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CU System briefs (01/31/2012)

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  • TRENTON, N.J. (2/1/12)--New Jersey Gov. Chris  Christie has nominated Ken Kobylowski  as director of the state's Department of Banking and Insurance (DOBI), succeeding Tom Considine, who will step down effective Feb. 10, according to the New Jersey Credit Union League (The Daily Exchange Jan. 31). Kobylowski joined DOBI as chief of staff in February 2010 and took on the additional role of acting director of banking in October 2011. He was responsible for all legislative, regulatory, operational and administrative matters.  Kobylowski was in private law practice for 20 years and began his career as a bank analyst at the Federal Reserve Bank of New York. His nomination is subject to confirmation by the state Senate …
  • HARRISBURG, Pa.  (2/1/12)--Karen Janoski has been appointed CEO of the Greater Pittsburgh (Pa.) Police FCU, effective today. She succeeds Sandy Lazzara, who is finishing a 35-year career in the credit union movement. Lazzara will stay on through the month to consult and train.  She was honored in 2004 with the Pennsylvania Credit Union Association's Lifetime Achievement Award as recipient of the William W. Pratt Professional of the Year. Janoski most recently served as CEO of Consumer Healthcare FCU in Moon Township, Pa.  (Life is a Highway Jan. 31) …
  • SALT LAKE CITY (2/1/12)--Mountain America CU, based in West Jordan, Utah,  was recognized as one of Utah's Best Places to Work by the state's Department of Workforce Services Office of Work and Family Life. This is the seventh time the more than $2.9 million asset credit union has received the award, which recognizes companies that have created outstanding work environments and business growth by providing well for the work/life needs of their employees. Twenty companies received the awards, based on confidential state surveys completed by employees. The award scores in these areas: flexibility and benefits; whole life; workplace excellence; and business and people success.  The credit union will hold a celebration tomorrow for employees to thank them for helping make the credit union a thriving corporate community, said Sterling Nielsen, president/CEO of the credit union …
  • MANSFIELD, Texas (2/1/12)--Texas Trust CU has been named best financial institution in the Mansfield, Texas, market by the Mansfield News Mirror, a community publication of the Star-Telegram. This is the sixth consecutive year the $680 million asset credit union has received the award. Texas Trust received more nominations than any of the other 21 financial institutions located in Mansfield. "It is an acknowledgement of the hard work and dedication our employees put forth every day to make Texas Trust stand apart from other financial institutions," said Jim Minge, president of the credit union …

Guilty plea for role in St. Paul Croatian collapse

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CLEVELAND  (2/1/12)--A central figure in a loan scam that caused the collapse of St. Paul Croatian FCU, East Lake, Ohio--in one of the largest  credit union failures in U.S. history--pleaded guilty Monday to 18 counts of bribery, bank fraud and money laundering.

Koljo Nikolovski, 49, a resident of both East Lake and Skopje, Macedonia,  entered the plea in the U.S. District Court in Cleveland. The charges stemmed from his alleged role in a $2.5 million fraudulent loan scam in which he allegedly obtained several loans worth about $2.9 million from 2003 through 2005 from the credit union (Cleveland.com and News-Herald.com Jan. 31).

He allegedly placed the money in a personal bank account before wiring about $2.3 million to a bank in Skopje. Local media reported that he was not eligible for the loans because he had previously defaulted on loans totaling more than $1 million (Cleveland Plain Dealer Jan. 5).

Nikolovski was one of nine people charged in the case. He has been linked by Macedonian authorities to organized crime there. He is scheduled for sentencing on April 23.

Anthony Ragus, 51, of Mentor, former CEO of the defunct credit union, pleaded guilty earlier this month to issuing more than 1,000 fraudulent loans to more than 300 account holders from 2000 to April 2010, according to the Justice Department documents (News Now Jan. 4). He allegedly accepted more than $500,000 in bribes, kickbacks and gifts from people obtaining the fraudulent loans. His sentencing will be Feb. 24.

St. Paul Croatian FCU was placed into conservatorship on April 23, 2010, and closed the following May 1. It held $238.8 million in funds from 5,400 members when it collapsed, costing the National Credit Union Share Insurance Fund $170 million. The collapse has prompted lawsuits by the National Credit Union Administration seeking to recoup some of the losses (News Now Jan. 4).

NCUA disappointed at tentative dismissal in RBS suit

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WASHINGTON and LOS ANGELES, Calif. (2/1/12)--The National Credit Union Administration (NCUA) Tuesday expressed disappointment at another tentative ruling Monday by a federal judge in California who said he plans to dismiss NCUA's $629 million lawsuit against RBS Securities Inc. over the mortgage-backed securities (MBS) it sold to the now defunct Western Corporate FCU.

The suit was filed by NCUA in July in the U.S. District Court for the Central District of California Western Division, Los Angeles. It claimed that RBS violated federal and state securities laws when it sold securities to San Dimas, Calif.-based WesCorp. The complaint alleged that RBS sellers and underwriters caused the corporate to believe the risk of loss associated with the investments was minimal. 

On Monday, U.S. District Judge George H. Wu told NCUA's attorneys that an additional briefing submitted by NCUA after his Dec. 19 tentative ruling to dismiss had not convinced him that he'd erred in the earlier ruling. He noted the briefing was "insufficient." Wu said he would decide by the end of this week whether to dismiss NCUA's case or grant another leave to amend. The question, he said, was whether the insufficiency is in a manner that cannot be remedied in good faith.

"We are disappointed with Judge Wu's tentative ruling," said an NCUA spokesman. "As we indicated during yesterday's hearing, we believe he is imposing a heightened pleading standard not required by the law. Our allegations are quite specific and the vast majority of District Courts have upheld far less specific allegations in cases like this one," he told News Now.

The information NCUA submitted addressed specific allegations of reduced documentation underwriting guidelines, loan-to-value ratios, and loan originators, among other things. It noted the same information has resulted in the denial of motions to dismiss in other securities-related cases in separate courts.

NCUA attorneys noted in Monday's hearing that it has originator-specific allegations indicating the originators did not follow underwriting guidelines.

In the December tentative ruling, Wu had said NCUA relied mostly on "conclusionary" allegations tied to statistics that showed how the investments were affected by the housing market collapse. Without additional information, he had said, the complaint would fail the pleading standards outlined in Bell Atlantic Corp. v. Twombly and Ashcroft vs. Iqbal.

In that tentative ruling, he also said NCUA failed to show that RBS, Indymac MBS Inc., Wachovia Mortgage Loan Trust LLC, Nomural Home Equity Loan Inc. and other entities had disregarded underwriting standards when offering MBSs to WesCorp and that NCUA's federal claims were barred by the passage of statute of repose deadlines.

NCUA did not say whether it will appeal the final decision when asked by News Now.

The suit is one of several filed by NCUA, seeking about $2 billion total from companies that sold MBSs to corporate credit unions. It has sued J. P. Morgan Securities LLC, Goldman Sachs and Wells Fargo, which succeeded Wachovia Bank.  In November, NCUA settled its suits with two other banks: Citigroup in a $20.5 million settlement and Deutsche Bank Securities for $145 million. Neither bank admitted any fault in the settlements (News Now Dec. 20). Also, on Dec. 7, Judge Wu  ordered NCUA and RBS to start negotiations for a settlement.

RBS is also being sued by CUNA Mutual Group in a $72 million lawsuit seeking a rescission of 15 certificates in 10 separate residential MBS offerings it bought from RBS before the financial crisis hit (News Now Jan. 19).

Irish league study Consumers fear harder year

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BELFAST, Northern Ireland (2/1/12)--Consumers in Northern Ireland are worried that 2012 will bring further economic decline in a country already beset by problems, according to research by the Irish League of Credit Unions.

Large numbers of Northern Ireland residents are borrowing cash from moneylenders to pay their bills and are rationing their fuel, the league survey--its first Household Income Tracker for Northern Ireland--found (Belfast Telegraph Jan. 30).

The report is based on representative survey of 500 people.

The survey's findings indicate:

  • 65% of consumers surveyed fear 2012 will be more difficult than 2011;
  • 87% ration fuel in cold weather;
  • 44% have less disposable income than 12 months ago; and
  • 150,000 people turn to payday loans and moneylenders.
The Irish League of Credit Unions has 103 member credit unions in Northern Ireland and 494 member credit unions on the entire island of Ireland.

Kansas CU Association launches more councils

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WICHITA, Kan. (2/1/12)--The Kansas Credit Union Association (KCUA) just launched its Marketing and Lending Council, joining its CUnext Young Professionals Council, which was started in early 2011.

Members of the Kansas Credit Union Association CUnext Young Professionals Council-- an initiative to give young credit union leaders the opportunity to help shape the future of the industry--talk during a recent meetup. About 25 young professionals attended the event.

Click to view larger image The CUnext Young Professionals Council gives young credit union leaders in the state the opportunity to help shape the future of the industry (News Now May 4).

Horizon CU's Josh Allison addresses credit union marketers during the Kansas Credit Union Association Marketing and Lending Councils kickoff event.  (Photos provided by the Kansas Credit Union Association)

Click to view larger image The association promoted the councils with direct mail, videos, articles in its e-newsletter and webinars. The council kick-off event introduced the Lending and Marketing Councils and featured national speakers.

Council-only seminars also are planned for KCUA's 2012 Annual Meeting & Convention in April.

Councils are open to employees or volunteers of affiliated credit unions or their credit union service organizations. They are governed by three directors, and are supported by annual membership dues.

Additional councils are being considered, to be launched at a later date. The councils were formed to promote synergy among all Kansas credit unions as the local, primary source for uniting and energizing individuals and credit unions by sharing best practices, education and resources, said KCUA.

 

Filene announces board transition

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MADISON, Wis. (2/1/12)--Paul Kundert, CEO of the University of Wisconsin CU, Madison, Wis., has been named to the Filene Research Institute's board of directors.

Kundert replaces Stephan Winninger, who retired as the CEO of Lake Trust CU, Lansing, Mich.

"Steve has been a passionate believer in the work of Filene, and we will miss him," said Patricia Smith, Filene chair and CEO of Unitus CU in Portland, Ore.

Kundert has served as CEO of $1.4 billion University of Wisconsin CU since 2003. Prior to that, he worked for fourteen years at Think CU (formerly IBM Employees CU) in Rochester, Minn.

Paper mills closures effect on CU minimal

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EVERETT, Wash. (2/1/12)--Mill Town CU will survive the shutdown of the Kimberly-Clark paper mill in Everett, Wash., this spring, but it will lose a large part of its legacy. The credit union was chartered in 1939 to serve mill employees.

Fortunately, the credit union is in good shape financially and has diversified its membership. Mill workers currently make up about a fifth of the credit union's membership, the credit union's CEO, Laura Leuze, told News Now.

The state regulator told local media that Mill Town CU had a high capital ratio to protect itself against potential losses (The Daily Herald Jan. 31)

Leuze said the $44 million credit union will have to move out of its 2,400 square-foot stand-alone facility, which is located adjacent to the mill, but she's not sure exactly when. "We seem to be least of their worries right now," she said.

About 150 workers are winding down operations in the mill. At full capacity, the mill employed 800 workers. March 31 is the targeted date for the mill's closing, Leuze said.

Leuze said a lot of members are using their severance checks from Kimberly-Clark to pay off loans. "That's good," Leuze said, "It's a lot better than charging them off later. But at the same time we're trying to grow loans like any other credit union."

The credit union has worked with other mill employees on loan modifications. Of course former mill workers can longer pay via payroll deduction and must set up payment via coupon books, which requires extra paperwork.

Leuze said she worries that some members will fall behind on loans. "When someone comes in, we try to be as proactive as we can. We ask them what we can do to set up a loan payment schedule," she said.

The credit union has budgeted more for loan losses, she said.

Everett also is home to a Boeing plant, where many ex-mill workers hope to find employment, Leuze said.

Leuze said the credit union's business plan called for further growth before the plant closing was announced. "In that sense our strategy hasn't changed," Leuze said. "We knew we needed to continue to diversify our membership. We just didn't anticipate it happening in quite this way."

Houston chapter receives TCULs first 12 of 2012

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FARMERS BRANCH, Texas (2/1/12)--The Houston Chapter of Credit Unions' "Experience a Houston Credit Union" initiative is the first recipient of the Texas Credit Union League's (TCUL) 12 of 2012 recognition program. 

Click to view larger image The Houston Chapter of Credit Unions was named as the first recipient of the Texas Credit Union League's 12 of 2012 recognition program for its Experience a Houston Credit Union" co-op advertising program. The 12 of 2012 is a year-long recognition program to recognize the state's brightest credit union stars. The 12 of 2012 is a year-long recognition program to recognize the state's brightest credit union stars.

Click to view larger image Pictured is the promotions group of the Houston Chapter's Experience a Houston Credit Union initiative. Front row, from left, Diana Fisher, vice president, marketing, Member Source CU; Stephanie Olszewski, marketing manager at Members Choice CU; Patsy Jalomo, marketing and business development manager, People's Trust FCU; Michelle Oshinski, senior vice president, government affairs and marketing, Primeway FCU. Back row, Malcolm Rene, chief financial officer/executive vice president, United Community CU, Galena Park, Texas; Frank Bucci, marketing manager, Primeway FCU; and Brian Ellis, vice president of marketing and business management at InvesTex CU. (Photos provided by Texas Credit Union League) The initiative got off to a slow start, said Tuggle. When the group's first website failed to attract many visitors, Malcolm Rene, executive vice president at United Community CU, Galena Park, Texas, led the formation of three committees: one to redesign the website, another to raise money for advertising, and a third to develop an advertising plan.

The renewed efforts generated $63,000 in funding. "We had to recognize that we weren't after a certain demographic: We were after web traffic," said Brian Ellis, vice president  of marketing and business management for InvestTex CU. Within two months the redesigned site had attracted three million visitors. By the end of the year, seven million had visited the site.

The team also added a local spokesman to the mix. Michael Garfield now promotes credit unions regularly in his role as the "High Tech Texan" on talk radio.

The success of this new, hybrid model of an ad co-op has heightened interest in credit union collaboration in the region, Tuggle said. During the last legislative session, the chapter recruited area credit union leaders who hadn't take part in past advocacy efforts. The group held a luncheon in Austin under the banner of "Experience Houston Credit Unions."

The success has inspired the group to reach out to TCUL, which is working to roll out the idea across the state.

CU System briefs (01/30/2012)

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  • RANCHO CUCAMONGA, Calif. (1/31/12)--Three finalist have been named for the second annual CO-OP THINK Prize--a $10,000 grand prize presented by MasterCard--said CO-OP Financial Services. The prize aims to inspire innovative solutions to issues in the credit union industry. Finalists and their business plans are: Maricela Jauregui, branch manager, Mid Cities CU, Compton, Calif., for "QC Code for Account Access"; Jay Schwartz, vice president, sales and service delivery, Marriott Employees' CU, Bethesda, Md., for "Social Networking for Credit Union Members"; and Paul Yang, CEO, Premier Community CU, Stockton, Calif., for "P2P Payment Card for CO-OP Network Cardholders."  They were selected from 25 semi-finalists by judges with CO-OP Financial Services and the Filene Research Institute.  The winner will be announced May 1 at the THINK 12 Conference, held in Boca Raton, Fla., April 29-May 2. CO-OP Financial Services will work with the finalists to produce a video on their ideas, which will be available on the THINK website …
  • RALEIGH, N.C. (1/31/12)--Coastal FCU has launched a new VIP Program as an initiative aimed at paying qualified members a special dividend of $1.5 million. The Raleigh, N.C.-based, $2 billion asset credit union said it is giving back to members who actively participated in the cooperative during the past year.  The program rewards members who have their primary checking account at Coastal with special benefits and exclusive offers. Members qualified by performing 144 withdrawals from their Coastal checking accounts during 2011. Chuck Purvis, executive vice president and chief operating officer, noted the program is a unique program model "built solidly around our checking accounts and using Coastal as your primary financial institution." In the program, members could earn Loan Rebate Dividends and Deposit Bonus Dividends, which ranged from $100 to $500. Of the 47,000 members who earned VIP status this year, more than 6,000 received a dividend. Purvis said giving a small dividend to every member "lacked substance. Seven and eight dollar payouts might not get noticed, but even members who knew in advance that they were getting a payout were pleasantly surprised when they saw $200 or $300 in their account." One can become a VIP member with either two or more loan types or two or more deposit types …

Members accounts hacked at CU in Alabama

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TALLADEGA, Ala. (1/31/12)--First Educators CU, based in Hoover, Ala., is issuing several members new cards after someone accessed several accounts at its Tallageda and Anniston branches.

The hacking was discovered by a card servicer before any stolen information could be used for fraudulent purposes, according to local media (DailyHome.com Jan. 28).

No members lost funds in the breach.  The $115.7 million asset credit union notified members whose accounts were compromised with a courtesy call and is sending follow up letters, the credit union told The Daily Home.

It was not known how the hacking occurred or how many accounts were involved.

Through VITA program CUs provide free tax help

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WASHINGTON (1/31/12)--More than 12,000 free tax preparation sites will be open nationwide this tax season with an army of volunteers to help low- and moderate-income households with their tax preparation, according to the Internal Revenue Service (IRS). Credit unions will be among them.

Credit unions are offering their expertise through the IRS Volunteer Income Tax Assistance (VITA)  program and the Earned Income Tax Credit (EITC) program. Also, IRS has a Tax Counseling for the Elderly (TCE) Program offering free tax help to taxpayers who are 60 and older, it announced Friday

VITA offers free tax help to people earning $50,000 or less.  It provides trained and certified community and credit union volunteers to help taxpayers with special tax credits and completing their terms. Through the VITA program, credit unions help lower-income consumers keep more of their EITC refunds in their own pockets, according to the National Credit Union Foundation's REAL Solutions VITA site.

Taxpayers who qualify can claim the EITC credit and could pay less federal, tax, no tax, or get a tax refund. The credit is for low-income working families to offset the burden of Social Security taxes and provide an incentive to work (News Now Jan. 30).

Royal CU, a $1.2 billion asset credit union in Eau Claire, Wis., will offer the program from Feb. 7 to April 14, with the exception of March 15-21 at its Shopko South office on Tuesdays and Wednesdays 1-4:30 p.m. It offers assistance filling out basic tax forms (1040EZ, 1040A and 1040). Volunteers are University of Wisconsin-Eau Claire and Chippewa Valley Technical College accounting students certified by the IRS, says RCU's website.

The $876 million asset Georgia United CU, Duluth, Ga., is partnering with IRS and the College of Family and Consumer Sciences of the University of Georgia to provide its VITA program, beginning today. Sessions will be on Tuesday and Thursday evenings through April 12, and on Saturdays through April 14 (OnlineAthens.com Jan. 29).

Beginning Wednesday--and for the ninth year--the $4.2 billion asset Bethpage (N.Y.) FCU will help low- to moderate-income households on Long Island  through the VITA program at 12 of its branches. It will make available 150 IRS-certified volunteers, including bilingual tax assessors, to members and nonmembers. Its VITA services will be available Wednesday evenings and Saturday afternoon.

Bethpage also joined with the Health and Welfare Council of Long Island to help educate eligible taxpayers about EITC, which each year goes unclaimed for thousands of taxpayers. EITC can bring an additional $7,476 into the hands of some families. Roughly 20% of Long Islanders are eligible to receive the EITC because of unemployment or declining wages, according the credit union (Patch.com Jan. 30).

State Employees' CU, Raleigh, N.C., began its VITA efforts Jan. 23 and will run the program until April 17. It has offered the VITA service for four years and its own low-cost tax preparation service for consumers earning more than the $50,000 VITA annual income cutoff for two years. In 2011, SECU tax preparers filed more than 53,000 returns, with members receiving $82 million in refunds and saving $7.9 million in tax preparation fees. 

According to the Pennsylvania Credit Union Association, which is collecting information from credit unions acting as VITA sites in that state, "program participation  is a great way to attract the attention of elected officials and their communities to show how credit unions make a difference by providing citizens with a valuable financial resource" (Life is a Highway Jan. 27).

To help consumers, credit unions can advise them to bring these items when they have their returns prepared:

  • Photo identification;
  • Social Security cards for the taxpayer, spouse and dependents;
  • Birth dates for primary, secondary and dependents on the tax return;
  • Wage/earning statements forms--W-2, W-2G and 1099-R, from all employers;
  • Interest and dividend statements from financial institutions (Form 1099);
  • A copy of last year's federal and state tax returns, if available;
  • Bank routing numbers and account numbers for direct deposit;
  • Other relevant information about income and expenses;
  • Total paid for day care; and
  • Day care provider's identifying number.

CU sues for bond claim in huge ATM scam

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WHITE PLAINS, N.Y, (1/31/12)--A New York credit union has sued CUMIS Insurance Society for reimbursement of its claim of more than $565,000 in losses the credit union incurred when an ATM money management and armored car business defrauded credit unions, banks, retailers, hospitals and universities of  $50 million by "playing the float."

In its lawsuit, filed Jan. 20 in the U.S. District Court for the Southern District of New York, White Plain, Northeast Alliance FCU said it lost $565,462.93 in the Ponzi-like scheme at Mount Vernon  (N.Y.) Money Center  (MVMC) in New York. The Bardonia, N.Y.-based credit union alleges that CUMIS breached its contract when it denied the credit union's insurance claim for losses under the credit union's bond.  Northeast Alliance FCU seeks monetary damages and  a declaratory judgment that would require CUMIS to pay the full amount, plus interest.

The money center supplied cash to more than 5,300 ATMs, including those of several credit unions, which lost a total $5.8 million in the fraud  (News Now Sept. 27, 2010).  ATM provider Cardtronics Inc. also lost $2.1 million and reportedly shut down about 4% of its ATMs as the result of the fraud (News Now May 24, 2010). MVMC had handled Northeast Alliance FCU's cash replenishment and armored transportation needs for more than 15 years, said the complaint.

From 2005 to February 2010, the document said, MVM's president, Robert Egan, and chief operating officer, Bernard McGarry, allegedly conspired with other employees to misappropriate money belonging to the money center's customers, including Northeast Alliance; converted the funds for the company's or personnel's own use; and co-mingled funds of clients, the complaint alleged. 

Both men pleaded guilty to charges of bank fraud and conspiracy to commit bank fraud, according to the court document.  They engaged in a practice known as "playing the float," relying on the continual influx of funds to misappropriate clients' funds to cover its operating expenses, repay prior obligations to other clients or keep for their own  enrichment, said the court document. "Similar to a Ponzi scheme, 'playing the float' schemes have an ultimate breaking point where the influx of funds will be insufficient to cover the monies misappropriated," it alleged.

In January 2010, federal agencies launched an investigation of the money center and uncovered the fraud.  Unaware of the investigation, the credit union requested cash replenishment services on several dates in between Feb. 2 and Feb. 9 for the $565,000 total but did not receive the funds, said the complaint. Egan and McGarry were arrested on Feb. 8, and the Federal Bureau of Investigation was authorized to seize the property. On May 27 that year, the MVMC petitioned for Chapter 11 bankruptcy.

In the lawsuit filed, the credit union claims that CUMIS was aware that the credit union used couriers and armored motor vehicle carriers and other third party servicers and vendors; that the credit union expected its property to be covered from the moment it left the credit union's possession until it was returned to the credit union or its authorized facilities; and that the credit union wired funds each week for replenishing its ATMs and cash teller dispense machines.

The complaint said it was not advised that its "in transit" coverage did not protect the credit union from theft or embezzlement by MVMC representatives when the property was located in MVMC's possession but not within an armored motor vehicle, or when the property was located in the MVMC vault or MVMC bank account. The credit union also alleged it was not advised of the deficiencies in its bond coverage and was not offered a product to cover embezzlement or theft by a third-party vendors.

The case is before U.S. District Judge Edgardo Ramos.  It is one of several lawsuits related to the MVMC theft.  CUNA Mutual Group does not comment on pending litigation.

Catalyst Corporate begins second round of Town Hall meetings

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PLANO, Texas (1/31/12)--Catalyst Corporate FCU executives have begun the second half of a six-week series of Town Hall meetings to help credit unions find a future direction as they transition from Western Bridge Corporate during 2012.

More than 540 representatives from 282 credit unions have registered for the meetings. Catalyst Corporate executives spoke to nearly 300 attendees at the first 13 meetings.

The meetings are a follow-up to the National Credit Union Administration (NCUA) December announcement that Catalyst Corporate in Plano, Texas, was selected to acquire the operations of Western Bridge Corporate FCU in San Dimas, Calif. NCUA's decision led to a plan that provides for a non-disruptive, low-cost transition of Western Bridge member credit unions, said Catalyst Corporate.

The meetings aim to provide Western Bridge member credit unions with information about the Catalyst Corporate business model, investment requirements, and products and services, and to offer details of the upcoming transition and an opportunity to ask questions.

"One of the key points that we share with attendees is the way in which the model allows the corporate to maintain a low-risk balance sheet while building retained earnings sufficient to meet future regulatory requirements," said Dianne Addington, Catalyst Corporate president/CEO."Catalyst Corporate's efficiency will ensure that the corporate will thrive financially, meet all of the capital and retained earnings objectives, and continue to be innovative in the delivery of services."

Catalyst Corporate is already exceeding many of the financial measures included in the business plan, such as the coverage ratio, the key measure of efficiency, Addington said. "Our coverage ratio expectation was high--estimating a ratio of approximately 82%, compared with an industry average of about 55%," she added. "We were delighted when we realized that at the end of November we had achieved 93.9%."

Catalyst's model is designed to be less dependent on member contributed capital over time as a result of strong growth in retained earnings, Addington explained, adding that Catalyst's membership capital requirement is a one-time occurrence with no future adjustments.

Seven meetings remain. For more information, use the link.

Upcoming meetings will be held in:

  • Las Vegas (Jan. 31);
  • Honolulu  (Feb. 1);
  • Lahaina, Hawaii  (Feb. 2);
  • Fresno, Calif.  (Feb. 8);
  • Bakersfield, Calif.  (Feb. 9);
  • Boise, Idaho (Feb. 15); and
  • Pocatello, Idaho  (Feb. 16).

N.C. league to meet about dual exams

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RALEIGH, N.C. (1/31/12)--The North Carolina Credit Union League said it will conduct a special meeting Wednesday to discuss how to protect its credit unions following the National Credit Union Administration's (NCUA) decision to require dual exams. The move came after the Raleigh, N.C.-based State Employees' CU got authorization from its state regulator and disclosed its state-issued CAMEL score.

NCUA said the dual exams are needed to protect the National Credit Union Share Insurance Fund and the credit union system.

The CAMEL rating system is NCUA's method of evaluating the health of credit unions. The rating, adopted by the NCUA in 1987, is based upon five critical elements of a credit union's operations: (C) Capital,  (A) Asset quality, (M) Management, (E) Earnings and (L) asset Liability management.

"The league feels it is important to give our credit unions the opportunity to ask questions and share their frustrations," John Radebaugh, league president/CEO, told News Now about the reason for the meeting. "The state regulator of credit unions in North Carolina, as well as the chair of the North Carolina Credit Union Commission, will be on hand to offer information and answer questions. Both federal and state-chartered credit unions have been invited to participate in this meeting, as we feel that this in an issue that impacts all credit unions in North Carolina.

"This is the first time that our credit unions will have a chance to meet together since they found out that NCUA would be conducting separate examinations," Radebaugh continued. "For credit unions, it will be a chance to hear from their state regulator in person, ask questions and share their perspective. This is a very frustrating time for our credit unions, and we feel that it is important to promote an open and transparent environment that allows our credit unions to see all sides of this issue and participate in the dialogue.

He noted that the league is "in the process of setting up a similar meeting with NCUA and all of our state and federally chartered credit unions."

North Carolina credit unions are well capitalized and among the healthiest credit unions in the country, said the league. As NCUA stated, the action is not the result of any safety and soundness concern about state-chartered credit unions in North Carolina, the league added.

"We have 53 state-chartered credit unions in North Carolina that will now be facing two exams per year--one from the state and one from NCUA," Radebaugh explained. "For approximately 45 of these North Carolina state-chartered credit unions, this is the first time they have ever had NCUA examiners in their credit union. The regulatory burden is real and significant for these credit unions.

"The bottom line in this is the regulatory burden on credit unions is at an all-time high, [and] we need state and federal regulators working together to protect credit unions and their members," Radebaugh said. "Dual examinations on safe, sound, and healthy credit unions do nothing more than add to the regulatory burden and ultimately distract credit unions from focusing on serving and meeting the needs of their members."

Iowa Childrens Museum CU promote fin. lit.

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CORALVILLE, Iowa (1/31/12)--The University of Iowa Community CU, Iowa City, Iowa, has teamed with Iowa Children's Museum to promote financial literacy among children in a museum exhibit.

The museum recently opened a City Money exhibit, which includes a station where kids can write fake checks, make deposits and withdrawals from a pretend ATM and "drive up" to a mini teller window (The Gazette Jan. 30). Kids also can learn about monetary denominations and distinguish between wants and needs.

The museum received a federal grant and money from the Community Foundation of Johnson County to open the exhibit.

The exhibit provides an opportunity for children to learn how money truly works, Deb Dunkhase, the Iowa Children's Museum executive director, told The Gazette.

For example, children must make a deposit into the ATM before they can make a withdrawal, added Dick Noble, director of operations at the credit union.

The University of Iowa Community CU and the Iowa Children's Museum have also worked together to provide free financial workshops for parents and children. Plans are in the works to offer workshops at local schools in the fall and projects with boy and girl scouts.

To read the full article, use the link.

Two pro sports womens groups to form CU

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KATY, Texas (1/31/12)--Two pro sports women's associations are collaborating to form a credit union that has an educational wealth empowerment program for pro athletes and their families.

Professional Sports Wives Association (PSWA), a not-for-profit association that provides resources to peers in more than 16 professional sports leagues, and Leagues of Their Own Inc. (LOTO), a not-for-profit wealth empowerment and financial literacy institute, will form the new credit union (PRNewswire Jan. 27).

"We're sick and tired of seeing pro players and wives go broke, divorce and suffer after playing pro sports," said Gena Pitts, PSWA founder.

"Our mission of chartering a federal credit union is to implement education focused on 'total wealth family leadership and legacy planning' that redefines what we are doing in our own lives and in the larger community," said Stacey August, LOTO founder and mother of Prince Fielder, 2011 major league all-star MVP and newly signed Detroit Tigers first baseman. "We believe that a family's human capital is just as important as financial capital.

"The sudden success of the athlete marks a turning point in the athlete's life that can sometimes be overwhelming," she added. "It is through research and personal experience that we understand the complex issues of our community and are here to transform it with the implementation of systems that focus on all aspects of one's wealth, to include the human capital as well as the financial capital for a more balanced life. Our programs are two-fold, offering wealth empowerment coaching and financial literacy programs." 

The credit union will help fill a void [in providing] "professional athletes and their families with a practical, viable educational training program to learn how to preserve and protect athletes' wealth in an industry where nearly 85% of pro athletes are divorced and a quarter of a million dollars in debt when they retire," Pitts explained.

NCUF elects Butke to board updates grant program

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MADISON, Wis. (1/31/12)--Lee Butke, president/CEO of Corporate One FCU, Columbus, Ohio, has been appointed to the the National Credit Union Foundation's (NCUF) board of directors.

Butke joined the board at NCUF's board meeting in Scottsdale, Ariz., last week. He is the new Association of Corporate Credit Unions (ACCU) representative on the board.

NCUF has worked with Corporate One FCU for years, most notably on the Community Investment Fund, the foundation's primary funding mechanism,  Bucky Sebastian, NCUF executive director, said.

The NCUF board also voted to update the foundation's annual grant program, Financial Education Grants, to make a bigger impact. Instead of a number of smaller grants for different projects, the foundation will make one large grant to support a replicable project around financial education. The NCUF Grants Committee is finalizing details of the grant changes and will provide an announcement in the spring.

NCUF has also updated its logo and mission. The new logo tagline is "Making Financial Freedom Achievable." The updated mission statement is "making financial freedom achievable through credit unions."

National Credit Union Foundation (NCUF) Chairman Gary Oakland presents board member Sandy Lingerfelt with a glass gavel at NCUF's Jan. 24 board meeting. Lingerfelt has been on the NCUF board for more than ten years. (Photos provided by National Credit Union Foundation)
After the Credit Union National Association (CUNA) board meeting in March, Winona Nava, president/CEO, of Guadalupe CU in Santa Fe, N.M., will join the NCUF Board as a CUNA board representative. Sandy Lingerfelt, president/CEO of Clinchfield FCU in Erwin, Tenn. currently holds the CUNA seat on the NCUF Board, but her on the CUNA Board term will end in March.

Additional members of the NCUF board include:

  • Chairman--Gary Oakland, president/CEO, BECU, Tukwila, Wash.;
  • Vice chairman--Laida Garcia, president/CEO, Florida Central CU, Tampa, Fla.;
  • Secretary/Treasurer--John Radebaugh, president/CEO, North Carolina Credit Union League, Greensboro, N.C.;
  • President--Bill Cheney, president/CEO, CUNA, Washington, D.C.;
  • Paul Gentile, president/CEO, New Jersey Credit Union League, Hightstown, N.J.;
  • John Gregoire, president, The ProCon Group, Madison, Wis.;
  • Joe Guilfoy, executive director, Indiana Credit Union Foundation and vice president, consulting & education, Indiana Credit Union League, Indianapolis;
  • Rudy Hanley, president/CEO, SchoolsFirst FCU, Santa Ana, Calif.;
  • Stan Hollen, president/CEO, CO-OP Financial Services, Rancho Cucamonga, Calif.;
  • Christopher Roe, senior vice president, corporate & legislative affairs, CUNA Mutual Group, Madison, Wis.; and
  • Mark Twisdale, senior vice president, human resources, State Employees' CU, Raleigh, N.C.

Three Ohio CUs combine will keep brands

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COLUMBUS, Ohio. (1/31/12)--Three Columbus, Ohio, credit unions have announced a merger under which each will maintain their respective brands, facilities and staffing.

The credit unions are $64 million asset Western CU, $60 million asset Powerco CU and $50 million asset Members First CU.

Michael Shafer, current CEO of Powerco, will serve as CEO of the combined entity. Greg Kidwell, treasurer and CEO of Members First, will serve as president. Western's CEO, Tom Furrey, retired Dec. 31 and will remain as a consultant during the transition.

The merger still must be approved by the Ohio Division of Financial Institutions.

"In this partnership, the individual brands of each credit union will be preserved and the excellent work that each credit union has accomplished in their respective communities will continue and thrive under this partnership," said Kidwell.

"Together we have a combined total of 83 years of credit union management experience, and we each share a common vision and foresight as to the benefits that this partnership will bring to each of our respective credit unions," he said.

The credit unions have been exploring the partnership for three years, Furrey said.

CUNA Mutual steps up internal fraud suits vs. CU employees

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MADISON, Wis. (1/31/12)--The dollar amount paid by CUNA Mutual Group in bond claims that cover fraud losses stemming from dishonest credit union employees has increased steadily since 2006, prompting the insurer to step up recovery efforts through litigation against those responsible for the losses.

"In 2006, CUNA Mutual paid roughly 250 bond claims due to employee dishonesty," Loose said. "In 2010, that number was about 200.  However, claim dollars paid more than tripled, jumping from $12 million in 2006 to $38 million in 2010," she said.

The increase in dollars significantly outpaced the reduction in the number of claims, said CUNA Mutual, noting the average claim cost about $190,000 in 2010, compared with $50,000 in 2006. "Employee dishonesty claims account for 13% of the total number of bond claims paid by CUNA Mutual Group but represent 45% of the total dollars paid," Loose said.

CUNA Mutual said it is aggressively pursuing recovery through civil litigation against the individuals responsible for the losses in an effort to recoup the losses on behalf of its policyowners.

It noted that the individuals sued do not have to be convicted of a crime. Sometimes legal authorities choose not to press charges, said CUNA Mutual.  "Our recovery efforts involve the filing of civil lawsuits, which require only a preponderance of evidence, and that's beneficial for our recovery efforts," Loose said.

CUNA Mutual filed 30 such suits in 2011.  Before suing, CUNA Mutual's subrogation unit typically performs a cost/benefit analysis on each claim and weighs the likelihood of success. "If there are assets available and there's a good probability of success, we will pursue recovery."

Recovering paid claims through civil lawsuits helps lower the cost of insurance, which can benefit policyholders collectively and individually through recouped deductibles, improved loss ratios and lower premiums, Loose added.

Although the company always has pursued recovery in these types of cases,  recovery has become more important with losses increasing  in recent years.  Pursuing recovery is "simply the right thing to do for the greater good of credit unions. Those perpetrating these crimes should be held accountable and repay what they stole. We will continue to aggressively pursue those that take money from our credit union partners," Loose concluded.

Jan.s CEO transitions give succession plans a workout

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MADISON, Wis. and FARMERS BRANCH, Texas (1/30/12)--January was a transition month for many credit unions, with announcements of CEO retirements popping up each week or new CEOs taking the helm.  Succession plans for the credit unions have received a workout.

CEO retirements will trend upward as more baby boomers hit retirement age.  As they retire, the people replacing them will have left key senior positions at other credit unions,  which will trigger the implementation of succession plans at those credit unions.

Credit unions and their boards should be prepared for the transition while finding the right person for the critical job. Having a detailed succession plan is essential, according to Karen Houston-Johnson, vice president of Credit Union Resources' OnBalance.

Failing to plan for succession well in advance of an executive search can result in chaos, contribute to costly delays in organizational momentum and progress, and needlessly create uncertainty among members, volunteers, staff and other stakeholders in the credit union, Houston-Johnson told the Texas Credit Union League (LoneStar Leaguer Jan. 11).

Effective boards understand that while CEO departures are often unexpected, turnover in executive leadership is inevitable, she said. "To lay the groundwork for a successful transition, boards should invest in the forethought and advance work of succession planning."

The planning works best when the board and incumbent CEO collaborate to create conditions for a successful transition--expected or not expected, said the article. 

Houston-Johnson outlined the benefits of an effective succession plan. The plan should:

  • Respond to emergencies by designating an executive or management team to run the credit union until the boar names an interim CEO;
  • Provide a step-by-step list of short-term and long-term board tasks;
  • Give the board an assessment of the strengths and weaknesses of senior executives;
  • Guide the development of senior executives with an emphasis on preparing them to fill the CEO's position on either ran interim or permanent basis;
  • Reflect the unique nature of every credit union's market and membership; and
  • Reassure members and employees so the board can initiate  quickly steps that ultimately will lead to naming a new CEO in a timely manner.
How important is this?  Ask a credit union that underwent a CEO change this month.  Here are  10 credit unions that  announced a CEO transition in January. There are probably more.  They include:

  • Members 1st  CU, Brattleboro, Vt.--CEO Judy Wisell officially handed the reins to successor Rick Chapin, former vice president of Chittenden bank, at year end and commemorated the exchange at its annual planning discussion Jan. 22 (Newslines Express Jan. 27).
  • Greater Iowa CU, Ames, Iowa--The $280 million asset Greater Iowa CU hired Scott Zahnle, executive vice president at $850 million asset  IH Mississippi Valley CU, Moline, Ill., to succeed David Carlson as president/CEO, effective Feb. 8.
  • Guthrie FCU, Sayre, Pa.--John Savelli has been appointed president/CEO. He most recently was controller at United Health Services Hospital System and earlier was senior vice president/chief financial officer oat GHS FCU, Binghamton, N.Y. (Life is a Highway Jan. 10).
  • Tobyhanna FCU, Scranton, Pa.--Sean Jelen, chief operating officer at Palisades FCU, Pearl River, N.Y., was named president/CEO at TobyFCU, succeeding James Kanaley, who retired Jan. 3 (Life is a Highway Jan. 10).
  • Commonwealth CU, Frankfort, Ky.--Karen C. Harbin, executive vice president of the credit union, was named president/CEO, succeeding Gary Wallace (By The Way Newsletter Jan. 20).
  • University of Michigan CU, Ann Arbor, Mich.--Tiffany Ford, executive vice president at Michigan State University FCU, East Lansing, was named president/CEO of University of Michigan CU (Michigan Monitor Jan. 16).
  • Valley Bell CU, Elgin, Ill.--Jackie Hoonjan, previously with Workers' CU, Fitchburg, Mass., was appointed president/CEO of Valley Bell CU.
  • Laclede Community CU, Alton, Ill.--Paul Smith, vice president of Laclede since 1993, was named president/CEO after the retirement of Janice Callies, who held the position since 1998.
  • Shell Community CU, Wood River, Ill.--Gregory Lyons, vice president of member services at Shell Community, was appointed president/CEO, succeeding Kathy Swearingin, who retired.
  • Market USA FCU, Laurel, Md.--Laura Hassan, executive vice president at Market USA since 1994, has been promoted to president/CEO, succeeding Robert McClosky, who retired Dec. 31.

