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CU System briefs (10/17/2011)

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* ROCKFORD, Ill. (10/18/11)--A Rockford, Ill., man was sentenced Oct. 11 to more than 5 1/2 years in prison for the robbery of four Rockford-area financial institutions, including two credit unions. Dannell L. Sampson, 25, pleaded guilty on Aug. 17 to the May 3, 2010, robbery of First Northern CU. Sampson allegedly waited outside in a Oldsmobile while another man robbed the credit union. The two drove the stolen car to a second car where a third man waited, and they abandoned the Oldsmobile. Sampson admitted in a plea bargain that he also robbed an Associated Bank on June 22, 2010; PNC Bank on July 15, 2010, and Members Alliance CU, July 28, 2010. Sampson was ordered to pay $31,175 in restitution to the four institutions (US Fed News Oct. 12) … * SOUTH CHARLESTON, W. Va. (10/18/11)--Heather Nicole Laake, 21, of Winifrede, W.Va., has been charged with felony embezzlement of more than $100,000 from South Charleston (W.Va.) Employees FCU (Daily Mail Oct. 13). Laake is a former employee of the credit union. The credit union told police Laake allegedly wrote numerous checks totaling $101,296 to her boyfriend, DeWayne Spaulding, between May 3 and Aug. 26, and wrote checks to another person totaling $495. Laake changed addresses of where account statements were sent to hide the missing money from members … * GREENSBORO, N.C. (10/18/11)--North Carolina Credit Union League President/CEO John Radebaugh has joined the board of directors of the Support Center, a statewide nonprofit that partners with community development credit unions and community-based organizations to provide small business and mortgage lending services to its members. The center also provides training, grants and loans to create economic opportunities for individuals, families and communities in underserved markets (Weekly Update Oct. 12) …

FBI alerts to scam on Kelly Blue Book name

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WASHINGTON (10/18/11)--The latest frauds reported by the Internet Crime Complaint Center (IC3) involve an online vehicle scam in Kelly Blue Book's (KBB) name and an auto sale fraud that victimizes a buyer twice, according to a release from the Federal Bureau of Investigation. In the first scam, individuals misrepresent themselves as KBB "agents" and swindle victims out of thousands of dollars in online vehicle purchases. In the scam, the victim finds a vehicle and makes an inquiry to the seller, who requires the buyer to make the transaction through KBB's escrow-based buyer-protection plan to protect both of them. KBB, a legitimate business familiar with many credit unions and auto buyers, does not offer such a plan. The fraudster claims the protection plan will hold the buyer's money for a five-day period while the buyer receives and inspects the vehicle. The fraudster sends the buyer a link, supposedly to the KBB site, providing details of the process. Some victims report the fraudster sent them photos of the vehicle. Once the purchase is agreed on, the fraudster sends the buyer an official looking e-mail, claiming to be from KBB and instructing the victim to wire the payment to the KBB agent. When they contact KBB, the victims are told the transaction is a scam, and that KBB does not offer escrow-based buyer-protection plans. In the second scam, fraudster targets an online auto buyer and hits the victim twice. The fraudster posts a nonexistent vehicle, typically a luxury or sports car, for sale on the Internet. Details of the vehicle, including photos and description, usually are lifted from legitimate websites. The buyer, hoping for a bargain, responds and is told the vehicle is overseas. The victim is instructed to send a deposit via wire transfer to initiate the shipping process. In a new twist to the scam, the fraudster advises the victim there's a problem with the initial wire transfer and sends the victim a cashier's check. The victim is told to cash the check and resend a second wire transfer to a different account. The victim, unaware that the check is counterfeit, follows the instructions and is duped twice. Other scams reported include:
*A traffic ticket spam that may contain malware; * Radio spots for mystery shoppers to evaluate money transfer services and involving counterfeit checks; * Use of government officials' identities on social networking sites to befriend potential victims; * Modeling jobs offered through unsolicited e-mails that contain a link that logs the keystrokes of the victim's computer; and * Phishing e-mails claiming to be from the Federal Deposit Insurance Corp. and informing victims their account automated clearinghouse and Wire transactions are suspended. It sends the victim to a bogus website and asks for personal or confidential information.

