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CUs woo consumers with bank fee campaigns

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MADISON, Wis. (10/12/11)--Credit unions are seizing on the public's discontent with big banks' fees and stepping up marketing efforts to pull in more members, said The Baltimore Sun (Oct. 10). It was just one of dozens of reports in media about credit unions seeing increased inquiries about membership as part of the Bank of America debit card fees fallout. Credit unions are attracting big-bank customers like Ken Rose, a Bank of America customer who is switching all his banking to Destinations CU in Parkville, Md., reported the Sun. Rose, a retired bus driver, told the newspaper, "You go to banks, they treat you like a criminal." But at credit unions, "they treat you so good." Destinations has served a credit-challenged field of membership, said Brian J. Vittek, president/CEO. Understanding the struggle of members, the credit union knows that "the last thing we want to do is impose more fines and more fees for no reason other than to make more money. Fees' almost like a bad word." Usually Destinations gains about 50 new members a month. But in September, 70 people joined the credit union, said the article. Richard Williams Jr., president, SecurityPlus FCU, Woodlawn, Md., told the publication that the fees outcry is "really an opportunity for most of us to … let people know we offer products that are equal to what large banks are offering." Consumers should take time, he said, to evaluate their relationship with their financial institutions. Rod Staatz, president/CEO of SECU CU of Maryland and vice president of the Maryland and District of Columbia Credit Union Association, noted that even without banks implementing fees "we're still a better deal than most of the banks out there." Many credit unions are wooing new members by educating the public about the benefits of credit unions and the credit union difference. But they also are pledging commitments to charging no debit card fees. In South Carolina, credit unions are signing "Free Debit Card" pledges. Sharonview FCU, Fort Mill, S.C., became the 33rd credit union to pledge that it would not charge debit card fees, said the state credit union movement's Facebook page. Michigan Schools & Government CU, Clinton Township, Mich., told Warren Weekly that consumers are taking notice that credit unions are not only a place to store money, but also a way to save from increasing bank fees. Kim Socha, marketing director, told the publication the credit union is gaining more wallet share. Triangle CU, Nashua, N.H., which grew about 7.5% so far in 2011, expects the numbers to increase after Bank of America's plans to charge $5 a month for debit cards were announced. Dick Lavoie, vice president of marketing at Triangle, told The Telegraph (Oct. 9) that banks keep shooting themselves in the foot by implementing restrictions on their accounts. People are fed up and moving accounts, and "They're coming to credit unions." Now is not the time to come up with a new fee in this economy, he said. Karen LaPlume, vice president of marketing at Granite State CU, Manchester, N.H., reported to The Telegraph the credit union had received a slight influx of people inquiring about their checking accounts and fees since the BofA announcement. Some credit unions are capitalizing on the opportunity in their advertising. "Why pay for your debit card?" asks an ad for St. Louis (Mo.) Community CU. The ad is "our bags-fly-free moment," said Patrick Adams, CEO, referring to Southwest airline's ad, which mocks fees charged by its competitors (St. Louis Post Dispatch via Oct. 10. CNN Wire reported that consumers are "mad as hell, and they're not gonna take it anymore," referring to bank fees. The new fees are the final straw, but analysts cautioned against the difficulty of measuring the closure of accounts due to a policy change. However, one switch can be attributed to a $15 a month fee Chase placed earlier this year on the business account of Jeff Fisher, a graphic designer and author from Oregon. Fisher said he decided to switch banks, even though the location was less convenient. When he tweeted his dissatisfaction, he received two offers--one from OnPoint Community CU, Portland, and one from a smaller bank. After evaluating his options, he moved to the credit union. Fisher told CNN he "really appreciated" the way he was treated as a small business person. "They treated me like I was one of the biggest businesses in the city coming in."