Large CU helps smaller one offer microenterprise loans

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ST. LOUIS (1/30/12)--A partnership between two St. Louis-based credit unions--one large, one small--means the smaller one now can officer microenterprise loans.

A local foundation had asked Choices FCU, which has less than $400,000 in assets, if it could offer microenterprise loans.  The credit union was interested, but its staff struggled to structure a product that would be large enough in scale while acceptable to regulators, said a press release from the Missouri Credit Union Association (MCUA).

The solution emerged when leaders from Choices met with leaders of  long-term industry mentor St. Louis Community CU, a $207 million asset credit union. They developed a program that would introduce a microenterprise product to Choices Federal's borrowers, with St. Louis Community agreeing to purchase a 90% participation in each loan closed under the program.

Choices Federal also received a $15,000 grant from the foundation that initially approached the credit union about offering the loans.  The grant allows Choices Federal to close up to $100,000 in microenterprise loans, which will be targeted at $35,000 or less.

"These loans will assist aspiring entrepreneurs and small business owners to finance the start-up or expansion of their businesses," said Phil Minden, senior business manager at Choices FCU. He noted that the small loan sizes "will target a segment of the market that is largely underserved by traditional financial institutions."

The partnership also will "bring more resources to the small business community," said Mike O'Brien, St. Louis Community senior vice president and chief marketing officer. "Most financial institutions don't want to offer micro loans, but it's a natural for both of our credit unions.  Working together makes a lot of sense--practically and philosophically."

The joint structure means Choices Federal can offer members a new product while mitigating potential risks. It plans to offer the loans for the next two years and expand its portfolio to $250,000, before moving forward independently.

"The collaboration is an excellent example of how larger, more established credit unions can work with small, emerging  credit unions to expand their product base and grow their balance sheet," Minden concluded.

Catalyst analyst Guard against concentration risk

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FARMERS BRANCH, Texas (1/30/12)--The Federal Reserve's statement last week that it will keep interest rates at near-zero levels through 2014 could cause concentration risk, which could have consequences for credit unions, an industry expert warns.

Concentration risk is the overall spread of a financial institution's outstanding accounts over the number or variety of debtors to whom the institution has lent money.

The Fed's statement appears to be a "polite way of saying, 'If you liked 2011, you're going to love 2012'," Brian Turner, director and chief strategist with Catalyst Strategic Solutions, told the Texas Credit Union League (LoneStar Leaguer Jan. 27).

Catalyst Strategic Solutions is merger of the former Southwest Corporate Investment Services credit union service organization and Georgia Corporate's asset/liability management service.

The Fed has been able to create a no-growth, low-inflation environment, which softens the impact on the consumer, he added. However, it had to inject too much money into the system to achieve that goal. "This could cause interest rates to skyrocket when true economic growth kicks into gear," Turner said.

For credit unions, the timeframe during which growth leads to increased loan demand could be short-lived, Turner said.  This would be followed by another round of falling interest rates.

"Institutions should stick to the proper balance sheet allocation to manage against concentration risk, maintain a stable liquidity profile by not seeking long-term assets to invest and proactively position their interest-rate profiles within certain risk-tolerance limits that still permit stable short-term earnings," Turner concluded.

Maine CUs offset fed cuts on Keep ME Warm project

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PORTLAND, Maine (1/30/12)--Maine's credit unions have collectively contributed $30,000 to the "Keep ME Warm" program in response to an urgent need to help offset cuts to the federal low-income Home Energy Assistance Program (LIHEAP), said the Maine Credit Union League.

The program is a collaboration of the 20 United Way and Community Action Programs in Maine.

The contribution will purchase nearly 9,000 gallons of fuel for families statewide. John Murphy, league president, who pre­sented the check on behalf of Maine's credit unions, praised the willingness of Maine's credit unions to come together in a cooperative effort (Weekly Update Jan. 27).

"Credit unions are located across Maine and have members in every community," Murphy said. "To credit unions, helping members goes far beyond just providing financial services, it means so much more. The op­portunity to help families in communities throughout Maine heat their homes speaks directly to what credit unions are all about."

Murphy said credit unions suggested contributing because they wanted to do something as a group. "The contribution came together in less than 72 hours," he added.

IRS forms for HSAs updated

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MADISON, Wis.  (1/30/12)--The Internal Revenue Service (IRS) has released updated model Health Savings Account (HSA) documents.  

Form 5305-B, Health Savings Trust Account, and Form 5305-C, Health Savings Custodial Account are the IRS versions of HSA plan agreements, which are used to establish HSAs. These updated model documents, with a revision date of December 2011, replace the November 2007 versions. Most credit unions that offer HSAs use the IRS model HSA agreements as the basis for their opening documents, according to Ascensus HSA programs, based in Madison, Wis.

The new IRS model agreements incorporate a number of HSA-related changes that have occurred since the IRS last updated its model HSA agreements.

These changes include updated cost-of-living adjustments to reflect the 2011 and 2012 annual HSA contribution limits, as well as the penalty increase from 10% to 20% for distributions not used for qualified medical expenses.

The IRS did not remove the qualified HSA funding distribution language from the forms, even though provisions allowing trustee-to-trustee transfers from health flexible spending accounts (FSAs) and health reimbursement accounts (HRAs) to HSAs expired on Dec. 31.

The IRS has not announced whether HSA trustees or custodians must begin using the new model or if existing HSA agreements must be amended for these changes.

"We anticipate that credit unions will want to begin using the new documents because the November 2007 model HSA agreements are outdated due to the law changes," said Dennis Zuehlke, compliance manager for the Ascensus HSA programs. Ascensus is a provider of HSA and IRA compliance solutions to the credit union marketplace.

Providing up-to-date HSA documents is critical to HSA program compliance, and by adopting the latest model HSAs and amending existing HSA agreements, credit unions can provide their members with accurate HSA documents that reflect the current state of the law, Zuehlke said.

Vermont regulator issues revised biz lending reg

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SOUTH BURLINGTON, Vt. (1/30/12)--The Vermont credit union regulator entered its rewrite of the state's credit union business lending regulation into the final procedural steps toward adoption.

Regulation B-2012-01 will update Vermont's 11-year-old business lending regulation, which sets guidelines for credit unions to make member business loans (MBL). Changes make the new rule compatible with federal provisions of the National Credit Union Administration and create a more definition of construction and development loans.

The new regulations also increase the limits for qualification of business loans to $50,000 from $15,000, set requirements for the credit unions policy and qualification requirements of underwriters, and update credit union loan limits and accounting limitations.

A public hearing on the revised regulation is scheduled for 10 a.m. ET March in the Vermont Department of Banking, Insurance, Securities and Health Care Administration (BISCHA) office. Public comments will be accepted by BISCHA until March 16.

The Credit Union National Association and credit unions have been pressing for Congress to raise the member business lending limit to 27.5% of assets from the current 12.25% of assets. Doing so would provide $13 billion to lend to small business owners. Injecting that amount into the economy would create roughly 140,000  new jobs at no cost to the taxpayer.

2012 World CU Conference opens online registration

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MADISON, Wis. (1/20/12)--World Council of Credit Unions (WOCCU) has opened online registration for its annual World Credit Union Conference, July 15-18 in Gdańsk, Poland.

More than 1,500 credit union executives and volunteers from more than 50 countries are expected to attend this year's conference.

Host city Gdańsk is home to the historic Solidarity movement, which freed Poland from communism--as well as the country's credit union system, considered to be one of the fastest-growing and most advanced in the world, said WOCCU. Tradition combines with progress to create an educational environment for charting the credit union movement's course in facing a challenging future, WOCCU said.

Among speakers on the agenda are:

  • Professor Youngme Moon, senior associate dean and chair of the Harvard Business School's Master's in Business Administration program, whose new book, Different: Escaping the Competitive Herd, chronicles the intersection of business, branding and culture in ways that help enterprises such as credit unions stand out from the crowd of competitors.
  • Financial services technology expert Brett King, author of the bestselling book Bank 2.0 and founder of Movenbank, the first widespread mobile bank in the U.S. and the United Kingdom. King will discuss ideas from his new book, Bank 2.1, to be released later this year.
Breakout sessions featuring international speakers will focus on topics in four educational tracks:

  • Leadership and strategy;
  • Credit unions on the frontier;
  • Compliance, regulation and political affairs; and
  • Technology and innovation.
Other activities featured at the conference include:

  • Global Women's Leadership Forum. The annual networking and educational gathering of the Global Women's Leadership Network, the world's only peer-to-peer credit union women's leadership organization, will meet July 14–15, prior to the conference. For more information, use the link. (Separate fee applies.)
  • WOCCU Young Credit Union People (WYCUP) program. The annual educational and networking event for credit union professionals age 35 and under will award educational scholarships to five participants for the 2013 conference. The WYCUP program begins July 15 and runs concurrently with the conference. For more information, use the link.
  • Worldwide Foundation for Credit Unions Golf Tournament. Both men and women can play 18 holes on one of Poland's golf courses while raising money for global credit union development. The event is July 14. For more information, use the link. (Separate fee applies.)
For more information about the educational and networking credit union event this year, use the link.

Corporate One expands hours

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COLUMBUS, Ohio (1/30/12)--Corporate One FCU, Columbus, Ohio, has expanded its Member Services hours, check collection and vault ordering deadlines.

"As more credit unions realize the strength and opportunity at Corporate One, we have seen consistent interest and growth in our membership from credit unions around the nation," said Robert Coyan, Corporate One marketing and operations senior vice president.

"To ensure that all of our members, regardless of where they are in the U.S., receive the quality member service for which Corporate One is known, and have access to solutions that help them serve their members well, we have expanded our hours and deadlines in all key areas."

In the latter half of 2011, Corporate One added a second shift and expanded its Member Services department hours to 8 p.m. ET to accommodate all members throughout their entire business day.

Corporate One also added several hours to its daily Check 21 collection services deadline. Members now have until 9:30 p.m. ET to submit related files, and Check 21 aggregators that partner with Corporate One, such as Bluepoint, VSoft, Jack Henry, Diebold and eDoc, have until 10 p.m.

Most recently, Corporate One worked with its preferred partner for vault services to push back the daily ordering deadline to 1 p.m. local time for its member credit unions in the continental U.S.

Corporate One's membership profile breakdown as of Jan. 26 is: 571 credit union members in the Great Lakes region; 78 credit unions in the Western region; 52 credit union members in the Southeastern region; 47 credit union members in the Northeastern region; and, 22 credit union members in the Plains.

LSCU State GAC attracts 23 lawmakers

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TALLAHASSEE, Fla. (1/30/12)--The League of Southeastern Credit Unions hosted its annual State Governmental Affairs Conference (GAC) in Tallahassee, Fla., Tuesday and Wednesday.

Attendees of the League of Southeastern Credit Unions' annual State Governmental Affairs Conference in Tallahassee, Fla., gained insight from state lawmakers and regulators. Pictured, from left, are: Art Wood, CEO of Railroad and Industrial FCU, Tampa, Fla.; Mary Wood, CEO of Florida West Coast CU, Hillsborough, Fla.; Sen. John Thrasher (R-8) and State Rep. Rachel Burgin (R-56).
Attendees explored federal and state regulatory and legislative issues, underscored by recurring themes: The credit union message to lawmakers must clear and focused on the members, and bankers will no longer define the credit unions.

Twenty-three lawmakers attended the Lawmaker Reception at the Governor's Club. Credit union representatives spent two hours talking about issues and building new relationships with their local policy makers, said the league.

The visits to the statehouse the next day were fast and furious, because lawmakers were also meeting in session and committees, the league said. Credit unions carved out small chunks of time with lawmakers in offices, meeting rooms and sometimes in the hall.

"The most important part of these events is the meeting with lawmakers," said LSCU President/CEO Patrick La Pine. "We had a great legislative reception the night before with 23 legislators stopping by to visit with our credit unions and then the final day we spent time in many of our lawmakers' offices talking about public deposits, foreclosure legislation and our tax-exempt status."

The LSCU State GAC featured speaker John McKechnie, who has more than 25 years of experience with credit unions through his work at the Credit Union National Association and the National Credit Union Administration (NCUA).

Also, credit union representatives met with federal and state regulators during the Regulatory Roundtable, which included NCUA Region III Director Herb Yolles, Florida Office of Financial Regulation (OFR) Director Linda Charity and OFR Bureau Chief Bruce Ricca.

New for 2012 was the league's Florida Lawmaker of the Year award, which was presented to Speaker Designate of the Florida House of Representatives Will Weatherford (R-61). Weatherford worked closely with the LSCU Governmental Affairs team on the public deposits legislation.

The league will hold a State GAC for its Alabama member credit unions on April 4-5 in Montgomery, Ala.

From left: D.W. Smith, chairman of Tyndall FCU, Panama City, Fla.; Sen. Don Gaetz (R-4); and Jim Warren, CEO of Tyndall FCU. Rep. Jim Frishe (R-54) talks with League of Southeastern Credit Unions President/CEO Patrick La Pine. (Photos provided by League of Southeastern Credit Unions)

CU System briefs (01/27/2012)

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CU System briefs

  • DENVER (1/30/12)--Credit Union of Colorado, based in Denver, has launched a new foundation, the Credit Union of Colorado Foundation, to build on the credit union's history of philanthropic commitment to members and their communities. The foundation will focus on two areas: human services and education. "Our board of directors established this foundation to honor the legacy of service that began with the people who founded our credit union in 1934," said Terry Leis, president/CEO. "With these first steps, we hope our foundation will start a new legacy of making our communities a better place to live." One can become a member of the foundation by donating a minimum of $10. Foundation members are eligible to become members of the credit union …
  • HIGHTSTOWN, N.J. (1/30/12)--The New Jersey Credit Union League has promoted Marissa Anema to marketing and communications coordinator, the league said in its newsletter, The Daily Exchange (Jan. 27). Anema has been with the league since January 2010 as marketing and communications assistant.  Since that time, she has coordinated the league's newsletters, maintained its website, and played other key roles in the department. The league's newsletters include: The Daily Exchange, The Weekly Exchange, Quarterly Membership Update, NJ Credit Union Digest (for lawmakers), NJ DNA Network Connect (for directors), NJ/CU Foundation and the PSG Newsletter. It's newest newsletter, Shared Insight, will be published for shared-branching credit unions to keep them informed on Network news …
  • PORTLAND, Maine (1/30/12)--Edwin Currier, former manager of Thomas Laughlin CU, Portland, Maine, died Jan. 18, the Maine Credit Union League has learned. He was 88.  The credit union served employees of the Thomas Laughlin Co. in Portland (Weekly Update Jan.27) …
  • FORT BRAGG, N.C. (1/30/12)--Rudy Ford, longtime board member of Fort Bragg (N.C.)  FCU, died Dec. 28 at the age of 65, according to the North Carolina Credit Union League (Weekly Update Jan. 27). Ford, who retired as a command sergeant major in the U.S. Army, was on the $385 million asset credit union's board nearly 20 years, beginning in 1993 and serving continuously until his death. He served on several committees, including the nominating, investment, policy and planning, annual meeting and building committees, and most recently served as treasurer. The credit union has created a scholarship fund in his honor …

CUs an alternative to stealth bank fees

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MADISON, Wis. (1/27/12)--Credit unions are among those institutions cited as an attractive alternative to the "stealth bank fees" that banks are starting to charge to recoup lost revenues from regulations and the sluggish economy, said a column Wednesday on MSNBC.

"We've found that credit unions, online banks and local community banks tend to be cheaper than the big banks," Greg Daugherty, executive editor at Consumer Reports told Herb Weisbaum, "The Consumer Man" on MSNBC's "Bottomline."

The article--just one of several appearing the past couple of weeks alerting consumers to expect new fees, more fees, and higher fees during 2012-- noted that banks are charging for: paper statements; higher safe deposit box fees; one-time services such as certified checks, money orders, wire transfers, using a teller, paying by phone, cashing a check from another bank; ATM fees for noncustomers;  and higher penalty fees for overdrafts.

Chase and PNC banks are charging $25 to close accounts in certain situations, and PNC  charges $3 when a customer goes to a teller to transfer funds (The Wall Street Journal Jan. 14).  Many are raising their monthly maintenance fee. In February, TD Ameritrade Holding's TD Bank will charge noncustomers a $5 fee to cash checks at its branches.

Customers at Citizens Bank, a unit of Royal Bank of Scotland Group, already ante up $50 a month if they fall below the minimum balance required on some money-market accounts. Bank of America charges some customers $25 if they fall below the minimum balance on premium-checking accounts.  U.S. Bancorp charges a 99-cent fee to make a mobile deposit.  Those are just the tip of the iceberg.

However, some analysts predict that if the fees don't make sense, consumers will vote with their feet, like they did on Bank Transfer Day. Consumers concerned about higher fees are inundating consumer websites. For example, CreditCardForum's site received 900 questions about fees so far this month--a leap from the 200 questions about bank fees it received last January.

During a conference call to discuss the bank's earnings, Bank of America CEO Brian Moynihan admitted that the $5 monthly debit card fee it proposed in late September was rescinded when customers began fleeing the bank because of the fee. Moynihan said the ensuing public consumer outcry resulted in an "elevated level of account closings" in fourth quarter. He reported a 20% jump in closings during fourth quarter 2011, from account closings in 2010 (ABC News Jan.23).

Meanwhile, consumers are being advised by publications to look at the institution's fee schedule, watch for account-terms changes, try to negotiate with the institution to waive a fee, and if that doesn't work, move the money to a credit union, online bank, or local community bank.

JP Morgan uses NCUA suit vs. WesCorp officials in case

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WICHITA, Kan. (1/27/12)--JP Morgan Chase--one of the Wall Street entities sued by the National Credit Union Administration  (NCUA) for allegedly misrepresenting the risks involved in mortgage-backed securities sold to four corporate credit unions--has filed its response to NCUA's complaint in a federal court.

NCUA filed the suit in U.S. District Court for the District of Kansas, Wichita,  against  JP Morgan Securities LLC; JP Morgan Acceptance Corp. I, American Home Mortgage Assets LLC; IndyMac MBS Inc., and Bond Securitization LLC.

In the suit, NCUA, liquidating agent for four corporates,  alleges the entities misrepresented the risks when they sold MBSs to Western Corporate FCU (WesCorp),  U.S. Central FCU, Members United Corporate FCU and Southwest Corporate FCU, and that those MBSs were instrumental in the failure of four corporates, according to court documents.

In its motion to dismiss the case, filed Wednesday, JP Morgan asserts that NCUA:

  • Was not specific enough in terms of specific loans and certificates purchased to demonstrate that JP Morgan  made material misrepresentations  in selling them.
  • Failed to prove that the investment originators "systematically disregarded" their underwriting guidelines in making the loans. JP Morgan noted that NCUA relied heavily on post-purchase loan performance statistics to argue that point and that most allegations refer to relaxation of underwriting standards, not the abandonment or systemic disregard of the standards in place.
  • Labeled as irrelevant the offering documents that "explicitly disclosed the risks associated with reduced documentation loans."
  • Was wrong in asserting that loan-to-value ratios were held out to investors as reasonable measures to ensure borrowers would pay. JP Morgan said the ratios "might not be a reliable indicator of rates of delinquencies, foreclosures and losses that could occur."
  • Failed to plead a complete abandonment of underwriting related to general loosening of standards.  "The (NCUA)  board has admitted that credit unions should have understood those risks as early as 2005…Thus, although the board now contends that  'public information was not sufficiently material to dissuade a reasonable investor from purchasing the certificates,' it took exactly the opposite position when it sued the WesCorp directors for ignoring the disclosed risks. It is beyond dispute that the credit unions knew or should have known about the risks associated with loans at issue. Additional disclaimers could not have 'significantly altered' the mix of available information. "
JP Morgan also argued that the statute of limitations was past and thus barred NCUA's claims. It noted "sufficient storm warnings to alert a reasonable person to the possibility" of misrepresentations were made by no later than February 2007.  The warnings included "public disclosures of the same general mortgage loan origination allegations upon which the board now relies," warnings from NCUA to credit unions regarding the potential for inflated appraisals and the risks of liberalized underwriting practices, and monthly trustee reports and data that indicated spikes in delinquencies and defaults. 

"That information put the credit unions on inquiry notice by February 2007 (at the latest) of the very facts the board now asserts in its complaint." NCUA's claims "would be time barred because credit unions had actual knowledge of the facts alleged in the complaint before February 2007," JP Morgan said in its motion to dismiss the case.

WesCorp settlement conference set for Feb. 27

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LOS ANGELES (1/27/12)--A settlement conference has been set for Feb. 27 by a federal court overseeing the National Credit Union Administration's (NCUA) $6.8 billion lawsuit against top executives of the now defunct Western Corporate FCU (WesCorp).

The U.S. District Court for the Central District of California, Los Angeles, ordered the parties to appear at 10 a.m. PT on that date.  The session is expected to continue throughout the day, according to the court order setting the conference.

Also, they are to deliver or fax to Magistrate Judge Margaret A. Nagle, on or before Feb. 20, a confidential settlement conference statement  that summarizes the factual background of the case, important legal and factual issues; damages or other relief sought; settlement negotiations; trial plans; and other relevant facts.  Nagle will preside over the settlement negotiations.

NCUA's lawsuit alleges that senior WesCorp executives were negligent in monitoring the investments of the corporate, which was hard hit by losses related to mortgage-backed securities. The suit against former WesCorp officers Robert Siravo, CEO; Thomas Swedberg, head of human resources; Timothy Sidley, chief risk officer; Robert Burrell, chief investment officer; and Todd Lane, chief financial officer, alleges breach of fiduciary duty and fraud related to the investments that resulted in $6.8 billion in investment portfolio losses (News Now Jan. 24).

The executives filed counterclaims and affirmative defenses against NCUA, alleging the agency was aware of WesCorp's investment strategies and approved of and encouraged the strategies.

Local media shine spotlight on CU growth

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MADISON, Wis. (1/27/12)--Local media recently highlighted the growth of credit unions in Pennsylvania and Florida.

Tobyhanna FCU, a $155.8 million asset credit union based in Scranton, Pa., in July moved into its new three-story glass-and-brick headquarters, which has three drive-thru lanes and an ATM and offers financial services that range from business loans to first mortgages (thetimes-tribune.com Jan. 22).

After its humble beginnings situated on the Tobyhanna Army Depot grounds, the credit union merged with a local hospital's credit union and moved to downtown Scranton. Over the years, Tobyhanna added more than 500 select employee groups, ranging from companies with sole proprietors to big manufacturers, the paper said.

The credit union now has four branches--one each in Scranton, Tobyhanna, East Stroudsburg and Wilkes-Barre.

In the past two decades, credit union assets in the state more than tripled to $33.8 billion from $8.9 billion, the Pennsylvania Credit Union Association told the paper.

Another Scranton credit union, the $126.3 million asset Penn East FCU, also has seen large growth. Penn East opened its first office in 1995, after operating for most of 73 years "out of a volunteer's briefcase," the paper said. Aided by a community charter, the credit union added two new branches--one in Scranton and one in Clarks Summit--since 2007.

The $9.2 million asset Scranton Times Downtown FCU also has a community charter to serve residents of downtown Scranton, the paper said. To read, the article, use the link.

Also, three Florida credit unions are experiencing above-average success, according to The North Central Florida Business Report (Jan. 18).

They include:

  • Campus USA CU, a $1.04 billion asset Gainesville-based credit union, with 65,000 members and $844 million in deposits--compared with $841 million for Wells Fargo--the bank with the most deposits in the surrounding county.
  • The $446.2 million asset Florida CU in Gainesville, which garnered twice as many members as usual in the fourth quarter, even though the credit union didn't do any advertising about Bank Transfer Day, Chris Clore, the credit union's vice president of marketing, told the publication. Its assets have risen to $500 million today from $74 million in 1995.
  • SunState FCU in Gainesville has seen it assets increase to $283 million from $70 million in 1992. In that timeframe, SunState's membership has grown to 28,000 from 15,000.

CU offers Mad Money for foster youth

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SAN JOSE, Calif. (1/27/12)--Volunteers from $1 billion asset Meriwest CU, San Jose, Calif., recently used the Credit Union National Association's (CUNA) "Mad City Money" simulation program to teach young adults in the Santa Clara County Social Services Foster Youth program about real-life budgeting and lifestyle management.

Developed by CUNA, "Mad City Money" provides each participant with an occupation, a salary, a family and some debt. Players learn to create and manage a monthly budget.

Just as in life, there are variables in "Mad City." One variable is the vendors, who are encouraged to "up-sell" the students to make them overspend and create difficult budget situations. Students often have to go back to vendors to get refunds and buy some less expensive items.

At other times, unforeseen life events can affect students' budgets: Teeth whitening creates a $200 expense; selling some old compact discs produces a profit of $45.

Students learn how the decisions they make about life and money can have some far reaching consequences.

"It was a special night that created some great memories for our youth and taught them some valuable lessons," said Liza Giron-Espinoza Santa Clara County Social Services Agency foster youth program supervisor. "Not only did I see a team of knowledgeable professionals, but a group of people who really cared."

Greg Meyer, Meriwest CU community relations manager said the students and staff "connected." "We were able to do away with the generational and economic differences between us to focus on the important lesson of the day: Manage your money well and thrive. Manage it poorly and live with the consequences," he added.

VolCorp W.Va. Corporate merger OKd by NCUA

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NASHVILLE, Tenn. and PARKERSBURG, W.Va. (1/27/12)--Volunteer Corporate CU (VolCorp) in Nashville, Tenn., and West Virginia Corporate FCU in Parkersburg, W.Va., announced that the proposed merger of the two corporates received approval Thursday from the National Credit Union Administration (NCUA).

The NCUA board addressed the corporates' merger request Thursday during a closed meeting.

Obtaining NCUA's approval for the merger is one of the requirements that VolCorp and West Virginia Corporate FCU must have before the merger can be completed. The others include approval from the West Virginia Corporate membership--to be decided during a special member meeting on Jan. 30, certification of the West Virginia member vote, and final approval from the Tennessee Department of Financial Institutions.

"The combined entity will be large enough to be very competitive on pricing, yet small enough to provide a high level of service to each of our members," said VolCorp President/CEO Rick Veach.

Charlie Thomas, president/CEO of West Virginia Corporate, said the capital commitments made by West Virginia members to ensure the merger were a definitive testament that credit unions are willing to work together within a cooperative system to further their member-service goals.

The combined corporate will have assets of about $1.4 billion with 335 members.

iU.S. Newsi CUs support community development

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MADISON, Wis. (1/27/12)--A Jan. 26 U.S. News & World Report article praises credit unions for supporting community development.

"In addition to providing excellent customer service, many credit unions give back to their local communities in a variety of creative and generous ways," wrote reporter Tim Chen in the article, headlined "How Credit Unions Support Community Development."

Among the "amazing" ways credit unions support their communities listed by Chen:

  • No-fee checking and savings accounts. While some banks require a minimum balance to avoid fees, many credit unions offer no fee-checking without any requirements, and high-yielding savings accounts.
  • Financial literacy training. Credit unions offer classes, free credit counseling online courses and reading material on personal finance.
  • Microloans for personal businesses. Credit unions make smaller loans to both individuals and businesses that banks won't typically offer.
  • Low annual percentage rate credit cards. "Credit union cards generally have lower [annual percentage rates] and fees, which make them a great resource for people looking to build credit," Chen wrote.
  • Grants and scholarships. Chen cited Alliant CU in Chicago and Freedom First FCU in Salem, Va., as credit unions that give back to their local communities through scholarships and grants.
  • School and university outreach. The article noted that Alternatives FCU in Ithaca, N.Y., runs nine student credit unions in local elementary schools. Generations FCU, San Antonio, offers No Suckers Here, a program that helps students understand basic financial concepts.
To read the article, use the link.

CU System briefs (01/26/2012)

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  • FORT WORTH, Texas (1/27/12)--CUNA Mutual Group employees in the Fort Worth, Texas,
    Click to view larger image Click for larger view
    area partnered with their sales colleagues from around the country to raise donations for a local charity as part of a national team meeting held in Fort Worth. Participants who attended (pictured in the photo) contributed $5,000 plus food donations to Mission Central, a non-profit, emergency assistance center that supports economically disadvantaged families in Hurst, Euless and Bedford, Texas.  Funds were raised through friendly contributions during the three-day event and resulted in a record-setting event donation to Mission Central. (Photo provided by CUNA Mutual Group) …
  • SAN FRANCISCO (1/27/12)--CMG Mortgage Insurance Co. (CMG MI) announced that Pete Pannes has been named senior vice president and general manager. He succeeds G. Michael Edwards, who retired in November, and joins co-senior vice president and general manager Kim Shaul in leading the company. Under the terms of the joint venture agreement between CMG MI's parents, CUNA Mutual Group and PMI Mortgage Insurance Co., the company is always headed by two senior vice presidents and general managers. Shaul oversees marketing, sales, legal and product development. Pannes will supervise insurance operations, including risk management, underwriting, customer service and loss mitigation. Pannes was formerly senior vice president for field sales and national accounts at PMI. Before that, he worked with CMG MI, serving in key positions from 1994 to 2004, including that of senior vice president and general manager between 2002 and 2004 …

OCUF 67 grants in 2011 total 197k

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COLUMBUS, Ohio (1/27/12)--The Ohio Credit Union Foundation (OCUF) awarded 67 grants in 2011, totaling more than $197,000, to assist credit unions, communities and individuals statewide.

The grants were made possible through the generosity of many credit unions, individuals, chapters and business partners, OCUF said.

The grants in 2011 included a grant for more than $97,000 for reality day events, classroom visits and two student-run credit unions that serve more than 6,000 high school students. Also, $35,000 in disaster relief was granted to help credit unions, their members and communities in the U.S. and worldwide in the wake of six catastrophes.

Roughly 43 professional development grants and three memorial scholarships totaling more than $50,000 were granted to strengthen leadership, credit union advocacy and job expertise, said the foundation.

"The need for grants last year was greater than ever," said Becky Hart, OCUF executive director. "The 2011 grant-making budget was nearly depleted by the end of September and the foundation Board of Trustees approved allocating money from its endowment fund to meet the increased demand, allowing OCUF to further help credit unions meet their training, outreach and financial education needs."

Also in 2011, OCUF partnered with the National Credit Union Foundation and Corporate One FCU to create a renewed Community Investment Fund (CIF) option. The CIF gives credit unions a vehicle to support financial education, professional development, community outreach, and disaster relief initiatives. With the Corporate One CIF option, credit unions can choose products such as callable and bullet U.S. government agency securities, and negotiable certificates of deposit, without a capital requirement.

"Corporate One took the initiative to examine the traditional CIF model, with the goal of creating a new option that benefits investors and helps sustain OCUF and the national foundation," Hart said.

Other successes for OCUF in 2011 include the debut of the William A. Herring Society, which raised more than $50,000 for the foundation, and a re-tooled golf outing, which netted more than $20,000.

For 2012, the Ohio Credit Union League Board of Trustees established a $200,000 fundraising goal, and the foundation has $234,000 to grant this calendar year.

Altura CU financial results for 2011 strong

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RIVERSIDE, Calif. (1/27/12)--Altura CU, with $642 million in assets, Riverside, Calif., on Wednesday reported net income of $8.43 million for 2011--a substantial improvement over 2010, when the credit union reported a loss of $5.8 million. 

For the fourth quarter, Altura reported net income of $3.53 million, continuing a trend of improvement, said the credit union.

"Our net income for the most recent quarter marks the third straight period of strong net income," said Mark Hawkins, Altura CU CEO.  "After the economic turmoil of the past few years, 2011 was our best year since 2006. Although we continued to deal with a difficult economy, 2011 was the year in which we finally saw the marketplace begin to firm up.  Unemployment is settling down, and foreclosures and delinquencies have eased substantially."

Altura ended 2011 with a net worth ratio of 7.84%, an improvement of more than 200 basis points over its year-end 2010 net worth ratio of 5.81%. 

It also reported $642.9 million in total assets, compared with total assets of $721.6 million in 2010.

Following multiple branch closures in early 2011, Altura membership grew during the  fourth quarter to 95,990 members.

A subtle improvement in the local economy allowed Altura to reduce its set-asides for loan losses. Altura ended 2010 with $35.6 million in its allowance for loan and lease losses.  For year-end 2011, Altura reduced its allowance balance to $30.8 million.

This trend is consistent with credit unions across the country, according to the Credit Union National Association (CUNA). Credit unions are reporting bottom-line improvements as credit quality has improved, reductions have been realized in loan loss provisions, and operating expenses have been slashed.

"Over the past few years, Altura has had to adapt to a radically different marketplace," said Hawkins.  "And, we had to do so while continuing to focus on the needs of our members.  Thankfully we were able to remain focused on delivering core services to our membership, while examining other areas where we could reduce costs. These decisions were not easy, such as closing branch locations and reducing member convenience. Now, we are seeing the results of those decisions."

CU System briefs (01/25/2012)

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  • WASHINGTON (1/26/12)--Paul Hazen, who recently stepped down as president/CEO of the National Cooperative Business Association (NCBA), has been named executive director of the U.S.  Overseas Cooperative Development Council (OCDC), effective Feb. 1. Hazen has more than 30 years' experience in international and domestic cooperative development. OCDC champions, advocates and promotes effective international cooperative development. NCBA is the oldest national cooperative organization in the U.S. Under Hazen's leadership, its international cooperative development portfolio grew from $8 million annually to over $30 million. In 2001,  Hazen was named CEO Communicator of the Year by the Cooperative Communicators Association. He has served as board member of the Consumer Federation of American, member and chair of OCDC board; board member of the International Cooperative Alliance; and chairman of the United Nations International Year of the Cooperative steering committee. With projects in over 70 counties, OCDC members implement the largest portfolio of cooperative development programs in the world. Its members are: ACDI/VOCA, CHF International, Cooperative Resources International, Communications Cooperative International, HealthPartners, Land O'Lakes International Development, NCBA, NRECA and the World Council of Credit Unions …
  • ARVADA, Colo. (1/26/12)--For the seventh consecutive year, Partner Colorado CU (PCCU) has ranked in Denver's top 10 "Best Places to Work" in the medium-sized company category by the Denver Business Journal. The credit union placed sixth in the category and was recognized for its commitment to employee satisfaction. It is the "staff's team effort that makes PCCU a great place to work, " PCCU CEO Sundie Seefried said, adding, "We take pride in putting our members first, and everything we do grows out of that philosophy." The survey conducted by Quantum Workplace, measured 40 attributes that drive engagement. It broke down questions into 10 categories: team effectiveness, retention risk, alignment with goals, trust with co-workers, individual contribution, manager effectiveness, trust in senior leaders, feeling valued, work engagement and people practices. "During the past seven years, we've seen a steady improvement at PCCU in both employee and member satisfaction," Seefried said. "We've reduced employee attrition and increased member service scores. The real reward is what our employees give back to the credit union and our members."  …

January big month for dividends

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MADISON, Wis. (1/26/12)--As the first month of the new year, January is a prime time for credit unions to announce distribution of dividends to members.

Dividends or cash rebates are given to members as a thank you for their support over the year, say many of the credit unions who have announced dividends, which often are based on a percentage of deposits a member has with the credit union. Credit unions provide these dividends in addition to offering members better rates as an added benefit for their member-owners. News Now reported earlier dividends last month and earlier this month as well.

Here are some of the more recent payouts by credit unions:

  • The $3.2 billion asset Ent FCU in Colorado Springs, Colo., returned $10 million to its members through a one-time Special Member Dividend. Based on their use of credit union products and services in 2011, members will be rewarded with dividends ranging from $25 to $1,000.
  • ACIPCO FCU in Birmingham, Ala., paid its members a rebate for the 19th consecutive year. In 2011, the $133 million asset credit union collectively paid $1.4 million to more than 7,400 members.
  • MECU of Baltimore paid its members an extraordinary dividend of a combined $1 million on Dec. 31. The $1.12 billion asset credit union also paid a $1.1 million loan interest rebate in November and more than $2 million in cash bonuses in June.  MECU paid its members more than $4 million in cash bonuses during 2011.
  • Omni Community CU in Battle Creek, Mich. paid its fourth annual Cashback Rebate to members Jan. 13. The $264 million asset credit union returned nearly $1 million to its membership--its biggest CashBack Rebate ever (Michigan Monitor Jan. 23).
  • Sierra Central CU, a $598 million asset credit union in Yuba City, Calif., announced Jan. 1 it had paid a total of $1 million into dividends into members' accounts at year-end.
  • Two Maine credit unions--Otis FCU in Jay, and Acadia FCU in Fort Kent, collectively provided members nearly $650,000 in bonus share dividends and loan interest rebates, said the Maine Credit Union League (Weekly Update Jan. 20).
  • DATCU in Denton, Texas, paid a 2011 bonus dividend of $363,940 on Jan. 1 to its members--the $556 million asset credit union's third consecutive annual bonus.
  • Pelican State CU, a $185 million asset credit union based in Baton Rouge, La.,  announced  Jan. 17 that its board approved payment of $172,000 in bonus dividends to its membership. The payout is through a Special Member Dividend--a distribution of excess earnings based on the amount of interest members earned on deposits and paid on loans.
  • Dannemora FCU in Plattsburgh, N.Y., paid its members a bonus dividend of $226,000 for 2011--the19th consecutive year the $106.3 million asset credit union has paid its membership a bonus.

Bill to increase CUs communitycharity support passes Wis. Senate

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MADISON, Wis. (1/26/12)--The Wisconsin Senate--in a unanimous vote--passed a bill that will allow credit unions to increase their levels of support for charitable and community organizations.

Senate Bill 356 and its companion bill, Assembly Bill 468, both garnered strong bipartisan support and are co-sponsored by 33 lawmakers, said the Wisconsin Credit Union League.

More than 200 credit union activists were visiting lawmakers at the State Capitol as the vote occurred. They were there to seek support for the legislation and share their 2011 REAL Solutions Scorecard, which details their stories of community service, said the league.

"Wisconsin's member-owned financial institutions are vested in and committed to making significant contributions to the communities they serve," said league President/CEO Brett Thompson. "Increasing the amount they can give to charitable and community causes will ensure they can continue to do so long into the future.

Authors of the bill are State Sen. Glen Grothman (R-20) and State Rep. Dale Kooyenga (R-14). They and state senators who voted in support of the measure "helped pave the way for the adoption of a policy that will allow credit unions to continue to be highly active in their communities in a thoughtful and measured way--at no cost to taxpayers," he added.

WOCCU accepting WYCUP scholarship nominations

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MADISON, Wis. (1/26/12)--The World Council of Credit Unions (WOCCU) is accepting nominations for the 2012 WOCCU Young Credit Union People (WYCUP) scholarship program. The deadline for nominations is June 1. Scholarships will be presented at the World Credit Union Conference in Gdańsk, Poland, in July.

