review and approve a credit union’s alternative capital plans and mechanisms prior to its issuance of alternative capital instruments. * Steps should be taken promptly to repeal or reform statutes and regulations that prohibit credit unions from obtaining alternative capital. There are no compelling reasons to delay.

Thief empties Hawaii ATMs snags IDs of 900 people

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HONOLULU (1/3/08)--Police in several states are looking for a man responsible for an identity theft scheme with more than 900 victims nationwide and $88,000 stolen from ATMs in Oahu, Hawaii, including that of a credit union. All the victims have accounts with Washington Mutual Bank. Police suspect he acquires victims' personal information, uses a cell phone to call the bank and change their personal identification numbers (PINs), and requests duplicate cards (KGMB9.com Dec. 27 and MSNBC.com Jan. 2). The thief used an ATM at Hawaii Central CU 27 times in three minutes to drain the machine of its cash, police said. He used a different ATM card for each transaction. The man was in Hawaii from Oct. 8 through Oct. 29. He repeated the thefts in Las Vegas and New York, said police. Police believe he is part of a larger network.

Latino Community CU rolls out online banking

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DURHAM, N.C. (1/3/08)--Latino DirectNet, a new online service provided by Latino Community CU, was introduced to members Tuesday. Latino DirectNet allows members to access most of the $50.8 million asset, Durham-based credit union’s products and services. “With this service, available in English and Spanish, members will be able to manage their accounts and carry out many types of transactions from home,” said Angel Romero, Latino Community marketing director. “Members will no longer need to go to branches, use the phone or go to an ATM. They will be able to do it all from their computers--from any place that has an Internet connection.” Transactions at Latino DirectNet are protected by physical, electronic and procedural measures, the credit union said. A highlight of the new bilingual system is the possibility of making investments online. “For example, members will be able to open share term certificates to enjoy Latino Community’s dividend rates,” Romero explained. “Another feature of Latino DirectNet is that it allows users to transfer money between accounts. Users can pay credit cards and loans as well. “Also, members will be able to pay utility bills and other services with BillPay. Through the BillPay system, credit union members will be able to schedule one-time or recurrent payments,” he added.

Sale of CU mortgage company PHH Corp. is off

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MT. LAUREL, N.J. (1/3/08)--PHH Corp. announced Tuesday that it has terminated plans for its purchase by General Electric Capital Corp. (GECC), a unit of General Electric Company, and The Blackstone Group. The merger was called off because Blackstone could not finance the deal. PHH has requested a repayment of $50 million as a termination fee. The merger was to be completed Dec. 31. Under the agreement, a wholly-owned subsidiary of GECC would have merged with and into PHH. Following the merger’s closing, GECC was to sell the company’s mortgage business to Pearl Mortgage Acquisition 2 LLC. Pearl is an affiliate of The Blackstone Group. "I am disappointed that we could not conclude the transactions contemplated by the merger agreement,” said A.B. Krongard, PHH non executive chairman of the board. “The board will determine in due course whether to continue to explore the company's strategic alternatives. The board remains focused and committed to delivering value for our stockholders regardless of the decision." PHH is a provider of mortgage and vehicle fleet management services. PHH purchased CUNA Mutual Mortgage in 2005, and 18 former employees of CUNA Mutual have since founded Greystone Residential Funding Inc. (News Now Aug. 8, 2007).

CU helps members with heating bills

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FALL RIVER, Mass. (1/3/08)--Fall River Municipal CU is helping its members pay their oil heating bills with a new loan program. The credit union is offering up to $1,000 in loan assistance for heating bills. The loan period is for 10 months at a rate of 5.5%. The program seeks to help members spread their heating bills into smaller payments (Standard-Times Jan. 2). Lisa Reid, consumer lending manager, told the Standard-Times a few members have taken out the loans. She expects the number of loans will increase. Though the program is scheduled to finish at the end of January, it could be extended if heating costs remain high, Reid said. Bruce Morell, executive director of People Acting in Community Endeavors, told the newspaper that Fall River’s program is a “godsend” for low-income residents. Many low-income residents can’t afford $800 monthly payments for oil, and have stopped paying rent or buying food and medicine, he said. Estimated winter heating costs for houses in the Northeast will be $1,879, a 25% increase from last year, the newspaper stated. Fall River Municipal CU has $24.7 million in assets.

WOCCU No CUs affected in Kenyan turmoil

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MADISON, Wis. (1/3/08)--Recent deadly riots over a disputed presidential election in Kenya have not affected credit unions in that country, according to the World Council of Credit Unions (WOCCU). Violence in Kenya has resulted in more than 300 people killed since President Mwai Kibaki was re-elected and sworn in for another term as the country’s president Sunday. The opposition candidate claimed the election was rigged (USA Today Jan. 2). Most of the violence has occurred in the city of Nairobi. Only 3% of the country’s 34 million people have been affected by the violence, according to a Kenyan government spokesman. The violence is costing the country $31 million per day, said Kenyan Vice President Moody Awori (The Associated Press Jan. 2). WOCCU has three projects in Kenya related to SACCOs or credit unions. “All three projects are on hold for at least another week before they get back underway,” Brian Branch, WOCCU chief operating officer and executive vice president, told News Now. “There was no known damage to credit unions because most everything was shut down due to the holidays and the election. So most businesses were not operating [when the riots broke out].” The SACCO Growth Project, which is funded by the Gates Foundation, is directed by Jesus Chavez. The project, which is designed to provide technical assistance to consultants who work with credit unions, is in Kibera, a slum inside Nairobi. Another project in Nairobi, funded by the British, is the SACCO Capacity Building Program, managed by Erick Sile. It is designed to improve the product pricing and financial efficiency of about 20 SACCOs. The third project is Mitigating the Impact of HIV/AIDS on Economic Growth through Credit Union Modernization; Institutional Restructuring; Agricultural Business Development and Services and Education. The project is run by Sam Dunlap in the city of Kisumu, and is funded by the U.S. Department of Agriculture. Sile is currently in Kenya, while Chavez and Dunlap are in the U.S. waiting to return to Kenya when tensions ease, Branch said. Kenya has 2,993 credit unions nationwide with more than 3.26 million members, totaling $2.147 billion in assets, according to WOCCU statistics.