First South Financial Dyersburg CUs merge

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BARTLETT and DYERSBURG, Tenn. (10/12/11)--Two Tennessee credit unions--First South Financial CU, Bartlett, and Dyersburg (Tenn.) CU--have merged, effective immediately. First South Financial CU is a $385 million asset credit union with 46,877 members. The merger will bring its 15th branch location. Dyersburg CU is a $12 million asset, community based credit union serving 3,300 members in Dyer County. It has one branch and nine employees. Although the merger is effective immediately, both credit unions will continue to operate independently until their information systems can be combined. "We hope to achieve this goal by Nov. 30," South Financial CU President/CEO Craig Esrael said in a letter to members on the credit union's website. The letter attributed the merger to the financial crisis of 2008, which brought the recession, and "sweeping regulatory changes that have dramatically affected several areas of credit union operations. These new rules and regulations have been challenging for all financial institutions to implement, but the burden is even greater on small credit unions, who may not have the time or resources necessary to make these major changes while also conducting normal business." There will be no job cuts from the merger, Esrael told the Memphis Business Journal (Oct. 10). The merger provides an opportunity for the combined credit union to grow, with Dyersburg CU members receiving access to services and products not previously available and with First South Financial benefitting from an expanded membership base, he said.

NCUA seeks 2.2M from St. Paul Croatian members

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AKRON, Ohio (10/12/11)--The National Credit Union Administration (NCUA) filed a lawsuit Friday in a federal bankruptcy court in Akron, Ohio, against two members of the now defunct St. Paul Croatian FCU, seeking more than $2.2 million on defaulted loans related to a scheme that involved kickbacks to the Eastlake, Ohio, credit union's former chief operating officer. In the court document, filed Friday in the U.S. Bankruptcy Court for the Northern District of Ohio Eastern Division, Akron, NCUA alleged that Sinisa Nmn Baros and Simona Nmn Baros of Medina, Ohio, owe $2.2 million for multiple loan principals and interest for loans fraudulently granted them by the credit union's former chief operating officer, Anthony Raguz. The Baros couple filed for Chapter 7 bankruptcy on March 25, said the document. NCUA is seeking to make the amounts owed nondischargeable in bankruptcy. NCUA placed the credit union into involuntary liquidation on April 30, 2010. Raguz has pleaded guilty to six counts of fraud, money laundering and bribery related to more than 1,000 fraudulent loans totaling more than $70 million to more than 300 account holders between 2000 and April 2010. He was one of 16 people charged for their roles in the credit union's collapse. Raguz is scheduled for sentencing on Jan. 4 (News Now Sept. 29). NCUA's complaint said that Sinisa Nmn Baross received multiple loans from the credit union through Raguz and refinanced loans numerous times. Each time he allegedly received additional advances of money, and failed to disclose changes in his financial condition, such as unemployment. NCUA also alleged that he misrepresented his income on at least one application to obtain loans, and that Raguz and Baros shifted loans to Mrs. Baros' share account to spread the loan money over a broader base. The complaint also alleged that the couple made no payments on the loans from 2002 to 2010 and provided no collateral for the loans, except for a home loan. It charged that Raguz took kickbacks of as much as $30,000 to process the loans. The liquidation of St. Paul Croatian FCU cost the National Credit Union Share Insurance Fund about $170 million in losses, making it the largest credit union failure in history.

Internatl CU regulators issue 21 principles of supervision

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MADISON, Wis. (10/12/11)--The International Credit Union Regulators’ Network (ICURN), an independent international body that promotes greater global coordination among cooperative financial services regulators, has issued Guiding Principles for the Effective Prudential Supervision of Cooperative Financial Institutions. The new document outlines 21 principles conducive to developing an effective supervisory system for credit unions, caisses populaires, savings and credit cooperatives, savings and credit associations and other global financial cooperatives, said the World Council of Credit Unions (WOCCU). WOCCU serves as the ICURN secretariat. Based on the Core Principles for Effective Banking Supervision, developed by the Basel Committee on Banking Supervision, the document’s intent is to serve as guiding principles to help establish an environment to facilitate effective supervision of credit unions and other financial cooperatives. “We believe that the implementation of these guiding principles by supervisory organizations in all countries that support a cooperative financial services sector would be a significant step toward continuing their excellent record of financial safety and soundness,” said Andy Poprawa, ICURN chair and president/CEO of the Deposit Insurance Corporation of Ontario, Canada. “Our network of member countries is committed to these principles as one more tool to enhancing the public's confidence in financial cooperatives.” The 21 guiding principles fall into specific groups of oversight. The groups include:
* Objective, independence, powers, transparency and cooperation; * Licensing and ownership; * Prudential regulation and requirements; * Methods of ongoing supervision; * Accounting and disclosure; and * Enforcement.
Although based on the Basel Committee’s guidelines, the principles were developed independently by the ICURN steering committee to offer guidance to the organization’s members. The goal of the principles is to help ICURN members--who represent a range of supervisory structures--develop prudential oversight methodologies appropriate to their individual circumstances. “Credit unions around the world thrive when they have appropriate prudential oversight to guide their growth and development,” said Brian Branch, WOCCU president/CEO. “Assuring that the guidance is appropriate and empowering to credit unions is the goal of the Regulators’ Network’s new guidelines.” Formed in 2007, ICURN has members in 30 countries and jurisdictions. A steering committee of representatives from six regions across the world leads ICURN and assists WOCCU in organizing the annual Regulators’ Roundtable. The next roundtable will take place June 18-20 in Toronto, Canada. For more information on ICURN and a copy of the guidelines, use the link.