World Council of Credit Unions Chair Manuel Rabines, Peru (far left); and Director and Awards Committee Chair Ron Hance, U.S. (far right); presented the 2011 WYCUP scholarships in Glasgow, Scotland, to recipients (second from left) Edel McKenna, Ireland; Michelle Coehlo, Australia; Marcy Lovberg, Canada; Tracia Pounder, Barbados; and Yola Charles, Trinidad & Tobago. (Photo provided by the World Council of Credit Unions)
The WYCUP program seeks individuals who have already made significant contributions to the development of their own credit unions or regional or national credit union systems and have demonstrated the potential to employ their talents at the international level. WOCCU encouraged its member credit unions and credit union organizations to nominate young leaders to compete for a WYCUP scholarship.

"The hallmark of any profession is its willingness to prepare its future leadership," said Brian Branch, WOCCU president/CEO. "The WYCUP scholarship program cultivates and supports the leadership credit unions will need on a global basis in the years to come."

To be eligible for the scholarship, nominees must:

  • Be sponsored by their credit union or credit union organization to attend the 2012 World Credit Union Conference in Gdańsk, Poland, in July;
  • Be 35 years of age or under as of Jan. 1, 2012; and
  • Submit a completed nomination form to WOCCU with all the necessary supporting materials by June 1.
WYCUP scholarships--all-expense-paid trips to the 2013 World Credit Union Conference in Ottawa, Ontario, Canada--will be awarded to five recipients at the 2012 conference in Gdańsk. All WYCUP nominees will be formally recognized in Gdańsk and invited to take part in events and networking sessions at the conference specifically for participants age 35 and under. Conference registrants in this age bracket also qualify for a discounted registration fee, regardless of whether they compete for the scholarship.

For more information on the WYCUP scholarship program, use the link. For questions about WYCUP, contact Liliana Tangwall at ltangwall@woccu.org or 608-395-2043.

For more information, use the links.

Global womens network focuses on remote transaction tech

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MADISON, Wis. (1/26/12)--Remote transaction technology applications will be the focus of the 2012 engagement programs sponsored by the Global Women's Leadership Network, a World Council of Credit Unions initiative devoted to connecting women credit union leaders worldwide through education and networking opportunities.

Farm laborers receive credit union services where they work because of remote technology deployed by Ventura County CU, the destination of the first of two World Council of Credit Union's Global Women's Leadership Network engagement programs this year.
Two groups of both men and women will examine how transaction technology, developed to provide financial services in rural Mexico, has been successfully adapted to serve farm laborers in southern California.

The first of this year's engagement programs will visit Ventura County CU, Ventura, Calif. The credit union delivers financial services to employees of local farms via handheld personal digital assistants (PDAs). The May 20-25 program, which will enable participants to examine the strategy and technology firsthand, costs $1,700 for network members and $2,000 for nonmembers.

Participants interested in delving even deeper into the topic can participate in the second program, which will take them to Querétaro, Mexico, where the technology and delivery strategy were first developed. Participants will travel with credit union representatives deep into rural areas to see how members with no credit union access can successfully be served. The Nov. 5-10 program costs $1,800 for network members and $2,100 for nonmembers.

Fees for both programs include in-country travel, food and lodging, but are exclusive of airfare and other costs of arriving at the program locations. The programs are open to women and men, and participants who attend both programs can take 10% off their total fee.

Credit unions in Mexico were among the first to implement remote credit union service delivery. The second Global Women's engagement program will bring participants together with those credit union members. (Photos provided by World Council of Credit Unions.)
The idea for the Ventura PDA program came about during a networking session at an early Global Women's Leadership Forum, the annual meeting of the network held in conjunction with the World Credit Union Conference. From there, a participant took the idea back to California for implementation. The successful technology transference from a developing to a developed country illustrates how effective such program participation can be, according to Brian Branch, World Council president and CEO.

"Developing credit union systems often learn from systems in developed countries, but we also have seen that this can be a two-way street," Branch said. "In addition to providing participants with the opportunity to participate in global credit union development, this year's engagement programs offer a technology and delivery strategy that can be successfully applied to credit unions anywhere and at all levels of sophistication."

This year's network forum is scheduled for July 14-15 in conjunction with the World Credit Union Conference in Gdańsk, Poland.

Mazuma CU inks 3M loan to small engines business

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KANSAS CITY, Mo. (1/26/12)--Mazuma CU, Kansas City, Mo., has signed a financing agreement with American Performance Technologies (APT), a manufacturer of small engines used for motor, power sports and lawn equipment.

The deal will help APT expand its operations facility and create 88 new jobs in the Kansas City metro area.

Mazuma CU, with $452 million in assets, will provide $3 million in debt financing as part of an overall $7.7 million investment made by APT.

"Our Business Resources department has done an incredible job in fostering this relationship with American Performance Technologies," said Brandon Michaels, Mazuma CU president/CEO. "We are eager to help small businesses succeed and will continue to make the resources available to do so."

APT qualified for financing under the New Market Tax Credits (NMTC) Program, a federal tax program designed to help direct the flow of capital into low-income communities. The program provides corporations with a tax-credit incentive and uses the CDE as a portion of it. The CDE uses investments to provide financing to qualified business or real estate development projects located in low-income communities.

APT qualified for NMTC financing assistance from the Kansas City, Mo., Community Development CDE. Since 2010, CDE financed more than $50 million in investments for low-income communities in Kansas City.

The Credit Union National Association and credit unions have been pressing for Congress to raise the member business lending limit to 27.5% of assets from the current 12.25% of assets.  Doing so would mean $13 billion available to lend to small business owners.  Injecting that amount into the economy would create roughly 140,000  new jobs at no cost to the taxpayer.

CO-OP transactions for Dec. top 200M cites CU growth

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RANCHO CUCAMONGA, Calif. (1/26/12)--CO-OP Financial Services processed more than 200 million electronic payment transactions by credit union members during December, marking the first time the company exceeded the 200 million milestone in a single month.

"Reaching 200 million transactions in just one month is a tribute to the growth of the movement, as more members continue to become debit and credit cardholders with their credit unions," said Stan Hollen, CO-OP Financial Services president/CEO. "CO-OP Payment Processing helps institutions keep up with this demand, ensuring continued convenience for their cardholders and ensuring cost-effective processing that maximizes profitability for the credit union."

For the entire year of 2011, the company processed more than 2.2 billion transactions. CO-OP Financial Services first exceeded the one billion transaction mark in 2004.

The company processed more than 100 million shared-branch transactions in 2011, reflecting CO-OP's merger with Financial Service Centers Cooperative (FSCC), which was announced in September and finalized Tuesday.

CO-OP Financial Services provides services on cardholder debit, credit, ATM and shared-branch transactions.

CU System briefs (01/24/2012)

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  • BRUNSWICK, Maine (1/25/12)--Marsha Richard, 42, of Topsham, Maine, was sentenced to nearly three years in federal prison for embezzling more than $500,000 from Atlantic Regional FCU, Brunswick, Maine (Sun Journal Jan. 23) from November 2004 to October 2010.  U.S. District Judge D. Brock Hornby sentenced Richard to 33 months in prison and five years of probation. She pleaded guilty Sept. 23 to the charge. Richard allegedly manipulated account entries for credit union members' deposited checks that had been returned for nonsufficient funds. Instead of crediting an internal account, Richard credited the accounts of family and friends then accessed the diverted money …
  • SPRINGFIELD, Mo. (1/25/12)--Tips from the public yielded an arrest in the robbery Friday of Assemblies of God CU, Springfield, Mo., said police (ky3.com Jan. 23). Paulanthony Rossmann II, 28, of Springfield, allegedly a member of the credit union, was arrested Saturday and charged with bank robbery. According to police, a man entered the credit union, presented a teller with a demand note, indicated he had a gun, and said that "this is not a joke." The man fled with $4,728. After viewing surveillance photos on local media, a tipster said a backpack carried by the robber was the same as those given away at a volleyball coaches conference and that it had a red and blue emblem. Rossmann's estranged wife also identified the backpack as his …
  • KALAMAZOO, Mich. (1/25/12)--Consumers CU, a $368 million asset credit union based in Kalamazoo, Mich., has launched a member testimonial campaign designed to tell its story one member at a time.  The campaign, Good Times Ahead, underscores that members own the credit union and that many people are celebrating success in West Michigan. "We are asking members to tell us their stories and are thrilled with the response," said Kit Snyder, president/CEO.  Members featured include Jeremiah from South Haven, who talks about Seriously Free Checking; Thomas and Diedre from Holland, discussing Silver Lining Lending; Rick from Holland, talking about Credit Card Balance Transfers; Alex from Kalamazoo, discussing Student Accounts; and Theresa from Kalamazoo, talking about Business Services. Consumers CU worked with local companies to produce the campaign. Partners include Motion Possible, which filmed on location; 2Fish Co., which provided photography; and South Post Studios, which produced audio for radio.  Also, Western Michigan University students wrote, sang, and provided instrumental portions of the music …

24 CU pros named to Catalyst Councils

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PLANO, Texas (1/25/12)--Catalyst Corporate FCU in Plano, Texas, named 24 credit union professionals to serve as members of two of its three newly formed Catalyst Councils.

"Settling on a slate of participants from a pool of highly qualified candidates proved challenging, but we were guided by our promise to ensure diversity--in asset size, geography and areas of expertise," said Dianne Addington, Catalyst Corporate president/CEO.

Catalyst Corporate first announced its plans to form Catalyst Councils in September and began recruiting applicants during its fall conferences. The councils will help channel member feedback into the corporate's decision-making process and will meet four times annually to discuss products, service levels and strategic initiatives.

The corporate has finalized participants for the Eastern Regional Catalyst Council and the Central Regional Catalyst Council. The application process for the Western Regional Council was extended to allow credit unions in that region to apply following the December announcement that Catalyst Corporate had won the bid to acquire the operations of Western Bridge Corporate FCU.

The Central Regional Catalyst Council members are:

  • Lisa Coen, comptroller, Oklahoma Employees CU, Oklahoma City, Okla.;
  • Kathi M. Gill, president/CEO, Neighbors FCU, Baton Rouge, La.;
  • Karyn Gonyea, vice president, Union Pacific of Arkansas, North Little Rock, Ark.
  • Linda Jeffery, president/CEO, TruService Community FCU, Little Rock, Ark.;
  • Jared Johnstone, vice president/Deposit Operations & Business Services, Mountain America CU, West Jordan, Utah;
  • Keith Kearney, president/CEO, InvesTex CU, Houston;
  • Kim Troy Kyle, chief information officer, Capital CU, Austin, Texas;
  • Derrick Peterson, senior vice president/chief financial officer, Greater Texas FCU, Austin, Texas;
  • Drew Schmid, executive vice president/chief financial officer, Randolph-Brooks FCU, Live Oak, Texas;
  • Andrea Stocks, chief operating officer, A+ FCU, Austin, Texas;
  • Marty Tressell, president/CEO, High Plains FCU, Clovis, N.M.; and
  • Diane Ward, chief financial officer, Bossier FCU, Bossier City, La.
 

The Eastern Regional Catalyst Council members are:

  • Brian Akin, president/CEO, North Georgia CU, Toccoa, Ga.;
  • Tim Bridges, executive vice president/chief financial oficer, Associated CU, Norcross, Ga.;
  • Sean Ferrell, associate vice president/controller, LGE Community CU, Marietta, Ga.;
  • Kevin Hill, vice president/chief financial officer, Five Star CU, Dothan, Ala.;
  • Walter Hobby, chief financial officer, CDC FCU, Atlanta;
  • Beverly Knutsen, senior vice president, Augusta (Ga.) Metro FCU;
  • Gary Kyle, chief financial officer, Atlanta Postal CU;
  • Maggie Martinez, president/CEO, South Florida FCU, Miami;
  • Keith Pritchard, CEO, Georgia-Florida United Methodist FCU, Marietta, Ga.;
  • Issa Stephan, president/CEO, First Financial FCU, Wall, N.J.;
  • Mary Svoboda, senior vice president/chief operating officer, Jax FCU, Jacksonville, Fla.; and
  • Sam Whitehurst, president/CEO, Summit CU, Greensboro, N.C.

Alabama storm damages CU

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BIRMINGHAM, Ala. (1/25/12)--A tornado that touched down in Alabama Monday ripped a large portion of the roof off the main branch of Secure First CU in Birmingham, Ala., and also did structural damage to the drive-thru, second floor and front entrances. The credit union is closed.

A tornado that touched down in Alabama Monday ripped a large portion of the roof off the main branch of Secure First CU in Birmingham, Ala., and also did some structural damage to the drive-thru, second floor and front entrances. (Photo provided by the League of Southeastern Credit Unions)

Click to view larger image
Secure First has two other branches--one in Birmingham and one in Brookwood, Ala.

"Thus far, no employees at Secure First have been displaced. They were just unable to come out of their homes yesterday due to debris and surface damage," Amy Jowers, director of information services for the League of Southeastern Credit Unions, told News Now.

"We are picking up a mobile branch today and will deliver it to Secure First on Thursday. The mobile branch is owned by Pen Air FCU [in Pensacola, Fla.] They are lending it to Secure First to use until things are back up and running."

A press report that an employee of the $379 million asset Secure First CU lost a home in the tornado isn't true, Jowers added. Secure First CEO Jordan Sullivan said Tuesday afternoon that no employees lost their homes.

However, Birmingham-based Legacy Community FCU employees have had some tremendous losses, Jowers said. No specifics were available at press time.  Everyone still seems to be in the assessment stage, Jowers said.

The tornado destroyed or damaged hundreds of homes, leaving two people dead. The National Weather Service confirmed that a tornado with winds estimated at 150 mph touched down near the town of Clay, Ala., early Monday. The storm destroyed at least 211 homes and seriously damaged another 218, according to the American Red Cross in Alabama (CNN.com Jan. 24).

Seven Alabama counties reported damage from the storm, with most occurring in Jefferson and Chilton counties. Five schools still were closed Tuesday in Jefferson County, including one that will have to be razed, said CNN.com.

UVA Community CU sponsors IBizKidI on public TV

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CHARLOTTESVILLE, Va. (1/25/12)--UVA Community CU in Charlottesville, Va., is helping to bring BizKid$, a financial education television series, to the Greater Charlottesville area each Saturday morning on public television by sponsoring the show.

Launched in January 2008, BizKid$: Helping Kids Make and Manage Money, is a national financial education initiative to inform, educate, inspire and motivate kids of all ages to learn about money, credit, taxes, business and becoming young entrepreneurs. To keep young viewers (9-16 years old) engaged, the series includes a mix of direct education, sketch comedies, animation and stories featuring real-life young entrepreneurs.

"As a not-for-profit financial cooperative, we are committed to improving the financial literacy of our community's residents so they may reach their financial goals," said Alison DeTuncq, president/CEO of UVA Community CU. "Youth education, in particular, is a big part of our financial education program. This show compliments our student-run branch program initiative and our frequent in-class presentations conducted for students of all ages."

Each show is complemented by resources on a website, lesson plans, outreach activities and a monthly electronic newsletter. Topics covered include "The Economics of Economics," "Take It to The Bank," "Businesses Going Green," and "What to Do with a Windfall."

BizKid$  also has received the status of "recommended educational resource" by the state boards of education in Virginia, Florida, California, Illinois, Iowa, Idaho, Wisconsin and Texas.

Condo developer indicted for fraud on CU loan apps

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ANCHORAGE, Alaska (1/25/12)--A condo developer has been indicted by a federal grand jury in Anchorage, Alaska,  on charges that he lied and cheated on credit union loans connected with  several construction projects, the U.S. Attorney's Office announced Friday.

The charges are one of a number of cases filed across the nation by the U.S. Justice Department targeting lenders, contractors, financial managers and others who contributed to the U.S. housing market collapse  in the nation's financial crisis, said the office.

Lee Baker Jr., 55, is accused in the 14-count indictment of misleading Denali Alaskan FCU in several loan transactions in 2005. Baker is known for building "site condos," developments where inexpensive houses are crowded onto small land parcels with inadequate road access, said prosecutors (The News Tribune Jan. 21 and MortgageDaily.com Jan. 23).

The charges in the indictments include:

  • Allegedly creating a series of land-sales transactions to obtain a loan from the credit union under false pretenses for buying and developing Lake View Estates in Wasilla. Court documents alleged he transferred the estates property from his company, Discovery Construction, to himself and then back to his company, and sought to finance what he allegedly termed a legitimate deal with the credit union. However, the indictment charges, he allegedly used the money to reduce his shareholder debt to the construction company.
  • Allegedly lying to the credit union, saying he had completed 12 stages of an East Anchorage apartment project related to a $9.2 million construction loan and acquiring part of the loan with each claim. Prosecutors alleged little work had been done on the project.
  • Allegedly engaging in money laundering by paying a subcontractor one a different project out of the funds for the apartment complex project.
Baker eventually defaulted on the loan, said the prosecutors,  and in 2008, the credit union joined other creditors and contractors in suing the developer, alleging fraud. The credit union sought to recover $16 million in delinquent loans.

White paper highlights best practices in lifestyle lending

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COSTA MESA, Calif. (1/25/12)--MeridianLink will release a white paper, "Best Practices in Lifestyle Lending," focusing on the success of two Utah credit unions.

Lifestyle loans are loans designed to enhance a member's lifestyle, and can include loans for cosmetic surgery, dental work, heating and air conditioning or musical instruments.

The white paper, to be released in February, includes feedback and information from community business providers that offer their customers and patients financing through lifestyle lending at the two credit unions.

  1. Work with a lifestyle program and a system that is easy to understand and use and has a track record of success.
  1. Designate one individual or a department within the credit union to manage the program.
  1. Establish a strong group of core providers within the community.
  1. Suggest that providers include the phrase, "Financing Available" on their websites and in their advertising.
  1. Be sure providers have the necessary materials to market the program to their customers and patients.
  1. Build strong relationships with providers. Respond quickly to concerns and questions.
MeridianLink, based in Costa Mesa, Calif., is a provider of enterprise business solutions for financial service organizations.

CU execs Red Tail Guitar tells WWII story

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MADISON, Wis. (1/25/12)--A credit union executive has a connection with the subject of a film released Friday. "Red Tails" tells the story of the Tuskegee Airmen, the first African American aviators in the U.S. armed forces.

Dan Wagner, chief financial officer and manager of Lisbon Farmer Union CU, Lisbon, N.D., built The Red Tail Guitar to commemorate the Tuskegee Airmen, the first African American aviators in the U.S. armed forces. (Photo provided by Dan Wagner)
Before the Tuskegee Airmen battled the Germans in the European theatre, they had to overcome racism within their own military.

Long before "Red Tails" hit theatres, Dan Wagner, chief financial officer and manager of Lisbon Farmer Union CU, Lisbon, N.D., helped share the legacy of the Tuskegee Airmen, who officially were the 332nd Fighter Group and the 477th Bombardment Group of the U.S. Army Air Corps.

Wagner designed and built the custom "Red Tail Guitar" in honor of the Tuskegee Airmen. The guitar includes parts from the P-51 Mustang, the aircraft most commonly associated with Tuskegee Airmen.

"I want everything I build to mean something," said Wagner, who has built several guitars. "This guitar tells the story about overcoming adversity."

The parts for the guitar were supplied by the Commemorative Air Force, an organization founded to acquire, restore and preserve in flying condition combat aircraft which were flown by U.S. military services, and aircraft of other nations.

In 2009, he presented the guitar to the Experimental Aircraft Association's Young Eagles Program with Tuskegee Airman Charles McGee, who flew more than 400 combat missions for the U.S. Army Air Corps.

EAA Young Eagles is a program that provides children ages 8 to 17 an opportunity to fly in a general aviation airplane.

The program is special to Wagner. He wanted to learn to fly as a child, but couldn't afford lessons. "It's a program that literally makes dreams come true," Wagner said.

The Red Tail Guitar was auctioned for $5,000. The money was used to sponsor Young Eagle memberships. At $10 per membership, the money will sponsor 500 Young Eagle memberships, Wagner said.

Wagner said building the Red Tail Guitar, telling the story of the Tuskegee Airmen and, more specifically, working with groups such as EAA and the Commemorative Air Force, reminded him of his daily work with credit unions.

"Every step of the way, somebody was willing to help," Wagner said. "That's what made the experience so gratifying."

Small Biz Authority to ICNBCI Raise MBL cap

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NEW YORK (1/25/12)--The CEO/chairman of a CUNA Strategic Services provider, The Small Business Authority, touted raising credit unions' member business loans as a way to ease the nation's credit crunch in an article Tuesday on CNBC.com.

Barry Sloane,  CEO/chairman of the The Small Business Authority, which is powered by Newtek, was among members of CNBC's Small Business Council to be asked what they hoped to hear during the president's State of the Union address to the nation Tuesday night.

Sloane outlined three topics small business owners are concerned with, including reducing the deficit and reducing government regulation. The third concern among small business owners was the need to "ease the credit crunch," he told CNBC.com.

One way to do that would be to allow credit unions to increase the cap on what credit unions can loan commercially, he said. He noted that if the cap is increased, the nation would have $13 billion more available nationally to lend to small business.

The Credit Union National Association and credit unions have been pressing for Congress to raise the member business lending limit to 27.5% of assets from the current 12.25% of assets.  Doing so would mean $13 billion available to lend to small business owners.  Injecting that amount into the economy would create roughly 140,000  new jobs at no cost to the taxpayer.

Young professionals have until Feb. 17 to Crash Illinois

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NAPERVILLE, Ill. (1/25/12)--Credit union professionals age 30 or younger will have the opportunity to "crash" the Illinois Credit Union League (ICUL) 82nd Annual Convention April 26-28.

Crash Illinois is limited to 15 people. The deadline for applications Feb. 17 .Crash attendees will be announced during the week of Feb. 20, said the league.

This initiative is part of The Cooperative Trust (formerly The Crash Network), a grassroots organization comprised of hundreds of young credit union professionals.

Sponsored by ICUL and CUNA Mutual Group, Crash Illinois will allow young credit union professionals to participate in the event by attending the full convention and additional mentor sessions with industry thought leaders and to build relationships with other young credit union professionals. After a crasher welcome on Thursday before the Annual Convention kick-off, other sessions and a lunch will be held for the group.

Brent Dixon, young adult adviser at the Filene Research Institute is the founder of The Cooperative Trust. At the ICUL Convention, Dixon will present two sessions: "Attracting and Retaining Younger Members" and "Design Thinking: A Human Centered Approach to Innovation."

Connie Payton, wife of the late football legend Walter Payton, will be event's keynote speaker.

HomeTown FCU opens Minn.s first student branch

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ST. PAUL, Minn. (1/25/12)--Owatonna, Minn.-based HomeTown FCU opened Minnesota's first-of-its-kind student branch and held its grand opening Jan. 18 at Owatonna High School, according to the Minnesota Credit Union Network (MnCUN).

The first of its kind in Minnesota, HomeTown FCU's student branch celebrated its grand opening at Owatonna (Minn.) High School on Jan. 18. It is operated by (beginning second from left) student Seth Stoykovich, HomeTown FCU manager David Dorsett, and student Abdul Mahamud. (Photo provided by the Minnesota Credit Union Network)
The credit union worked with teachers, the school board and school administrators for the past five years to make the new student branch a reality. The branch, which opened at the beginning of the school year, is operated by student workers and supervised by a manager at the credit union.

Although the in-school branch opening is a milestone, the more important aspect is the financial literacy teaching tool it provides, said MnCUN.  Marian Murphy, vice president of business growth, and other HomeTown FCU staff gave presentations over the years on financial topics to high school business classes. The branch will add another way for the credit union to make an educational impression.

"We really pushed the financial literacy component when we proposed this idea [for the branch]," said Murphy. "Financial education is not a requirement in Minnesota schools, but just having a student branch can help spark their interest in financial education."

The high school's marketing classes use the branch to create advertising campaigns about the importance of students investing and saving for the future. The school plans for art students to create a concept for a mural outside the branch office to encourage financial literacy.

The branch also promotes a weekly trivia game that offers students a small incentive for stopping by the branch office. "We're training students to come to the branch. If we can get them there, we can talk to them and teach them about what we do," Murphy said.

David Dorsett, the credit union's new youth education supervisor, oversees students' work at the branch and helps lead classes on topics such as saving, budgeting, credit, information security and loan applications. The branch is equipped to handle opening new accounts, processing checking and savings account transactions and providing account maintenance.

The branch is open to students and faculty at the school from 11 a.m. to 1 p.m. daily. It conducts more than 200 transactions per month, and, depending on demand, may increase its hours later. The credit union also has a long-term goal of having students develop and implement a business plan for the office.

CU House calls for Hall of Leaders nominations

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WASHINGTON (1/25/12)--The Credit Union House is calling for nominations for its prestigious Credit Union House Hall of Leaders. Nominations are due by Feb. 17.

The Hall of Leaders provides lasting recognition for credit union leaders whose commitment has made a significant impact on the credit union movement at the local, state, or national level, according to its year-end 2011 Credit Union House Highlights From the Hill newsletter.

Those selected for the honor have shown commitment that inspires others in the credit union movement. Inductees include board chairmen, league presidents, credit union CEOs, league board members and volunteers.

Nomination forms must be in by Feb. 17 for recognition at the Credit Union National Association's upcoming Governmental Affairs Conference, March 18-22 in Washington, D.C. They can be obtained on Credit Union House's website and sent to:

Credit Union House

403 C St. NE

Washington, D.C. 20002
 

Credit Union House is a townhouse in Washington, D.C., owned by every state credit union trade association and AACUL. It was built primarily for credit unions and credit union groups throughout the nation as a coordination center on Capitol Hill and is considered a symbol of the strength and permanence of the credit union movement on the national scene.

For more information, use the links.

New postage rates now in effect

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WASHINGTON (1/24/12)--Just about everybody--including credit unions--will pay more this year for mailing letters and packages through the U.S. Postal Service (USPS). New postage rates for mailing items took effect Sunday, with a single ounce letter increasing one cent to 45 cents, the first increase in this category since May 2009.

Overall, the average rate increase for all market-dominant services, including First Class Mail and Periodical rates, is 2.133%, an increase tied to the price of inflation.  Standard Class Mail rose 2.04% and rates for market-dominant Package Services rose 2.115%.

Regulators approved the price hikes in November. However, although the price hikes fall under USPS's annual inflation-linked price cap,  USPS continues to seek regulators' approval  to increase rates even higher  to help compensate for the recession years, said Post & Parcel (Jan. 23).

The changes include:

  • Letters (one ounce)--one cent increase to 45 cents;
  • Letters additional ounces--unchanged at 20 cents;
  • Postcards--three-cent hike to 32 cents;
  • Letters to Canada or Mexico (one ounce)--five-cent increase to 85 cents;
  • Letters to other international destinations--seven-cent increase to $1.05.
Price increases for single-piece mail are greater than for presorted mail. In First Class Mail, single-piece letters and card rates rose by 2.468%, while presort letters and card rates rose 1.58%.

In Standard Mail, letters increased 1.867% while parcels rose 2.86% and high density flats and parcels rose 2.87%.

The largest rate hikes occurred for First Class Mail Parcels, which rose 10.8% and reflected the transfer of much of that category to Commercial Plus and Commercial Base parcels. Also. international First Class Mail rates increased by 4.68%.

The postal service is also implementing an incentive by expanding its lightest weight step for presorted First Class Mail from one to two ounces, meaning the second ounce is sent for free. USPS said it hopes the incentive will encourage mailers to stay with First Class Mail as a communication channel, allowing extra pages with their mailings for no extra charge.

All new pricing is available at the USPS link.

Help schools on National Fin. Capability Challenge

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WASHINGTON and MADISON, Wis. (1/24/12)--Credit unions have the tools to assist high schools in preparing for the National Financial Capability Challenge, sponsored by the U.S. Department of the Treasury and the U.S. Department of Education from March 12 to April 13.

The challenge is being announced because students today face a fast-paced, dynamic economy and need a good financial education to succeed, said the Treasury Department. The challenge is intended for teachers to administer in high school classrooms equipped with computers. It  is a free, online series of financial questions for high school students to test their knowledge of earning, spending, saving, borrowing, risk protection and more.

Credit unions will see more information about how to work with high school educators participating in the project from the Credit Union National Association's (CUNA) youth services. CUNA's youth products provide tools to improve the financial capability of youth as well as of their families.

Googolplex began touting the challenge in its December monthly subscriber e-mail, and subscribers' January newsletter will explain how easy it is for credit unions to pair with high schools. Next week, CUNA's Youth Week e-News will share some sample questions and explain that a credit union can work with a teacher to deliver the curriculum before the students take the challenge in class. The challenge also will likely be mentioned in the financial literacy chapter of CUNA's upcoming Environmental Scan (E-Scan).

According to the Treasury announcement, the challenge is:

  • Quick. It takes about 30 minutes to administer the challenge online but lessons students will learn in preparing for it will last a lifetime.
  • Easy.  Comprehensive lesson plans and sample questions are available in the online Educator Toolkit to assist preparing students for the challenge.
  • Rewarding. Educators and top-scoring students in each school will earn personalized award certificates and states with the highest participation will be recognized.
Also, any high school educator--even those not teach math, business or personal finance--can register their students to participate. 

The website also provides tools to help spread the word about the challenge, including:

  • Content to e-mail other educators;
  • A flier with details to attach to the e-mail or post in a teacher's lounge;
  • Content to submit for publication in the school district's newsletter; and
  • Content to post on websites, blogs and other online sites.
Meanwhile, credit unions can several youth financial education sources from CUNA at the resource links.

CU Walgreens sign pact for surcharge-free ATMs

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DOWNEY, Calif. (1/24/12)--Financial Partners CU (FPCU) in Downey, Calif., said it has introduced several new technological features and services to better serve its members, including a recently signed agreement to provide surcharge-free ATM access at all Walgreens in California.

The $732 million asset credit union also launched a new website, upgraded ATMs, and presented a mobile capture option that allows deposits via cell phones.

The credit union signed a two-year agreement with Walgreens that allows surcharge-free ATM access for its members at all Walgreens stores statewide.

This will "provide more than 500 additional free ATMs statewide for our members through this agreement," FPCU President/CEO Nader Moghaddam said. "This, along with our other recent technological additions, is part of our delivering on our promise to provide more convenience for our members, and to help them save money and time."

The credit union on Dec. 5 launched its new website, www.FPCU.org.

"Now finding the products and services our members are looking for is easy and quick," Moghaddam said. "All it takes is one click to get to any product information in any category. The new site also provides additional information and comparison tools to help members make better financial decisions."

The credit union upgraded ATMs to provide easier navigation and improved visibility for faster transactions. The ATMs come equipped with 17-inch non-glare touchscreens and more secure card readers. Members no longer need envelopes to deposit checks or money, and they can receive printed images of checks and mini-statements listing their last 10 transactions.

Members also can deposit checks through their cellphones using a special FPCU mobile app. Users can snap a photo of their check, and the app verifies that the check is endorsed and the deposit is made. Members can deposit up to 20 checks per day.

Iowa CUs to convene for legreg conference

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DES MOINES, Iowa (1/24/12)--The Iowa Credit Union League (ICUL) will hold its annual Legislative & Regulatory Issues Conference Feb. 14-15 in Des Moines.

More than 100 Iowa credit union representatives are expected to attend to learn more about the legislative and regulatory issues affecting the credit union industry.

CNN political analyst Paul Begala will be the keynote speaker. With an eye to the 2012 presidential election, Begala will dissect the Republican race for a presidential nominee, discuss Congress and the Obama administration, and examine whether a divided U.S. House and Senate will help or hinder the efforts of both political parties as they look to grow their influence over the electorate ahead of the 2012 elections.

Other invited speakers include U.S. Rep. Tom Latham (R-Iowa); Iowa  Gov. Terry Branstad; Bill Cheney, president/CEO of the Credit Union National Association; and JoAnn Johnson, superintendent of the Iowa Division of Credit Unions.

CU CEOs cite sales marketing as No. 1 priority for 2012

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AUSTIN, Texas (1/24/12)--Credit union CEOs listed improving sales and marketing as their top priority in a survey conducted by Abound Resources. About 57% of 450 CEOs surveyed named improved sales and marketing as their No. 1 priority.

Abound Resources is a CUNA Strategic Services provider.

Almost half (45%) indicated that expanding online presence and adding electronic banking channels is a high priority. "Credit union CEOs are recognizing that they need to step up their efforts to gain market share and demonstrate state-of-the-art delivery channel technology to compete in today's increasingly electronic and mobile financial services environment," said Brad Smith, Abound Resources president/CEO.

Smith will present the highlights of the survey in a free webinar today at 2 p.m. CT. To register, use the link. A complimentary white paper analyzing the complete survey results also is available.

The weak economy/loan demand was cited by 70% of CEOs as their top concern for 2012. About 53% said continued regulatory demands is a major concern. About 45% were concerned with the interest-rate environment.

Abound Resources also polled chief operating officers, chief information officers and chief financial officers about their technology concerns and project plans.

The executives said they plan to extract more value from existing technology purchases and vendor relationships, with 68% naming optimization as their top concern for 2012. They also are concerned about delivering quality support to users, information security and compliance, and not having enough resources to complete projects. Three-quarters (73%) of respondents reported that their technology spending would remain flat or only slightly elevated, while 15% noted that spending would increase significantly.

Florida subcommittee rejects CU municipal deposits bill

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TALLAHASSEE, Fla. (1/24/12)--The importance of grassroots advocacy hit home for Florida credit unions when they were defeated by one vote in a state House subcommittee that rejected a bill that would have allowed credit unions to accept municipal deposits.

The House Insurance and Banking subcommittee voted down, 7 to 8,  House Bill 669, which was introduced by state Rep. Jason Brodheur (R-Sanford). It would have allowed qualified public depositories to include credit unions, thus allowing municipalities a choice of where to do business.

Banks argued against the bill, saying that credit union should not serve local government because they "don't pay taxes," said League of Southeastern Credit Unions (LSCU) President/CEO Patrick La Pine in an editorial Saturday in the Florida Times Union. "Now banks will continue to enjoy a virtual monopoly," he said.

In the editorial La Pine noted that credit unions do pay tangible personal property taxes, real property taxes and employment taxes, and that their income tax exemption lies in their nonprofit structure--cooperative ownership and volunteer leadership--not because of their size or the type of services they provide.

Florida has 40 Subchapter S banks that, like credit unions, receive an exemption from corporate income taxes, "yet are allowed to serve the state as qualified public depositories," he added. For the full editorial, use the link.

What's next?  "The biggest step is to have our credit unions engage our lawmakers more so that they can educate them on the differences between a credit union and a bank, and why credit unions, despite their tax exemption, would be proper institutions to serve the state as qualified public depositories," La Pine told News Now.

"We were certainly out-hustled by the banks when it came to grassroots advocacy on this issue, and we need to do a better job of getting our message to lawmakers from the people in the field," he added.

"The vote illustrates the importance of grassroots advocacy and getting the credit union message to lawmakers," said La Pine. "Our lobbyists can do so much and did, as evidenced by having a hearing, having the support of the majority and minority offices, getting the support of the League of Cities, and having such a close vote. By having our advocates out there, it very well could have flipped one vote, and we'd be looking at an 8-7 victory as opposed to a 7-8 defeat."

An amendment, offered by state Rep. John Wood (R-Haines City), would have required any credit union accepting public deposits to waive its tax exemption. The league and Florida Commerce CU General Counsel Andy Price, who testified on behalf of credit unions for the public deposits bill, succeeded in defeating that amendment. However, "that too was a close 7-8 vote," said La Pine.

The only way to introduce a bill in Florida is to have a member of the legislature sponsor the bill. It would need to be passed identically through both chambers. Although there are ways to amend legislation throughout the process, once a bill is introduced, heard in committee, and fails, that subject is no longer available to be heard as an amendment, said the league.

Voting for the bill were: Reps Mack Bernard (D-West Palm Beach), Rachel Burgin (R-Riverview), Janet Cruz (D-Tampa); Bill Hager (R-Boca Raton), Clay Ingram (R-Pensacola), Wood, and Ritch Workman (R-Melbourne).

Voting against it were: Reps. Ben Albritton (R-Bartow), John Boyd (R-Bradenton), Doug Broxson (R-Pensacola); Daniel Davis (R-Jacksonville), Evan Jenne (D-Fort Lauderdale), John Patrick Julien (D-North Miami Beach), Subcommittee Chairman Bryan Nelson (R-Apopka), and Richard Steinberg (D-Miami Beach).

Report Wisconsin CUs saved members 201M

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PEWAUKEE, Wis. (1/24/12)--Wisconsin credit unions saved 2.2 million state consumers $201 million through competitive rates on savings and loans and lower and fewer fees for financial services, according to the REAL Solutions Scorecard for Wisconsin Credit Unions, a report by the Wisconsin Credit Union League, released Monday.

Credit union members saved more than $128 million on loans, earned in excess of $36.6 million on savings products and paid $36.5 million fewer fees than if they had used a for-profit bank, the league report said. Most credit unions still offer free checking, a member of any credit union can save nearly $1,000 on a five-year new-car loan, and the average household saves $164 annually by using their credit union's services, the report added.

The report also cited additional value from credit unions that provide services such as nearly 30,000 hours of free financial counseling that have prevented home foreclosures and improved borrowers' creditworthiness, free tax preparation for low-income filers, outreach to new Americans, and financial education within schools. Those services are part of a voluntary effort by credit unions called REAL Solutions to help families and small businesses in ways that for-profit financial institutions typically won't offer, said the league. 

Since the start of the recession in 2007, Wisconsin credit unions increased their lending to small businesses 51.8% to compensate for a lack of available business credit from banks. About $44 million of the savings on financial product use accrued to lower-income consumers. Credit unions operated 40% of all the financial institution branches in low-income areas.

Most credit unions in the state offered loans of $500 or less at modest interest rates--an alternative to costly payday loans, the league said. Credit unions also outperformed non-credit union lenders by approving 65.2% of home loans for low-income borrowers and 71.1% of home loans for minority borrowers, compared to a 56.6% and 57.2% approval rate by other lenders, respectively.

The state's credit unions also run 97 branches inside schools to teach young people to save, and students statewide stashed $3 million in their in-school accounts. Credit unions delivered 5,460 presentations to 34,104 consumers to improve their financial savvy, sponsored Wisconsin teachers to attend summer workshops that help them improve financial lessons offered in classrooms, and purchased 49,700 copies of a personal finance magazine to help 405 teachers at 350 high schools teach money management in line with state teaching standards, said the report.

Also, Wisconsin credit unions engaged nearly 15,000 students in financial decision-making through reality fairs and the online game Money Mission, supported close to 3,000 charities, granted $114,150 in scholarships and delivered 60,000 hours of online training to 5,476 employees from credit unions and Wisconsin firms to encourage investing, the league said.

WOCCUs Bierecki named to European Council

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SOPOT, Poland (1/24/12)--Grzegorz Bierecki, president/CEO of the National Association of Cooperative Savings & Credit Unions (NACSCU), Poland's credit union trade association and a World Council of Credit Unions (WOCCU) member, was named to the Parliamentary Assembly of the Council of Europe (PACE).

The council is Europe's oldest international parliamentary group and precursor to the European Union. As one of the council's two statutory organs, PACE investigates, recommends and advises European policy development.

Bierecki, who serves as WOCCU's first vice chair, was elected senator in Poland's parliament last year. It was Bierecki's first election to public office.

"The appointment to the Parliamentary Assembly of the Council of Europe could not come in a more timely fashion," Bierecki said. "While the financial markets still are in turmoil and the world has not yet recovered from the deep crisis, more challenges are ahead for credit unions. There has to be a non-banking voice present in the European forum adding the human dimension to finance."

Bierecki's new roles as senator and one of Poland's 12 representatives to PACE are not considered full-time obligations. He will continue to serve in his capacities with NACSCU and WOCCU.