IReutersI INYTimesI note CUs are bank-fee alternatives

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MADISON, Wis. (10/18/11)--While everyone tries to figure out exactly how many people are switching their accounts to credit unions and community banks because of the big banks' debit card fees, big name media such as Reuters and The New York Times continue to report credit unions as an alternative for consumers fed up with fees. Reuters Monday included credit unions in its report about alternative lenders that are gaining traction as banks turn off the tap for cash and start charging fees for services consumers are used to getting for free. The article, "Analysis: As banks squeeze, alternative lenders gain traction," centers on what will happen to nearly one-fifth of the adult American population--60 million consumers--who were either underbanked or unbanked in 2009. "That number is likely to rise as banks choke off free checking, and adjust to new rules that cut into their revenue," said Reuters (Oct. 17). Enter credit unions. "Credit unions are an alternative source for the kind of services a bank provides," Professor Lawrence White Stern School of Business in New York, told Reuters. "Credit unions, which are effectively not-for-profit cooperatives, are stepping up to offer cheaper alternatives to the short-term, high interest loans provided by payday lenders," said Reuters, noting that demand for short-term, small dollar loans from credit unions rose 52% during second quarter. Reuters cites aggressive campaigns such as Livonia, Mich.-based Co-op Services CU's "Shred My Card" campaign, which offers $105 to anyone who opens a free checking account with a direct deposit or who cuts up their bank card. "We want consumers to know they can fight back against big banks by saying 'no' to more fees," said Credit Union National Association President/CEO Bill Cheney in the article. The article also mentioned that credit unions are lobbying in Congress to have their member business lending cap lifted to 27.5% of assets from 12.25%. The New York Times article, "Online Banking Keeps Customers on Hook for Fees," discusses how banks' online bill paying services have created "powerful tethers" that make it more difficult to switch to another financial institution. That has emboldened the big banks to turn to new fees as other revenue sources dry up, said the Times (Oct. 15). A marketing study commissioned by Fiserv has indicated using the Internet to pay bills, perform automatic deductions and send electronic checks has cut customer turnover for banks by 95% in some cases, said the article. This has spurred a measure in Congress to make it easier for consumers to switch financial institutions, and prompted lawmakers to ask the Department of Justice to investigate whether banks are colluding on the fees they set. The Times article also acknowledges the consumer backlash to debit card fees and the Occupy Wall Street protests, which have focused on debit card fees as another example of corporate greed. It noted that "activists are calling on account holders to switch to nonprofit credit unions en masse on Nov. 5," Bank Transfer Day. A Facebook page devoted to the effort has drawn more than 38,000 supporters, said the Times.

CUs reporting hefty member increases this month

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MADISON, Wis. (10/18/11)--Some credit unions are reporting significant hikes in new members and membership inquiries since Sept. 28, the day it was disclosed that Bank of America (BofA) customers would be charged $5 a month to use their debit cards. Since the disclosure, other banks have hiked fees, and created a backlash among consumers. Some consumers are switching to credit unions and community banks to avoid the big-bank fees. Last week the Credit Union National Association (CUNA) canvassed a number of credit union CEOs, most of whom said they were seeing a spike in inquiries and new account activity from consumers. Here's a rundown on some of the credit unions reporting increased membership applications:
* LGE Community CU, Atlanta, Ga., swapped out its ads, which focused on refinancing, and replaced it with ones that tell consumer that its checking accounts are still free. In the past three weeks, online applications for membership totaled 70 a day, compared to its usual 25 a day, spokeswoman Andrea Shorr told the The Atlanta Journal-Constitution (Oct. 16). * Delta Community CU, also based in Atlanta, said its monthly average of 1,500 applications through July jumped to 2,200 in August and 2,300 in September. Since then, "folks are coming in and they're pretty upset [about bank fees]," Todd Marksberry, executive vice president and chief operating officer at the $4 billion asset credit union, told the Atlanta newspaper. * LA Financial CU, a $345 million asset credit union in Pasadena, Calif., said its member requests skyrocketed (American Banker Oct. 17). It reported receiving 175 applications in the two weeks since the BofA's fees were disclosed, compared with 27 during the same period in 2010. * Credit Union of Atlanta will offer online account opening to accommodate a spike in new members. It grew $4 million in assets since the end of August, which is unusual for the $71 million asset credit union (American Banker Oct. 17). * SAFE CU, A $1.8 billion asset credit union in North Highlands, Calif., reports a 54% increase in online account applications in the past month (MSP News Oct. 17). The article also suggested consumers go to ASmarterChoice.org to locate a credit union. * The Golden 1 CU, Sacramento, Calif., has been running newspaper ads that encourage consumers to "Say 'No!' to Big Bank Fees!" and promises free checking accounts and debit cards with no monthly fees. As a result, there's been an "uptick" in new account inquiries (MSP News Oct. 17) . * BECU, Tukwila, Wash., signed up 5,400 new members in the week and a half before Oct. 14. The $10 billion asset credit union usually signs 6,000-7,000 new members a month but if the current surge continues, it will nearly triple that rate for October (Puget Sound Business Journal Online Oct. 14). * Washington State Employees CU, a $1.6 billion asset credit union based in Olympia, Wash., said that since Sept. 28, its new accounts have outpaced the previous month's by 22%. Spokeswoman Ann Flannigan told the Puget Sound Business Journal that the spotlight on credit unions' good value and great service has never been brighter. She noted the contrast between what is being delivered by big banks on those fronts versus credit unions "has never been bigger." * Bay State credit unions are already seeing some increased interest, according to Rob Kimmett at the Massachusetts Credit Union League. For consumers facing higher fees for other services, a debit card fee is the last straw, he told the Taunton Gazette (Oct. 17). He called the fees "a major irritant" and a "thumb in the eye kind of a thing."
CUNA's website for consumers, aSmarterChoice.org, saw double its typical level of traffic. A boost in web traffic for the site has happened before when credit unions received national media attention, but this time it is more sustained. From Sept. 29 to Oct. 9, roughly 36,000 visitors have entered the site. During the past seven months, visits averaged about 16,500 per month. That means the past two weeks have seen roughly two months' worth of visits. CUNA President/CEO Bill Cheney called the attention "nothing short of extraordinary." He told The New York Post.com Sunday, "We've seen surges in the past; most of the time it drops back down, but this is more sustained and seems to be gaining momentum." For more, see related stories "Cheney: Bank backlash leads to growing CU membership" in the Washington section and "Reuters, NYTimes note CUs are bank-fee alternative" in the System section of News Now.