CU System briefs (10/11/2011)

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* FRESNO, Calif. (10/12/11)--Counterfeit checks are circulating with Fresno County FCU's name, according to the Better Business Bureau (BBB). The Fresno, Calif.-based, $438 million asset credit union learned that official bank checks were sent with a scam letter encouraging recipients to cash the checks ( Oct. 7). The credit union was notified by an officer of the U.S. Customs & Border Patrol division of the JFK Airport in New York, who indicated that the division had confiscated one box of checks shipped from Africa to an individual in Los Angeles. The box contained 250 FCFCU "official" checks in various dollar increments: $40,000, $15,000, $7,500, $3,500, and $2,500. The box could have cost more than $2 million in losses. The credit union also received calls from various banks and individuals indicating they had been presented the checks and asking for verification of funds … * HARRISBURG, Pa. (10/12/11)-- Harrisburg, Pa.-based Belco Community CU announced that two training activities of its training coordinator, Jennifer Fetterhoff, have been published in a new book, "The Book of Road-tested Activities by Elaine Biech. The book was published by the American Society of Training and Development and Pfeiffer, a resource for training. It includes a collection of more than 100 games and activities tested in real training situations. Fetterhoff's contributions, "Acquainted Antics" and "Puzzled Prospects," were both created for Belco employee training sessions and are among the few submissions from financial institutions, said the credit union. Fetterhoff, shown with the book, is co-editor of the Central Pennsylvania ASTD chapter newsletter. (Photo provided by Belco Community CU) … * LEWISTON, N.Y. (10/12/11)--Virginia A. "Ginny" Venditti, manager of the Niagara Falls Air National Guard FCU, Niagara Falls, N.Y., for more than 25 years, died Sunday in Lewiston, N.Y. She was 57. Venditti served as treasurer of the board and treasurer of the Niagara chapter of the Credit Union Association of New York (CUANY) for more than 15 years. In 2006, she received the "Professional of the Year" award from CUANY. In 2009, the credit union merged with Niagara Falls Air Force FCA, where she continued working until her illness (Niagara Gazette Oct. 9) …

Survey Consumers duped by online banking sites

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MADISON, Wis. (10/12/11)--When trying to find the official website of an advertised product or service, 67% of consumers visit a different website than the one they had intended after using a search engine, according to a September survey about online shopping, navigation and trust by Melbourne IT Digital Brand Services. The company is an Australian first domain name registration company, which also does website design, e-mail and Web hosting. It conducted the survey in September with 1,007 consumers. For consumers who go online, fraud remains a big concern, the survey found. A third of consumers surveyed said they have trouble differentiating between websites selling genuine goods and those selling counterfeit items. Of those who don’t regularly shop online, 36% are worried about the security of their information or money, and 19% are concerned about buying fake products. When banking online, nearly half the consumers surveyed rely on website appearance for authenticity--which helps phishing scams that collect sensitive personals information by pretending it be a trustworthy entity, Melbourne IT DBS said. “Marketers strive to capture online shoppers from offline marketing efforts, yet with the majority of consumers using a search engine such as Google to find a company’s site, the risk is most users get side-tracked,” said Tim Callan, chief marketing officer, Melbourne IT DBS. “It is a real concern for the brands that spend millions on TV and radio ads, sponsorship, and direct mail to get those leads to the right website to buy, without losing them along the way.” Other key findings of survey:
* 80% think online brands should better help consumers tell the difference between websites selling genuine goods from websites selling counterfeit or fake goods. * 74% are likely to go online to find a better deal than what they found in-store, before buying; * 49% prefer to visit websites that remember preferences and display relevant information; and * 44% of consumers shop online a few times a week or month; 6% shop online daily.