Bierecki was a former staff member of Lech Wałęsa's Solidarity party, which helped reestablish Poland's credit union movement in partnership with WOCCU in 1989. The Polish movement has since grown to one of the world's most successful systems. Poland's 59 credit unions, operating under a unified marketing brand from a central back-office platform, support 1,852 branches and serve 2.2 million members nationwide.

Bierecki's election and new PACE appointment have increased credit unions' public profile in both Poland and throughout Europe, according to WOCCU President/CEO Brian Branch.

"Grzegorz Bierecki's appointment to PACE gives European credit unions a strong voice beyond Poland's borders," said Branch, who last year led an engagement program of U.S. credit union league and association executives to NACSCU headquarters to study the Polish credit union system. "As the European credit union movement continues to grow, it can only benefit from increased support at the international parliamentary level."

To help celebrate the 20th anniversary of Poland's credit unions, World Council will hold its 2012 World Credit Union Conference, July 15–18, in Gdańsk, Poland.

CU System briefs (01/23/2012)

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CU System briefs

  • MADISON, Wis. (1/24/12)--People throughout Wisconsin partnered with Madison, Wis.-based Heartland CU to raise more than $25,000 in Heartland's Give Local challenge. The credit union offered a 25% increase for every donation to six local non-profits, up to $1,000 per charity. As the campaign progressed, Heartland raised the bar and increased the match to 50%. It also donated every time someone chose to "Like" Heartland's Facebook pages, which raised another $1,500. The effort helped these local causes:  Gio's Garden, which provides respite to families with special-needs children; Center for Families, which supports Dane County families; Community Groundworks, which connects people to nature and local food at Troy Gardens; InHealth Clinic, which provides free health care for uninsured people; Madison Dental Initiative, which offers free dental care to homeless families and individuals; and Southwest Tech, which supports students with a food pantry, gas cards and scholarships. Shown here are, from left, Robin Marohn, Heartland vice president of marketing/business development, and Lisa Bell of Madison Dental Initiative.  (Photo provided by Heartland CU) …
  • * TROY, N.Y. (1/24/12)--CAP COM FCU donated $30,000 to the Seton Health Foundation Wednesday in support of a prescription drug assistance program for low-income families in the Albany, N.Y., capital region.  The gift--the credit union's second donation to the cause--will support the Rensselaer Cares Prescription Assistance Program, which filled nearly 4,000 prescriptions for uninsured and underinsured people during 2011.   The credit union and its charitable arm, the CAP COM Cares Foundation, made a similar $30,000 contribution in 2009.  The program helps patients get free or low-cost medication directly from pharmaceutical companies. In 2011, the program enrolled 1,508 new patients and helped them get 3,928 prescriptions with a retail value of more than $2.1 million. Pictured, from left are:   Norman Dascher, executive vice president, Acute Care, and CEO, Samaritan and St. Mary's Hospitals; Paula A. Stopera, president/CEO, CAP COM FCU; and Michael Danieli, director, Seton Health Foundation. (Photo provided by CAP COM FCU) …
  • LANSING, Mich. (1/24/12)--MCUL & Affiliates has selected Steven Schwartz to serve in a newly created position of chief financial officer, announced the Michigan Credit Union League (Michigan Monitor Jan. 23). Schwartz has spent a decade as vice president of finance for the Detroit Regional Chamber of Commerce, one of the largest chambers of commerce in the nation. There he oversaw the finances of the organization's more than 20,000 members and affiliates as well as a for-profit subsidiary that administers programs to other chambers in the U.S., and a 501(c)3 nonprofit entity.   Earlier he was with Plymouth, Mich.-based Financial One where he provided niche accounting services to nonprofit businesses, and spent four years as an accountant with Deloitte & Touche …
  • MUSKEGO, Wis. (1/24/12)--Corporate Central CU, based in Muskego, Wis., has named Chris Felton as executive vice president, the corporate announced Monday. He will lead all areas focused on the member experience within the corporate, including: member service, correspondent services operations, business development, investment and loan sales, marketing and education, and online system access related to member interaction.  Felton also will be responsible for all existing service partner relationships and securing new partners to deliver innovative and cost-effective service for members.  He will help guide the strategic vision for the corporate by partnering with members to collaborate on initiatives and innovation. He has been with Corporate Central since 1990, when he became the first sales represenat6ive for what was then Wisconsin Corporate Central CU …

Programmer charged in Treasury-software theft at N.Y. Fed

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NEW YORK (1/23/12)--A Chinese computer programmer working as a contract employee on part of a source code for the U.S. Treasury's software system at the Federal Reserve Bank of New York has been charged with stealing the code.

Bo Zhang, 32, of Queens, N.Y., worked from May until August in an access controlled electronic environment at the central bank. He is charged with stealing the source code from the Treasury's Government-Wide Accounting and Reporting Program (GWA), which manages central accounting and reporting functions and processes associated with budget execution, accountability and asset management (Security Week and Bloomberg.com Jan. 19).

GWA provides federal agencies with a statement of their balances with the Treasury Department.  Although some credit unions use the bank to process items, it is not known whether any credit unions' account information would have been compromised through this type of theft.

Zhang is charged with accessing and coping the code onto a hard drive at the Federal Reserve Bank of New York, then copying it to a bank-owned external hard drive, which he allegedly connected to his private office computer, his home computer and his laptop.  He allegedly used the code in training individuals in computer programming in his private business.

The case is different from an incident that occurred in November 2010, when a Malaysian computer expert was arrested for hacking into the Federal Reserve Bank in Cleveland and breaching the computer servers of a number of major financial institutions (finextra.com Nov. 19, 2010).  In that case, Lin Mun Poo, 32, was arrested with a laptop holding more than 400,000 stolen credit and debit card numbers, authorities said. He allegedly hacked into FedComp, a data processor for federal credit unions, said authorities.

New York man files more ATM disclosure lawsuits

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DALLAS (1/23/12)--A New York man who had already filed 13 lawsuits against credit unions and banks in Texas and Louisiana, alleging violations of the ATM fee disclosure provisions of the Electronic Funds Transfer Act (EFTA), has added three more lawsuits to the court dockets with the same allegations.

Don Anderson filed the latest barrage of actions in federal courts in Texas  against Coastal Community FCU, Galveston, Texas, on Jan. 12;  and The People's FCU, Amarillo, Texas, on Jan. 18, and against Interstate Bank, according to court records.

The lawsuit documents are all identical, except for relevant dates and the locations  of the ATMs and the names of the institutions owning them. Anderson alleges he used an ATM belonging to The People's FCU on June 25 in Amarillo and one belonging to Coastal Community FCU on July 1 in Galveston. The ATMs had no notices disclosed about the fees for a nonmember using the ATM, according to the complaints filed in the courts.

Anderson is one of several litigants who have filed multiple lawsuits against credit unions and banks charging nondisclosure of ATM fees. 

During the week of Dec. 12, Anderson filed EFTA suits against FirstLight FCU, El Paso, Texas; Firestone Community FCU, Bridge City, Texas; Centric FCU, West Monroe, La.; Monroe Telco FCU, West Monroe, La.; and Capital One Bank.  The week of Dec. 5, he filed EFTA suits against eight other banks (News Now Dec. 20).

Other cases have been filed by a Minnesota man, Adam Johnson, and a Michigan couple, Nancy Kinder and Ray Harrison, who traveled in several states and took photos of ATMs without disclosure notices. Kinder and Harrison filed suits against at least 36 credit unions and banks within two years.

The rash of lawsuits sparked several institutions to offer settlements and prompting warnings about ATM disclosures from the Credit Union National Association, CUNA Mutual Group and the Consumer Financial Protection Bureau  (News Now Jan. 3 and April 25). Some credit unions have discovered that notices on their ATMs have been removed by others, and the national organizations have warned credit unions to develop and write procedures for regularly inspecting their ATMs.

DieboldDirect, a CUNA Strategic Services provider, is offering ATM surcharge notification decals to help credit unions with the disclosure requirements, said CSS. (For more information, use the link).

Anderson filed the recent complaints as original class action lawsuits.  In a similar ATM disclosure case, a U.S. District Court in Minnesota earlier this month denied a motion by Johnson to certify his suit as a class action lawsuit (News Now Jan. 9).

Illinois brings back Real Solutions FiCEP program

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NAPERVILE, Ill. (1/23/12)--The REAL Solutions Enhanced Financial Counseling Certification Program (FiCEP) has been brought back to Illinois for a second year with two modifications to allow as many Illinois credit unions as possible to participate in the program, said the Illinois Credit Union League.

The enhancements include a reduction in cost and an increase in number and locations of proctored test sites. The Illinois Credit Union Foundation board will cover the cost of the REAL Solutions enhancement, so the only cost to Illinois credit unions is the purchase of FiCEP books and exams from the Credit Union National Association (CUNA).

In the first year of the Illinois program, 23 individuals from 11 credit unions graduated as Certified Credit Union Financial Counselors.

According to the league, there are several benefits to the program:

  • Participants attain financial counseling skills that become part of the credit union's culture;
  • The program is written for all staff so anyone can offer financial counseling during every member interaction;
  • Certification satisfies members' needs for value in their credit union;
  • The credit union can differentiate itself by having certified financial counselors for each team; and
  • Staff can help members transform the way they deal with money through real-world counseling.
As CUNA's financial counseling certification self-study program, FiCEP enables all credit union staff to become more confident in helping members build a stronger financial future. FiCEP is designed for credit union staff members who work in the financial counseling, collections and loan departments, or any others who are committed to helping members gain control of their financial futures.

CUNA releases model bylaws for state-chartered CUs

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WASHINGTON (1/23/12)--The Credit Union National Association (CUNA) has developed model bylaws to serve as a guideline for state-chartered credit unions. Because requirements for bylaws vary from state to state, the model bylaws are intended to provide options of what may be included in them, said CUNA.

"The model bylaws have been designed to provide maximum flexibility to credit unions, drafted in a broad manner to allow discretion and not restrict a credit union's operations," said Lynn Coard, director of state advocacy and an attorney with CUNA's State Government Affairs, which developed the model bylaws.

CUNA advises credit unions to ensure their bylaws are consistent with their state credit union act, as well as with any other applicable laws and regulations. These model bylaws will be a useful resource to assist state-chartered-credit unions in enhancing their governing documents and provide better service to their members, said CUNA.

A group of league attorneys who worked last year on updating the Model Credit Union Act had suggested that model bylaws be developed to provide a tool for state-chartered credit unions to assess and, when appropriate, modify their bylaws to facilitate effective credit union management and operation.

CUNA's State Credit Union Subcommittee, which comprises 12 credit union executives and three representatives from state leagues, also was involved in drafting the bylaws and provided input based on credit unions' experiences.

The bylaws include sections on, among others:

  • Membership;
  • Elections;
  • Committees; and
  • Amendment of bylaws.
To access the model bylaws, use the link.

CU mergers announced in several states

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MADISON, Wis. (1/23/12)--At least seven credit union mergers were announced in several states this month.

They include:

  • Northwest Hills CU, a $300 million asset credit union in Torrington, Conn., announced the completion of a merger with CHH CU Inc. in Torrington, a $3.3 million asset credit union previously serving the employees of the Charlotte Hungerford Hospital along with the healthcare facilities in northwestern Connecticut. Now everyone in Connecticut's Litchfield County can join Northwest Hills CU.
  • Henrietta FCU, Rochester, N.Y., with $4 million in assets, has merged into the $122 million asset Family First CU in Rochester, N.Y. The combined credit union will operate under the Family First name with four branches and 12,000 members (Rochester Business Journal Jan. 17). During the past year, credit union mergers in the state have slowed, said William Mellin,  president/CEO of the Credit Union Association of New York (democratandchronicle.com Jan. 19). Many small credit unions are continuing to add more sponsor employee groups to maintain market share or to grow, Mellin added.
  • Campus FCU, a $448 million asset credit union based in Baton Rouge, La., will take over Our Lady of the Lake Regional FCU, Baton Rouge, with $5 million in assets under a proposed merger. The latter credit union serves hospital employees at Our Lady of the Lake Regional Medical Center. Both boards have approved the merger, but the Lady of the Lake's 2,000-plus members and the National Credit Union Administration must still approve it (theadvocate.com Jan. 9).
  • Pocatello (Idaho) Teachers' FCU, a $17.3 million asset credit union, will merge Feb. 1 into the $114 million asset Idaho State University (ISU) FCU, based in Pocatello. It will become ISU FCU's sixth branch location in the area (kpvi.com Jan. 19).
  • First Ohio CU, Fostoria, Ohio, with $8.4 million in assets, will soon merge into Southeast Financial CU, a $425 million asset credit union based in Franklin, Tenn. First Ohio members approved the merger Dec. 22 (fostoriareviewtimes.com Jan. 7).
  • Members First CU, a $191 million asset credit union in Midland, Mich., has applied with state regulators to merge with the $110 million asset Central Michigan Community FCU, based in Clare, Mich.
  • United Community Bay CU in Bay City, Mich., with $162.4 million in assets, has applied to merge with Mattawan, Mich.-based Access First CU, with $32.8 million in assets.   

Seven CUs added to Indianas 2012 ignite venture

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INDIANAPOLIS (1/23/12)--Seven Indiana credit union representatives have been selected to be part of ignite, an initiative of the Indiana Credit Union League focused on developing innovations that aim to help credit unions better the financial lives of their members.

At the group's meeting later this month, the igniters will form small working groups and begin developing their 2012 innovations.

Sixteen innovations have been developed by ignite to date and several have been adopted by credit unions. To promote them, members of the working groups make presentations during the league convention and at several chapter meetings around the state.

Newly selected individuals who will serve two-year terms are:

  • Elaine Rinehart, Eli Lilly FCU, Indianapolis;
  • Courtney Keeler, FORUM CU, Fishers;
  • Mike Pence, KEMBA CU, Indianapolis;
  • Craig Dauksas, Members Choice FCU, Bloomington;
  • Karen Houser, Natco CU, Richmond;
  • Catrina Tate, Teachers CU, South Bend; and
  • Raine Lee, Vigo County FCU, Terra Haute.
These individuals are in the second year of their two-year terms:

  • Stacy Lengacher, Crane FCU, Odon;
  • Amanda Middleton, Finance Center FCU, Indianapolis;
  • Bridgetta Bullock, Finance Center FCU;
  • Clinton Miller, General CU, Fort Wayne;
  • Cindy Crowley, Heritage FCU, Newburgh;
  • Lynette McClusky, Heritage FCU;
  • Brett Rinker, Industrial Centre FCU, Muncie;
  • Chris Smith, Interra CU, Goshen;
  • Jackie Hofman, Purdue FCU, West Lafayette;
  • Tara Holloway, Teachers CU, South Bend.
The project's three-member leadership team includes Director Doug True, FORUM CU, Fishers; Bob Falk, Purdue FCU, West Lafayette; and Nan Morrow, Centra CU, Columbus.

New Jersey league board elects officers

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HIGHTSTOWN, N.J. (1/23/12)--The New Jersey Credit Union League (NJCUL) board last week elected new officers at its regular January meeting.

They were:

  • Lou Vetere, president/CEO of Garden Savings FCU, Parsippany, was elected chairman;
  • Ray Del Nero, president/CEO of Merck Employees FCU, Rahway, was elected vice chairman; and
  • Michael Reilly, president/CEO of Central Jersey FCU, Woodbridge, was elected secretary/treasurer. Table officers are elected to one-year terms.
Linda McFadden, president/CEO of XCEL FCU, Bloomfield, and Jay Flanagan, CEO of Elizabeth (N.J.) Firemen's FCU, elected to the board last year, joined the NJCUL board for its first meeting of 2012.

The 2012 NJCUL board also includes:

  • Leo Ardine, president/CEO, United Teletech Financial FCU, Tinton Falls;
  • Bob Steeves, CEO, Essex County Teachers FCU, Bloomfield;
  • Christina Olender, CEO, Parlin (N.J.) DuPont Employees FCU; and
  • Tracy Sussmann, president/CEO, MidState FCU, Carteret. 

Registration open for Fall DE training

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MADISON, Wis. (1/23/12)--Registration is open for the Fall 2012 Credit Union Development Education (DE) training class taking place Sept. 6-13 in Madison, Wis.

Attendees of the six-day immersion experience will learn about credit unions' social responsibility, and domestic and international development, said the National Credit Union Foundation (NCUF), which sponsors the event.

NCUF said participants cite several benefits of attending DE training, including:

  • Acquisition of skills in credit union outreach initiatives, problem solving, technical assistance, team building and public presentations.
  • Certification as Credit Union Development Educators (CUDEs).  Graduates join a networking group of more than 1,000 in more than 30 countries;
  • A realization that local issues are global--and that global issues are local;
  • An understanding that credit unions grow stronger by working cooperatively; and
  • An understanding of how to promote cooperative principles and credit union values as advantages in today's competitive financial services marketplace.
The training will take place at The Lowell Center, part of the University of Wisconsin-Extension on the UW-Madison campus.

Registration is limited to 42 attendees. For more information, use the link.

North Jerseys service to unbanked Muslims spotlighted

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TOTOWA, N.J. (1/23/12)--An article appearing last week in NJBIZ magazine highlights North Jersey FCU's development of unique products based on  an Islamic religious law's prohibitions on earning and paying interest.

North Jersey FCU, Totowa, N.J., has developed products to serve New Jersey's unbanked Muslim community. Pictured is Lourdes Cortez, North Jersey FCU president/CEO. (Photo provided by the New Jersey Credit Union League.)
North Jersey FCU, with $198 million assets, Totowa, N.J., is the first credit union to offer products based on Islamic religious law, or Sharia law. It serves an unbanked population of Muslims in North Jersey, said the New Jersey Credit Union League (The Daily Exchange Jan. 20).

About two years ago, Muslims and local religious leaders in Paterson asked New Jersey FCU to provide lending and savings products that comply with their religious beliefs, according to the article.

Interpretations of Islamic law differ from congregation to congregation, making it difficult to design products that are in compliance with law, the article said. However, North Jersey FCU developed products that complied with a variety of Sharia interpretations.

Lourdes Cortez, North Jersey FCU president/CEO, said it has been a challenge to serve the Muslim community it is difficult to have programs that can calculate the interest on the consumer loans in a way that can be reflected on notes and disclosures.

CU System briefs (01/20/2012)

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  • ATLANTA (1/23/12)--A Lithonia, Ga., man was sentenced Wednesday to 22.5 years in prison for the March 9 robbery of Georgia's Own CU by a U.S. District judge in Atlanta. Cepeda Broughton, 41, pleaded guilty in September to charges of armed bank robbery, use of a firearm during a crime of violence and possession of a firearm by a convicted felon. The incident occurred at about 3 p.m. when a robber pulled a member attempting to leave the credit union back inside and ordered the member and four employees into a back room, according to a press release from the U.S. Attorney's office (7thspace.com Jan. 20). One employee was told to bind the others with duct tape, open the vault and place all the money in a bag. The robber then forced her to go to the teller stations and give him that money.  They returned to the back room and he bound her with duct tape before fleeing with $140,276, said the attorney's office.  The suspect's getaway car was blocked by a police car, but he jumped a curb and allegedly led police on a high speed chase that resulted in multiple accidents and damage to police and citizens' vehicles.  Broughton surrendered to police after running behind an apartment complex …
  • SANTA ROSA, Calif.  (1/23/12)--Redwood CU (RCU) President/CEO Brett Martinez has been named chairman of the board of the Santa Rosa (Calif.) Chamber of Commerce. As chairman, Martinez  will work with the chamber's board and CEO to help support and guide its mission to promote and advocate for local businesses and create a viable, sustainable economy in the region. Martinez has been RCU's president/CEO since 2004. He is active on several non-profit, community and industry boards and committees.  RCU, a $2 billion asset credit union, serves 210,000 members in the North Bay and San Francisco areas with 19 locations …

Verdict against bank in Ponzi scheme is rare

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MIAMI (1/20/12)--A $67 million verdict Wednesday against a bank for allegedly aiding in a $1.2 billion Ponzi scheme is rare, but should serve as a cautionary note for credit unions and other financial institutions on the importance of compliance with the Bank Secrecy Act and its anti-money laundering provisions.

The verdict means that a Miami, Fla., jury decided that TD Bank helped a now-disbarred Fort Lauderdale lawyer, Scott Rothstein, defraud a group of Texas businessmen, Coquina Investments, by turning a blind eye on procedures meant to stop fraud and money laundering activities (South Florida Business Journal, Jan. 18).

Rothstein was sentenced to 50 years in prison for luring investors into his $1.2 billion Ponzi scheme. He created fictitious pre-lawsuit settlements for sexual harassment and whistle-blower lawsuits and told investors they were buying interest in the settlements.  To succeed at the scheme he needed bankers who would not ask questions about overdrafts or why he was moving large sums quickly between attorney trust accounts, said the article.

Coquina was awarded $32 million in compensatory damages and $35 million in punitive damages in the decision, which is being seen by some analysts as a signal to other victims of other possible Ponzi schemes that they could seek relief from the financial institutions involved--knowingly or unknowingly-- in funds related to Ponzi schemes. the article said.

Coquina had maintained in the lawsuit that the bank failed its responsibility to know its customers and detect fraud under BSA's anti-money laundering provisions and failed to stop the scheme at several points in the process. The bank maintains it was merely Rothstein's bank and that it was he who committed the frauds.

In March, TD Bank will face another trial related to a second set of Rothstein Ponzi scheme victims called the Razorback group. The group seeks $200 million from the bank and other defendants.

Court lifts stay on NCUA suit vs. defunct CU management

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BLUEFIELD, W.Va. (1/20/12)--A federal court in West Virginia on Wednesday lifted a stay and reinstated to active status a lawsuit filed in 2009 by the National Credit Union Administration (NCUA) against employees and family members of the now defunct Bluefield, W.Va.-based N&W Poca Division FCU.

The $2.4 million lawsuit alleges the defendants breached their fiduciary duties, and engaged in fraud, conspiracy to commit fraud, and gross negligence that contributed to the credit union's collapse. The agency is also seeking punitive damages to be determined by the court.

The stay had been ordered on Dec. 10, 2010, by Senior Status U.S. District Judge David A. Faber of the Southern District of West Virginia, Bluefield, pending criminal cases brought against credit union employees Rebecca L. Poe, assistant manager, and Pamela M. Mullins, a teller.

The two were convicted in September of embezzling more than $2.4 million from 2003 to August 2008 by using several methods,, including creating fictitious deposits into their account and accounts of family members, making fictitious loan payments; issuing official checks to themselves and family members. No funds were received by the credit union to support these.

Poe was sentenced to 51 months in prison, three years of supervised probation and ordered to pay restitution totaling more than $2.4 million. She also was banned under an NCUA prohibition order against participating in the affairs of any federally insured financial institution (News Now Sept. 29).  Mullins was sentenced in September to 30 months in prison and ordered to pay restitution of $2.4 million.

In addition to Poe and Mullins, the suit names:

  • Deborah G. Bailey, manager of the credit union, who is the mother of Poe and aunt of Mullins;
  • Kenneth J. Bailey, husband of the manager;
  • Joey L. Poe, husband of the assistant manager; and
  • Christopher Mullins, son of the teller and a member of the credit union's Supervisory Committee.
NCUA  placed the credit union into involuntary liquidation on Oct. 3, 2008, due to its insolvency, said the original lawsuit filed on June 26, 2009.

In lifting the stay, Faber ordered  that a status hearing be held to determine schedule for the case.

Michigan law requires licensed tow companies on repos

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LANSING, Mich. (1/20/12)--A new Michigan law requires towing companies to obtain authorization from a state agency to operate, according to information provided to the Michigan Credit Union League (MCUL).

The Midwest Auto Auction in Michigan advised MCUL & Affiliates that Public Act 111 of 2011 now requires all businesses that transport vehicles for hire as part of their business operations to be subject to the Michigan Motor Carrier Act and to obtain intrastate authority from the Michigan Public Service Commission (Michigan Monitor Jan. 16). The law went into effect Jan. 1.

Failure to register is a misdemeanor punishable with a fine up to $500 and/or 90 days in jail. Also, operators who are not licensed can have their tow truck and any attached vehicle impounded.

Although the state's towing industry was in the process of becoming licensed, they were surprised by the legislation, MCUL said. Credit unions and other auto lenders in the state should ensure that the companies they hire to tow or repossess vehicles are licensed due to potential impounding, MCUL said.

All previously existing exemptions for towing companies have been eliminated, including towing companies, repossession operations, repair facilities, auto auctions and dealerships, MCUL said. The license is good for the calendar year and must be renewed by the carrier every year.

Foreclosure bill headed to Wisconsin House

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MADSION, Wis. (1/20/12)--The Wisconsin State Senate Tuesday approved the Expedited Foreclosure Bill (SB 307), which will combat blight by placing abandoned homes on the real estate market within five weeks, rather than within two months under current law. The Wisconsin Credit Union League supports the legislation.

State Sens. Lena C. Taylor (D-Milwaukee), Glenn Grothman (R-West Bend) and Tim Carpenter (D-Milwaukee) authored the bill (News Channel 7 Jan. 18).

The Wisconsin league said it supports communities' efforts to control blight, encourage redevelopment and protect home values through the adoption of the strongly bipartisan proposal, Senate Bill 307.

"To be clear, the purpose of SB 307 is quite narrow and targeted at only shortening the foreclosure process for abandoned properties, which is a particular challenge for the city of Milwaukee," Tom Liebe, league government affairs vice president, told News Now. "Credit unions are not advocating for additional changes to shorten the foreclosure process, limit homeowner's rights and continue to support a balanced procedure for foreclosure.

"Credit unions have never deviated from their practice of making prudent mortgage loans and lead the industry when it comes to keeping consumers in their homes when faced with challenging financial circumstances," Liebe added.

The bill stipulates factors to be considered to determine if a property has been abandoned. It also allows the court to obtain evidence from a representative of a local government where the property is located, so it can assist in ascertaining whether the property was abandoned, News Channel 7 said.

Colombia forms new CU trade association

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BOGOTA, Colombia (1/20/12)--Eleven of Colombia's 192 credit unions are forming a new credit union trade association in response to growing regulatory burdens and an increasing need for advocacy.

This week's meeting between World Council of Credit Unions (WOCCU) leadership and members of the new Colombian credit union trade group included (from left): Brian Branch, WOCCU president/CEO; Luis Fernando, Creafam; Vincente Pabon, Congente; Victor Hugo Camacho, Cooptenjo; Marco Antonio Fonseca, Coofisam; WOCCU Chair Manuel Rabines; Juan Carlos Borda, Alianza; Jesús Medina, Commerciacoop; Juan José Camargo, Sumared; and WOCCU Project Director Oscar Guzmán. (Photo provided by the World Council of Credit Unions)
The Asociación Colombiana de Cooperativas Financieras y de Ahorro y Crédito was established in December. The new association met this week with World Council of Credit Unions (WOCCU) Chairman Manuel Rabines of Peru and WOCCU President/CEO Brian Branch.

The new organization represents a positive step for Colombia's credit unions, said Rabines, who is also president/CEO of Federación Nacional de Cooperativas de Ahorro y Crédito del Perú (FENACREP), World Council's member association in Peru.

The founding credit unions serve 600,000 members and control 30% of all credit union assets in Colombia, a country whose 192 credit unions serve 2.2 million members, or 7.5% of the population.

Some Colombian credit unions have recovered their space from setbacks in the 1990s, and now there are credit unions with as much as US$400 million in assets and serving 300,000 members, Rabines said. "To organize an association is part of the process of integration, first among credit unions, then with their national cooperative federation and one day with World Council at the international level."

WOCCU has worked extensively in the past with Colombia's credit union movement, now 50 years old. Since 2003, the global credit union development agency has participated in four programs to help strengthen Colombia's credit unions and help them grow, especially in their outreach to poor population segments in rural areas.

The Colombian government invited WOCCU to replicate its Semilla Cooperativa [cooperative seed] rural outreach model, originally developed through a World Council program in Mexico, to expand financial inclusion in some of Colombia's most marginalized areas.

WOCCU will train and equip credit union field officers to travel to remote communities to deliver services using mobile technology, helping to expand the existing credit union networks and reach rural people who formally had no access to financial services. The three-year, $2.5 million program will employ mobile technology to bring financial services to 100,000 previously unbanked people in rural and low-income communities nationwide.

Continuing development efforts and the formation of a new trade association should give Colombia's credit unions the structure they need to grow and expand services, Branch said.

"World Council has worked with many of these credit unions for several years now, so we are familiar with their leadership, their financial soundness and the quality of the services they provide," Branch said. "We are glad to see them organize and become part of the international community."

Members reject merger of two Louisiana CUs

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DENHAM SPRINGS, La. and METAIRIE, La. (1/20/12)--Members of the $96 million asset Main Street Financial FCU, Denham Springs, La., voted Tuesday to reject a merger with $260 million asset Jefferson Financial CU, Metairie, La.

Some Main Street Financial FCU members may have had concerns about possible branch closings, Mark Rosa, president/CEO of Jefferson Financial CU told News Now.

Among the reasons Main Street Financial contacted Jefferson Financial, located in a New Orleans suburb, as a potential merger partner was because other Baton Rouge-area credit unions would present a geographical overlap of service coverage, Rosa said.

He added that Jefferson Financial FCU had offered its assurances that existing Main Street Financial branches would remain open. "We absolutely would need that infrastructure," Rosa said. "We need coverage in that area."

Main Street Financial FCU also was "bruised" by the recession, Rosa said.

About 10% of the Main Street Financial FCU membership voted on the merger, Rosa said. He estimated that two-thirds were "no" votes.

Rosa said he still remains open to a merger. The Jefferson Financial board would discuss the matter at a meeting yesterday, he said.

He suggested that Main Street Financial FCU members would be more open to the merger if they were provided with more information.

"I think we need more of a town hall-type meeting, where we can all sit down and people can ask questions and we can provide them with all the information they need," Rosa said.

Corporate Central to host strategic balance sheet conference

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MUSKEGO, Wis. (1/20/12)--Corporate Central CU will host a strategic balance sheet management conference Feb. 8 in Muskego, Wis.

The conference is designed to challenge management ideas on future earnings and growth during a sluggish economy. The conference also will offer ideas on how to turn the asset/liability management process from a regulatory requirement to a profitable decision-making tool.

The conference will be presented by Dave Koch, chief operating officer of Farin & Associates, who specializes in asset/liability and interest-rate risk management.

Koch will examine recent regulatory guidance and build the framework for compliance, with credit union growth and capital needs in mind. He also will tell how to grow loans and management risks to ensure profitability necessary to manage capital and risk.

SECU offering two programs to aid tax payers

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RALEIGH, N.C. (1/20/12)--State Employees' CU (SECU) is offering two programs to assist North Carolina tax payers.

The Raleigh, N.C.-based SECU has partnered with the North Carolina Department of Revenue (DOR) and the Office of State Personnel to promote individual income-tax debt-payment loans.

SECU will offer qualifying members a 5% loan to repay unresolved balances, generating savings for the members and allowing them to take advantage of up to 35% in a penalty/fee waiver being offered by the state.

DOR's new program is offered through April 30 when taxpayers can repay past due taxes, with the DOR  waiving unpaid penalties and collection fees. 

Under the new loan program, a SECU member who owes $2,000 in back taxes and interest can expect savings of about $700 through waived penalties and fees. A member who owes $4,000 would save nearly $1,400 in penalties and fees on back taxes.  Terms of the SECU loan will, in most cases, allow for payments of $50 to $125 per month. 

A second tax-related program the $23 billion asset SECU is offering will help members save money through various tax preparation services, including the no-cost Volunteer Income Tax Assistance (VITA) program sponsored by the Internal Revenue Service (IRS) and the credit union's own low-cost tax preparation service.

SECU has offered the IRS VITA service each of the previous four years and its own for two years, helping members save in fees and claim larger refunds through tax credits such as the Earned Income Tax Credit. 

In 2011, SECU tax preparers filed more than 53,000 returns, with members receiving $82 million in refunds and saving $7.9 million in tax preparation fees.

CU System briefs (01/19/2012)

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  • LONDON (1/20/12)--A new cooperatives bill in Britain would make it easier for the nation's residents to set up and manage cooperative businesses, said U.K. Prime Minister David Cameron Thursday during a speech in London. Addressing popular capitalism, Cameron noted that the government wants to encourage different capitalism models where employees have a more direct stake in the success of their companies.  If people have a stake in their business, they will support its growth and share its success, Cameron said. The bill would consolidate and streamline the current law on cooperatives, which he said is "outdated."  Cooperatives are a "vital branch of popular capitalism," he said.  2012 has been designated by the United Nations as the International Year of the Cooperative …

SunCorp plans town hall meetings webinar on status

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WESTMINSTER, Colo. (1/20/12)--System United Corporate FCU (SunCorp) has added eight more town hall meetings and a town hall Web conference with Western credit unions considering alternatives for cooperative financial solutions.

In the meetings, SunCorp's executive management team will discuss its capitalization status and business plans for the future, said the corporate's announcement. Credit unions also will learn more about SunCorp's payment, liquidity and investment services.

The meetings will be held in the West and Northwest to discuss the value and service SunCorp offers, according to Thomas R. Graham, president/CEO.

Currently scheduled meetings are at:

  • Idaho Falls, Idaho, Jan. 24;
  • Boise, Idaho, Jan. 26;
  • Federal Way, Wash., Jan. 31;
  • Milwaukie, Ore., Feb. 1;
  • Redwood City, Calif., Feb. 8;
  • Vacaville, Calif., Feb. 9;
  • Brea, Calif., Feb. 15; and
  • Hawthorne, Calif., Feb. 16.
The town hall Web conference will be Feb. 23. For more information, use the link or e-mail a business development officer.

Why Thrivent decided to apply for CU charter

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MINNEAPOLIS and APPLETON, Wis. (1/19/12)--What are the major reasons prompting Thrivent Financial Bank--a profit-making subsidiary of Thrivent Financial for Lutherans, the fourth largest privately held company in Minnesota--to announce it will become the second bank in U.S. history to convert to a credit union charter?

New regulations and regulators for bank holding companies were the driving factor, as well as benefits of the not-for-profit member-ownership structure and cost, according to CEO Todd Sipe, in an interview with The Nonprofit Quarterly (nonprofitquarterly.com Jan. 18).

Thrivent announced last week it would convert its bank subsidiary to a credit union, pending approval of its charter from the National Credit Union Administration and other regulators (News Now Jan. 17).

The driving factor for the charter switch is the Dodd-Frank Act, which introduced new regulators to organizations like Thrivent, Sipe told the publication. In the past the bank was regulated by the Office of Thrift Services (OTS), which was absorbed into the Office of the Comptroller of the Currency (OCC).  At the holding company level, its regulators changed from OTS to the Federal Reserve. "There are additional costs and a burden associated with dealing with two regulators," he told the publication. The cost burden of having multiple regulators was a key driver, he said.

Thrivent Financial also looked at ownership structure to balance an "appropriate level of regulatory oversight but not have undue increase in cost or burden."  It researched the needs and preferences of its members and decided the credit union model was "the best model to serve members of Thrivent Financial Lutheran going forward," he said.

Credit unions are not strangers to Thrivent Financial for Lutherans, which was the result of a merger in 2001-2002 of the Aid Association for Lutherans and Lutheran Brotherhood. The two organizations had a trust bank, three credit unions and a community bank in the Twin Cities. At that time it picked the thrift charter, which provided flexibility to continue to offer all the products and services of all the banks and credit unions.

This time, members preferred to become a member-owned not-for-profit organization where profits are returned in the form of better rates and fees, he said.  As of Jan. 17, Sipe said he had not received one concern or complaint about moving to a credit union, a fact he called "remarkable."

Taxation was not a key consideration or a driving concern in the decision, he said.  The total tax liability would be well below a million dollars a year, while the regulatory burden was going to be significantly higher than any tax break.

Consumers are looking for an entity they can trust and moving from banks to credit unions. Thrivent already has members' trust because it's a faith-based organization, so the charter move is not an attempt of a bank to regain trust, he said.  "The credit union model is a great model in today's environment…clearly credit unions do enjoy a trusted relationship, so it reinforces the relationship we already have with our clients."

If approved, the new credit union will serve about 40,000 members, with a potential 2.3 million to 2.5 million people eligible for membership. It will have about $530 million in assets, which would mean it would be in the top 10% of the credit union industry by assets, said Sipe.

To read the full article, use the link.

CU System briefs (01/18/2012)

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  • GRAND RAPIDS, Mich. (1/19/12)--WESCO Net, a network solutions integrator and division of CU*Answers, has changed its name to  CU*Answers Network Services, to better reflect clients' needs and the changing competitive landscape, as well as distance itself from the old Wesco brand that CU*Answers previously operated under, said the company. WESCO Net was formed in 2002 to help credit unions transition from terminals to PCs and offer ancillary services such as firewalls. At that time, it rebranded as CU*Answers Inc.  but chose to keep the WESCO Net name to help with marketplace name recognition and ease the transition.  "The WESCO Net brand at times had the unintended consequence of putting us in a 'capabilities box' and did not recognize that we are part of an organization nearly 200 strong," said David Wordhouse, vice president of network technologies.  The company now offers a full suite of network services …  

CUNA Mutual sues RBS Securities over failed RMBS

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MADISON, Wis. (1/19/12)--CUNA Mutual Group has filed a $72 million-plus  lawsuit against RBS Securities Inc.  seeking  a rescission of 15 certificates in 10 separate residential mortgage-backed securities (RMBS) offerings CUNA Mutual bought from RBS before the financial crisis hit.

The suit was filed by CUNA Mutual Insurance Society, CUMIS Insurance Society Inc. and Members Life Insurance Co. in Dane County Circuit Court,  but on Tuesday CUNA Mutual filed a notice to remove the case to the U.S. District Court for the Western District of Wisconsin.

The suit alleges that when CUNA Mutual bought the certificates between 2004 and 2007, RBS had made "representations about the credit quality of the pools of mortgage loans collateralizing those RMBS." The supporting documents for the investments contained "untrue or misleading statements concerning the loans underlying each separate RMBS offering," according to the court documents filed. The RMBS performed poorly and the certificates lost much of their value, CUNA Mutual maintained in its complaint.

"This action is about righting a wrong and is being taken in the best interests of CUNA Mutual Group and its policyholders," said Jim Buchheim, vice president of corporate communications at CUNA Mutal Group. "The complaint we filed fully explains why we took this action. However, because this issue is in litigation, we will not comment further on the lawsuit," he told News Now.

Before filing the suit, CUNA Mutual commissioned a forensic investigation of the loan pools collateralizing the 10 RMBS to test the accuracy of RBS's quantitative representations. CUNA Mutual analyzed 17,947 loans from the RMBS transactions or about 40% of all the loans in the pools, said the court documents. "The results of CUNA Mutual's forensic investigation revealed that RBS's quantitative representations in the offering documents of all 10 RMBS were false at the time they were made," alleged the court document.

The document also alleged that RBS made representations about the mortgage underwriting standards of the originators that issued the mortgage loans serving as collateral for the 10 RMBS. The representations "were also false at the time they were made. In truth, the originators had systematically abandoned their underwriting standards," said the document filed. RBS was also accused of inflating credit ratings to induce CUNA Mutual's purchase of the certificates.

The document named five originating lenders that are in bankruptcy or that are subsidiaries of bankrupt entities: Washington Mutual, First Magnus Financial Corp., Delta Funding Corp., New Century Mortgage Corp., and Fremont Investment & Loan.

In its summary citing its "justifiable reliance" on the representations by RBS, CUNA Mutual noted that "but for the misrepresentations and omissions in the offering documents, CUNA Mutual would not have purchased or acquired the certificates, and those representations and omissions were material to its decision to acquire the certificates."

The suit does not say that RBS intentionally or knowingly made the misrepresentations. CUNA Mutual seeks to exercise the rescission clause in the sale of the securities.