Michigan league meets with OFIR (10/17/2011)

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LANSING, Mich. (10/18/11)--Michigan Credit Union League (MCUL) representatives and legislative and regulatory affairs staff met with John Kolhoff, deputy commissioner of the state’s Office of Financial and Insurance Regulation (OFIR), Oct. 4 to discuss industry trends and concerns that have surfaced since the last bi-annual meeting in March. One objective of the meetings is to determine opportunities in which league resources can best be used (Michigan Monitor Oct. 17). Kolhoff reported that in the quarter ending June 2011, Michigan credit unions’ financials reflected slow but continued improvement. While the agency is optimistic, it remains cautious as the economy continues to struggle, loan demand remains low, and interest-rate risk concerns are prevalent, said the league. Hot exam topics continue to focus on three key areas: member business lending and its associated risks and controls; the need for interest-rate risk modeling especially for credit unions with a concentration of long-term, fixed-rate loans; and liquidity risk concerns--especially for credit unions that are slow to re-price deposits in a weak lending environment. OFIR said it continues to experience interest in the state charter due primarily to field-of-membership flexibility contained in the Michigan Credit Union Act, and anticipates adding to the number and size of the credit unions it oversees. The agency is posting on its website a post-exam survey for credit unions to give feedback on the exam experience. The survey will assist OFIR in identifying strengths and weaknesses in the exam process, so it can take quick action if required. The appeal process also will be posted. OFIR is developing a set of exam policy guidelines that acknowledge credit union concerns, Kolhoff said. As a result of the National Credit Union Administration’s recent Letter to Credit Unions announcing that it would share CAMEL ratings with federally insured credit unions, OFIR also will begin sharing its ratings and supporting information, Kolhoff reported. He anticipates a future OFIR Letter outlining this new step.