Federation forms committee for NYCs IYC campaign

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NEW YORK (10/12/11)--The National Federation of Community Development Credit Unions has organized a Host Committee with representatives of all the cooperative sectors in New York City to mark the International Year of Cooperatives (IYC), which will officially kick off Oct. 31 with a statement by United Nations Secretary-General Ban Ki-moon in New York City. A year-long campaign, “New York: Building a Cooperative City,” will be launched Nov. 1 with a seminar at the Ford Foundation in New York City. The seminar will feature panel discussions by representatives of credit unions, and housing, food and workers’ cooperatives, as well as a proclamation by the City Council. Federation President/CEO Cliff Rosenthal described the excitement that IYC has generated. “For the first time, we brought together representatives of all the co-op sectors in New York,” he said. “We estimate that among credit unions, housing co-ops, and others, more than one-million New Yorkers are members of cooperatives.” One of the main goals of the campaign is to raise awareness of the role cooperatives play in people’s lives. “Many people actually do not fully realize that they are members and owners of their cooperatives,” Rosenthal said. “Some, though not all credit unions, for example, do not prominently market the fact that they are financial cooperatives. We think that this is a huge opportunity to spread that message to the masses.” The National Cooperative Business Association, of which the federation is a member, is the U.S. coordinating body for IYC. “I was inspired by a recent opportunity to meet with the Caribbean Development Educators, some of whom had developed a detailed, creative month-by-month plan to celebrate IYC,” Rosenthal said. The seminar is free, but attendance is limited, so pre-registration is required. For more information, use the link, or contact federation Program Associate Elizabeth Friedrich at: or 800-437-8711, ext. 205.

111 people in five ID theft rings charged

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NEW YORK (10/12/11)--Roughly 111 people--among them employees of financial institutions--have been charged in a worldwide identity-theft scheme based in Queens County, N.Y., allegedly responsible for an estimated $13 million in fraudulent purchases. The defendants, members of five organized crime rings based in Queens County with ties to Europe, Asia, Africa and the Middle East, allegedly stole account information with card skimming devices in financial institutions, restaurants and stores. Eighty-six are in police custody. Another 25 are still at large. The defendants were charged in 10 indictments, culminating a two-year investigation, dubbed “Operation Swiper” by authorities. Queen County District Attorney Richard A. Brown calls the indictments the “largest identity theft takedown in U.S. history.” “This is by far the largest--and certainly among the most sophisticated--identity theft/credit card fraud cases that law enforcement has come across,” Brown said. “Credit card fraud and identity theft are two of the fastest-growing crimes in the U.S., afflicting millions of victims and costing billions of dollars in losses to consumers, businesses and financial institutions. Thousands of people were allegedly defrauded during 16 months, from May 2010 until last month. Scamsters often gained victims’ credit card information from restaurant employees who used hand-held skimming machines, according to the indictment. Hackers working overseas and financial institution employees also played a role in stealing personal information, they said. Earlier this year, CUNA Mutual Group reported an uptick in card fraud, saying credit unions across the nation were experiencing losses. Those losses were not believed to be a part of the skimming activities, however. Stolen account numbers were sent to a “manufacturer” who re-encoded the information onto the magnetic strips of blank credit cards using a “reverse” skimming device. Other members of the ring then forged credit cards with the stolen account information and went on weekly shopping sprees, purchasing designer clothes, electronics, jewelry and travel services. Shoppers were helped by collusive store owners or employees who had access to cardholder information and could identify high-value targets and/or steal credit card information, according to the indictments. Once a shopper purchased high-end merchandise with forged credit cards, the merchandise was turned over to the crew leader who gave the merchandise to the ringleader of the operation. The ringleader would sell the merchandise to a “fence” at a discounted price. Nearly two dozen of the defendants were also charged with participating in burglaries and robberies in Queens County. Four defendants are charged with conspiring to commit a bank robbery in Forest Hills, N.Y. Five are charged with stealing more than $95,000 worth of cargo from Kennedy Airport, and seven are accused of stealing about $850,000 worth of computer equipment from the Citigroup Building in Long Island City.