RBS also is being sued by the National Credit Union Administration  (NCUA)  related to $1.1 billion of mortgage-backed securities RBS allegedly sold to the now defunct Western Corporate FCU.  NCUA has filed similar suits against Goldman Sachs, JP Morgan Chase and Wachovia Securities (now a unit of Wells Fargo and Co.).

CUs create prosthetic hands for Afghanistan

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A poster promoting the Credit Union Helping Hands program will appear in Afghanistan's Islamic investment and finance cooperatives once the program to provide prosthetic hands for disabled conflict victims begins operations there. (Photo provided by the World Council of Credit Unions)
KABUL, Afghanistan (1/19/12)--A group of U.S. credit unions and supporting organizations have teamed up to create prosthetic hands to help some Afghanistan conflict victims begin the recovery process. Years of armed conflict have left many Afghan civilians disabled and finding it difficult to support themselves and their families.

With World Council of Credit Unions' (WOCCU) assistance, the group will soon distribute the prosthetics through Afghanistan's Islamic investment and finance cooperatives (IIFCs), or credit unions.

The Credit Union Helping Hands program, launched by the CU Philanthropy Group (CUPG), has been assembling and distributing prosthetic hands for those in need through Rotary International for three years. The group works with the Islamic Investment and Finance Cooperative Group, the Afghan trade association established by World Council to support IIFC growth and development, to plan the delivery of prosthetic hands in northern Afghanistan. Victims who register with IIFCs will receive the hands free and do not need to be IIFC members.

"The goal of credit unions is to foster economic empowerment and growth for their members, thereby helping strengthen the communities in which they live," said Brian Branch, WOCCU president/CEO. He noted that IIFCs "have found yet another way to help meet what for some members is their most critical need."

CUPG's consulting services' past credit union clients have assembled the prosthetic hands as part of teambuilding and process-improvement exercises with the firm, said Frank Hackney, founder of the Washington, D.C.-based philanthropy and consulting group. Participants from about 25 credit unions already have assembled as many as 100 hands.

"The credit unions get a great learning experience with a powerful philanthropic component that the employees love," Hackney said.

Last year, Rotary International arranged for several IIFC volunteers, members of social organizations from across Afghanistan, to travel to Ahmedabad, India, for prosthetic-fitting training sessions. Credit union consulting firm DDJ Myers financed the trip. Those volunteers will train others throughout Afghanistan to fit the prosthetic hands on their recipients.

"The primary value of the hands is that they enable the user to grasp," Hackney said. "The ability to grasp allows recipients to hold tools or utensils, steer a bike or an automobile and, in many cases, increases their ability to work."

The first shipment of 50 hands will be sent during first quarter, once the initial demand has been determined, Hackney said.

For more information about the Credit Union Helping Hands program, contact Frank Hackney at fmhackney@cuphilanthropygroup.org or 866-918-8969.

Southeast Corporate Corporate One sign merger pact

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COLUMBUS, Ohio and TALLAHASSEE, Fla. (1/19/12)--The boards of directors of Corporate One FCU, Columbus, Ohio, and Southeast Corporate FCU, Tallahassee, Fla., have signed a definitive merger agreement.

The two corporates announced their intent to merge on Sept. 13 and are in the process of submitting their formal application to the National Credit Union Administration (NCUA) for approval.

The agreement governs the terms and conditions that binds the organizations together, and it formalizes many of the merger details, the two corporates said.

"As we drafted the definitive merger agreement, our No. 1 goal continues to be the preservation of the collective $63 million in member capital shares (MCS) held by members at Southeast," said Brad Miller, Southeast Corporate president/CEO.

"With the definitive merger agreement now completed and signed, it is increasingly clear that choosing Corporate One was the best choice for Southeast members. Once the merger is approved by the NCUA and voted on by members, we can look forward to a smooth merger with Corporate One," Miller said.

The next step in the merger process is to submit the application to the NCUA sometime this month. Once the application is reviewed by the NCUA, the memberships of the credit unions will vote on merger. If approved, the official capital subscription process will begin soon thereafter.

Keynoters set for CUNAs 2012 Americas CU Conference

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MADISON, Wis. (1/19/12)--The Credit Union National Association's (CUNA) 2012 America's Credit Union Conference (ACUC) will be held June 17- 20 in San Diego, and the keynote speakers have been set. Conference registration can be found at acuc.cuna.org.

ACUC is designed to connect progressive credit union leaders with like-minded business experts and action-inspiring ideas. Each year, ACUC features the industry's top line-up of business speakers, CUNA said.

CUNA Mutual Group's Discovery breakout sessions are led by credit union experts and designed to help credit union leaders solve problems, capture opportunities and address current market challenges. The small-session sizes foster networking opportunities and strong connections among attendees.

"Collaboration is a unique trait that differentiates credit unions from other financial institutions and helps make our movement stronger," said Jeff Post, CUNA Mutual president/CEO. "ACUC's energetic atmosphere and focus on a successful future for credit unions is a natural fit for our Discovery sessions."

The 2012 ACUC also offers Thought Leader sessions, an exclusive Executive Series for CEOs, one of the largest exhibit halls in the industry, networking and guest programs to enjoy San Diego.

Additional speakers, session topics and programs will be announced in the weeks to come.

For more information, use the link.

CUNA WOCCU video IYC an opportunity to educate

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MADISON, Wis. (1/ 19/12)--Bill Cheney, president/CEO of the Credit Union National Association (CUNA), and Brian Branch, president/CEO of the World Council of Credit Unions (WOCCU), offered a special, joint message on the meaning, importance and value of credit unions getting involved in the International Year of the Cooperative (IYC).

Kentucky Corporate chooses LT for correspondent services

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WICHITA, Kan. (1/19/12)--LT, a third-party service provider to correspondent financial institutions, has entered into an agreement with Kentucky Corporate FCU, Louisville, Ky., to deploy LT's Private Correspondent Gateway for transaction and reporting services for the corporate's member credit unions.

The transition to LT's system will include a full replacement and enhancement to all APEX automated clearinghouse functionality with the addition of international wire transfer services through a real-time interface to Travelex Global Business Payments.

Kentucky Corporate also will use LT's direct connection to the Federal Reserve, allowing automated ACH file delivery of inbound and outbound files.

The entire solution will be secured by LT's biometric multi-factor authentication.

Kentucky Corporate will also provide member credit unions with their own branded LT cash management systems to business members (select-employee groups) through the partnership with LT. Credit unions will be able to provide their business members with cost-effective ACH services that will integrate into Kentucky Corporate's Private Correspondent Gateway for processing, said LT.

Montana First CU members defeat merger proposal

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MISSOULA, Mont. (1/19/12)--Members of $63 million Montana First CU of Missoula, Mont. have voted down a proposed interstate merger with $432 million Horizon CU of Spokane Valley, Wash.

The results of a special member voted were released Tuesday (Missoulian.com Jan. 18).

About 18% of the membership voted, with 249 more "no" votes than "yes" votes, said Montana First CEO Chris Cisco in the article.

Boards from both credit unions approved the proposal in October, but some directors and members from Montana First expressed concern about whether merging with an out-of-state credit union is the best way to help grow and serve the membership of Montana's oldest credit union (News Now Jan 4.)

Members also said they lacked information about the merger. An informational meeting about the merger was held Jan. 5, the same day ballots were due.

For now, the merger is off the table, said Mark Londine, Montana First CU board chair.

Montana First serves its 9,700 members through two branches. Horizon has 38,000 members and 18 branches.

CUNA launches Youth Week online store with discount

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MADISON, Wis. (1/19/12)--The Credit Union National Association (CUNA) has launched its National Credit Union Youth Week online store and is providing early bird prices for credit unions. Youth Week will be celebrated April 22-28.

 

Through March 9, credit unions can save 10% on print materials to promote the "Be a Credit Union Super Saver" theme and events, financial education materials to introduce money concepts to youth, items to reward young savers and apparel to dress the part in April. Discounts of up to 10% apply to standard items in inventory and bulk or customized orders.

Credit unions also can choose to participate in the nationwide Saving Challenge, where hundreds of credit unions track youth savings deposits during April. CUNA will award $100 cash prizes to youth at 10 of the participating credit unions.

"Participating in the Saving Challenge is a great way for individual credit unions to raise awareness about the importance of financial responsibility and the benefits of credit union membership on a national scale," said Joanne Sepich, CUNA's Youth Week coordinator. "Last year, participating credit unions reported more than 9,000 new accounts and savings deposits of $28.5 million. This is a prime opportunity to increase member involvement," she added.

For Youth Week and throughout April, credit unions can outfit staff in Super Saver two-color imprint T-shirts in adult and youth sizes.  The credit union can choose from five colors and customize by adding its name. The shirt features the Credit Union Super Saver dollar sign logo highlighted by a yellow lightning bolt across the front.

Also new for this year's Youth Week, the online store builds upon the International Credit Union Day store design. Improved product categories support enhanced item browsing and easier site navigation. For updates on Youth Week, credit union staff can sign up for a free e-newsletter and visit the Youth Week site. For more information, use the links.

Fin. marketers survey Inadequate budgets top challenge

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MEDFORD, Ore. (1/18/12)--Credit union and bank marketers have named insufficient budgets and manpower as their No. 1 challenge for 2012, according to a new marketing survey.

Forty-six percent of the 228 marketers served said budgets and manpower were their biggest marketing challenge, according to The Financial Brand's 2012 Bank and Credit Union Marketing Survey. Respondents included  84 banks, 30 community banks and 104 credit unions. Forty-five percent of respondents indicated their marketing budget will increase this year, while 12% expected a decrease.

Difficulty measuring and proving results for return on investments was the second most common challenge, cited by 38% of respondents. That was followed by inflexible and limiting information technology (IT), 37%; employee support for marketing and branding sales, 34%; and regulation and compliance issues, 33%.

Top marketing priorities for the next 12 to 24 months include cross-selling and loan growth, according to the survey. Products expected to receive the most heavy promotion include: mortgage loans, auto loans, free checking, credit cards, online banking, small business banking, mortgage refinancing, small business lending, and auto refinancing.

Credit unions and banks continue to use traditional marketing tools. Nearly half of them said that print, TV, radio and outdoor advertising will have about the same importance this year as in 2010. However, online ads, social media and personal finance management tools will grow in importance.

More institutions picked up on using e-mail as a marketing tool, with 79% of those surveyed using e-mail, compared with 69% in 2010.  More credit unions and banks also are paying for online banner ads today--68%, compared with 54% in 2010--and more are using ads in their e-statements.

As for social media tools, Facebook dominates, with 72% of respondents using this tool, followed by Twitter (54%); YouTube (49%); Linked in (48%)  and others.   However, the survey noted that 40% of credit union and bank marketers devote only one to five hours a week to social media each week.

For the full survey report, use the resource link.

IBankrateI CUNA offers tips on finding CD deals

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MADISON, Wis. (1/18/12)--A Credit Union National Association  (CUNA) economist offered some tips on finding the best certificates of deposit (CD) in a low-rate environment, in an article in Bankrate.com (Jan. 11).

"Look for specials," Bill Hampel, CUNA chief economist, told Bankrate. "Some financial institutions sometimes have strong loan demand for whatever reason and have a need for money for a certain period. They could be offering a relatively more attractive rate on one kind of CD."

Also, consumers looking to save who have debt may be better off paying off their debt with their savings rather than putting savings in a CD, because it is hard to rationalize an investment returning less than 2% while having to pay out 16% interest to credit card companies, Hampel said.

To read the article, use the link.

Pa. CUs performed better than national CU average banks

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HARRISBURG, Pa. (1/18/12)--Pennsylvania credit unions performed better than the state's banks during the 12 months ending Sept.30, according to the Third Quarter 2011 Pennsylvania Profile. Also, the state's credit unions continued to grow ahead of national averages.

Credit union assets rose 5.5% during the period, compared with a 3.5% increase for banks, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Jan. 17).

Credit unions saw loan growth of 1.4%, while Pennsylvania banks reported a 3.3% decline in loan balances for the period. Pennsylvania credit union loan growth was slower than all of 2010, when loan balances increased 3%.

Member business loans was the fastest-growing loan category, with an increase of 21.7%, more than five times the national growth rate of 4.3%. Commercial loans at Pennsylvania banks during the same period increased 8.3%.

Also growing in loan growth were first mortgages and credit card balances. They exceeded the national rates of 3.4% and 2.8%, respectively.

As of Sept. 30, 533 federally insured credit unions in Pennsylvania managed $35.2 billion in assets, and served 3.6 million members. Membership grew 1.2%. Savings deposits grew 5.4%, ahead of the 5% national rate, but below the state's rate of 6% for 2010.

The 2012 state forecast calls for improving job growth and consumer confidence, and for household balance sheets to increase credit union loan growth, said PCUA.

CU employees call 911 after woman blacks out on phone

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YAKIMA, Wash. (1/18/12)--Fast thinking employees at Yakima, Wash.-based Solarity CU called 911 when they realized something was wrong with a member who began slurring her words and blacking out while she was on the phone Thursday with the credit union.

The woman, Wanda Neff, 60, credits them with saving her life. She told local media she took too much prescription medication Thursday afternoon just before she called the credit union. During the call, she began to feel odd, started slurring her words and everything was turning to a dark blue, she said (WAPP TV Jan. 16).

The Solarity employees she talked to, Teresa Wood and Kelcy Young, realized Neff was in trouble. While Young kept her on the phone, Wood call 911 for help. They used caller I.D. to identify Neff's address and direct paramedics to her.

When paramedics arrived, Neff fell trying to get to the door but was able to open it. She wouldn't let go of the phone, which she said was "like a lifeline."

The credit union's employees said they were frustrated they couldn't do more to help, but Neff, who spent the night in the hospital, praised the tellers. Without their help, she would have been alone until family arrived the next day, she told the station.

Filene adds to shuffles leadership roles

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MADISON, Wis. (1/18/12)--The Filene Research Institute has hired Jason Milesko as chief of advisory services as it continues to focus on using research findings to help credit unions thrive. Under the new organizational structure, George Hofheimer will be the chief research and innovation officer, and Denise Gabel will serve as chief finance and strategy officer.

Polands CU pioneer nominated for sainthood

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SOPOT, Poland (1/18/12)--Franciszek Stefczyk, a former country school teacher and political organizer, soon may make Poland the first country to have a credit union saint, according to the World Council of Credit Unions (WOCCU). Stefczyk is credited with starting Poland's first credit unions in the early 20th century.

"Dr. Stefczyk, who has been referred to as the 'Polish Raiffeisen,' was an ardent Christian, a great Polish patriot and a pioneer of rural cooperative credit unions," said Janusz Ossowski, president of Poland's Cooperative Research Institute. "He was a person of wonderful qualities of spirit and mind whose entire life bears testimony to the belief that the rules of business can be reconciled by the Gospel if those rules are based on true values and the idea of helping one's neighbor."

Beatification, often years in the making, is based on specific criteria established by the Roman Catholic Church. In December, World Council First Vice Chair Grzegorz Bierecki, president/ CEO of the National Association of Cooperative Savings & Credit Unions (NACSCU) and a senator in Poland's parliament, nominated Stefczyk for beatification to the Most Rev. Mieczysław Mokrzycki, archbishop of Lvov. Mokrzycki accepted the request, expressed his support and pledged to take further action based on the church's canonization laws.

"Franciszek Stefczyk was an eminent personality, setting the example for Poles," Bierecki said. "He was a man who, through his personal example, showed how the Gospel can be put into practice, and he deserves canonization."

The credit unions Stefczyk created flourished until 1939, when Nazi forces shuttered them during the invasion and occupation of Poland. The credit union movement was further suppressed under the communist rule that followed World War II. Credit unions remained virtually dormant until the Solidarity movement helped the country earn its freedom in 1989.

With some early assistance from WOCCU, Poland's credit unions have blossomed since that time, and the country has become home to one of the world's fastest growing and most progressive credit union systems, said WOCCU.

In 2012, SKOK will celebrate its 20th anniversary, which will include hosting WOCCU's World Credit Union Conference. The event will be held July 15–18 in Gdańsk, birthplace of Solidarity and adjacent to Sopot, where Poland's credit union trade group and World Council member NACSCU is headquartered.

For more information on the conference, use the link.

CU members spent 15 more during holidays--study

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RANCHO CUCAMONGA, Calif., and FRANKLIN, Mass. (1/18/12)--Credit union members spent 15% more during 2011's holiday shopping season than they did in 2010, according to a new analysis by CO-OP Financial Services and Saylent Technologies.

"This month-long holiday spending surge among credit union members is even higher than Black Friday sales growth among the same group, which we found grew 8.1% year over year," said Stan Hollen, president/CEO of CO-OP Financial Services. "This robust sales activity mirrors the powerful momentum of the credit union movement overall," he added.

"Our analysis revealed a remarkable 10% increase in the number of debit cards in use during the holiday season, the result of a burgeoning consumer interest in credit unions," said Tyson Nargassans, president/CEO of Saylent Technologies.

Highlights include:

  • A 513% increase in political contributions, which CO-OP and Saylent attributed to the U.S. presidential campaign;
  • A 48% increase in sales at tavern and alcoholic beverage purveyors;
  • A 38% increase in contributions to charitable and social service organizations; and
  • A 125% increase in stocking up sales at buying clubs and shopping services.
The strongest sales were in leather goods, and records and compact discs, each up 42%.  Other strong sales were in flowers and nursery stock, up 40%; bicycles, up 22%; computer software, up 21%; books, up 21%; candy and nuts, up 18%; and pets, up 17%.

The analysis  is based on more than 71.9 million transactions representing $2.8 billion in spending between Nov. 25 and Dec. 25. Drawn from debit card transactions across 563 credit unions processed by CO-OP, the comparison was performed through an advanced analytic solution, CO-OP Total Revelation, which is powered and conducted by Saylent.

The spending analysis looked at credit union members both at brick-and-mortar and online establishments.

Saylent is a provider of payment intelligence solutions based in Franklin, Mass.  Rancho Cucamonga, Calif.-based CO-OP provides access and convenience products for credit unions.

Ohio foundation grants states newest CU 5K

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COLUMBUS, Ohio (1/18/12)--The Ohio Credit Union Foundation has given a $5,000 grant to the state's newest credit union, Neuva Esperanza (New Hope) Community CU, Toledo.

The credit union, chartered in May 2010, is the first credit union chartered in the state in the past 15 years. The outreach grant is for ongoing support to help it grow and serve the underserved membership in south Toledo, said the foundation in the  Ohio Credit Union League's eLumination Newsletter  (Jan. 11).

The foundation said it has $237,000 available for grants in 2012 because of contributions and support in 2011 from credit unions, chapters and individuals.  For more information, use the link.

CDCU volunteers receive MLK Service Awards

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NEW YORK (1/17/12)--Thirteen community development credit union (CDCU) staff and volunteers Monday were honored with the Martin Luther King Drum Major Service Awards, presented by the National Federation of Community Development Credit Unions.

The awards are for volunteers who perform extraordinary everyday acts of service with reliability and commitment, said the federation. Combined, the recipients have 417 years of service to their credit unions, communities and the credit union movement.

"Many CDCUs were born in response to injustices, economic and otherwise, that the Civil Rights struggle sought to address," said federation President/CEO Cliff Rosenthal," so it was only fitting that these CDCU leaders be honored with the Drum Majors for Service Award, named after the late Dr. Martin Luther King Jr."

Award recipients and their years of service are:

  • Laurel Benjamin of All Souls FCU, New York, N.Y.,  20 years;
  • Lillian Bent, Bethex FCU, New York, N.Y., 21 years;
  • Willie Carpenter, FOGCE FCU, Eutaw, Ala., 33 years;
  • Tom Connors, America First CU, Riverdale, Utah, 30 years;
  • George Daniels, St. Mark's FCU, New York, N.Y., 18 years;
  • Rita L. Haynes, Faith Community United CU, Cleveland, Ohio, 53 years;
  • Marvin G. Jensen, Episcopal Community FCU, Los Angeles, 37 years;
  • Melvina Johnson, All Souls FCU, New York, N.Y., 40 years;
  • Daniel Morrisey, Queen of Peace Arlington FCU, Arlington, Va., 32 years;
  • James H. Parson, Church of the Master FCU, New York, N.Y., 46 years;
  • Eunice J. Rogers, NRS Community Development FCU, Birmingham, Ala., 30 years;
  • Sharon Saulters, Triumph Baptist FCU, Philadelphia, Pa., 17 years;
  • Shirley Inez Spruill, Renaissance Community Development CU, Somerset, N.J., 40 years.
"In this time of economic challenge for our nation, Dr. King's vision of service and volunteerism are more critical than ever," said Rosenthal.

To learn more about each of the awardees, use the link.

Sen. Snowe invites Maine CUs to small biz event

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PORTLAND, Maine (1/17/12)--U.S. Sen. Olympia Snowe (R-Maine) asked the Maine Credit Union League to encourage credit union attendance at today's Facebook for Small Businesses event in Augusta, Maine.  Snowe is slated to be a guest speaker at the event.

The league reported in its Weekly Update (Jan. 13) that Snowe's office contacted the league. Snowe is the ranking member on the Committee on Small Business and Entrepreneurship. Her senior counsel on the committee contacted Quincy Hentzel, the league's director of governmental affairs, to invite credit unions to attend.

Hentzel said the event is a "great opportunity for those credit unions who would like to use Facebook and social media outlets to reach new members and stay connected with current members. " The free event also is a way to keep credit unions visible to lawmakers, she said.

Member business lending (MBL) is a key priority among credit unions. The Credit Union National Association (CUNA) and credit unions have been urging Congress to increase the MBL cap for credit unions to 27.5% of assets from the current 12.25% to help inject more than $13 billion in small business loans into the economy. Doing so would help generate 140,000 new jobs, without cost to the taxpayer, CUNA said.

Ohio DFI announces revisions on CU rules

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COLUMBUS, Ohio (1/17/12)--The Ohio Division of Financial Institutions (ODFI) has finished its quinquennial review of the  Ohio Administrative Rules for state-chartered credit unions and filed changes with the Legislative Services Commission, according to the Ohio Credit Union League.

The most significant changes, said the league in its eLumination Newsletter (Jan. 11), include:

  • Waivers or approvals for rules or authorities were tightened to include specific time frames that ODFI must meet or the requests are deemed approved;
  • The "Investment" section would allow federally insured credit unions to participate in participation loans without prior approval from the National Credit Union Administration and ODFI, subject to the agency's approval of the ODFI regulation;
  • A new merger rule establishes time frames for the ODFI to approve or disapprove a merger application; and
  • The superintendent's authority was expanded to allow approval of less restrictive policies.
League General Counsel John Kozlowski worked with the ODFI on the revisions and will continue to encourage additional clarifications, the league said. A public hearing before the ODFI and Credit Union Council has been scheduled for Feb. 1.

Eight CUs five banks start Bank on Baton Rouge effort

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BATON ROUGE, La. (1/17/12)--Eight Baton Rouge, La.-area credit unions are participating with five local banks in a public-private partnership, called Bank on Baton Rouge, which will offer free or low-cost financial accounts to residents who do not use financial institutions.

The credit unions and banks will reduce or waive fees for participants who open checking and savings accounts.

Depositors also will have their overdraft charges eliminated, and their monthly minimums for account balances will be waived.

An estimated 12.1% of Baton Rouge households are unbanked, Kip Holden, Baton Rouge mayor-president, told the publication, adding that over a life time, a person without a credit union or bank will spend an average of $40,000 to cash checks.

Credit unions involved in the partnership are:

  • Baton Rouge City Parish Employees FCU;
  • Baton Rouge Telco FCU;
  • Neighbors FCU;
  • Pelican State CU;
  • Campus FCU;
  • Southern Teachers & Parents CU;
  • Dow Louisiana FCU; and
  • E FCU.

ICNN MoneyI CUs are best borrowing alternative

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NEW YORK (1/17/12)--Credit unions are the best borrowing alternative for consumers who are fed up with big U.S. banks, according to a Friday CNNMoney article.

Although they offer similar services to banks, credit unions are not held captive by the bottom lines of their balance sheets or shareholders, the article said.

That structure usually allows credit unions to provide more favorable terms for borrowers, Bankrate.com's Greg McBride told CNNMoney.

The average five-year new-car loan is 3.5% at credit unions versus 4.9% at banks, according to Informa Research Services, a CUNA Strategic Service provider quoted in the article.

For home equity lines of credit, credit unions offer a 4.4% interest rate, and banks 4.7%, on average, said CNNMoney.

Although fixed-rate mortgages are roughly the same at credit unions and banks, consumers likely will save hundreds in fees and have more direct access to decision-makers at a credit union, the publication said.

To read the article, use the link.

NCUF grantee equips Montana CDCUs with counseling expertise

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HELENA, Mont. (1/17/12)--Credit unions in Montana have embarked on a new program that will give their members access to certified financial counselors and financial coaches

With the help of a financial education grant from the National Credit Union Foundation (NCUF) and a grant from U.S. Department of Agriculture, Montana Credit Unions for Community Development (MCUCD) has helped establish a program offering Montana credit unions an affordable avenue to train one or more staff members as financial counselors and/or coaches. In the past seven months, professionals from 14 of Montana's 57 credit unions completed training.

Montana's first Credit Union Financial Counseling Certification Program class poses alongside instructor and REAL Solutions Coach Mark Lynch (far right). (Photo provided by the National Credit Union Foundation)
"We believe [the program] will help credit unions make an incredible difference in their members' lives," said Karen Smith, MCUCD director of outreach services. "Knowing what makes good financial sense is the first step, but the next step is applying that knowledge-- discovering and making the actual changes you need in your life. Now, imagine being able to get both at your local credit union. That's what this program is going to make possible in Montana."

The program makes it possible for Montana's credit unions to offer low‐income individuals in rural areas the same kind of financial education services more widely available in non‐rural areas.

The program also builds on the asset-building and financial education work that many Montana credit unions are, with the help of MCUCD, already engaged in. Several program participants come from credit unions involved with MCUCD's programs, which offer free tax services, matched savings accounts, consumer resource centers and payday loan alternatives.

Combining the lower cost and convenience of the Credit Union National Association's (CUNA) self-study Credit Union Financial Counseling Certification Program (FiCEP) enhanced with webinars and local in-person training and networking, the training enables credit union staff to become more confident in helping members build stronger financial futures.

Once they successfully complete the FiCEP training, participants earn the Credit Union Certified Financial Counselor (CCUFC) designation. The enhanced FiCEP program is a result of a partnership between NCUF's REAL Solutions program, CUNA's Center for Professional Development (CUNA CPD), the Montana Credit Union Network and their member credit unions.

In late 2011, MCUCD coordinated a financial coach training program through the New Mexico Project for Financial Literacy (NMPFL). Coaching is goal-oriented: it empowers clients to achieve their objectives and helps them to navigate life transitions. To provide for the long-term sustainability of financial coaching in Montana, staff from MCUCD and partner organizations received instruction from the NMPFL, enabling them to serve as in-state trainers of financial coaches.

As a result, after the initial training from NMPFL, MCUCD will be able to train additional financial coaches without requiring outside assistance. MCUCD's intent is to provide several financial coach trainings across the state in 2012.

NCUF grants are made possible by supporters of the foundation and the Community Investment Fund, a system of investments that help credit unions earn dividends while donating to national and state community development programs.NCUF grantee equips Montana CDCUs with counseling expertise.

CU System briefs (01/13/2012)

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  • LAREDO, Texas (1/17/12)--A former credit union employee has been arrested in connection with the Jan. 6 robbery of Laredo (Texas) CU, said police. Asael Cruz, 29, of Laredo was arrested Tuesday without incident. The robbery occurred at 7:08 p.m. when an employee who exited through the credit union's rear door was confronted by a man with a handgun. The armed robber allegedly threatened to kill the employee if he called police, and bound his wrists and ankles, taped his mouth shut and left him in a storage room. The armed man told a female employee to open the vault and fill a plastic bag with money. He allegedly also threatened her life. He taped her to a chair and fled with the money (7thspace.com and pro8news.com Jan. 12) …
  • WAUSAU, Wis. (1/17/12)--A Feb. 29 hearing has been set for David Samuelson, 52, of Green Bay, Wis., who is charged with robbing the Tower CU in Wausau on Jan. 10. During the heist, the robbery suspect allegedly showed a gun to a teller and demanded money. The teller froze, and the robber screamed at a second teller to give him money; pounded on the counter; and threatened to shoot the credit union's operations manager. The robber fled and police gave chase. Samuelson was arrested while allegedly hiding behind trees (WSAU.com Jan. 12)  …
  • HOUSTON (1/17/12)--The U.S. Small Business Administration (SBA) says Houston-based Members Choice CU (MCCU) earned the No. 10 spot among the Top 10 Lenders  in the Houston SBA District Office. The presentation was made at a recent Houston Association of Government Guaranteed Lenders luncheon to MCCU President/CEO Steve Gilman and staff by Manuel R. Gonzalez, SBA district director.  In June, the credit union earned a Preferred Lender designation from SBA, giving the credit union authority to streamline the process to provide financial assistance to small businesses. At the presentation are, from left, Regina Jenkins, Bruce Hurta, Pat Harris, Gilman, Gonzalez, and Yolanda Garcia Olivarez. (Photo provided by Members Choice CU) …

Thrivent plans to become CU

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MINNEAPOLIS and APPLETON, Wis. (1/17/12)--Thrivent Financial for Lutherans, with dual headquarters in Minneapolis and Appleton, Wis., will convert its bank subsidiary to a credit union pending approval from the National Credit Union Administration and other regulators, several news outlets reported Friday.

Thrivent FCU, as the credit union would be called if approved, would open around mid-year (Minneapolis/St. Paul Business Journal Jan. 13).

The proposed credit union would have about $530 million in assets and 40,000 members.

The bank was formed in 2001 through the consolidation of three affiliated credit unions, a trust bank and a community bank. At that time, Thrivent opted for a thrift charter because it provided the most flexibility, said Todd Sipe, Thrivent Financial Bank president/CEO (American Banker Jan. 13).

Sipe would stay on as CEO of the new credit union.

Pasadena FCU story of the day on IYC site

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PASADENA, Calif. (1/17/12)--Pasadena (Calif.) FCU's story of partnership with its local community was the "Story of the Day" for Friday on the website, Stories.coop, devoted to 2012 International Year of Cooperatives (IYC).

Stories.coop is an initiative of Euricse (European Research Institute on Cooperative and Social Enterprises) and the International Cooperative Alliance (ICA) that will result in the world's first digital library of cooperative stories (News Now Jan. 9). The site takes the message of the United Nations' IYC--Cooperative enterprises build a better world"--to the global public.

Pasadena FCU recently commissioned a mural, "Building Pasadena," created by Art Center College of Design alumnus Jerry Ortega. It is designed to demonstrate the credit union's commitment to building community. 

"The mural celebrates more than 75 years of standing strong in the community and provided a unique way for us to tell our rich story," said Ron Berry, Pasadena FCU president/CEO. 

That story resonated with coordinators of the website, located in Italy, who announced that the credit unin would be featured as one of its first "Stories of the Day."  Each day a cooperative from around the world is featured on the site. 

"We want the stories of cooperation from every corner of the globe; from the smallest cooperative to the biggest; from the cooperators with personal stories to tell or the stories of business success; to those with observations on the cooperative model," said the organization's website. 

The Credit Union National Association offers materials from the International Credit Union Day campaign built on the IYC theme. Use the link.

Corpus Christi mayor signs CUs IYC proclamation

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FARMERS BRANCH, Texas (1/17/12)--Corpus Christi, Texas, Mayor Joe Adame Tuesday signed an International Year of Cooperatives (IYC)  proclamation presented by the Coastal Bend Chapter of Credit Unions, said the Texas Credit Union League.

"Corpus Christi residents now have a deeper understanding of credit unions a
Representatives from the Coastal Bend Chapter of Credit Unions were present Jan. 10 when Corpus Christi, Texas, Mayor Joe Adame signed the International Year of Cooperatives proclamation presented by the chapter. (Photo provided by the Texas Credit Union League)
d the value these financial cooperatives bring to their community," said the league in its newsletter (LoneStar Leaguer Jan. 13).

The mayor proclaimed the year 2012 as International Year of Cooperatives for the city

"Cooperative organizations, including the 22 credit unions that make up the Coastal Bend Chapter of Credit Unions, help build and sustain healthy communities by promoting jobs and enhancing the quality of life for those in our community; and they are an important economic force, employing 587 people; governed by more than 196,300 members; with total combined assets of nearly $2 billion," the proclamation noted.

The city's proclamation encourages "all citizens to recognize the many contributions credit unions have made to the communities in this state, both tangible and intangible, through the years, and express appreciation and support for the service and commitment of cooperative credit unions."

Events for the United Nations-designated IYC began officially worldwide last week, with the theme, "Cooperative Enterprises Build a Better World."

The Credit Union National Association's (CUNA) International Credit Union Day last October built on the cooperative theme. CUNA says it still has materials available. Use the link for more information.

Check these dates for fin. education opportunities

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MADISON, Wis. (1/17/12)--Credit unions have many opportunities to tie promotion of their financial education programs to national events through April, including National Credit Union Youth Week, April 18-24.

Among the events scheduled:

  • The President's Advisory Council on Financial Capability meeting, Thursday. The council assists Americans in understanding financial matters and making informed financial decisions to encourage financial stability, according to the California Department of Financial Institutions. It is composed of nongovernmental representatives with relevant backgrounds, such as financial services, consumer protection, financial access and education. The meeting will be held at the Department of the Treasury in Washington, D.C.
  • Earned Income Tax Credit Awareness Day, Jan. 27. The sixth annual event promotes public understanding of the Earned Income Tax Credit (EITC). The web site has information on how to participate in EITC Awareness Day and about the availability of free tax preparation sites. Many credit unions will be working with this in relation to their Volunteer Income Tax Assistance programs.
  • America Saves Week, Feb. 19-26. The Consumer Federation of America (CFA), the American Savings Education Council and America Saves host the annual America Saves Week. The event's goal is to encourage people, particularly lower-income families, to save money and build wealth. The event offers information and advice on paying down debt, building an emergency fund, and saving for a home, education and retirement.
  • Military Saves Week, Feb. 19-26. Military Saves is a social marketing campaign to persuade, motivate, and encourage military families to save money every month, and to convince leaders and organizations to be aggressive in promoting automatic savings. Military Saves was developed and tested by its non-profit sponsor, CFA and the military services from 2003 to 2006 and launched throughout the Department of Defense. The Defense Credit Union Council (DCUC) is the primary liaison to the Department of Defense for defense credit unions. The DCUC ensures members of the U.S. armed forces are provided financial services in the finest traditions of the credit union philosophy. While Military Saves Week is an ongoing campaign, the entire military community joins together to focus on financial readiness during the week.
  • 2012 National Consumer Protection Week, March 4-10. The Federal Trade Commission, other federal agencies, and nonprofit organizations sponsor this event. It highlights the importance of consumer education and offers free resources to help consumers protect their privacy; manage credit and debt; avoid identity theft; understand mortgages and other loans; and recognize fraudulent scams that target consumers.
  • National Financial Capability Challenge, March 12-April 13. Sponsored by the U.S. Department of the Treasury and the U.S. Department of Education, this event challenges high school students to increase their financial knowledge and capability. The program includes a voluntary online exam and classroom toolkit designed to help educators teach students about personal finance.
  • National Credit Union Youth Week, April 18-24. America's credit unions are shining the spotlight on how young people earn, spend, save and manage their own money. The celebration takes place during the Jump$tart Coalition's Financial Literacy for Youth Month. The Credit Union National Association offers resources and ideas for promoting credit unions to America's youth. Use the link.

CU System briefs (01/12/2012)

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  • SEAL BEACH, Calif.(1/13/12)--Patelcorp CEO Scott Waite has been appointed to a new advisory board for SaveDaily Inc., a provider of mutual fund investing platforms used by financial institutions. The board will assist SaveDaily's management with marketing and financial industry best practice strategies. At Patelcorp, Waite is responsible for corporate finance and accounting, asset liability management and investments, plastic card services, and the investment brokerage and insurance subsidiary corporate for Patelcorp CU. He is also chief financial officer for its parent company, Patelco CU and in 2003 became the first credit union industry representative on the Advisory Council of the Financial Accounting Standards Board. He is serving his seventh year as chair of the Credit Unions of North America's accounting subcommittee …
  • DALLAS (1/13/12)--Deborah Matthews, director of payment strategies at ProfitStars, a division of Jack Henry & Associates, has been elected chairperson of The Internet Council of NACHA-The Electronic Payments Association. She took office Jan. 1. NACHA represents more than 10,000 financial institutions via 17 regional payments associates and direct membership. The council's mission is to advance electronic commerce over open networks by enabling digital business in a straight-through, secure, and cost-effective manner. Its initiatives include enhancing the integrity and security of the automated clearing house (ACH) network; developing best practices for data security, fraud management and authentication; facilitating industry adoption of NACHA Operating Rules for mobile ACH payments; and continuing education …
  • SILICON VALLEY, Calif.(1/13/12)--Seven of NerdWallet's Top 10 Community-oriented Credit Unions are community development credit unions (CDCUs), said the National Federation of Community Development Credit Unions. CDCUs have a focus on serving low- and moderate-income communities, minorities and other at-risk populations. Federation President/CEO Cliff Rosenthal noted that the credit unions "are among our high-performing CDCUS" and show "the world day-in and day-out that serving low-income communities can be done effectively and profitably." News Now reported the top 10 list in Wednesday's issue
  • COLUMBUS, Ohio (1/13/12)--John Herriott, Ohio Credit Union League director emeritus, died Dec. 28 at the age of 84, said the league (eLumination Newsletter Jan. 11).  Herriott served on the league board from 1989 to 1999 and was inducted as director emeritus in 2003. He was a retired employee of W.G. Herriott and Sons, Popright, Marion Power Shovel and Rhodes Heating and Air Conditioning …

EOC preparing to open CU in Fresno

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FRESNO, Calif. (1/13/12)--Fresno (Calif.) Economic Opportunities Commission  (EOC)  is planning to establish the only EOC-operated credit union on the West Coast, which would be a community development credit union serving low-income residents to counter high-interest-rate payday lending in the area.

The credit union, Community First CU, would serve low-income and loan customers in Fresno and eight other counties, reported The Business Journal (TBJNow Jan. 9). EOC currently makes loans through a certified loan fund handled through Fresno's Community Development Financial Institution, which works through banks.

Banks prefer larger loans, EOC said in the article. The  proposed credit union would offer loans in the $5,000 to $10,000 range, including personal, auto and consumer loans. Community First CU will contract some of its operations to larger credit unions.

EOC has received permission from the Small Business Administration to serve eight additional counties from Bakersfield to Sacramento, and it is applying for inclusion in San Luis Obispo and Sonora, the article said.

EOC, which is already looking for an office for the credit union, is seeking donations, grants and low-interest loans to help fund it.

CUNA Ohio league continue meetings with CFPB

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COLUMBUS, Ohio (1/13/12)--Credit Union National Association (CUNA) President/CEO Bill Cheney will meet later this month with the nation's newly appointed Consumer Financial Protection Bureau (CFPB) director, Richard Cordray. Director Cordray reached out to CUNA's Cheney following his appointment.

CFPB also has reached out to CUNA  to help arrange a meeting with credit unions in Alabama in conjunction with a field hearing on payday lending, Dunn told News Now. CFPB asked CUNA to have a credit union person at the hearing to discuss how credit unions are good alternatives to high fee pay day lenders.

The Ohio Credit Union League also will meet with Cordray, who hails from the state.

Cordray, who was appointed Jan. 5 by President Barack Obama in a recess appointment, is the former attorney general and treasurer of Ohio. He was serving at the time of his appointment as the agency's enforcement chief (News Now Jan. 5).