WesCorp OKd to restate 2005 financial statements

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SAN DIMAS, Calif. (1/3/08)--WesCorp has received approval from KPMG LLP, its auditing firm, to release its delayed 2006 audited financial statements, after 10 months of discussions and review, the corporate credit union announced Wednesday afternoon. The statements will be posted on WesCorp's website and also will be distributed to its more than 1,100 member credit unions. The delay in publishing the 2006 audited financials was due to a difference in interpretation of the Statement of Financial Accounting Standards (SFAS) 133 for certain derivative transactions used in WesCorp's hedging strategies to manage interest-rate risk. The resolution means WesCorp will restate its earnings for the year 2005, make adjustments for 2006, and revise its hedge accounting practices for 2007. In aggregate, the restatement will result in an increase to WesCorp's income and retained earnings. The restatement has no adverse impact on the financial strength and safety of WesCorp, the corporate said. Under the adjustments, WesCorp will report earnings that are $16.1 million more than previously reported during the period 2005 to September 2007. Year 2005 will show a negative adjustment of $22.9 million. However, financials for year 2006 and up to September 2007 will more than compensate for the adjustment with positive net income increases of $16.9 million and $22.1 million, respectively. "As we were working closely with KPMG on the 2006 audit, we arrived at the conclusion that some of our documentation for certain hedge transactions did not meet the qualifications for hedge accounting under the 'short cut' methodology," said Todd Lane, executive vice president and chief financial officer of the $33 billion corporate credit union. "Interpretations of SFAS 133 in 2005 differ from those of today," he said. The restated financials "adhere to the most recent guidance for accounting treatment of hedge transactions under SFAS 133." WesCorp management believes that most of the hedges during the period under review would have qualified for hedge accounting under a "long haul" method. However, long haul accounting can't be applied retroactively, so the restatement assumes hedge accounting was not applicable to the derivatives and the related hedged item. The short cut methodology--a practice now abandoned by WesCorp and many other financial institutions--permits the user to assume no ineffectiveness if the company meets certain strict criteria, which means ongoing effectiveness testing is not required. However, if the criteria are not met in their entirety, the company must use the long haul methodology, which requires extensive documentation, analysis and testing at the creation of the hedge and during its lifespan. Standard & Poor's and Moody's recently reaffirmed their high ratings of WesCorp's portfolio and noted the corporate's outlook is "stable."

Financial resolutions include advice from SAFE CU

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NORTH HIGHLANDS, Calif. (1/3/08)--A credit union CEO was featured in a Tuesday Sacramento Bee article about financial resolutions. The article encouraged readers to “get into financial shape,” noting a number of ways that consumers can improve their finances and save money. The article also featured advice from Henry Wirz, president/CEO of SAFE CU in North Highlands. Wirz suggested several ways that consumers can boost their credit scores, such as: signing up for payroll direct deposits and then setting aside a fixed amount for savings. “Doing this, I saved for the down payment on my first home,” he told the newspaper. Converting to online payments can help members avoid late fees and save money on postage, Wirz said. He also suggested that consumers ladder certificates of deposit, and stagger maturity dates so they don’t roll over at the same time. Check credit unions’ interest rates, and buy certificates in April or October, when many credit unions offer special rates or discounts. “There’s usually a generous spread between six-month CDs and longer-held CDs that can offer better rates,” he wrote. Reviewing credit reports annually and cancelling unused credit cards will help to raise FICO scores, Wirz added. For readers looking to purchase a car, he suggested they study car prices and then check loan rates at their credit unions.

CU System briefs (01/02/2008)

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* HARRISBURG, Pa. (1/3/08)--The Pennsylvania Credit Union Foundation raised more than $255,000 in unrestricted funds in 2007 during its fundraising and grants campaigns, according to foundation board Chairman Norb Kaczmarek (Life is a Highway Jan. 2). The amount is an increase of $60,000 or 30% over the record total raised in 2006. More than $175,000 in grants went to projects ranging from financial literacy to strategic planning and small credit union development, reflecting an increase of $79,000 or 82% over its 2006 grants. Since the foundation was formed, it has raised nearly $2.1 million and awarded 296 grants for more than $1.27 million … * HANSCOM AFB, Mass. (1/3/08)--Hanscom FCU rang in the new year by giving members more than $1 million in loyalty dividends Monday. The total represents a 3% bonus on dividends earned and consumer loan finance charges paid in 2007. "This year brought an extraordinarily challenging financial climate. I am proud of our team for continuing to grow our assets and also thrilled to be sharing that success with our members," said Paul Marotta, board chairman. "I can think of no better way of telling them all, 'Thank you.'" Hanscom serves 42,000 members and has $578 million in assets … * HARRISBURG, Pa. (1/3/08)--Mid-Atlantic Corporate FCU has hired ALM expert Bruce Six to lead its new Asset and Liability Management (ALM) department. He brings more than 17 years' experience in the credit union movement, with various roles, including most recently administrator of ALM and investments at Pennsylvania State Employees CU. Six will work with credit union members and current ALM business partners to grow the corporate's ALM function. He also will be a member of its Investment and Asset and Liability Management committees (Life is a Highway Jan. 2) …