Leagues recognized by CUNA for communications efforts

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MADISON, Wis. (10/12/11)--The Credit Union National Association (CUNA) announced its 2011 Blockbuster and Pro Awards for outstanding communications work by state credit union leagues at last week’s American Association of Credit Union Leagues Communicators Conference in Minneapolis. Leagues submitted 56 entries in 17 categories. Blockbuster awards are divided into two sections: 1) advertising and marketing efforts for state-level organizations, and 2) advertising and marketing for credit unions. Leagues that won first-place awards in Blockbuster category are:
* Best Sales Promotion--League of Southeastern Credit Unions; * Best Print Materials--North Carolina Credit Union League; * Best Campaign--Michigan Credit Union League; * Best Credit Union Ad--Montana Credit Union League; * Best Credit Union Campaign--Michigan Credit Union League; and * Best Logo Design--Georgia Credit Union Affiliates.
The Blockbuster Best of Show award was presented to the Michigan Credit Union League for its Best Campaign entry. Pro Awards recognize the best public relations and online communications efforts. First-place awards in the Pro category were presented to:
* Blow Your Own Horn--Pennsylvania Credit Union Association; * Best Community Relations Program--Montana Credit Union League; * Best Public Relations Project--Michigan Credit Union League; * Best Piece on the Uniqueness of Credit Unions--Wisconsin Credit Union League; * Best League Publication (Newsletter)--Credit Union Association of the Dakotas; * Best League Publication (Magazine)--California/Nevada Credit Union League; * Most Improved Newsletter or Magazine--Minnesota Credit Union Network; * Best League Annual Report or Yearbook (print)--Kansas Credit Union Association; * Best Website--League of Southeastern Credit Unions; * Best Online Publications--Pennsylvania Credit Union Association; and * Best Use of Social Media--Michigan Credit Union League.
The Pro Best of Show award was presented to the Montana Credit Union Network for it Best Community Relations Program entry.

NCUF makes 19 fin-ed grants for 2012

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MADISON, Wis. (10/12/11)--The National Credit Union Foundation (NCUF) has approved 19 financial education grants for 2012, totaling $287,387. About 34% of consumers gave themselves a grade of C, D or F in personal finance skills, according to last year’s Financial Literacy Survey of adults from the National Foundation for Credit Counseling Inc. About 78% agree that they would benefit from advice and answers to everyday financial questions from a professional, and nearly one-third (31%) strongly agree. “The need for financial education is still critical in America,” said Tom Candell, NCUF deputy executive director/chief operating officer/chief financial officer. “This is the second year in a row that NCUF is focusing exclusively on financial education in our grants, which will ultimately help more people achieve financial freedom.” NCUF grants are made possible by supporters of the foundation and the Community Investment Fund, a system of investments that helps credit unions earn dividends while donating to national and state community development programs. To view a list of the grant awardees and their projects, use the link.

RCU acquires mortgages from The RiverBank

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EAU CLAIRE, Wis. (10/12/11)--Royal CU (RCU), based Eau Claire, Wis. with $1.2 billion in assets, and The RiverBank, Osceola Wis., have entered into an agreement for RCU to acquire the servicing rights of The RiverBanks’ $600 million in mortgage loans. The transaction, which is expected to be finalized Monday, adds about 4,200 mortgage loan members to RCU. “We welcome these 4,200 mortgage customers to RCU,” said Charles Grossklaus, RCU CEO. “Our commitment to staying local is strong and, consistent with our vision to satisfy all of our members’ financial needs; we look forward to building relationships with these members so we can be there when they need their next financial product.” In a letter to its customers The RiverBank said, “We have now come to a turning point in our business model that we need to make a change. Realizing the importance of the local servicing, we have partnered with RCU to transition the servicing.” The transfer of the servicing of the mortgage loan does not affect any term or condition of the mortgages.