The appointment "is positive news for credit unions, as Cordray and CFPB staff have been strong supporters and highly accessible since the agency was created in 2010," said Paul Mercer, president of the Ohio league (eLumination Newsletter Jan. 11). "The action means CFPB will be able to assume regulatory authority over financial entities, like payday lenders and check cashers, not currently subject to federal regulation," Mercer added.

The league has a long-standing relationship with Cordray, dating back to his days in the state's administrative branch. Two days after his appointment, Cordray called league General Counsel John Kozlowski to thank credit unions for their support. He noted he looked forward to working with the movement.

CUNA and the league, which met earlier with the appointee "will meet with Cordray again shortly to reinforce that credit unions are consumer-owned cooperatives and need meaningful regulatory relief, not new regulations, in order to protect consumers," said CUNA and the league (News Now Jan. 5). They said they would "continue to consistently and aggressively press for regulatory relief to allow credit unions to continue their critically important role as consumer advocates and champions."

Now that the agency has a director, the agency can move forward with its Consumer Advisory Board, which will consult on key issues and some regulations, including remittances, that were stalled, the league said.

CUNA has emphasized to Cordray and other CFPB staff that the agency must consider ways in which the bureau can help minimize regulatory requirements for credit unions and other financial institutions. CUNA's Deputy General Counsel Mary Dunn will join the meeting with Director Cordray.

CUNA closed Monday for holiday no INews NowI (01/12/2012)

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WASHINGTON and MADISON, Wis. (1/13/12)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association will be closed Monday in observance of Martin Luther King Jr. Day, a federal holiday.

News Now will not post an issue Monday but will resume its publication on Tuesday.

Redistricting in Ohio pits CU supporters against each other

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COLUMBUS, Ohio (1/13/12)--Ohio will lose two House seats in the mandatory congressional redistricting, which means that some long-serving, credit union-friendly legislators will compete against each other in this year's elections, said the Ohio Credit Union League.

U.S. Reps. Marcy Kaptur (D-Toledo) and Dennis Kucinich (D-Cleveland) will compete for the 9th Congressional District seat. Kucinich could have run in the new 11th District in Cleveland, but he chose the 9th District, said the league (eLumination Newsletter Jan. 11). The new district includes a large portion of Toledo that likely would favor home-town candidate Kaptur in the race, the league added. Both are credit union friends. Kaptur recently co-sponsored HR 1418, legislation to expand credit unions' member business lending to 27.5% of assets from 12.25%.

Two other credit union friends will vie for the new 16th District seat. U.S. Rep. Jim Renacci (R-Wadsworth), a member of the House Financial Services Committee, actively supported the financial services industry's position on interchange, while U.S. Rep. Betty Sutton (D-Copley) is a long-time sponsor of MBL legislation, including the current HB 1418, and a public supporter of credit unions' tax status, the league said.

In the new 10th District, U.S. Rep. Steve Austria (R-Beavercreek), facing a tough primary, said he would not seek re-election. He would have run against U.S. Rep. Mike Turner (R-Dayton) in the primary. While they are not sponsors of pro-credit union legislation, Turner took the financial services industry's side in the interchange battle and has worked to build close relationships with area credit unions, said the league.

The redistricting means Ohio will have 16 House districts.

"The redistricting that is taking place in the U.S. Congress right now is going to present some difficult challenges, like the one in Ohio, for supporters of credit union-friendly candidates this year. That's the bad news," Trey Hawkins, vice president of political affairs at the Credit Union National Association, told News Now.

"The good news is that in a race in which two credit union-friendly candidates are competing, credit unions--and their members--are the real winners, no matter what the outcome," Hawkins concluded.

Catalyst Three investment resolutions for CUs

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PLANO, Texas (1/13/12)--Catalyst Corporate FCU in Plano, Texas, has three investment resolutions that it says credit unions should follow in 2012.  They are: Don't wait for rates to rise--stay invested; don't get lazy with liquidity; and don't fall for the "bond of the day."

While everyone would like to see improvement over 2011, many factors that are beyond credit union control--such as Europe's continuing debt crisis, the November U.S. presidential election, and the nation's unsolved budget problems in Washington, D.C.--have the potential to sidetrack economic progress, the corporate said.

Most credit union leaders have some concern about what to do with the growing investment portfolio that has replaced what used to be a healthy loan portfolio. Even seasoned investors have found themselves in a quandary over the mismatch of basic lessons from Economics 101, according to Sarina Freedland, senior investment officer at Catalyst Strategic Solutions.

"We are beginning to see glimmers of progress in economic growth that would tempt us to believe we are at the beginning of a growth cycle that would lead to higher interest rates," Freedland said. "That means buying short-term investments, right? However, we have heard many times over the Federal Reserve's intentions to keep interest rates at extreme low levels until mid-2013, not to mention the European Central Bank's recent move to actively lower interest rates. So, that means locking up yields for longer periods."

Credit union managers struggling to make sense of these mixed messages have reason to be optimistic, Freedland said.

"A year ago, earning even the slightest margin over cost of funds seemed impossible," she explained. "However, most credit unions managed to eke out enough return to satisfy examiners and members. But, credit unions will continue to rely heavily on investment portfolio income to replicate revenue streams. Currently, every $1 in loan principal received requires $2.65 in investment principal."

Freedland offered credit unions three resolutions to maximize investment returns in 2012:

1. Don't wait for rates to rise--stay invested. Rates have been at their lows for a long period. Recent job reports show net job gains, and housing sales gaining traction rather than falling. Given this scenario, a prudent investor might think it best to hold onto cash rather than lock in low rates. Most individuals believed this a year ago, too, but rates continued to fall throughout 2011.

Staying in cash in hopes of higher rates will only rob credit unions of needed interest income. Investing in a two-year agency at 0.65% could earn an additional 40 basis points over what the credit union would earn by keeping liquid funds in cash, or $4,000 for every $1 million invested (in the first year). If the credit union stays true to its investment ladder with call and maturity dates evenly spread out, it is protected and will have funds to invest when rates do make the turn. Freedland said.

2. Don't get lazy with liquidity. Credit unions added close to $400 billion in new balances in 2011, an increase of 5% in the 12 months ending September 2011. The Credit Union National Association is forecasting another 5% share growth for 2012, while also predicting a 3% increase in loan demand. If reports from retailers about holiday shopping trends are any indication, credit unions could see improvement in loan demand. It remains to be seen whether holiday shopping trends point to improving loan demand, or if high unemployment will hold the line on members' big ticket spending. Maintaining adequate liquidity could be trickier in 2012, said Freedland.

Although today's liquidity profile is strong, credit union managers must continue to protect their long-term cash needs, the consumer is fickle and can change buying habits abruptly due to sales promotions, government tax provisions, even the prospect of landing a new job, the corporate said. Portfolios must be managed proactively through 2013, setting aside a reasonable cushion of available funds and paying greater attention to the investment ladder, it added.

3. Don't fall for the "bond of the day." The bond-of-the-day strategy won't work in 2012, said Catalyst. Credit unions will need to become more selective in their purchases. This year, the structure will be as important as the coupon. The credit union may have to give up a higher coupon to gain some protection. Common sense says to buy along the yield curve, keep a close eye on short-term needs, and watch the portfolio cash flow structure closely, the corporate added.

Choosing portfolio duration is not always straightforward. Strategically, investment duration targets depend on the credit union's prevailing loan-to-asset ratio. The lower the ratio, the further out on the curve a credit union should consider going with its investments. For most active credit union portfolios, that means extending out to the three- to four-year area of the curve. Extending much past four years at this time will not provide enough yield to make up for a lack of liquidity, the corporate concluded.

WOCCU calls for Distinguished Service Award nominations (01/12/2012)

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MADISON, Wis. (1/13/12)--The World Council of Credit Unions (WOCCU) is seeking nominations for the 2012 Distinguished Service Award (DSA), the international credit union system's highest honor.

World Council of Credit Unions' 2012 Distinguished Service Award will be presented at the World Credit Union Conference July 18 in Gdańsk, Poland. Nominations are due March 30. (Photo provided by the World Council of Credit Unions)
The awards will be presented at this year's World Credit Union Conference, July 15-18 in Gdańsk, Poland.

Nominations are due March 30.

"Credit unions worldwide are able to excel thanks to the committed efforts of people and organizations who believe in their mission," said Brian Branch, WOCCU president/CEO. "Help us honor those who have given outstanding service by recognizing them with this prestigious award."

The DSA honors the exceptional achievements of individuals and organizations whose activities have furthered WOCCU's vision of "improving people's lives through credit unions."

The DSA is not an annual award, rather WOCCU bestows the special honor based on the proven achievements and worthiness of candidates in the eyes of the awards committee.

Individual recipients may be WOCCU member organization officers, directors or representatives; international credit union pioneers; field technicians with a long and outstanding service record; or individuals whose actions have benefitted global credit union development. WOCCU presents up to three individual awards in a single year.

Institutional recipients may be organizations or agencies that have provided financial or technical assistance to develop international credit union movements and their service infrastructures over an extended period of time. WOCCU presents only one institutional award each year.

To download a nomination form, use the link.

KCUA Kansas CUs outperform national trends

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WICHITA, Kan. (1/13/12)--Third-quarter 2011 statistics indicate Kansas credit unions continue to beat national trends, said the Kansas Credit Union Association (KCUA) Thursday.

Kansas credit unions show solid performance in most areas such as assets, shares and loans, including a 5.4% loan growth, where national trends show a decline, KCUA said.

Membership at the state's 101 credit unions has increased 3.4%, five times the national average of 0.65%. Kansas credit unions added 20,636 members between September 2010 and September 2011.

Kansas also is a nationwide leader in auto loans, with a year‐to‐date market share of 23% at the end of the third quarter. This is more than 50% higher than the national average of 14.5%, KCUA said.

The data indicate that Kansas credit unions, serving more than 625,000 Kansas consumers, remain a stable option for financial services to both individuals and businesses, the association added.

"For the past year, the numbers have been good," Bob Mayes, KCUA vice president of credit union support services, told News Now. "Kansas credit unions never tightened that much when the [national] credit crunch came and we kept lending to members."

Auto loans have been a consistent source of good business for the state's credit unions. "With auto loans, some credit unions have developed a loyal following, some have a strong indirect program and some have a strong recapture program," Mayes said.

Members borrowing auto loans know they are getting a good deal, Mayes explained. "Members have trained themselves because they know they are going to get the best deal at credit unions, so they go there time and again."

Regarding the economy, Kansas never had it as bad as some of the coastal states during the tough financial times the past several years, but it still had some challenges, Mayes said.

"Kansas credit unions continue to grow, and our mortgage originations also have grown," he said.

Statistics for Kansas credit unions' third-quarter performance were compiled by Callahan & Associates.

Four common mistakes credit unions make online

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DES MOINES, Iowa (1/13/12)--A new white paper from PolicyWorks provides credit unions with tips for ensuring their online marketing and advertising efforts meet compliance and disclosure standards.

"Credit unions are held to many of the same regulations governing the big banks and the way they advertise their products and services," wrote author Kyle Woodmansee, PolicyWorks compliance officer. "Therefore, they need to apply as much scrutiny and due diligence to their creative messages as do large financial institutions."

The white paper addresses four questions related to communicating online:

  1. Is the newsletter really 'for members only?' Once they are published, online newsletters that previously were mailed only to members are open to public viewing. Once a newsletter becomes available to the public, new regulations apply.
  1. How free is "free?" Free checking is a key differentiator for credit unions in the wake of the new interchange rule and Bank Transfer Day. It's important for a credit union's marketing team to fully understand the fee structure behind "free checking" before advertising it as such.
  1. Is the giveaway being promoted more than $10? Giveaways are popular marketing promotions. Credit unions, though, are governed by specific rules about communicating a giveaway that is considered by the National Credit Union Administration to be a "bonus"--a premium, gift, award or other consideration work more than $10 given to a member for opening, maintaining or renewing an account or increasing an account balance. There is a large list of disclosures that must accompany the promotion. Those disclosures require screen space and bandwidth.
  1. Does the message pull the disclosure trigger? There's a long list of promotional terms that will trigger warning terms for an examiner. "No closing costs," "0% annual percentage rate," and "No balance transfer fee" are among them. Most of these require additional disclosures. Providing those disclosures online--in a YouTube video, for example--can be a challenge.

Texas CUs grew in assets loans deposits in 3Q

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FARMERS BRANCH, Texas (1/12/12)--In the past two years, Texas credit unions made strides in several areas, growing in assets, loans and deposits, according to the Texas Credit Union Profile for Third Quarter.

The Texas Credit Union announced several highlights from the report (LoneStar Leaguer Jan. 11). During the past two years:

  • Assets in Texas credit unions grew by $8 billion, while Texas bank assets grew $14 billion;
  • Loan portfolios grew by more than $2 billion; banks' portfolios shrank by $7 billion;
  • Deposits grew by near $8 billion for credit unions in the state, compared with a $36 billion increase in deposits at the state's banks;
  • On average, credit unions increased their net income by 14 basis points to 65, and their net worth ratio shrank by one-tenth percent, to 9.7 from 9.8.
The league also noted that credit unions have a 12.7% market share of all used-car loans; 11% of unsecured loans; 9.2% of credit card loans; and 7.4% of new-car loans in the state.

Mich. league survey 78 of under-35 would consider CU today

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LANSING, Mich. (1/12/12)--Roughly 78% of Michigan household decision makers under the age of 35 would consider a credit union if they were looking for a savings account, loan, credit card, or other financial product today, according to a survey conducted by the Michigan Credit Union League.

Since most credit unions are trying to attract younger members, the league asked the under-35 consumers what they really think about credit unions (Michigan Monitor Jan. 9).

Other findings:

  • Fifty-seven percent of those under age 35 surveyed currently have accounts at a credit union;
  • Thirty-eight percent would consider a credit union to be their primary financial institution;
  • Sixty-six percent recalled seeing credit union advertising in the past six months, compared with 55% of those over age 35.


According to the league, the results mean that younger generations are poised and ready to be credit union members and that Michigan credit unions' Credit Union Difference campaign is making a dent in public awareness.

CU survey 40 of Canadians unhappy with bank fees

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HAMILTON, Ont. (1/12/12)--The average Canadian has been with the same bank for more than 15 years, yet more than 40% of those surveyed are unhappy with high fees at their bank, says a survey report from FirstOntario CU, based in Hamilton, Ont.

Like credit unions in the U.S., Canada's credit unions are fighting misconceptions about credit unions and the difficulty of switching financial institutions.

"There are serious misconceptions among Canadians about what's involved in leaving your bank for another institution, and for many people even the thought of switching is daunting," said Dave Schurman, executive vice president and chief operating officer at the credit union. "The reality is that if you are unhappy with your bank, switching is simple and straightforward."

He cited these misconceptions:

  • Switching banks can negatively impact one's credit rating;
  • It's complicated to change banks.
  • The bigger the bank, the better the benefits.
  • Only chartered banks in Canada are regulated.
  • Only big banks offer online banking.
The credit union is launching a public awareness campaign to educate consumers about the benefits of a community-based credit union over Canada's big banks.  It is urging consumers to make the change in 2012.

The survey, conducted by the credit union in November, polled more than 2,500 Canadians about their banking practices, preferences, satisfaction levels and whether they would leave their bank.  Of the respondents, 432% indicated they are either "unsatisfied completely" or "somewhat dissatisfied" with their current institution. Nearly 10% said they were reluctant to switch because the bank is the only bank they've ever used or that switching would be too much trouble.

Canada has the world's highest per capita membership in the credit union movement, with more than 10 million Canadians and small business owners--about one-third of Canada's population--as members of a credit union or caisse populaire (Quebec's credit unions).

Colo. bill to propose financial co-op for med-marijuana industry

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DENVER (1/12/12)--Two state lawmakers in Colorado say they plan to introduce next week a bill that would allow the state's medical-marijuana industry to form a "financial cooperative" that would act like a credit union.

State Sen. Pat Steadman (D-Denver) and state Rep. Tom Massey (R-Poncha Springs) announced their proposed bill would provide banking services to medical-marijuana businesses, with membership limited to industry members (Denver Post (Jan. 11).  However, they said, the institution would be free of the kinds of federal insurance requirements existing with banks and credit unions, making them reluctant to work with medical-marijuana businesses.

The lawmakers said difficulty in finding banking services is an ongoing complaint in the industry. Steadman indicated the inability to have a financial institution for banking hinders regulatory enforcement. Instead of relying on piles of cash, a financial cooperative could provide a paper trail for regulation, he told the newspaper.

A bank that had worked with the dispensaries closed those accounts in October, followed by other closures from institutions that were wary of a federal law making distribution of the drug illegal. The bill is a top priority for the Medical Marijuana Industry Group in this legislative session, which began Wednesday, according to the newspaper.

ABCUL Reform package major breakthrough for Britains CUs

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LONDON (1/12/12)--A recent reform package that provides Britain's credit unions with increased powers to compete more effectively with banks has been hailed as a "major breakthrough" by the Association of British Credit Unions (ABCUL).

The reforms allow credit unions to pay interest on deposits instead of a dividend for the first time. The reforms also allow credit unions to grow by accepting new types of membership, such as limited companies (WalesOnline.co.uk Jan. 11).

The changes will make it easier for credit unions to expand, consolidate and merge because they will no longer need to prove that all eligible members have something in common, the publication said.

ABCUL said the reforms would allow credit unions to provide a more effective alternative to banks, high-cost lenders and loan sharks.

The changes are a "major breakthrough" for Britain's communities, Mark Lyonette, CEO of ABCUL, told the publication, adding that the new rules will allow credit unions to more effectively compete with banks and other lenders to provide affordable services and reach many more people--benefitting communities.

Compared to the U.S. and Canada, Britain's credit union sector is relatively small--with 400 credit unions. ABCUL expects membership will surpass one million members this year.

Michigan First CU offers Turning Point home loans

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LATHRUP VILLAGE, Mich. (1/12/12)--Michigan First CU is offering an alternative lending option for consumers who have not previously qualified for a traditional mortgage.

"The current state of the housing market creates an excellent opportunity for metro Detroiters to get into the home of their dreams," said Chris Maynard, vice president of lending for the Lathrup Village, Mich.-based Michigan First CU. "Unfortunately the state of the financial industry may create a challenge for many consumers to get a mortgage. With the Turning Point Home Loan, we are able to work closely with our members and simplify some of the requirements of conventional mortgages."

Michigan First CU considers potential borrowers with credit scores as low as 580 for the Turning Point Home Loan program. The $600 million asset credit union will also consider members who have previously filed for bankruptcy, so long as the bankruptcy filing is more than two years ago.

Turning Point Home Loan participants can make a lower down payment--typically about 10%--than a conventional mortgage requires--and private mortgage insurance is usually waived.

Loan terms--10-, 15- and 20-year loans, or a seven-year-year balloon loan similar to a standard 30-year fixed-rate loan--are flexible to fit the needs of borrowers, said the credit union.

The credit union also offers free seminars to help members improve their credit scores and explore lending options.

IABC NewsI IConsumer ReportsI note CUs as high-fee alternative

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NEW YORK (1/12/12)--Ways for consumers to fight back against escalating fees at banks--including switching to a credit union--were featured on "Fighting Against Bank Fees," a segment that aired Tuesday night on ABC News and in which Consumer Reports gave advice.

Most banks now charge a fee for non-interest checking accounts, said Consumer Reports on Eyewitness News on Channel 7 WABC-New York. Most of those accounts were free two years ago. ATM fees and overdraft charges also are setting record highs.

Consumers can combat this hike in fees, said Consumer Reports. If consumers are assessed a fee, they should ask their bank to waive it. If the bank refuses, they should move their accounts. Consumers who decide to move their money out of banks should consider a big credit union, said Consumer Reports' Kim Kleman. The fees for basic checking at major credit unions are on average 42% lower than at big banks.

"Credit unions used to serve just small groups," Kleman said. "But that has changed. Now it's pretty easy to find one you can join."

Consumer Reports also lists some steps to take before switching accounts to make for an easier transition.

To view the segment, use the link.

Three Arizona CUs piloting first ATM Visa gift cards

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MESA, Ariz. (1/12/12)--Three Arizona credit unions are participating in a pilot program offering Visa's first ATM-dispensed gift cards.

Credit Union West, Glendale; MariSol FCU, Phoenix; and Pinal County FCU, Casa Grande; are offering their members Visa gift cards at walk up and drive-through ATMs.

Screens on the ATMs include the option to purchase a gift card, and they prompt users to designate the value to load on each card. Cards are available with no activation fee in $25 denominations during the pilot.

The new ATM-dispensed Visa Gift card is made of a durable, yet thinner, material than debit and credit cards. The gift cards can easily pass through the cash mechanisms of ATMs, said Visa.

Better ATM Services patented the technology that enables sale of prepaid cards through ATMs.

Visa said it is working with manufacturers, independent sales organizations and financial institutions to make ATM-dispensed gift cards a common offering at ATMs nationwide.

Senators preview legislative session for Twin Cities CUs

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ST. PAUL, Minn. (1/12/12)--Two  leaders in the Minnesota state Senate provided an insider's preview into the upcoming legislative session during a Twin Cities credit union chapter meeting Tuesday.

Minnesota state Senate Majority Leader Dave Senjem (R-Rochester), second from left, provided attendees at a Twin Cities credit union chapter meeting Tuesday  a preview of the upcoming legislative session. (Photo provided by the Minnesota Credit Union Network)
Senate Majority Leader Dave Senjem (R-Rochester) and Senate Commerce Committee Chairman Chris Gerlach (R-Apple Valley) discussed the challenges and opportunities that will face legislators during the 2012 session, said the Minnesota Credit Union Network (MnCUN).

Senjem said he is uncertain about what this year's legislative session will hold for lawmakers and the state as a whole. However, he proclaimed that the legislature will preserve credit unions' tax-exempt status.

A longtime credit union friend, Senjem has served as a volunteer and board member of Rochester-based Mayo Employees FCU for 23 years. Since his election in 2002 to the Minnesota Senate, he has openly supported and fought for credit unions and the legislation important to them, said MnCUN.  Over the years, he repeatedly has declared his commitment to protecting credit unions' tax-exempt status and the ability to meet members' needs, MnCUN added.

Gerlach provided an overview of the Senate Commerce Committee's operations and processes. The committee examines most of the bills impacting credit unions, and the overview  strengthened credit unions' understanding of how they can impact the legislative process, said MnCUN.

"It is through long-standing relationships with legislators like Sen. Senjem and Sen. Gerlach that Minnesota credit unions are able to maintain our strong presence at the State Capitol," said Mara Humphrey, MnCUN vice president-governmental affairs. "Our dedication to building and maintaining relationships with elected officials both during the session and in the interim demonstrates our strong grassroots network and strengthens our ability to impact the legislative process," she added.

The politically focused chapter meeting was part of Minnesota's ongoing initiative to develop and maintain strong relationships with federal and state elected officials.

On Jan. 5, credit union representatives also met with U.S. Rep. Keith Ellison (D-Minn.) at Richfield Blooming CU, Bloomington. During that meeting, credit unions stressed the importance of passing legislation that would raise the member business lending (MBL) cap to 27.5% of assets from 12.25%. They also focused on the increasing regulatory burdens facing credit unions and how they impact operations.

One of the Credit Union National Association's (CUNA) priorities is to work with leagues to highlight their work in advocating for, promoting and defending credit unions at the state level.  On a national level, CUNA and state leagues are urging Congress to raise the MBL cap, which would inject $13 billion in loans to small businesses and help create 140,000 new jobs, without costing the taxpayer.

CU4Kids fundraising YL4Kids apps due Jan. 31

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WASHINGTON (1/12/12)--To ensure the funds raised last year by credit unions for children's hospitals are counted in the Credit Unions for Kids' 2011 fundraising totals, Children's Miracle Network (CMN) Hospitals must receive checks from credit unions by Jan. 31.

By CMN Hospitals' estimates, only one-third of funds raised in 2011 have been received. Use the link below for a form to send with donations and remittance instructions.

Credit Unions for Kids is a nonprofit collaboration of credit unions, chapters, leagues/associations and business partners nationwide, engaged in fundraising activities to benefit 170 Children's Miracle Network Hospitals.

The collaboration is also seeking young leaders from the credit union movement to serve on The Young Leaders for Kids Board (YL4Kids).

Composed of individuals who are under forty years of age from credit unions, leagues and industry partners, the YL4Kids Board benefits from a broad spectrum of talent, experience, perspective, and reach within the credit union movement.

The purpose of YL4Kids is to create, grow and inspire Credit Unions for Kids enthusiasts among the next generation of credit union leaders. Applications also are due by Jan. 31. For an application, use the link.

CU System briefs (01/11/2012)

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  • DEARBORN, Mich. (1/12/12)--A man about to go on trial for the 2001 fatal shooting of an armored-truck guard outside Dearborn (Mich.) FCU (now DFCU Financial CU) pleaded guilty Tuesday.  Norman Duncan, 43, entered the plea to the murder charge just before selection of the jury was to begin (Associated Press via MLive.com Jan. 11).  Duncan was not accused of pulling the trigger. Two other men, Kevin Watson, 41, and Timothy O'Reilly, 37, already have been convicted in the shooting death of Norman Anthony Stephens, 30, during the robbery while Stephens was loading an ATM outside the credit union.  O'Reilly escaped receiving a rare death sentence after the jury could not reach a unanimous verdict on the death sentence. Six men were involved in the $204,000 heist (News Now Nov. 28 and Feb. 10) …
  • TULSA, Okla. (1/12/12)--A Tulsa man pleaded guilty Monday to robbing the Tulsa (Okla.) CU on July 18, even though he allegedly told the Federal Bureau of Investigation that he does not remember giving a teller a note saying he had a briefcase with a bomb and a gun (Tulsa World Jan. 11).  Steven Paul Wooten, 41, told police he realized he must have committed a robbery when he noticed a large sum of money blowing around in his car and that a voice told him to commit the robbery. The bomb threat was a hoax. Wooten was found mentally competent on Dec. 26 to stand trial. He will be sentenced in a U.S. District Court on April 9 and faces from five years, three months to six-and-a-half years in prison …
  • ORANGE, Texas (1/12/12)--Linda Cupit, president of Orange, Texas-based Sabine FCU is retiring after 31 years of service at the credit union. She will be succeeded by David Meaux. Cupit began her credit union career as a teller in 1980, said the Texas Credit Union League (LoneStar Leaguer Jan. 11). She was the credit union's vice president of accounting until 1995, when she was named branch manager after the Strickland Drive branch opened.  In 2000, Cupit was promoted to chief financial officer. She was named president after the retirement of former president/CEO Lyndell H. Bray.  Cupit is a 1989 graduate of Southwest CUNA Management School  …

NerdWallet announces Top 10 Community-oriented CUs for 2011

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NEW YORK (1/11/12)--Alternatives FCU, Ithaca, N.Y., is at the top of the inaugural list of the Top 10 Community-oriented Credit Unions of 2011, presented by NerdWallet.com, a personal finance credit card search website.

Alternatives was No. 1 for its support of small businesses, said the website, which sought to list credit unions who gave gone far above their mandate to provide not-for-profit financial services.

"2011's community-oriented credit unions are outstanding examples of how credit unions enrich the lives of their members and more," said NerdWallet CEO and founder Tim Chen. "Profits are returned to members, so that money stays local; but on top of that, these institutions truly make an investment in their communities," he added.

In addition to Alternatives Federal, the top credit unions on the list were:

  • Cooperative FCU, Woodridge, N.Y., for promoting equality;
  • Hope CU, Clarksburg, W. Va., for its community infrastructure support;
  • ASI FCU, Harahan, La., for its new microloan program;
  • Latino Community CU, Durham, N.C., for its outreach to at-risk populations;
  • Family Trust CU, Rock Hill, S.C., for its personalized financial counseling services;
  • Alliant CU, Dubuque, Iowa, for its loan assistance program;
  • Self-Help CU, Durham, N.C., for its innovative microbranch;
  • Generations FCU, San Antonio, for its online financial literacy resources; and
  • Freedom First, Roanoke, Va., for its work supporting local nonprofits.

CU System briefs (01/10/2012)

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  • ROCKFORD, Ill. (1/11/12)--A former collections supervisor at a Rockford, Ill.-based credit union has pleaded guilty in a U.S. District Court to embezzling more than $122,110 from the Rock Valley FCU in Loves Park, Ill. Thomas A. Miles, 42, allegedly embezzled 163 loan checks from members made payable to the credit union from October 2007 through August 2010 and directed tellers to cash the checks and issue money orders for the amounts. He then allegedly deposited the money orders into a personal account at a bank. He faces a maximum penalty of 30 years in prison and a $1 million maximum fine. Sentencing has been set for April 18 (Rockford Register Star Jan. 9) …
  • COLUMBUS, Ohio (1/11/12)--Susan Packer, HGTV co-founder and former chief operating officer, will keynote the Ohio Credit Union League's annual conference, the 2012 InVest 48 Conference, which will be held April 24-25 in Columbus, Ohio. She will describe her vision and experiences in taking HGTV from an idea to a business worth more than $7 billion and the lessons she learned …
  • SAN ANTONIO (1/11/12)--The Armed Forces Financial Network (AFFN), in a

    Click to view larger image Click for larger view
    partnership with on-base financial institutions on Lackland AFB, presented 100 "Thank You" cards of $50 each to the Lackland Fisher House to distribute to military families staying there in 2012.  The cards thank the families for the service and sacrifice made by troops in the armed forces and can be used at any of the 1.3 million locations worldwide accepting AFFN payments. The cards function as a regular debit or ATM card. Representatives from Air Force FCU, Security Service FCU and Broadway Bank made the presentation to Maj. Gen. Byron Hepburn, 59th Medical Wing Commander; Capt. Leria Diaz, commander, Financial Analysis Flight 802nd, and Dwayne F. Hopkins, Fisher House executive director, on behalf of the financial institutions on base on Friday. Pictured are, from left, Diaz: Hopkins; Hepburn; Bob Glenn, president/CEO of Air Force FCU; Arnette Willis, banking service representative at Broadway Bank; and Ethel Harris, assistant service center manager, Security Service FCU.  (Photo provided by Air Force FCU) …

Four CUs chalk up nearly 14 M in member dividends

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MADISON, Wis. (1/11/12)--Four credit unions have tallied nearly $14 million in dividend payments to members, they announced this week.

They are:

  • American Airlines FCU in Fort Worth, Texas, which announced it paid a $10 million dividend Dec. 31 to qualifying members. The $5.42 billion asset credit union's board approved the dividend payout at its board meeting Dec. 16. The bonus dividend was based on dividends earned on qualifying share accounts and/or interest paid on applicable loans. The savings portion of the dividend was calculated on share dividends earned through Nov. 30, and the additional portion of the bonus dividend amount was calculated on loan interest paid from Jan. 1 through Nov. 30, 2011.
  • Empower FCU, a $1.02 billion asset, Syracuse, N.Y.-based credit union, which announced a $2.5 million "give-back" for 2011. The credit union is paying $2.5 million in bonus dividends and interest rebates to reward Empower members for a successful year.
  • Mazuma CU in Kansas City, Mo., which paid its members a bonus dividend Dec. 31. The $454.6 million asset credit union's board approved a $930,000 dividend payout. Members received 4% of the interest earned on deposits in 2011 and 4% of the interest paid on loans in 2011.
  • Hanscom FCU, Hanscom Air Force Base, Mass., returned $567,000 to its members at the end of 201l with a loyalty dividend. The dividend represents a 2% bonus on dividends earned and consumer loan finance charges paid during the year by the $919.5 million asset credit union.

League advocates and the statehouse 2011 and 2012

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WASHINGTON (1/11/12)--Hundreds of bills impacting credit unions were introduced in state legislatures last year, according to information collected by the Credit Union National Association's (CUNA's) State Government Affairs staff from leagues' governmental affairs staff.  As states begin their legislative sessions for 2012, leagues will have more opportunities to promote and protect credit unions at their statehouses, with CUNA working to support their efforts.

This year most state legislatures will convene new sessions by the end of January, six states start in February and one in March.

Montana, Nevada, North Dakota and Texas do not have a regular legislative session this year. Even though some states won't have a legislative session, league government affairs staff still will work with legislators and legislative staff.  For example, although Texas is not in regular session this year, the Texas House of Representatives is studying and will make recommendations on the business tax structure, including any tax exemptions during the interim.

During 2011 state legislative sessions, leagues actively engaged in promoting and protecting credit unions' interests.  Among the year's highlights:

  • Tight budgets caused many states to consider repealing or suspending certain tax exemptions to raise additional revenue.  State tax exemptions for credit unions were mostly untouched, but leagues indicated they remain vigilant to protect credit unions' tax treatment.
  • Many states considered reforms to their foreclosure process; however, few measures were enacted. Leagues were active in shaping legislation that did pass.
Several states saw favorable changes made to their credit union acts. They include:

  • California, which created parity between federal and state charters regarding loans to credit union officials;
  • New York, which now allows state-chartered banking institutions--including credit unions--to apply for federally permitted powers and expedites the time period that regulators have to consider these applications;
  • North Carolina, which now permits a state-chartered credit union to own and operate an insurance company to benefit its members;
  • Missouri, which saw a number of improvements such as confidentiality provisions to protect information obtained during examinations; and
  • Oregon, which saw a number of changes including ones related to mergers of credit unions.
Other states capped 2011 with these efforts:

  • New Jersey, Oregon and Illinois made progress to enable or expand public deposit authority for credit unions.
  • Prize-linked savings legislation passed in Nebraska, North Carolina and Washington.
  • Financial literacy measures moved forward in California and Virginia.
  • Several states, including Arizona, Hawaii and Oregon, considered legislation establishing a state bank, like the Bank of North Dakota. None succeeded in passing.
  • State interchange bills introduced in a number of states such as Maine, Massachusetts, Minnesota, Rhode Island, and Oregon were not successful.
  • Although strongly opposed by the Wisconsin Credit Union League, a last-minute addition to the state's budget bill allows Wisconsin credit unions to directly convert to banks.
While 2011 saw changes and progress, the coming year will bring more opportunities to advance credit union interests in state legislatures.  Issues that leagues will address in 2012 include:

  • Foreclosure. As a result of the crisis in foreclosures, several states such as Hawaii, Georgia and Maine will continue to address issues related to changes in mortgage foreclosure laws.
  • State banks. Several states, including Arizona, Hawaii and Maryland, will likely consider further legislation to create a state bank.
  • Tax reform. Leagues will continue to monitor tax reform efforts to ensure proposed legislation does not impact credit unions' exemptions.
  • Credit union Acts. At least two states --Alabama and Illinois--plan to update their credit union act.
  • Public deposits. Alabama and Florida will take up legislation to allow its credit unions to accept public deposits.
  • Prize-linked savings.  After its success in Washington state last year, the Northwest Credit Union Association is set to lobby for prize-linked savings in Oregon.
With the enhanced activity this year on credit union issues in state legislatures nationwide, one of CUNA's priorities is to work with leagues in highlighting their work in advocating for, promoting and defending credit unions at the state level. For more information, use the link to CUNA's State Government Affairs.

Nebraska CUs launch Save to Win program

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OMAHA, Neb. (1/11/12)--The Nebraska Credit Union League and nine Nebraska credit unions will launch the "Save to Win" program Thursday and Friday in several cities in the state to offer credit union members a way to increase their savings.

Three separate launch events will be held in Omaha, Lincoln and Kearney.    

By making a $25 deposit, members at one of the participating credit unions will be entered into a drawing to win a $25,000 grand prize. Those same members also are eligible for monthly prizes. 

Members are guaranteed to have more money saved than when they started, because they keep all the money they have saved plus interest, said the league.

"The Save to Win program is yet another way in which our credit unions are promoting thrift to their members by incentivizing them to save for the future," said Scott Sullivan, league president/CEO. "By linking the chance to win great monthly prizes along with a $25,000 grand prize, we believe the Save to Win program will lead some members to begin saving for the first time while helping others to accelerate their habit of saving."

To participate in Save To Win, members open a share certificate and for each deposit of $25 or more they earn an entry into a drawing of up to 10 prize entries per month. Prizes totaling $1,500 will be awarded to members who made savings deposits during the month and whose names are drawn. The prize entries also will be entered into a grand prize drawing of $25,000 in January 2013.  Members must be 18 years old and have a traditional share/savings account with a participating credit union. 

Credit unions participating are:

  • Family Focus FCU, Omaha;
  • Gallup FCU, Omaha;
  • Kearney (Neb.) FCU;
  • KEE FCU, Kearney and Lexington;
  • Liberty First CU, Lincoln;
  • MembersOwn CU, Lincoln and Beatrice;
  • Mutual 1st FCU, Omaha;
  • Omaha Police FCU, Omaha and LaVista; and
  • SAC FCU, Omaha and Bellevue.
Save to Win was first offered in Michigan in 2009. Across Michigan, more than 16,400 members at 43 participating credit unions have saved more than $30 million as of December, according to the Michigan Credit Union League.

International Year of Co-ops launches around the world Thursday

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MADISON, Wis. (1/11/12)--Cooperatives around the world will partner with other countries Thursday to launch the 2012 International Year of Cooperatives (IYC).

The Global News Hub for co-operatives (www.thenews.coop) will bring together live webcasts, with a stream of photographs and articles from the various country launches.

In Canada, a national launch (www.canada2012.coop) organized by the Canadian Cooperative Association and the Conseil canadien de la coopération et de la mutualité will take place in Ottawa, together with more than 12 other simultaneous regional events across the country.

All locations will be linked by a live webcast.

In the United Kingdom, Cooperatives UK will host a live broadcast with national newspaper the Guardian, which will be simulcast through the Global News Hub.

Cooperatives Europe will coordinate launches across continental Europe, which will include France, Italy and Portugal.

In the U.S., the IYC movement is sponsored by the nation's cooperatives, credit unions and the National Cooperative Business Association. They are urging cooperatives to tell their story on www.stories.coop.

Designated by the United Nations, IYC highlights the contributions cooperatives have made to help reduce poverty, create jobs and promote socio-economic development worldwide (News Now Jan. 4).

Crash Network now Cooperative Trust with CUNA Mutual support

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MADISON, Wis. (1/11/12)--A three-year title sponsorship commitment from CUNA Mutual Group is allowing the Crash Network--which has sent young credit union professionals to "crash" CUNA's Governmental Affairs Conference and state league conventions nationwide--to evolve into a more permanent network that encourages growth for, and change by, young credit union professionals.

The Cooperative Trust is the new incarnation of the Crash Network, which grew out of the Filene Research Institute's goal to help more young adult professionals get involved in the Credit Union System. The new Cooperative Trust network and website will formally launch Jan 25.

"Supporting and mentoring young professionals is key not only to their success but the credit union movement's success as well," said Bob Trunzo, CUNA Mutual Group chief operating officer. "The Cooperative Trust has the potential to make a real difference in the credit union communities it touches."

The Cooperative Trust will carry out four primary activities:

  • Connect with Cooperative Trust members through the online channel. With 294 active members, The Cooperative Trust aims to mobilize more than 1,000 members by the end of 2014.
  • Build mentorships between Cooperative Trust members and experienced credit union professionals.
  • Develop industry projects.
  • Hold national, regional and local meet-ups.
"This sponsorship comes at the perfect time," said Brent Dixon, founder of The Crash Network and an applied research adviser at the Filene Research Institute. "Not only does it allow us to keep the lights on, but it will help us keep the community together and hammer their ideas into projects that rejuvenate the Credit Union System."

In addition to the sponsorship, CUNA Mutual employees will mentor community members, speak at meet-ups, help evaluate community-member projects, and be active in the online community. The Cooperative Trust community will also help to advise the company on products and market development topics.

Edwards to fill new WOCCU global advocacy position

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MADISON, Wis. (1/11/12)--Michael Edwards has been named chief counsel and vice president for advocacy and governmental affairs for World Council of Credit Unions (WOCCU), Madison, Wis.

The newly created position is designed to more effectively address the growing global advocacy needs of World Council's member organizations.