Paper Cardholder-level info changing portfolio decisions

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DES MOINES (10/18/11)--A new white paper discusses how credit unions can use credit card portfolio data to get an understanding of members’ purchase behaviors. For most credit and debit card issuers, generating reports on the health of their portfolios is relatively simple and yields comprehensive results. But depending on the questions facing the issuer, “comprehensive” may not be the best type of information, said the paper, from The Members Group (TMG). In “The Whole Picture: How cardholder-level data is changing the way card managers make decisions, ” author Brian Scott argues that, rather than relying on aggregate data for examination of overall trends, card managers and executives teams should drill down to the cardholder level to understand their customers’ purchase behavior. In doing so, decisions on everything from marketing to future products become much simpler, he wrote. “As the impact of the debit interchange cap on exempt financial institutions becomes clearer, you will undoubtedly develop a set of solutions to ease the pain of lower interchange revenue,” wrote Scott, TMG vice president of sales. “Among the solutions predicted to be popular with credit unions and community banks is to incent cardholders away from debit and move them towards credit. If you know where individual cardholders are shopping, you can leverage that information to develop credit promotions with particular merchants to increase the chances of your cardholders choosing a credit card option.” Many card issuers regularly run reports to show their top 25 merchants based on transaction volume. But run reports on each merchant individually. “Does that particular merchant attract reoccurring, sporadic, large or micropayments, and how might that knowledge influence the way a credit union attempts to change the purchase behavior of its cardholders? Being able to pinpoint those answers quickly is extremely important as a credit unions evaluates the future of initiatives, such as loyalty programs,” wrote Scott. If a financial institution wants to increase credit transactions to earn more interchange revenue, migrating signature debit customers to credit will be much easier than convincing personal identification number (PIN) debit users. Already signing for their purchases, signature debit users are likely to view a switch to credit as fairly painless. On the other hand, PIN debit users---who are used to punching in their secret codes--may need more convincing. If the card team understands exactly which cardholders are accustomed to using PIN and which are accustomed to signing, they can work with the marketing team to target unique communications--and even unique incentives--to each type of cardholder, TMG said. TMG is a wholly-owned subsidiary of the Affiliates Management Company, which is owned by Iowa credit unions and their members. It provides card processing and payment solutions to credit unions and financial institutions across North America. To download the white paper, use the link.

Steps to take to make social media work for CUs

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MADISON, Wis. (10/18/11)--Credit unions watching the Occupy Wall Street movement realize the role social media can play in organizing support for a cause. Credit unions using or planning to use social media as a communication tool should follow a few guidelines, according to Allison Griffin of Griffin Strategies Inc. (LoneStar Leaguer Oct. 12).
* Be relevant. Stay up to date on current and new trends. About 80% of all social media links originate with traditional media sources, according to the Pew Center Research. * Be timely. If an issue or opportunity is “hot,” act on it. It may be stale and out of date if a credit union waits too long. * Be unique. Find a new angle or perspective to help tweets or posts receive attention among credit union members and the larger social media audience. * Cross promote. Invite members to connect to social media channels in all credit union communications: printed materials, e-newsletters, website, lobby displays and even e-mail signatures. * Special offers. These can get the attention of credit union members and to get them to “share” the opportunity with their social media networks. Pew reports that three-quarters of Americans said they get news forwarded via e-mail or posts on social network sites. * Follow and like thought leaders. Given a credit union’s audience, look for financial planning experts and money management gurus who are likely to post great information to share with followers. * Plan and monitor. Come up with a plan for social media posts. Anticipate built-in opportunities and join the social media plan with an overall communications and marketing plan. The planning process helps generate new ideas and measure effectiveness and team accountability.
Also, Fiserv Inc., a global provider of financial services technology solutions, shared five steps financial institutions can take to market themselves via social media (Business Wire via News Bites Pty Ltd Oct .11).
* Develop strategy: Developing a social media marketing strategy includes assessing customers’ current social activities, determining goals and objectives, planning for how relationships with customers will change and deciding which social technologies to use. * Listen and monitor the conversation: To get started, financial institutions should listen to what consumers say about their brand, competitors and industry. Use a listening tool, such as socialmention.com or Google alerts, to reveal where customers and prospects participate online. This may guide the decision on what sites to start with and where to focus initial efforts. * Lay the internal groundwork: Financial institutions should establish and share social media guidelines, which can be done in the form of a policy book, education video, fact sheet or other form of internal communication. Also, they should establish a brand voice--whether it is professional, casual, upbeat or reserved--and create a response matrix outlining how to respond in a variety of situations. Financial institutions should develop a content calendar outlining future content. * Integrate marketing: Financial institutions should promote their social presence in other marketing materials. Adding social icons and links to websites, e-mails, brochures and other materials lets consumers know the credit union or bank is active in social media and makes it easy for them to connect. * Use metrics and reporting: The metrics measured will depend on the goals and objectives initially identified. However, when starting out, financial institutions can measure social media impact by looking at how far messages are traveling, the gain in visitors to their websites, the number of engaged discussions and the number of users who return to financial institution social media sites.

Rock Co. ECU members OK merger into First Community

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BELOIT, Wis. (10/18/11)--Members of $3 million asset Rock County Employees CU, Janesville, Wis., have voted to merge their credit union into $76 million asset First Community CU of Beloit (Wis). Rock County Employees CU will consolidate into existing First Community operations late October or early November, according to Jack Gill, First Community president/CEO. All Rock County Employees CU employees have agreed to remain with First Community. In addition to its headquarters in Beloit, First Community CU has branch offices branch offices in Janesville, Machesney Park, Ill. and Monroe, Wis. First Community CU also recently purchased a former Evergreen State Bank building in Janesville. The 6,000 square-foot office features an ATM and three driveup lanes.