"A key purpose of World Council is to advocate on behalf of its members," said WOCCU President/CEO Brian Branch. "Michael Edwards brings significant experience and a high level of capabilities to this position, which will help us better serve our members' advocacy needs."

Prior to the WOCCU appointment, Edwards was senior assistant general counsel for the Credit Union National Association in Washington, D.C., and served as a volunteer on a number of World Council assignments. He was also editor of the American Bar Association's Administrative Law Review.

Edwards earned his juris doctor from the American University Washington College of Law, a master's degree in international development from the School of International Service at American University and a bachelor's degree in English from the University of Pennsylvania.

He joins WOCCU's Washington, D.C., staff.

CU System briefs (01/09/2012)

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  • GREENBURG, Pa. (1/10/12)--A Huntington, W.Va., man was convicted Thursday by a federal jury for his alleged role as the getaway driver in a 2010 armed robbery of Westmoreland Community FCU, Hempfield, Pa., in which four shots were fired and a teller was shot in the stomach. Lamont Laprade, 33, was found guilty on charges of bank robbery, armed robbery and conspiracy to commit both crimes with a firearm (Pittsburgh Post-Gazette Jan.6). He allegedly was the getaway driver for David Mathis, Crafton, Pa., in the Jan. 8, 2010 robbery. Mathis was sentenced in November to 25 years in prison for the robbery, in which he allegedly pistol-whipped one teller and shot another when the bullet ricocheted from a computer into the teller's stomach (News Now Nov. 1, 2011, and July 8, 2011.) Laprade faces at least 10 years in prison, said the Pittsburgh newspaper …

Mobile banking security tops 10 security threats for 2012

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MADISON, Wis. (1/10/12)--While credit unions gear up for what may be radical growth in mobile banking, they also must keep in mind that mobile security is the No. 1 security issue in the list of top 10 computer security threats for 2012, according to McAfee Labs.

Cyber criminals are hacking into all sorts of devices, breaking into to everything from cell phones to car systems, and security threats are escalating and becoming more malicious, said Adam Wosotowsky, senior anti-spam analyst with McAfee (The Motley Fool Jan. 3).

The No. 1 security threat is mobile threats that bypass personal computers, said McAfee. Attackers will launch mobile banking attacks, and consumers may start to see Trojan banking attacks such as SpyEye and Zeus spread to the smartphone. McAfee suggests consumers treat treat their smartphone like a computer. That means:

  • Don't click on unsolicited links or download software from sources whose origin aren't clear.
  • Use only apps from the credit union or bank, not third-party apps.
  • Don't mix money, work and fun.  Smartphones shouldn't be used for both visiting financial sites and visiting sites to download games. Often sites offering free games or porn contain viruses that harvest personal or financial information from a smartphone.
The other nine security threats looming in 2012 include:

  • Embedded hardware.  Digital cameras, medical devices, cars, and other items use embedded systems to control specific functions. An attacker can hijack control over the hardware to gain information. An example: A hardware hijacker can ask a car's GPS system where the victim lives.
  • Threats to virtual currency.  Hackers will increasingly target the growing use of cyber currency, which often isn't encrypted, as a means to steal money and install malware.
  • Alternative entry points by hackers. Advances in operating systems that direct them elsewhere will force hackers to find other entry points into a consumer's computer.
  • Blinking online traffic lights. Legislative issues may stall efforts to develop Internet traffic "rules of the road" that could aid in reducing instances where hackers steer unsuspecting users to another server.
  • Rogue certificates.  Expect an increase in fake digitally signed certificates, which are used to assure consumers and their security software that the website they are viewing is legitimate.
  • Cyberwar showoffs. Countries are expected to demonstrate their cyber-war abilities to send a message that their infrastructures such as utilities are not vulnerable to cyber attacks.
  • Hacktivism.  Online activists will join forces with physical demonstrators to target public figures, industry leaders and other entities. Already, certain hacker groups have raided accounts at certain institutions in an effort to "steal from the rich and give it to the poor."
  • Legalized spam.  Legitimate advertisers are purchasing e-mail lists of consumers who have authorized receipt of online ads. This move comes as global spam volume has decreased the past two years.
  • Increased industrial attacks.  Many industrial systems are not prepared for cyber attacks.  Attackers may engage in blackmail or extortion.

Lawsuit a reminder to CUs Be consistent on overdrafts

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BEAVERTON, Ore. (1/10/12)--The Northwest Credit Union Association (NWCUA) is warning credit unions that a new class action lawsuit against a Portland, Ore.-based bank, alleging misleading practices to charge unfair overdraft fees, serves as a reminder to be consistent and transparent on implementation of overdraft policies.

Umpqua Bank joins several other banks recently sued with similar allegations about overdraft policies. Wells Fargo & Co., Bank of Hawaii, Bank of Oklahoma, Union Bank and Westamerica all have repaid millions of dollars in overdraft fees in recent years.

The Umpqua lawsuit focuses on allegations that the bank  processed debit card transactions unfairly by reordering them from highest dollar amount to lowest, resulting in accounts that were depleted, said a press release from NWCUA.  Other institutions process transactions in the order received, in real-time, or the smallest transactions first.

All financial institutions must choose a method by which they process debit card transactions, and the highest to lowest dollar amount method, meant to assure that consumers' most important payments are made first, is not uncommon, even though it may cause low-balance accounts to go negative more quickly, said NWCUA.

"No matter which method is selected," said NWCUA CEO John Annaloro, "someone is likely to complain. The key is to make sure members have easy access to all the necessary information and that fee assessments are done in a manner that is consistent and fair."

For credit unions, the issue is covered partly by Regulation E. As of July 2010, credit unions were no longer allowed to charge an overdraft fee on non-recurring debit card transactions unless members opted in to the overdraft program. 

As a result, some members opt in to have transactions in excess of their balances approved and then pay a fee. Those who opt out either have transactions in excess of their balance declined or in some cases due to the electronic payments system, still get those transactions approved and pay no fee.

NWCUA has addressed the issue in the past and continues to work with its credit unions to develop strategies and policies that are fair to members without putting the credit union at risk, said Mary Sroufe, director of compliance services for the NWCUA. She noted that many credit unions in the association's compliance council already are moving to real time processing or planning to do so.

Southeast Corp. CUSO reaches 1B in assets managed

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TALLAHASSEE, Fla. (1/10/12)--Accolade Investment Advisory, a credit union service organization (CUSO) owned by Southeast Corporate FCU, continued to experience appreciable growth during 2011.

The Tallahassee, Fla.-based company ended 2011 with nearly $1.2 billion in assets under management--an increase from the $900 million under management at the end of 2010.

The increase comes from credit unions' growing awareness of the firm and the assistance it offers, said the CUSO's President Peter Gibson. "Credit unions increasingly are recognizing that partnering with an unbiased advisor adds tremendous value in guiding their portfolios through the constantly changing world of complex, fixed-income instruments," he added.

Despite the challenges of ongoing economic turmoil and the low interest-rate environment, Accolade transacted nearly $800 million in trades in 2011, an increase of nearly 30% from 2010.

"Accolade continues to provide a more price-efficient alternative for individual securities transactions by accessing the firms that own and originate the securities, as opposed to using regional broker dealers," Gibson said. "By actively seeking this best execution, we conservatively estimate that Accolade has saved client credit unions in excess of $1million during the year."

The company is a Securities and Exchange Commission-registered investment advisor.

2012 CUNA schools conferences lineup set

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MADISON, Wis. (1/10/12)--The Credit Union National Association (CUNA) has set its lineup of schools and conferences for the new year.

It annually hosts educational events that cover every aspect of the credit union movement. The 2012 slate of CUNA events ranges from large signature events that draw thousands of credit union professionals each year, to smaller, more topic-specific conferences.

This year's schools include:

  • CUNA Governnmental Affairs Conference, March 18-22 in Washington, D.C.;
  • CUNA Consumer & Residential Mortgage Lending School, April 2-5 in Orlando, Fla.;
  • CUNA CU Finance for Non-Financial Managers & Volunteers, April 22-25 in Orlando, Fla.;
  • CUNA Regulatory Compliance Schools, April 22-27 in Orlando, Fla.; and
  • CUNA Marketing Management Schools, April 30-May 3 in Las Vegas.
CUNA schools and conferences provide credit union professionals nationwide with updates on pressing industry topics and regulations. From compliance and collections, to marketing departments and board volunteers, the 2012 CUNA schools and conferences offer credit union-specific education for every position.

Programs are designed to showcase leading experts in their field and provide attendees with take-away strategies to use at their credit unions to boost membership, streamline efficiency and strengthen their organizations. Attendees also can network with other credit union professionals from around the country

Many 2012 CUNA conferences also offer opportunities for educational advancement such as Continuing Professional Education credits, certifications, designations, graduate degrees and awards for credit union excellence. These titles are recognized throughout the credit union movement as distinctions for both job competence and career

professionalism, CUNA said.

For more information, use the links.

CUNA Mutual investment process recertified

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MADISON, Wis. (1/10/12)--Mesirow Financial's Investment Strategies department has recertified CUNA Mutual's Group's Retirement Plan Services' investment selection and monitoring processes as diligent and consistent with industry standards and the Employee Income Retirement Security Act's (ERISA) fiduciary prudence standard.

"We take our responsibilities as a service provider seriously. At the top of our priority list is enablement of our plan sponsors to meet their obligations as fiduciaries,"  said Scott Knapp, CUNA Mutual's director of investment strategy. "Our investment process recertification with Mesirow Financial takes us a long way down that path."

CUNA Mutual provides investment options and administrative services to employer-sponsored retirement plans.

The company applies an initial screening and ongoing monitoring process to the investment options within in its standard investment program available to plans.

Cheney State fin lit award points to CUs core principles

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MADISON, Wis. (1/10/12)--Bill Cheney, president/CEO of the Credit Union National  Association (CUNA), said the Wisconsin Governor's Council on Financial Literacy's naming of  CUNA's  Money Mission LLC as a recipient of the 2011 Wisconsin Financial Literacy Award points to the essence of credit unions' core principles.

"Financial education is a core operating principle of credit unions, and one that state and federal lawmakers pay close attention to," Cheney said. "Projects like Money Mission increase awareness of credit unions and their values, and demonstrate credit unions' commitment to the community and long-term financial health of their members."

Money Mission, the Wisconsin Credit Union League and Madison, Wis.-based UW CU were recognized for efforts to improve the collective knowledge of personal finance among Wisconsin citizens. See News Now articles on the awards on Dec. 21 and Dec. 27 by using the links.

Money Mission is an interactive, Web-based simulation designed to educate young adults about the fundamentals of personal finance. It is not a series of tutorials, but rather a journey built from the most basic concepts of value and money through complex issues such as taxes, inflation and globalism.

Money Mission and the other recipients were selected from 45 nominations submitted for consideration. Criteria used in the screening process included innovative implementation, demonstrated measureable results, collaboration with partners, whether the effort was statewide or had the potential to be statewide and whether the effort was focused on needs-based groups.

"The recipients of the Wisconsin Financial Literacy Award are helping Wisconsinites of all ages improve their personal finance skills in our schools, in the workplace and in communities across the state," said Wisconsin Gov. Scott Walker. "These citizen leaders equip students, parents, peers and consumers with the necessary tools to make informed decisions about their own money, which improves individual quality of life, as well as the Wisconsin economy."

The results of Money Mission have been measured by the degree of participation and engagement. Almost 30 credit unions in Wisconsin participate, and nearly 4,000 students in more than 40 states have signed on for Money Mission in about a year of operation. The program is available through credit unions nationwide and is accessible to any interested participants. The initiative has helped several students realize their college dreams through its scholarship awards, CUNA said.

CUNA tells iWSJi Self-employed can consider CUs for mortgages

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MADISON, Wis. (1/10/11)--The Credit Union National Association provided information to two prominent newspapers--The Wall Street Journal and the Washington Post--for recent articles.

In an article about how small-business owners may have difficulty obtaining mortgages in the current market, Steve Rick, CUNA senior economist, told The Wall Street Journal (Jan. 8) that self-employed borrowers may want to consider credit unions for mortgage loans. Many credit unions keep mortgages on their books, Rick added.

CUNA also provided statistics to the Capital Business, a weekly local journal published by the Washington Post (Jan. 8) for an article about how credit unions in the Washington, D.C. area are hiring more employees.

"According to the Credit Union National Association, full-time employment at local credit unions dropped to 2,864 in September 2011 from 2,878 a year earlier as investments in information technology eliminated the need for some staffers," said the article, headlined "Credit unions adding more employees after surge" and written by Danielle Douglas "Yet industry observers say hiring picked up as credit unions experienced growth in membership throughout 2011."

State Employees CU of Maryland, Linthicum, Md., Educational Systems FCU, Greenbelt, Md., and NASA FCU, Upper Marlboro, Md., were among the credit unions named in the article

To read the articles use, the links.

Planned IT spending for 2012 up but growth slowing

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STAMFORD, Conn. (1/9/12)--Companies worldwide in 2012 will spend 3.7% more on information technology (IT) in 2012 than in 2011. However, they won't spend as much as originally projected, says research group Gartner. That means credit unions will need to pick the areas they spend their IT dollars on more carefully.

The Stamford, Conn.-based company originally forecast a 4.6% growth. Companies will spend $3.8 trillion on IT, compared with $3.7 trillion spent last year (E-Commerce Times Jan. 6). That was a 6.9% increase over 2010 spending, the company said.

The revised forecast means that all four major technology sectors--computing hardware, enterprise software, IT services and telecommunications equipment and services-- will grow slower than previously forecast, Gartner said. It attributed the slower growth rate to three major factors: the faltering global economy, the Eurozone financial crisis and the impact of flooding in Thailand, which is a major hard-disk-drive producer, said the publication.

Credit unions and other companies likely will see the strongest growth this year in telecom equipment spending, expected to increase 6.9%, followed by the enterprise software at a growth rate of 6.4%. Computing hardware is projected to rise 5.1%, followed by IT services at 3.1% growth, and telecom services at 2.3%.

Some analysts interviewed by E-Commerce Times also indicated that cloud computing and social mobile areas will have a major impact on how companies allocate their IT budgets, with cloud computing presenting a major challenge in demand.

Another survey projected that IT hiring will increase for the third consecutive year, with IT professionals with programming skills in high demand. Computerworld's annual Forecast survey forecasts a 45% increase in IT hiring expectations over the past two years.  Of the 353 IT executives it polled, 29% said they plan to increase IT staffing through next summer--up from 23% in the 2010 survey and 20% from the 2009 survey (Computerworld.com Dec. 27)..

Computerworld's survey indicates that IT managers are thinking about innovation, not merely maintaining.  Nine skills will be in particular demand:

  1. Programming and application development. Sixty-one percent plan to hire for this skill in the next 12 months, compared with 44% in 2010. Several analysts attribute the boost to mobile application development.
  1. Project management.  Forty-four percent plan to hire, compared with 43% in 2010.  The demand has been for more business analysts who can plan, design and implement projects, rather than project managers who merely oversee and monitor them.
  1. Help Desk/Technical support. Thirty-five percent expect to hire, down from 43% in 2010.
  1. Networking. Thirty-five percent, down from 38%. Virtualizagtion and cloud computing projects continues the high demand.
  1. Business intelligence. Twenty-three percent, compared with 13% in 2010. This indicates increased focus on cost savings and return on investments in technology.
  1. Data Center. Eighteen percent, compared with 21% in 2010, plan to hire.
  1. Web 2.0. Eighteen percent will hire, up from 17%.
  1. Security. Seventeen percent plan to hire, down from 32% in 2010.This does not diminish companies' emphasis on security; many already have security hired.
  1. Telecommunications. Nine percent plan to hire, down from 17% in 2010.

CU System briefs (01/06/2012)

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  • BOSTON (1/9/12)--Filene's Basement, a Boston-based discount store founded by credit union pioneer Edward A. Filene, officially closed all its 20 remaining stores on Jan. 1. Filene, who is considered the father of U.S. credit unions, founded the store as a way to sell excess merchandise from his father's department store upstairs. Filene's Basement called itself the "store that invented the bargain," said the Pennsylvania Credit Union Association (Life is a Highway Jan. 6) …
  • PORTLAND, Maine (1/9/12)--The Maine Credit Union League and several credit unions from the state attended a breakfast reception hosted by Gov. Paul LePage in Augusta on Jan. 3, one day before the start of the state's Legislative  Session  (Weekly Update  Jan. 6).  Attending were league President John Murphy; league Director of Governmental Affairs Quincy Hentzel; Sebasticook Valley FCU President/CEO Jim Lemieux, who is a league board member; and Ryan Poulin, president/CEO of New Dimensions FCU. Murphy said the event provided "an opportunity to reinforce the important role credit unions have in the Maine economy with the governor and key members of his staff …

Minn. fed court denies ATM disclosure class action

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ST. PAUL, MINN. (1/9/12)--A federal judge in Minnesota has denied a motion to certify as a class action lawsuit a man's claim against a Roseville, Minn.-based bank for failure to provide a fee disclosure on the outside of its ATM.

Like others in multiple lawsuits brought against financial institutions in several states, Adam Johnson claimed that the bank--in this case, U.S. Bank, N.A.--had violated the Electronic Funds Transfer Act (EFTA) by failing to post a notice of its $3 fee it charges to non-bank customers on the outside of the ATM.  He sought a class certification and the court heard oral arguments on Nov. 10.

Johnson used the ATM on Sept. 23, 2010, and was charged a $3 fee as a non-U.S. Bank customer for withdrawing $40 from the ATM, according to the Dec. 15 ruling by U.S. District Chief  Judge Michael Davis.  Before Johnson withdrew the funds, he saw an on-screen notice that informed him of the fee but chose to proceed with the transaction, the document said.

The ruling noted that Johnson did not meet two of the four requirements of a class action under Rule 23 of the Federal Rules of Civil Procedure, namely:   typicality, "that class representatives' claims or defenses are typical of the claims or defenses of the class," and adequacy--"the representative parties will fairly and adequately protect the interests of the class."

"The court concludes that the plain language of EFTA's actual damage provision requires that the plaintiff prove detrimental reliance. Johnson admits that he read the on-screen notice and , fully aware that he would be charged a fee if he proceeded, decided to withdraw money from defendant's ATM," said the judge's ruling. "He cannot show detrimental reliance. Therefore, his claims and defenses are not typical of the class he seeks to certify, which includes members who seek actual damages," the ruling added.

Although the finding is positive for the financial institution, it is limited to the motion to certify a class. 

The Credit Union National Association early last week alerted credit unions and the Consumer Financial Protection Bureau of an increasing number of lawsuits brought against credit unions and other financial institutions when ATM notices have been removed, damaged or destroyed (News Now Jan. 3).  CUNA's Center for Professional Development recently re-released a spring audio conference on the topic of ATM fee disclosures to assist credit unions with issues.

CUNA said some credit unions and others have discovered outside notices on ATMs have been removed or destroyed without the financial institution's knowledge and photographs taken to show "noncompliance."  Similar lawsuits charging EFTA noncompliance have been filed in Michigan, Texas, Louisiana, New Mexico, and other states. Last year, a rash of 12 suits were filed between mid-December of 2010 and January 2011 (News Now April 25, May 24, and Dec. 20).

League president touts CUs on local TV

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HIGHTSTOWN, N.J. (1/9/12)--Paul Gentile, president/CEO of the New Jersey Credit Union League, was interviewed on local television this month where he touted the benefits of credit unions and promoted aSmarterChoice.org, which helps consumers learn about and locate credit unions.

Well-known New Jersey broadcast journalist Steve Adubato interviewed Gentile on his show, "One-on-One with Steve Adubato" (The Daily Exchange Jan. 6).

During the interview, Gentile addressed the many differences between credit unions and banks, including what makes a credit union a better alternative to a traditional bank. He focused on recently passed state legislation on municipal deposit reform, which will allow more competition in New Jersey, resulting in lower costs for taxpayers.

Gentile also discussed the need to increase the member business lending cap to aid small businesses nationally. The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

To see the interview, use the link.

National CU Fin Ed Report released by NCUF

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MADISON, Wis. (1/9/12)--Roughly 1.6 million consumers received financial counseling and/or advice through a credit union, says a report released today by the  National Credit Union Foundation (NCUF) through its REAL Solutions program.

Click to view larger image Click for larger view
The free online report, "Credit Unions: Focused on Financial Capability Across the Nation," is the result of an almost yearlong data collection effort by NCUF with the help of state credit union leagues.

NCUF and REAL Solutions conducted a national study of credit-union-provided member and consumer financial education and counseling.

The report is designed to provide credit unions with quantitative data to illustrate how the credit union movement is making a difference through financial education and counseling.

Among the findings in the report:

  • Credit union representatives presented more than 24,000 educational sessions to more than 600,000 students in classrooms nationwide designed in accordance with state and national curriculum standards;
  • 111,500 student members had $34 million on deposit at 1,400 in-school credit union branches that encourage savings and connect financial education with financial access; and
  • Credit unions invested $140 million during 2010 toward improving the financial capability of members and consumers in general.
The report describes 10 financial education/counseling interventions offered to members/consumers by credit unions. It provides cumulative data about member use of and access to credit-union provided financial education/counseling products, tools, and courses, and reveals probable keys to program success.

National data are supplemented by case studies of credit unions and state leagues/associations that illustrate each type of educational intervention.

Data was collected through an online survey of U.S. credit unions from March 2011 through year-end 2011. The report is based on information submitted by 576 credit unions of all asset sizes. They represent 8% of all U.S. credit unions, and 27% of all U.S. credit union memberships as of December 2010.

The full report is available as a single document, and each state section also is available as a separate document. All are in PDF format.

CUs dole out millions in member dividends

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MADISON, Wis. (1/9/12)--Five credit unions have paid out millions of dollars in dividends to their members.

DFCU Financial CU, a $3.05 billion asset credit union based in in Dearborn, Mich., distributed a $21 million patronage dividend among its members on Wednesday. The credit union said on its website that it has returned $110 million to its members since 2006. Qualified members earn one-half percent (0.50%) cash back on average yearly deposit balances.

Wright-Patt CU in Fairborn, Ohio, Wednesday paid its members more than $5 million with a Special Patronage Dividend. The payment followed an announcement made on Dec. 1 that the $2.14 billion asset credit union would return excess earnings to its members for the fourth consecutive year. The dividend, which is $1 million more than the previous year, is possible because more than 215,000 member-owners brought more of their savings, checking, auto loans, mortgages and credit card accounts to the credit union.

Other credit unions returning money to members include:

  • CoVantage CU's board Thursday announced the $907 million asset, Antigo, Wis.-based credit union distributed a $1.5 million patronage dividend to its members (Antigo Daily Journal Jan. 5).
  • AMOCO FCU's board, for the 16th consecutive year, said Tuesday it would pay out this year roughly $1 million in bonus dividends in loan-interest refunds to its membership (CUinsight Jan. 3). Based in Texas City, Texas, AMOCO FCU has $560.6 million in assets.
  • Bay Winds FCU, a $129 million asset, Charlevoix, Mich.-based credit union, announced a $520,764 bonus dividend was distributed to members on Dec. 31.

CUNA to select 12 students to Googolplex youth board

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Madison, Wis. (1/9/12)--The Credit Union National Association (CUNA) will select 12 students from across America to serve one-year terms as youth editorial board members for Googolplex: The Credit Union Guide for Student Moneymakers, CUNA's online financial literacy toolkit.

Requests for applications are being accepted through Feb. 6. The new student board members' terms will begin on June 1.

"Year after year, the insight we receive from these bright students is instrumental in designing financial literacy tools that resonate strongly with children and young adults," says Rena Crispin, Googolplex managing editor. "At CUNA, we believe that it's vital to start financial education at a young age."

Googolplex is a youth-focused element of CUNA's onlineEDGE program, which guides credit union members through financial decisions at every stage of life. Googolplex features interactive games, videos, blogs and other content dealing with money matters and real life issues to promote financial literacy for youth aged six to 18.

Youth editorial board members complete two brief monthly online critiques of stories and games in age-specific sections of Googolplex's award-winning three-in-one website.

At the end of the terms, each board member writes an original story for Googolplex.

Other board-member responsibilities include:

  • Four elementary school-aged students will serve on the Clubhouse Crew for 5-Spot;
  • Four middle school-aged students will make up the Super Youth Team for AJ's; and
  • Four high-school-aged students will be on the Teenage Panel advising C-Note. 
"Our youth board members provide us with feedback that ensures that their peers feel welcome and validated whenever they use Googolplex on their credit union's website," said Susan Tiffany, director of consumer periodicals at CUNA.

Board members must be in grades 3-12 in the fall of 2012 or, if home-schooled, of the same grade-level ages. They will work from home.

Applications are available by request from Corey Pratt, Googolplex youth editorial board liaison. Please state the child's grade level or age equivalent if home-schooled. Requests are due by Feb. 6.

Fiserv files e-payments patent suit vs. FIS

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BROOKFIELD, Wis. (1/9/12)--Fiserv Inc., a global provider of financial services technology solutions, Thursday reported that two of its wholly owned subsidiaries have filed an e-payments patent infringement lawsuit against Fidelity National Information Services Inc. (FIS), and Metavante Corp., a wholly owned subsidiary of FIS.

The suit was filed in the U.S. District Court for the Middle District of Florida. The Fiserv subsidiaries are CheckFree Corp. and CashEdge Inc.

The lawsuit alleges that FIS infringes on Fiserv's patents when it provides customers with certain financial and payment solutions, including FIS's Payment Manager products, which process inter-bank account-to-account fund transfers, process payment instructions, and provide electronic biller notifications as a part of its electronic bill-payment processes.

"Fiserv is a leader in providing innovative and complex technology solutions and has devoted significant resources developing and maintaining an extensive intellectual property portfolio," the company said in a statement.

"These valuable assets, and the patent protection Fiserv has been granted, enable Fiserv to create and deliver cutting-edge technologies that meet evolving market needs," Fiserv added. "We have a responsibility to protect our intellectual property from further infringement and exploitation."

Fiserv is based in Brookfield, Wis.

Maine CUs get out the crystal ball for 2012

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WESTBROOK, Maine (1/9/12)--As credit unions leaders nationwide discuss what changes the new year will bring, Maine credit unions offered a forecast filled with opportunities and challenges.

Maine Credit Union League President John Murphy said he anticipates more consumers will turn to credit unions for financial services as the wave of positive publicity surrounding Bank Transfer Day continues to resonate (News & Views January).

"However, with the current rate environment, regulatory changes and continued economic uncertainty facing many consumers, the year ahead is certain to present its share of challenges, too. How we meet those challenges and others that may arise remains to be seen," Murphy said.

Building on the momentum of 2011 in 2012 will take some work, said Donna Steckino, president/CEO of Community CU, Lewiston.

"Our opportunity is also a challenge because there are still too many consumers who are not informed about the benefits of credit unions," Steckino told the league.

With the economy still recovering, credit unions have an opportunity to fulfill their mission and help consumers of low and moderate income with loan and deposit products, said Norman Dubreil, president/CEO of Maine State CU, Augusta.  "This may mean taking on a little more risk, but we can do it cautiously; it has and will continue to help us build member loyalty," Dubreil told the league.

Ken Hensler, president/CEO of The County FCU, Caribou, said the current strength of the credit union brand provides an opportunity for membership growth. "The credit union brand is strong and getting even stronger so we are in a position to leverage that into building and strengthening relationships," Hensler told the league.

Helping members find their way out of the financial crisis can benefit credit unions in the long term, said Diana Winkley, president/CEO of Capital Area FCU, Augusta. Another opportunity for credit unions is member business lending (MBL), she added.

The Credit Union National Association has estimated that increasing the current 12.25% of assets MBL cap to 27.5% of a credit union's total assets would have a number of beneficial effects on the ailing economy, including infusing $13 billion in new credit for small businesses and adding 140,000 new jobs within the first year of enactment--all at no cost to the American taxpayer.

Co-ops asked to tell your story on Iwww.stories.coopI

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WASHINGTON (1/9/12)--To help mark the start of 2012 as the International Year of Cooperatives (IYC), cooperative businesses from all sectors in the U.S. and abroad will be asked Thursday to post a story about their co-op on the website, www.stories.coop.

An international call for the stories will take place Thursday, according to the National Cooperative Business Association (NCBA), which is spearheading the U.S. cooperative movement's participation in the United Nations-designated IYC.

Using material from the stories posted, the site will feature a co-op story each day throughout IYC on Stories.coop, www.2012.coop, and on partner websites around the world.

NCBA is encouraging all U.S. cooperatives, which include credit unions, to upload their stories Thursday to the site.  That date has been set aside as a coordinated day of international action and cooperatives all over the globe will be hosting special events to mark the year. But for those who don't post Thursday, stories can still be posted after that date as well.

Stories.coop is an initiative of Euricse (European Research Institute on Cooperative and Social Enterprises) and the International Cooperative Alliance (ICA) that will result in the world's first digital library of cooperative stories. The site takes the message of the IYC--"Cooperative enterprises build a better world"--to the global public.

Stories can be shared in words, video or in Prezi presentation.  Visit the site to see the stories posted so far and to get tips on how to tell the credit union or cooperative's story. Cooperatives can upload as many stories as they like. Three steps are involved:

  1. Write, film or take a digital image of the story.
  2. Upload it to the site.
  3. Share the story with others.
Stories should be told in English. They can be posted ready for publication or Euricse's  professional writers can assist in writing stories based on information provided by cooperatives. The site also provides tips for telling an effective story. For more information, use the link.

GCUA report Expect the year of the financial planner

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DULUTH, Ga. (1/6/12)--The recovery of the economy has been a slow process and many consumers now realize they can't wait forever to firm up their long-term financial goals. That's why credit unions can expect 2012 to be the year of the financial planner, said the Georgia Credit Union Affiliates (GCUA).

This year financial planners likely will broaden their appeal, said GCUA's newspage, "Consider This." Many people turn to financial planners to help them invest, while others don't because they assume financial planners help only people with substantial funds to invest. This year, even consumers with tight finances and the middle-class aspirations may turn to financial planners for assistance, said GCUA.

Everyone needs financial coaching, Phillip Lambing Jr., independent sales manager for Waverly, Iowa-based CUNA Brokerage Services Inc., told GCUA. Common areas he sees consumer seeking help with include retirement planning and college education planning, but he adds planners can also assist with things like life protection and long-term care.

A financial planner helps consumers determine the level of risk they are comfortable with when investing their money and can help clients establish specific goals. "Planning for college isn't specific enough," he said. "Do you need to save enough for a state university or an Ivy League education?"

According to CDC FCU Senior Vice President Australia Hoover, financial planning is an important part of the credit union's mission of promoting financial health. Many members seek financial planners in response to major life events such as a first job, first child, children leaving for college, retirement planning, estate planning or long-term care.

Individuals should contact a planner when they need a partner to help them navigate their financial roadmap, Hoover told the league. "There are so many options available to consumers today and without help, it can be confusing. No amount of money is too small to consider talking with a planner."

Equifax Auto financers outpace FIs in subprime loans

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ATLANTA (1/6/12)--Auto finance lenders  have increased lending by 47% the past two years, and outpaced credit union and bank lending to subprime borrowers, according to the latest Equifax National Credit Trends Report.

The auto finance companies originated 854,800 loans in July 2011, compared with 581,300 originated  two years earlier. Credit unions and banks originated 820,000 loans in July 2011, a decrease of less than 2% from the 832,000 they originated in July 2009.

Auto loans to subprime borrowers, defined as those with an Equifax credit score below 640, now account for 38.5% of all auto loan originations at the companies, compared with 17.6% for banks and credit unions. Equifax said the numbers are approaching pre-recession levels.

Delinquency rates also improved--to 1.63% for  60+-day delinquencies on auto loans, compared to a 3% peak earlier, reflecting a sustained credit retraction that the auto lending industry experienced earlier than other loans, said Michael Koukounas, senior vice president of special client services for Equifax in a press release.

"With unemployment rates remaining elevated for a prolonged period, auto lenders have proactively adopted more comprehensive data and verification tools for greater loan-level transparency in evaluating a winder band of consumers, which has helped enable the auto lending industry to recover more quickly than others," Koukounas added.

In July, roughly 1.7 million auto loans--worth a combined $32 billion--were originated. From January to July of last year, 11.3 million new auto loans were originated, a 13.2% increase over January to July 2010 totals. The accounted for $213.9 billion, a 14.8% increase in amounts loaned over the period.

Average monthly payments for auto finance companies were $407 in July 2011, up from $404 the previous year.  For credit unions and banks, the average monthly payments were $364  for July 2011, compared with $377 the previous year.

Justice Dept. answers hackers claim he was authorized by feds

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BOSTON (1/6/12)--The Justice Department has filed its response to allegations by convicted hacker Albert Gonzalez, who seeks to vacate his 20-year sentence for hacking into TJX Cos., Dave and Buster's, and Heartland Payment Systems with the arguments that he had ineffective counsel and the breaches were authorized by the U.S. Secret Service while he was an informant.

The Justice Department, in its filing on Dec. 6 in the U.S. District Court for the District of Massachusetts, Boston, argues the court should deny Gonzalez's motions without a hearing.

Gonzalez, under a plea agreement, was convicted of some of history's largest data breaches, which occurred between 2003 and 2008.  Court documents indicated he "committed computer crimes, identity thefts and wire frauds resulting in the theft of tens of millions of credit and debit card numbers, causing hundreds of millions of dollars in financial losses."

Many accounts compromised belonged to credit union members. Credit unions and members suffered losses from fraud and from the cost of reissuing cards. The cases and similar ones sparked a variety of lawsuits against the companies breached, as well as new laws and regulations designed to protect consumers and financial institutions that bore the brunt of the costs associated with the data breaches.

In November 2009, Gonzalez entered his plea agreements in the three cases, pleading guilty in exchange for shorter and concurrent sentences. He was sentenced to three concurrent sentences that effectively resulted in a sentence of 20 years in prison.

On March 24, 2011, Gonzalez filed petitions to vacate, set aside or correct the sentences, claiming his guilty plea was not knowingly and voluntarily entered, that he received ineffective assistance of counsel related to his plea bargain, and that counsel did not tell him he had a "public authority" defense.

In moving to deny the motions, the Justice Department noted that a "guilty plea may be attacked on collateral review only in 'strictly limited' circumstances," and that "Gonzalez did not seek to set aside his plea in district court, nor did he challenge it on direct appeal."

As to his allegation that he did not know he could have a "public authority" defense and would not have pleaded guilty had he known, the Justice Department said: "Gonzalez's assertion that he believed that his Secret Service handlers had the authority to authorize him, and were authorizing him, to steal over 40 million credit and debit card numbers, sell blocks of victims' numbers through a Ukrainian fence, and bury over $1.1 million of the proceeds in his parents' back yard is inherently incredible."

It noted "Gonzalez admits concealing the crimes to which he pleaded from the Secret Service."

The government said in its brief that Gonzalez failed to satisfy a four-prong test for raising the "public authority defense":

  • Defendant must be requested to engage in covert activity by a government official;
  • The official must have actual authority to authorize such covert activity;
  • The defendant must have relied on the request; and
  • The reliance must have been reasonable.
The response also noted that Gonzalez waived his right to challenge his conviction and the sentences by knowing and voluntarily pleading guilty.

On Dec. 30, Gonzalez, who is acting as his own attorney from prison, requested a delay in filing his response, noting that  the government's brief and 400 pages of records in the case are lengthy  and because of limited resources in prison, he needed more time to prepare his reply. The court granted the extension on Wednesday until Jan. 17, according to the court docket.

Article notes Md.DC CUs growth hiring

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COLUMBIA, Md. (1/6/12)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) lists more than 50 job openings at area credit unions that are trying to keep up with their growth.

Because more consumers are seeing the benefits of credit union membership, MDDCCUA credit unions are seeing huge growth, John Bratsakis, association president/CEO, told  Baltimore.citybizlist.com (Dec. 30).

He attributed credit unions growth to Bank Transfer Day and a recent advertising push.

Openings include part-time and full-time tellers, member-service representatives and senior positions, such as Director of Human Resources, Controller, and Vice President of Mortgage Lending.

The number of job openings posted on MDDCCUA's website is only a portion of the credit union jobs available because many credit unions advertise their job openings through other media and means, Bratsakis told the publication.

In a weak economy, credit unions remain a viable option for those looking for a job and for consumers, Bratsakis added.

3Q strong for federally insured Calif. CUs

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SACRAMENTO, Calif. (1/6/12)--Federally insured California credit unions had a strong third quarter last year, with their assets increasing by $4.7 billion, or a 5.2% annualized rate, from Dec. 31, 2010.

Assets of federally insured California credit unions total $125.9 billion--which is 13.2% of the credit union industry, according to a report released to News Now by certified public accountants Richards & Associates.

Other third-quarter financial results for the state's federally insured credit unions are:

  • Net worth increased by an annualized rate of 9.04%. The net worth-to-assets ratio rose by 30 basis points to 9.95%.
  • Operating costs as a percentage of assets climbed to 3.01% from 2.84%.
  • Earnings, or return on assets, went up to 0.7% from 0.4% annualized. In the quarter, California credit unions paid $250.3 million in National Credit Union Share Insurance Fund premiums and Temporary Corporate Credit Union Stabilization expense--which consumed 29% of year-to-date earnings.
  • Loans decreased by 2.4% (annualized) to $1.27 billion. The loan-to share ratio declined to 63.6% from 67.5%, with all loan categories seeing a decline. Since the end of 2010, California credit unions decreased their allowance for loan losses by $223.8 million, or 10.7%.
  • Delinquent loans as a percentage of total loans dropped to 2.1% from 2.5%. However, overall loan delinquency continued to increase in the 12 months-and-over category, which could be an indication of delayed-loss recognition, said the accounting firm.
  • Net loan charge-offs to average loans fell to 1.34% from 1.77%. Loan losses peaked in 2009 and have gradually decreased since then.
  • Shares increased by $4.33 billion, or 5.6%. Core deposits--regular shares and share drafts--constituted 100% of all share growth. Declines occurred in nonmember deposits and share certificates.
  • Current members increased by 105,186--or 1.51% annualized. There are 9,396,614 members of federally insured credit unions based in California. That represents 10.2% of the industry, said the firm.
There are 423 credit unions based in California, with 410 federally insured and 13 privately insured through American Share Insurance. The state's federally insured credit unions operate out of 1,642 branches with 22,762 full-time employees and 2,573 part-time employees.

Mich. foundation supported CUs with 95K in 11

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LIVONIA, Mich. (1/6/12)--The Michigan Credit Union Foundation raised more than $95,000 in support of credit unions in 2011.

In 2011, more than half of MCUF's support activity was in the form of scholarships that benefitted 191 credit union employees from 71 credit unions. The scholarships were awarded for both educational support to small-asset-sized credit unions and for CUNA Management School scholarships. The MCUF also provided operational and Community Reinvestment Initiative (CRI) grants that assisted 34 credit unions.

The foundation will present certificates to 74 credit unions and chapters that provided support through an annual donation or from part of their income from investments in the Community Investment Fund. Award plaques will be presented in appreciation to 10 credit unions that made a donation at the gold level of $1,000 or more, according to the Michigan Credit Union League (Michigan Monitor Jan. 3).

With the donations, the MCUF can provide grants and scholarships to Michigan credit unions and their employees for community outreach and employee educational development.

In 2012, the MCUF is looking to increase the grant funding provided to credit unions and chapters for CRI activities targeted to financial education initiatives. Suggested activities for CRI grants include the Biz Kid$ public television program, financial education enhancements such as community and school events, Money Smart Week activities and financial counseling community outreach activities, said MCUF.

Volunteer Corp. teams up with correspondence services provider

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WICHITA, Kan. (1/6/12)--Volunteer Corporate CU (VolCorp), based in Nashville, Tenn., Thursday announced it has entered into an agreement with LendingTools.com (LT), a provider of third-party correspondent financial service solutions, to implement LT's Private Correspondent Gateway.

VolCorp will transition its members from U.S. Central Bridge's APEX Automatic Clearing House (ACH) platform to LT's ACH solution. The corporate anticipates the conversion will begin early this year, said Karla Knisley, VolCorp senior vice president and chief operations officer.

Outside of the Federal Reserve, the only third-party vendors to operate a wholesale ACH platform to this scale are U.S. Central and LT, said the two companies.

VolCorp also has secured the opportunity for member credit unions to offer their own branded LT cash management systems for ACH origination services to business members (select employee groups).

LT is headquartered in Wichita, Kan.

Poll 94 of consumers rely on credit cards

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WASHINGTON (1/6/12)--Consumers remain very connected to their credit cards, according to the National Foundation of Credit Counseling (NFCC). When asked to rank their 2012 financial resolutions, only 6% of more than 2,300 respondents indicated that decreasing dependence on credit cards was their No. 1 goal.

"At first glance, that statistic could appear to be a warning sign of future trouble.  However, credit is not the problem," said Gail Cunningham, NFCC spokesperson.  "Instead, it is the misuse of credit that leads people into financial distress."

Balancing the continuing reliance upon credit, 62% of poll respondents selected decreasing debt as their focus for 2012. "If consumers are able to decrease their debt load, continuing to use credit responsibly will help them meet the goal selected by 24% of respondents, that of increasing their credit score," said Cunningham.

About 8% of respondents ranked saving as their most important resolution, an indication that most of consumers are not setting aside funds for an emergency.

Credit unions can educate members with newsletter articles on how to use credit cards wisely, addressing the issue in their financial seminars with consumers and educate youth. For available resources from the Credit Union National Association, use the links.

Top 25 stolen passwords for 2011 announced

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LOS GATOS, Calif. (1/6/12)--What was the most stolen online password of 2011? "Password." Computer users who think switching the "o" to a zero to make it "passw0rd" didn't fare much better. Both are on the list of the 25 most common passwords used on the Internet this year, according to SplashData, a provider of password management applications.

Other common passwords include simple numerical choices like "123456," common names like "Ashley" and "michael," and patterns based on the layout of the keyboard like "qwerty" and "qazwsx."

According to SplashData, the most common passwords on the Web are:

  1. Password;
  2. 123456;
  3. 12345678;
  4. Qwerty;
  5. abc123;
  1. monkey;
  2. 1234567;
  3. letmein;
  4. trustno1;
  5. dragon;
  1. baseball;
  2. 111111;
  3. iloveyou;
  4. master;
  5. sunshine;
  1. ashley;
  2. bailey;
  3. passw0rd;
  4. shadow;
  5. 123123;
  1. 654321;
  2. superman;
  3. qazwsx;
  4. michael; and
  5. football.
SplashData suggests making passwords more secure with these tips:

  • Use passwords of eight characters or more with mixed types of characters. One way to create longer, more secure passwords that are easy to remember is to use short words with spaces or other characters separating them. For example, "eat cake at 8!" or "car_park_city?"
  • Avoid using the same username/password combination for multiple websites. Especially risky is using the same password for entertainment sites for online email, social networking and financial services.
  • Use a password management application that organizes and protects passwords and can automatically log into websites. There are numerous applications available, but choose one with a strong track record of reliability and security.

CU System briefs (01/05/2012)

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  • WAUSAU, Wis. (1/6/12)--J. David Christenson, president/CEO of Wausau, Wis.-based Connexus CU, has been appointed to the Wisconsin Credit Union Review Board by Gov. Scott Walker, the $340 million asset credit union announced Wednesday.  Christenson  will serve as a credit union experience representative on the board until his term is up in May of 2016. Christenson said he is pleased to serve the governor, credit unions and citizens of Wisconsin.  "I look forward to utilizing my experience from both the private and public sector in helping credit unions and their members achieve their financial objectives," he said …
  •  

Millennials may change 9 to 5 workday

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NEW YORK (1/5/12)--Several studies involving Gen Y and the millennials--those born between 1982 and 1993--in the workplace suggest that the eight-hour workday is on the demise, according to recent articles on workplace trends. And that will have implications for credit unions.

This year, 60% of the work force at companies such as Ernst & Young will be in the group of Americans that were born in the 1980s, according to estimates from the Business and Professional Women's Foundation (TIME Moneyland Dec. 21).  In just 13 years, nearly 75% of the global workforce will be millennials.

Communications firm Euro RSCG Worldwide, in naming the top trends for 2012, notes that millennials will overturn the traditional workday because they demand workplace flexibility,  prefer using social media on the job to stay in contact with family, friends and colleagues, and tend to stay wired into their technology at all hours.

Companies (including credit unions) recruiting this generation will need to offer more than the "stability" of a nine to five job that their parents are used to. They cannot expect Gen Yers to conform to the 9 to 5 workworld. If they do, they will have difficulty attracting employees.

Here are some recruitment realities:

  • Research by Cisco indicates that more than half this generation prefer social media freedom over a higher salary when considering a job offer and that more than half say the Internet is an integral part of their lives throughout the day. Credit unions will succeed with millennial workers if they offer the ability to use social media professionally.
  • Roughly 27% of Gen Y workers would take a cut in salary if they had more flexibility on the job, according to a report from Mom Corps. This generation believes that flexibility contributes to their productivity. Credit unions will need to offer staggered work hours, the ability to telecommute, or offer technology that enables a worker to check in with the credit union while out of the office.
  • The new tablet and smartphone technologies mean Gen Y workers are always connected to their jobs, whether in the office or not. That blurs the workday for everyone because no one is off the clock. Workers will be e-mailing and texting even from home. Credit unions will need to realize that being out of the office doesn't equate to less productivity.

Iowa CUs experience hubbub of caucus

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DES MOINES, Iowa (1/5/12)--Tuesday's Iowa Republican Caucus saw 2012 presidential candidate Mitt Romney win a narrow victory over candidate Rick Santorum. Although the nation's first caucus of the 2012 election is a high visibility experience, Iowa credit unions experienced the process from a distance.

"There's not a coordinated effort from a league perspective to support a candidate or candidates," Justin Hupfer, vice president of government affairs for the Iowa Credit Union league, told News Now.

"In September, Rick Perry spoke at the Iowa Credit Union League Annual Meeting and he spoke in favor of raising the member business lending cap for credit unions. Also, Newt Gingrich attended a brainstorming session of credit union leaders last summer to talk about the economy and jobs," Hupfer said.

The Iowa league follows the lead of the Credit Union National Association (CUNA) and does not endorse candidates or get involved with presidential campaigns, but instead encourages credit union advocates to get involved for the candidate of their choice.

On a personal level, Hupfer lives in Johnstown, a Des Moines suburb that has the largest caucus in the state, and he attended his precinct caucus and voted.

The usual format for a caucus is to provide a session of about 45 minutes to have a high-visibility surrogate for each candidate talk in support of a particular candidate. Each surrogate speaks for five to 10 minutes, and then the attendees write down who they want to vote for, Hupfer said. The one exception was that candidate Santorum spoke on his own behalf at the Johnstown caucus, Hupfer added.

CUNA's Credit Union Legislative Action Council (CULAC) is preparing to aggressively support credit union friends in this fall's elections, when the presidency, congressional seats, and state and local positions are all to be decided at the polls (News Now Jan. 4).

CULAC raised an estimated $1.8 million in funds from credit union supporters in 2011, and $1.35 million of those funds have been disbursed to pro-credit union candidates and committees.

DNCC deposits funds in Latino Community CU

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CHARLOTTE, N.C. (1/5/12)--The Democratic National Convention Committee (DNCC) announced it has deposited convention funds totaling $2 million each in two North Carolina minority-owned financial institutions--Latino Community CU (LCCU) and Mechanics and Farmers Bank.

The $2 million deposits are in non-interest bearing accounts.

DNCC made the announcement Wednesday afternoon at a press conference at the historic North Carolina Mutual Insurance Building in Durham, N.C. The building is the oldest and first African American-owned insurance company in the nation.

The funds "will help these institutions expand lending and economic development efforts to communities across the state," said Steve Kerrigan, DNCC CEO, noting that the committee "is working to bring Americans together to strengthen the economy ion a way that creates more opportunity for all communities."

DNCC typically deposits a portion of its federal grant in minority-owned banks in the city where the Democratic National Convention is held.  The tradition aims to provide local businesses and their customers with financial and public support in advance of a convention.

Durham Mayor Bill Bell said at the press conference that "Mechanics and Farmers Bank and the Latino Community CU are strong community partners, and the convention's investment in these banks will make a difference where it matters in the city of Durham and across the state of North Carolina.  We value the DNCC's commitment to diversity in choosing these two institutions."

The deposit "will continue to help us put deposits from institutions and individuals to work to help improve our local communities, through loans for working families to own their own homes, to build a credit history, or to improve their microbusiness," said Alison Beck Yonas, vice president of finance for the credit union. "LCCU's presence has been shown to reduce crime and improve property values, for the benefit of all North Carolinians."

Kim Saunders, president/CEO of Mechanics and Farmers Bank, noted that "as one of North Carolina's select few community development financial institutions," the bank "plays a critical role in expanding access to capital and providing lending services to North Carolina markets that traditionally have been underserved."

Warn members about mortgage fraud tactics

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SACRAMENTO, Calif. (1/5/12)--The California Department of Real Estate issued a mortgage fraud warning to consumers that credit unions can pass on to their members.

The department is advising consumers look out for mortgage relief, loan modifications, and foreclosure rescue scams perpetrated by fraudsters on financially strapped homeowners looking for a way out of trouble (American Banker Jan. 3).

One prominent tactic used by scamsters and third-party operators is to ask for an up-front fee from homeowners in exchange for promised reduced monthly mortgage payments. When the fee is paid, the con artists do little or nothing to procure the loan modification for the bilked homeowner, the Banker said.

More than 1,000 administrative actions for modification scams have been filed in the department's database since 2009, said the agency.

The most widespread action the department takes is the issuing of a desist-and-refrain order to shady third-party operators to stop their illicit activities.

It is not necessary for consumers to use third-party operators, because they may not enhance a homeowner's ability to obtain a payment modification--and may hinder working with the homeowner's mortgage servicer, said the California Association of Realtors. Any ads that claim to "stop foreclosure now" and offer "money-back guarantees," should be considered with caution, the association said.

Third-party fraudsters scan foreclosure notices in public filings and the news media to locate potential victims, according to the Federal Trade Commission.

Save to Win to appear on ICBS NewsI Monday

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LANSING, Mich. (1/5/12)--Michigan's prize-linked credit union savings program, Save To Win, will soon be featured on CBS News.

The network plans to debut a segment spotlighting the program on its morning news show, CBS This Morning, on Monday, from 7 a.m. to 9 a.m. An exact air date has not been set, but the segment should run in mid-to-late January, said the Michigan Credit Union League (MCUL) (Michigan Monitor Jan. 3).

It will feature interviews with Freakonomics co-author Steven Dubner, MCUL & Affiliates CEO David Adams, and a member of Communicating Arts CU in Detroit.

Forty-three Michigan credit unions participate in Save To Win, which rewards members for saving money by entering them into a $100,000 grand prize drawing every time they deposit $25. The program also awards monthly prizes, and at year's end all participants garner the deposits they've made plus interest.

Texas league rolls out year-long bright stars program

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FARMERS BRANCH, Texas (1/5/12)--The Texas Credit Union League is rolling out the "12 of 2012," a year-long recognition program to recognize the state's brightest credit union stars.

"We are recognizing efforts of credit union leaders and innovators who go above and beyond," said Dick Ensweiler, TCUL president/CEO. "From record-setting grassroots efforts to collaborative outreach on the chapter level to unprecedented fundraising for the political action committee, we've developed this program to highlight the good works underway throughout the state."

Recipients will not be limited to individuals, Ensweiler said. "Often time it's the collaborative effort of a chapter or the enthusiasm of an entire credit union that rises beyond expectations," he added. "We are looking forward to turning the spotlight on each of these high achievers and perhaps, by sharing the ideas they have launched, encourage others to do the same."

The league will announce the first 12 of 2012 award recipient on Jan. 16.

Top 20 iNews Nowi stories for 2011 topped by BTD

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MADISON, Wis. (1/5/12)--An article about the number of consumers who joined credit unions in the month leading up to Bank Transfer Day (BTD) was by far the most-read News Now article in 2011.

The top article received nearly three times more page requests than the second most popular article, a story about how credit unions could maintain the momentum of BTD.

The 20 most-read articles of 2011 were:

20. CU-to-bank conversions declining

MADISON, Wis. (1/14/11)--2010 was a year without a single credit union-to-bank conversion, and it arrived on the heels of two years in which only one such conversion per year occurred. News Now, sniffing a trend, decided to look closer and noted a decline in conversions since they peaked at eight conversions in 2001.

19. Wis. provision in budget bill would make CU conversions easier



PEWAUKEE, Wis. (5/16/11)--The Wisconsin Legislature's Joint Finance Committee Thursday voted to include language in the state budget bill that would make it easier for Wisconsin's 2.2 million credit union members to be stripped of their equity in the cooperative financial institutions they own--by permitting direct conversion from a credit union to a bank charter, according to the Wisconsin Credit Union League.

18. Fed final interchange rule reflects CU input, Cheney says

WASHINGTON (6/30/11)--Credit Union National Association President/CEO Bill Cheney said that the Federal Reserve "listened to the real concerns of credit unions" as it developed its final debit interchange fee cap rule, which was approved by a 4 to 1 vote by the Fed on Wednesday.

17. CUNA delves into corporate fund prepayment issues

WASHINGTON (6/14/11)--The National Credit Union Administration (NCUA) continues to evaluate credit union interest in its proposal to allow credit unions to prepay some of their corporate credit union stabilization fund assessments, and NCUA Deputy Director Larry Fazio on Monday said that whether or not a given credit union participates in the plan would not affect its NCUA examination or treatment by examiners.

16. NCUA advises examiners ahead of Bank Transfer Day

ALEXANDRIA, Va. (10/25/11)--Credit unions will be interested to know that the National Credit Union Administration has advised its examiners on alternative ways to view how the sudden inflow of deposits and members caused by the planned Nov. 5 Bank Transfer Day could impact credit union finances.

15. Western Bridge Corp. council OKs stand-alone option

TORRANCE, Calif. (2/22/11)--Western Bridge Corporate's Member Advisory Council has voted in favor of a recommendation to apply for a new charter as a stand-alone corporate credit union. A new charter would enable the corporate to take the next step toward consolidation with Members United Bridge Corporate.

14. CU efforts intensify at Fed as interchange delay fails in Senate

WASHINGTON (6/9/11)--Credit Union National Association (CUNA) President/CEO Bill Cheney said Wednesday that the U.S. Senate's failure to delay implementation of the Federal Reserve's debit card interchange fee cap is deeply disappointing and CUNA and credit unions will continue pressing the Federal Reserve to improve the proposed rule to minimize negative effects on credit unions and their members.

13. Visa CEO notes interchange rule's impact on CUs

NEW YORK (7/8/11)--As it made its first filing with the Securities and Exchange Commission since the Federal Reserve's final ruling on restricting debit card interchange fees, Visa Inc. said in a conference call Wednesday that it expects credit unions and small banks and other programs to see "unintended consequences" from the rule.

12. Fed issues interchange 'exempt/not exempt' lists

WASHINGTON (7/13/11)--In its first step to facilitate a two-tiered debit card interchange fee structure since adoption of its final rule, the Federal Reserve Tuesday issued two lists--one with the names of each institution considered to be covered by the new cap on debit interchange fees and another with the names of those that are exempt.

11. How stock market woes may impact CUs

MADISON, Wis. (8/8/11)--Thursday's 513-point plunge in the stock market--the worst decline in nearly two years--could affect credit unions and their members.

10. Senate, House bills would delay Fed interchange plan

WASHINGTON (3/16/11)--Credit Union National Association President/CEO Bill Cheney said last night that the proposed interchange delays introduced in both the Senate and House Tuesday give credit union members and other consumers "a ray of hope that the debit card programs they have come to appreciate may continue unchanged, at least for the short term."

9.  What CUs should do in 2011--CUNA economist

MADISON, Wis. (1/7/11)--The Credit Union National Association's (CUNA) 2011 Economic and Credit Union Forecast reflects expectations that the economy will improve, but the level of growth associated with the rebound will be lower than what is typically seen in an economic recovery. This has implications for credit unions' actions, says a CUNA economist.

8. CUs' checking accounts best: Schenk to Bankrate

MADISON, Wis. (4/13/11)--When it comes to offering higher interest rates, credit union interest checking accounts regularly outdo other types of accounts--including those of banks--Mike Schenk, vice president of research and statistics at the Credit Union National Association, told Bankrate Tuesday.

7. Early reports show Bank Transfer Day success

MADISON, Wis. (11/8/11)--For many credit unions, Saturday's Bank Transfer Day was a huge deal. Although many had seen an influx of new members throughout October after the mega-banks announced their now-rescinded debit card fees, many made record single-day strides in new accounts opened Saturday. Some reported more than 600 new members.

6.  Supreme Court to look at RESPA case

WASHINGTON (6/27/11)--Credit unions will want to be aware of last week's U.S. Supreme Court decision to hear a Real Estate Settlement Procedures Act--or RESPA--class action case that involves title insurance.

5. 2011 NCUSIF premium not a definite

ALEXANDRIA, Va. (2/22/11)—The National Credit Union Administration said it may not need to assess a National Credit Union Share Insurance Fund premium on credit unions in 2011.

4. CU execs must serve only one board, NCUA says

ALEXANDRIA, Va. (9/12/11)--The National Credit Union Administration's management official interlocks rule prohibits members of a credit union's management team from serving other nonaffiliated depository organizations, NCUA Associate General Counsel Hattie Ulan said in an agency legal opinion.

3. CUNA survey: 40k members, $80M in savings on BTD

WASHINGTON (11/9/11)--Credit unions brought in 40,000 in new members, and added $80 million in new savings account funds, on last Saturday's Bank Transfer Day, capping a month that resulted in nearly 700,000 new credit union members joining the movement.

2. Bank Transfer Day momentum sure to continue, CUNA says

WASHINGTON (11/7/11)—The official Bank Transfer Day came and went on Saturday, and by now the dust has settled and tallies have been taken of how many consumers switched from being bank customers to credit union members on the day that was so much ballyhooed in advance.

1. 650,000 new members ahead of Bank Transfer Day

WASHINGTON (11/4/11)--At least 650,000 consumers across the nation have joined credit unions in the past four weeks, reflecting consumers' reactions to rising fees at banks, according to a survey by the Credit Union National Association.

(Editor's note: In story No. 1, new-member numbers have since been revised to reflect the final results of CUNA's survey.)

Northeastern CUs top banks in customer experience study

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DENVER, Colo. (1/5/12)--At the risk of sounding like a broken record, credit unions again topped banks in a customer experience survey, this time in the Northeast U.S.

The study, the 2011 Northeast U.S. Bank & Credit Union Customer Experience Survey, was released Tuesday by Prime Performance, a Denver, Colo.-based company that advises banks on improving the client experience. (Use the link to download the free report).

"Credit unions are the overall customer experience leader with a Prime Experience Index (PXI) of 79%, well ahead of the overall bank average of 59%, with small banks, those with less than 100 branches, scoring 75%," said the company's press release (PR Newswire Jan. 4).  Other banks, with more than 100 branches, scored 66%. Credit unions also beat the regional average score of 61% for the Northeast.

Among large banks in the region, PNC ranked first with a PXI of 70%, followed by M&T at 67% and TD bank at 62%.  The lowest scoring banks were Wells Fargo and Sovereign Bank, both at 44%, and HSBC at 43%.

In between were Capital One (58%), Citizens Bank (56%), Citizens Bank (56%), Chase (53%), and Citibank (50%).  Bank of America ranked eighth among the banks, with a score of 46%. The study was completed before BofA made its announcement, now rescinded because of nationwide consumer backlash, it planned a monthly debit card fee.

The study surveyed 4,934 bank customers and credit union members in Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont. It showed the results for 11 major banks including Bank of America, Capital One, , Chase, Citibank, Citizens Bank, HSBC Bank, M&T Bank, PNC Bank, Sovereign Bank, TD Bank and Wells Fargo.

The PXI is a single metric showing how banks and credit unions are performing on delivering a superior customer experience and is comprised of four measures: satisfaction with service, likely to recommend, likely to come to the bank first for additional products or services (repurchase intent) and how effective that bank is at meeting financial needs. Use the link for more information on the calculations.

"When it comes to the emotional aspects of the customer/bank relationship, as well as how customers feel about rates and fees, banks come up short compared to credit unions," said Jim S. Miller, president of Prime Performance.

Other findings for the region:

  • Fifty-six percent  believe their bank or credit union is doing what is in the customer's best interest and 9% feel the bank or credit union is not acting in the customer's best interest, for a net score of 47%.
  • Seventy-four percent of members say their credit union is looking out for the member's best interest and only 2% believe they are not, resulting in a net score of 72%.
  • Among the big banks, customers trust M&T the most, with 59% believing the bank is doing what is in the customer's best interest and 5% not, for a net score of 53%.
  • PNC had the second highest net score among the big banks at 52%. While only 2% of credit union members and 4% of small bank customers believe their financial institution is not acting in the customer's best interest, 16% of Wells Fargo and 17% of Bank of America customers feel they are not acting in the customer's best interest. At both banks,  41% of customers do believe they act in the customer's best interest, resulting in a net score of 25% at Wells Fargo and 24% at Bank of America.
"Our survey concluded about a week before Bank of America announced its plans to add a debit card fee. Even at that time, many customers questioned whether they could trust their bank to act in their customer's best interest. In this economic environment, the importance of trust cannot be understated. No matter how hard they try, if  banks do not act in their customers' best interest, they cannot create a satisfying experience," said Miller.

"Credit unions have the trust of their members and it shows in their scores," he concluded.

The survey comes on top of other surveys the past month with similar findings.

On Dec. 14, News Now reported the American Customer Satisfaction Index, which found 87% of credit union members are more satisified than ever before with their credit unions' services, compared to 75% of bank customers' satisfaction with their banks.

On Dec. 8, Prime Performance released its national 2011 Bank & Credit Union Satisfaction Survey, in which credit unions scored 89%, compared with 82% for the banking industry and 80% for large banks.

CU System briefs (01/04/2012)

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  • LOVES PARK, Ill. (1/5/12)--Rock Valley CU, Loves Park, Ill., has named Michael T. Rosek as president/CEO announced the more than $75 million asset credit union's board.  Rosek has 25 years of experience in the credit union industry, primarily as a chief financial officer (CFO) and as a community credit union CEO.  His most recent role was in senior management as part of the CFO's team at Patelco CU, a $3.6 billion credit union headquartered in Pleasanton, CA.  He has held leadership positions in several credit union chapters and community service organizations and is a graduate of the Credit Union National Association's CUNA Financial Management Schools--Parts 1 and 2. …
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CU System briefs (01/03/2012)

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  • SUPERIOR, Wis. (1/4/12)--A former employee who pleaded guilty Thursday to stealing more than $14,030 from two member accounts at Superior (Wis.) Choice CU will spend 100 days in jail and two years under probation in a plea agreement (Duluth News Tribune Dec. 30). Shawn Wayne Johnstad, 21, pleaded guilty in Douglas County Circuit Court to felony theft and misdemeanor theft for allegedly taking the funds. Restitution of the $14,030 has been paid. If he successfully completes probation, the misdemeanor counts could be expunged from his record. Judge Kelly Thimm warned that if Johnstad's probation  and deferred judgment of conviction were revoked, he could face 11 years and eight months in prison …

IConsumer ReportsI Largest CUs rates beat largest banks rates

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YONKERS, N.Y. (1/4/12)--The largest credit unions' rates have beat the largest banks' rates in a side-by-side comparison cover story in the prestigious comparative-shopping venue:  Consumer Reports. And they did so in all areas compared.

"Take on your bank" is the lead four- page spread in an 11-page section on financial services in Consumer Reports' February issue, which is just hitting newsstands and subscribers' mailboxes.

The article leads off with consumers' anger, noting that consumers are "furious at behemoth banks, for myriad reasons: lending practices that helped sink the economy, government bailouts, foreclosures, huge bonuses for CEOs, and now higher fees and tougher account requirements."

It notes escalating fees and predicts that banks will continue to experiment with fee increases, tougher account requirements, cost cutting and new sources of revenue such as sharing customers' marketing data.

It also describes options-- credit unions. The Credit Union National Association  (CUNA) provides information about members with checking accounts and the history of credit unions' progression to full-service financial institutions that "have expanded services to match what you'll find at a bank."  The publication reports that credit unions exist solely for their members, and fees tend to be lower and offers CUNA's website locator to find a credit union.

"Credit unions and smaller banks charge consumers less, our data show," reads a pullout quote.

"The largest credit unions tend to have lower fees on average than the biggest banks," said a chart, "Banks vs. credit unions," in which credit unions were better than banks on all areas compared: noninterest checking monthly fees; minimum balance to waive fees; online bill payment monthly fees; use of another bank's ATM; ATM surcharge fees; insufficient funds; stop payment; and overdraft fees.

The article also compared fees for five service features  at the 10 largest banks by assets and the five largest credit unions. Seven banks had fees in every category; one had fees in four categories, one in three categories and one in two categories.  The fees for the most part were larger than credit union fees.

Only one credit union had fees in all five categories, and its fees were lower than banks'.  The rest of the credit unions had fees in only two categories--most of them charge overdraft fees and stop payment frees, which were lower than their bank counterparts.

To review the fees, use the resource link for the full article.

Seven agree to plead guilty in St. Paul Croatian fraud case

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CLEVELAND (1/4/12)--More defendants have changed their pleas to guilty against bank fraud and money laundering charges related to St. Paul Croatian FCU, the East Lake, Ohio, credit union that collapsed in April 2010 in the largest credit union failure in history.

That brings the total to seven defendants of the nine indicted in March who have made plea bargains in the case. Their sentences are being delayed until after the trial of a central figure in the case, Koljo Nikolovski, 49,  an Eastlake, Ohio,  resident who also maintains a residence in Skopje, Macedonia.

Nikolovski was indicted on Jan. 5, 2011, for allegedly obtaining $2.5 million in fraudulent loans and placing the money in a personal bank account before wiring about $2.3 million to a bank in Skopje (Cleveland Plain Dealer Jan. 5, 2011, and News Now Jan. 13, 2011).

The Plain Dealer reported that Nikolovski was not eligible for the loan because he had previously defaulted on loans totaling more than $1 million.  He is charged with numerous counts of bank fraud, money laundering, financial institution fraud, and giving commissions or gifts for procuring loans.

Changing their pleas to guilty  were:

  • Rose Ann Nikolovski, ex-wife of Koljo's Nikolovski, who is charged with financial institution fraud and money laundering. Her sentencing hearing was set for March 6.
  • Anthony Raguz, former CEO of the defunct credit union, who is charged with bank fraud, bank bribery, and money laundering.  He pleaded guilty to issuing more than 1,000 fraudulent loans to more than 300 account holders from 2000 to April 2010, according to the Justice Department documents (loansafe.org Sept. 28). His sentencing was reset for Feb. 24, according to the court docket records. It was originally scheduled for tomorrow.
  • Jon Cendol Jr., brother of Rose Ann Nikolovski, charged with financial institutions fraud and scheduled for sentencing Feb. 22.
  • Ruth Cendol, charged with financial institutions fraud and scheduled for sentencing Feb. 22.
  • Daniel Kocher, charged with financial institutions fraud and to be sentenced March 6.
  • Edward Watral, charged with financial institutions fraud and to be sentenced Feb. 24.
  • Jennifer Cerjan, charged with financial institutions fraud and to be sentenced March 5.
Nikolovski's trial is set to begin Feb. 13 before U.S. District Judge Christopher A. Boyko in the U.S. District Court in Cleveland, according to court documents.

St. Paul Croatian FCU was placed into conservatorship on April 23, 2010 and closed the following  May 1. It held $238.8 million in funds from 5,400 members when it collapsed  (News Now May 4, 2010) and caused the National Credit Union Share Insurance Fund about $170 million in losses.

Deputy hurt robbery suspect shot in CU heist

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FORT WORTH, Texas (1/4/12)--An off-duty sheriff's deputy working security at Fort Worth (Texas) Community CU and a robbery suspect were both injured in a confrontation in the credit union's parking lot after the credit union was robbed Saturday morning.

The deputy, Fredrick Bauer, 58, an eight-year veteran of the Tarrant County Sheriff's Department, received serious but non-life threatening injuries when his throat was cut by the suspect after he confronted the suspect in the parking lot (Star-Telegram Dec. 31 and 10kwtz.com Jan.1).

Bauer reached his handgun and shot the suspect in the head, said  Fort Worth police. He was treated at a local hospital and released in good condition.  The suspect was in critical condition at another local hospital.

The robbery occurred at 9:30 a.m. when a man entered the credit union and presented a note demanding money to a teller. The man then fled with the money.  A second suspected robber fled the scene in a car. Bauer shot at the car, possibly breaking windows, said police.

MnCUN kicks off international co-op year with video

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ST. PAUL, Minn. (1/4/12)--The Minnesota Credit Union Network (MnCUN) is joining cooperatives worldwide in celebrating the International Year of Cooperatives (IYC) in 2012, with a video message featuring MnCUN President /CEO Mark D. Cummins.

MnCUN used the video to kick-off its year-long initiative to tout the characteristics and benefits of cooperatives.

Designated by the United Nations, IYC highlights the contributions cooperatives have made to help reduce poverty, create jobs and promote socio-economic development worldwide. In particular, IYC celebrates a different way of doing business--one focused on human need and a model where the members, who own and govern the business, collectively enjoy the benefits, said MnCUN.

As one of the largest cooperative sectors, credit unions understand the value of the cooperative structure and the positive influence they have on local and global economies, said MnCUN. Consequently, credit unions enthusiastically join this celebration and effort to inform consumers about the cooperative alternative to traditional businesses, MnCUN added.

For more information, use the link.

CU membership rises loan delinquencies up in November

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MADISON, Wis. (1/4/12)--Credit union membership rose significantly in November, while credit union loan delinquency rates inched up, according to a Credit Union National Association (CUNA) economist's analysis of November's monthly sample of credit unions.

"Credit union memberships continued to increase at a fast pace as more households appear to have transferred from banks to low-fee, membership-focused credit unions," Steve Rick, CUNA senior economist, told News Now.

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"Overall, the sample of credit unions participating in our monthly survey report memberships increased a strong 0.5% in November," he added. "It is important to note that while we are confident that final data from the National Credit Union Administration (NCUA) will confirm relatively fast overall growth in memberships, the numbers reported Tuesday will be revised once the NCUA data is obtained late in February."

Credit union loans outstanding increased less than 0.1% during November, compared with a 0.3% increase in October. Unsecured personal loans led loan growth with a 1.0% gain, followed by credit card loans (0.8%), adjustable-rate mortgages (0.7%), and used-auto loans (0.3%). New-auto loans, home equity loans, and fixed-rate mortgages each decreased 0.3%, 0.4% and 0.5%, respectively. Credit union loans totaled $584 billion, compared with $580.7 billion in November 2010, said the monthly estimates.

Credit union savings balances rose 0.2% in November, compared with a 0.1% decrease in October. Money market accounts led savings growth with a 1.0% increase, followed by regular shares, which went up 0.4%, and individual retirement accounts, which increased 0.1%. One-year certificates and share drafts decreased 0.1% and 0.6%, respectively. Credit union savings in November totaled $838.1 billion--or $38.7 billion more than the $799.4 billion in November 2010.

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Regarding asset quality, credit unions' 60-plus-day delinquency rate inched up. "On a less positive note, credit union loan delinquency rates edged up slightly to 1.61% in November from 1.59% in October," Rick said.

"The credit union loan delinquency rate plateaued in the 1.58% to 1.61% range over the past seven months after a precipitous fall in the first quarter," he added. "No loan growth in November was one factor not helping to reduce the delinquency rate. We expect loan balances to rise 3% in 2012, hopefully increasing the denominator of the delinquency ratio faster than the numerator.  Faster loan growth and a strengthening economic recovery should bring credit union loan delinquency rates down to 1.35% by the end of 2012."

Credit unions' loan-to-savings ratio remained at 70%. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained constant at 18%.

The movement's overall capital-to-asset ratio remained at 10%. The total dollar amount of capital is $100 billion.

Mich. governor signs leagues foreclosure reform law

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LANSING, Mich. (1/4/12)--Michigan Gov. Rick Snyder has signed bills that reform the 90-day foreclosure-delay law championed by the Michigan Credit Union League (MCUL) & Affiliates.

The laws revise Michigan's "foreclosure by advertisement" process to develop a 90-day foreclosure-prevention workout program to provide borrowers more time to discuss with their lenders possible alternatives to home foreclosure (Michigan Monitor Jan. 3).

Under the program, the lender holding the mortgage is required to send a written notice to borrowers before foreclosing on a principal residence. The two parties have 90 days to participate in "pre-foreclosure" meetings to discuss possible alternative solutions. The goal is to encourage greater communication between borrowers and members of the mortgage industry, MCUL said.

MCUL supported the original act because of the rise in state foreclosures and because it had a two-year expiration date, set for July 5, 2011. However, with the law in effect for more than two years, MCUL worked with lawmakers to seek reforms to the process.

The reforms include:

  • Having clearer timelines concerning which actions must occur at certain points during the process for both lenders and borrowers, thereby allowing a lender to proceed immediately to foreclosure if a borrower is unresponsive to requests for certain documents. Borrowers will now have 30 days--instead of 14 days--to contact their lender or housing counselor if they want to try to make a modification. Under the law, within 60 days of sending the notice, if the lender has not received the requested modification documents from the borrower, the lender can proceed to foreclosure. Previously, there was no deadline established for borrowers to send the documents.
  • Holding borrowers responsible for damaging the property during the redemption period. Every notice of foreclosure by advertisement must now include language stating that if the property is sold at a foreclosure sale, the borrower will be held responsible to the person who buys the property or to the mortgage holder for damaging the property.
  • Reducing the redemption period for properties larger than three acres to six months from one year, if the property is not deemed to be for agricultural use. To qualify for the agricultural-use exemption, borrowers must provide an Internal Revenue Service Schedule F from their prior-year tax return. This will align the redemption periods for any residential property, regardless of size, to the six-month period.
  • Extending the sunset to Dec. 31. The bill originally proposed a July 2015 sunset, but the sunset was shortened to December 2012 because the legislature wanted to continue discussions on how to recognize the burdens placed on community lenders by the 90-day law. Credit unions and community banks lobbied hard for legislation that would have shortened the redemption period for portfolio loans by 90 days, which would have helped offset the additional burden of adding 90 days to the front end of the process provided by the 90-day law. A shorter sunset will ensure the discussions continue in the coming months, MCUL said.

Montana members debating merger with out-of-state CUs

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MISSOULA, Mont. (1/4/12)--Montana First CU, Missoula, Mont., will conduct a members meeting Thursday to vote on its proposed merger with Horizon CU, Spokane Valley, Wash.

Boards from both credit unions approved the proposal in October, but some directors and members from Montana First have expressed concern about whether merging with an out-of-state credit union is the best way to help grow and serve the membership of Montana's oldest credit union (Missoulian Jan 3).

Montana First, with $60 million assets, serves its  9,700 members through two branches. Horizon, with $420 million in assets, has 38,000 members and 18 branches.

The merger would allow Horizon to better serve Missoula First's younger, technology-oriented membership, said Montana First CEO Chris Sisco.

Also, between 15% and 20% of Montana First members live outside of Montana, with 36% of those living in Idaho and Washington, Sisco said. Horizon CU has branches in both Idaho and Washington, according to its website.

All Montana First employees will be retained with similar pay and benefits, and branches in Missoula will keep the First Montana name.

Board members expressed concern about moving the Montana First's assets outside the state.

If the merger is approved, the Horizon board with be temporarily expanded to include an eighth Montana First member. Montana First members will be eligible to run for one of seven spots during the next board elections.

iBankrate.comi CUs boosted safe and sound ratings 3Q

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NORTH PALM BEACH, Fla. (1/4/12)--More credit unions received the highest possible five-star ratings in Bankrate's latest Safe & Sound Star Ratings for third quarter.

The improvement is likely the result of the the influx of new members to credit unions as a result of Bank Transfer Day, according to Bankrate.com (Jan. 3).

Banks and thrifts also showed improvement overall, but fewer received the five-star rating, according to Greg McBride, Bankrate senior financial analyst.

In the third-quarter Safe & Sound ratings, credit unions showed their net improvement by gravitating within the four- and five-star bands--the two highest on the rating scale, McBride said.

Commercial bank and thrifts consolidated in the middle of the scoring band, with fewer institutions rating five stars.

The ratings take into account the performance of a financial institution's assets, its profitability, liquidity and other factors.

Top 10 iNews Nowi stories for December (01/03/2012)

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MADISON, Wis. (1/4/11)--An article about how credit unions set a customer satisfaction record was the most read News Now article in December.

The 10 most-visited stories for the month:

10. Former FCU employee convicted of ID theft

ALEXANDRIA, Va. (12/12/11)--The National Credit Union Administration on Friday blocked former University of South Alabama FCU employee Jennifer Stringer from working for a federally insured financial institution after she was convicted of identity theft.

9. Troops get special treatment for holidays

MADISON, Wis. (12/28/11)--Many men and women serving the country were not able to return home for the holidays. However, credit unions did their best to send them a little bit of home, be it words of encouragement on a video from loved ones, holiday gift packages donated by credit unions and their communities or even Christmas cards.

8. FinCEN delays use of new SAR, CTR reporting forms

WASHINGTON (12/21/11)--The Financial Crimes Enforcement Network  has pushed back the deadline for credit unions and others to use its new Currency Transaction Report and Suspicious Activity Report forms until March 31, 2013.

7. FIs move beyond basics in mobile banking, says study

BROOKFIELD, Wis. (12/15/11)--Financial institutions, including credit unions, are poised to ramp up their mobile banking capabilities, according a survey of the mobile banking and payment plans of 10 top-tier financial institutions, including credit unions.

6. BofA cuts off issuing CU credit cards

CHARLOTTE, N.C. (12/7/11)--Credit unions will no longer be able to sell credit card portfolios to FIA Card Services, the Bank of America unit that issues bank cards for other banks and credit unions under their names.

5. CUs' mortgage loans noted by media

MADISON, Wis. (12/21/11)--Consumers know now--thanks to Bank Transfer Day--that credit unions are good deals on checking and savings accounts. Two recent media reports also touted the benefits of getting a mortgage at a credit union.

4. U.S. News & World Report, Yahoo Finance cite benefits of CUs

NEW YORK (12/9/11)--An article outlining "Why You Should Consider a Credit Union" in Thursday's issue of  U.S. News & World Report, which also featured comments from the Credit Union National Association and the  National Credit Union Administration, was among several positive press items about credit unions in national media this week.

3. CUNA economist: Top five predictions for CUs in 2012

MADISON, Wis. (12/27/11)--This past year was a whirlwind for the U.S. economy and credit unions trying to rebound from a lingering recession, persistent unemployment, a depressed housing market, and worldwide economic trouble, especially in Europe.

So what does 2012 have in store for credit unions?

2. NWCUA: Joining a CU a good start for New Year

FEDERAL WAY, Wash. and BEAVERTON, Ore. (12/30/11)--Thousands of consumers got an early start to a financial healthy 2012 by joining credit unions in the weeks leading up to Bank Transfer Day Nov. 5.

1. Survey: CU satisfaction breaks all records

WASHINGTON (12/14/11)--Credit unions have set an all-time American Customer Satisfaction Index record, with 87% of credit union members surveyed saying they are "more satisfied than ever before" with their credit unions.