MCULs Capitol Day attracts lawmakers

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LANSING, Mich. (10/18/11)--The Michigan Credit Union League (MCUL) & Affiliates’ annual Capitol Day Wednesday provided several credit union representatives the opportunity to share lunch with their state lawmakers and explain the credit union position on some hot topics.
Representatives of Northland Area FCU, Oscoda, and Besser CU, Alpena, visited with Michigan State Rep. Peter Pettalia (R-Presque Isle) during the Michigan Credit Union League’s (MCUL) Capitol Day in Lansing Wednesday. From left, are: Pete Dzuris, Northland CEO; Howard Spencer, vice chairman of the MCUL board and chairman of the Northland board; Jennifer Pawlaczyk, assistant manager of Besser CU; Pettalia; and Michael Palumbo, treasurer of the Northland board. (Photo provided by the Michigan Credit Union League)
More than 75 credit union people statewide were on hand to greet about 100 lawmakers and staffers who attended the luncheon in the House Office Building, near the state Capitol in Lansing (Michigan Monitor Oct. 17). Topics discussed included potential reforms to Michigan’s current 90-day foreclosure delay process, raising the threshold for filing in small claims court, financial elder exploitation and removing the annual signature requirement for political action committee checkoff for payroll deductions. David Adams, league CEO, accepted legislative resolutions from the state House and Senate in honor of credit unions and their superior service and dedication to the more than 4.5 million members in Michigan. State Sen. Mike Green (R-Mayville) and State Rep. Lisa Posthumus Lyons (R-Alto) sponsored the resolutions and participated in the presentations. House Banking Committee Chairman Rep. Marty Knollenberg (R-Troy) and Senate Banking Committee Chairman Sen. Darwin Booher (R-Evart) also attended. Credit union participants educated lawmakers on the credit union difference. The luncheon will complement MCUL’s ongoing advocacy efforts at the state Capitol this fall, said Jordan Kingdon, league director of governmental affairs.

28 receive scholarships to CUNA Community and Growth Conference

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MADISON, Wis. (10/18/11)--The Credit Union National Association (CUNA) announced the 28 winners of the CUNA and CO-OP Financial Services co-sponsored scholarships to CUNA’s 2011 Community Credit Union & Growth Conference, Oct. 24-27, in San Francisco. This year’s conference theme is “Where innovation takes flight and growth happens.” Attendees will hear from keynote speakers, Jeanne Bliss and Doug Hall, network with peers, and participate in workshops, educational lectures and breakout sessions focused on putting big ideas into practice and generating growth. Scholarship winners include:
* Latonya Allen, Government Printing Office FCU, Washington, D.C.; * Christine Blake, Cardinal Community CU, Mentor, Ohio; * Peter Butterfield, Dakota Plains FCU, Lemmon, S.D.; * Christine Crew, GenFed Financial CU, Akron, Ohio; * Daniel Cumbee, Dakotaland FCU, Huron, S.D.; * Cathy Dahlbeck, CU Plus, Bay City, Mich.; * Geoff Davenport, Brooklyn (N.Y.) Cooperative FCU; * Cheryl Davis, SOCU, Bowling Green, Ky.; * Mac Dunaway, Land of Lincoln CU; Decatur, Ill.; * Dan Elliott, Rocky Mountain CU, Helena, Mt.; * Kenneth Filipovich, Pepco FCU, Washington, D.C.; * Ann Garmon, Horizon One FCU, Indianapolis; * Karen Grabowski, Westar FCU, Camillus, N.Y.; * Linda Hatfield, Birmingham (Mich.) Bloomfield CU; * Shantel Jennings, Sioux Falls (S.D) FCU; * Steve Kelly, Metrum Community CU, Centennial, Colo.; * Mohammad Khalil, Island Tradition FCU, Honolulu; * Kevin LaCamera, Cardinal Community CU; * Jennifer Pawlaczyk, Besser CU, Alpena, Mich * Cassie Roach, CFE FCU, Lake Mary, Fla.; * Lynn Sabatino, Members CU, Stamford, Conn.; * Shani Smith-Reed, Fiberglas FCU, Newark, Ohio; * Thomas Tangerman, Rogue FCU, Medford, Ore; * Mark Taylor, West Oahu Community FCU, Honolulu; * Michael Waylett, Memorial CU, Chattanooga, Tenn.; * Cheryl Webb, Generations Community CU, Windsor, N.C.; * Ashley White, Elga CU, Burton, Mich.; and * Anne Winn, Elga CU.