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Pa. man charged with defrauding 3 CUs in ponzi scheme

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HARRISBURG, Pa. (10/20/09)--A Pennsylvania man has been charged with operating a $2 million ponzi scheme that defrauded three credit unions, according to the Pennsylvania attorney general’s office. Eugene D. Miley, 58, is accused of selling fictitious certificates of deposit (CDs) to Moonlight CU, Worthington; VANtage Trust CU, Wilkes-Barre; and Stanwood Area CU, New Stanton. Miley allegedly served as a financial broker for the credit unions, offering to locate and purchase various high interest rate CDs. Miley used the money he received from the credit unions for his personal use. He also generated fake statements about the purchase, interest rates and redemption information for the CDs. “Miley claimed to be helping his clients earn a good return on their investments, but this was simply an illusion,” said Attorney General Tom Corbett in a statement. “As with other ponzi schemes, the money received from new clients was used to pay off older investors, or siphoned off for personal use, until the flow of money stopped--causing the operation to collapse and leaving victims with nothing more than empty promises.” Miley is accused of selling $2.08 million in certificates between 2006 and 2008. He sold $1.3 million to Moonlight CU; $594,000 to VANtage Trust CU; and $99,000 to Stanwood Area CU, according to the attorney general's office. Miley has been taken into custody and will appear for a preliminary hearing Nov. 20. He will be charged with one count of securities fraud for creating a scheme to defraud, a second degree felony punishable by up to 10 years in prison and a $1 million fine; and one count of securities fraud for the sale of unregistered securities, a third-degree felony punishable by up to seven years in prison and a $250,000 fine. Miley also will be charged with three counts each of theft by deception and theft by failure to make required disposition of funds--all third degree felonies, punishable by up to seven years in prison and $15,000 fines. Miley is not licensed to operate as a financial investment company, financial adviser or financial products dealer. The funds for his fraudulent investments were funneled through PNC Bank accounts belonging to him and his business. The transactions were conducted using a PNC Bank branch in Cranberry Township, Pa., Corbett said.

Lawmakers show support on ICU Day

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MADISON, Wis. (10/20/09)--Lawmakers nationwide gathered to show their support of credit unions on Thursday for International Credit Union Day. In Illinois, State Sen. David Koehler (D-Peoria) and State Rep. Joe Lyons (D-Chicago) read statements of support on Illinois Senate and House floors, according to the Illinois Credit Union League. “Congratulations to all Illinois credit unions on your day,” Lyons said while on the House floor. Koehler and Lyons both serve on credit union boards--Koehler on the CEFCU board in Peoria, and Lyons on the board of Credit Union 1 in Rantoul.
From left: Missouri State Rep. Al Liese (D-79) meets with Treina Lind of St. Louis Community CU during a legislative reception in St. Louis to celebrate International Credit Union Day. (Photo provided by the Missouri Credit Union Association)
Missouri lawmakers also gathered to celebrate at the Missouri Credit Union Association’s St. Louis Chapter’s International Credit Union Day Legislative Reception. During the event, 11 state representatives learned about the credit union difference and the benefits of credit union members (The Missouri difference Oct. 16). “When I explained the cooperative structure of shared branching to State Rep. Chuck Gatschenberger, he seemed impressed by the convenience it offers members,” said Charlie Waalkes, American Eagle CU president. “In speaking with the legislators, it was obvious that they are concerned about the financial services industry and the impact to consumers,” added Michelle Rosner, 1st Financial Federal CU vice president of marketing.
Wisconsin lawmakers gathered at Credit Union House in Madison, Wis., to celebrate International Credit Union Day. From left are: Rep. Jason Fields (D-11); Joanne Whiting, executive vice president and chief advocacy officer, Wisconsin Credit Union League; and Tom Liebe, Wisconsin league vice president of governmental affairs.(Photo provided by the Wisconsin Credit Union League)
The Wisconsin Credit Union League hosted an event Thursday at Credit Union House in Madison, Wis., with more than 70 individuals attending--including lawmakers and public officials. Attendees included:
* Rod Nilsestuen, secretary, Wisconsin Department of Agriculture, Trade and Consumer Protection; * Catherine Haberland, executive assistant, Wisconsin Department of Financial Institutions; * State Rep. Tom Nelson (D-5); * State Rep. Jason Fields (D-11), Wisconsin Financial Institutions Committee chair; * State Rep. Kelda Helen-Roys (D-81); * State Rep. Christine Sinicki (D-20); * State Rep. Jim Soletski (D-88); * State Sen. Rob Cowles (R-District 2); and * Darcy Luoma, Madison office director for U.S. Sen. Herb Kohl (D-Wis.).
Brett Thompson, Wisconsin Credit Union League president/CEO, spoke to guests about the league's involvement in the World Council of Credit Union’s International Partnership Program, and the importance of educating legislators, public officials and consumers on the value credit unions provide to their members and communities. "We find great value in sharing knowledge with our friends in the Dominican Republic," Thompson said. "It reminds us that we are part of a larger cooperative system that shares a common mission, and we must work together to protect peoples’ rights to belong to a not-for-profit credit union."

Ecuador CU delegation visits Colorado CUs

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DENVER (10/20/09)--A delegation from CACPE PASTAZA credit union in Ecuador visited the Credit Union Association of Colorado (CUAC) and some of its member credit unions last week to examine how they continued to serve members in spite of economic challenges. “Our Ecuadorian friends visited Colorado at a particularly important and busy period for the U.S. credit union movement,” said John Dill,
Click to view larger image Credit Union Association of Colorado (CUAC) representatives recently met in Colorado with visitors from CACPE PASTAZA, an Ecuadorian credit union. From left are: Pablo Santos, Tim Dore, Karina Espín, Melia Heimbuck, José Miguel Acuña, Janeth Carrillo, CUAC President/CEO John Dill, Pietra Dávila, Carmita Medina and Naila Espín. (Photo provided by the World Council of Credit Unions)
CUAC president/CEO. CUAC maintains a relationship with its Ecuadorian counterpart through World Council of Credit Unions’ (WOCCU) International Partnerships Program. “Our credit unions are recovering from the challenges posed by the U.S. economy's meltdown, and we're in the middle of major legislative fights over interchange fees and member business loans while struggling with member growth,” Dill said. “These are all good things for our South American partners to experience and understand.” The seven-person Ecuadorian delegation came to see the U.S. credit union movement, and CUAC’s role and products and services. The Ecuadorians studied CUAC’s financial education curriculum, its grassroots outreach and lobbying efforts, compliance products and other services provided to its members. Closer looks at the association's credit union service organization (CUSO) and its Credit Union Service Network also were on the agenda for the weeklong visit. “There are a few ideas we can already implement in Ecuador,” said Naila Espín, manager of CACPE PASTAZA's risk management department. “Technology is what we need to introduce very quickly.” The delegation visited several Denver credit unions, including Denver Community CU (DCCU), where the groups discussed ways in which DCCU can better attract and serve Latino members. The Ecuadorians also came to understand DCCU's successes to-date using “low-wealth” products, such as payday loans and financial education, to establish a strong Latino member base. At Premier Members FCU (PMFCU), Boulder, the delegation shared an overview of Ecuador's credit union system, including the country's strict regulatory climate and the challenges that small, unregulated credit unions pose to the system as a whole. PMFCU staff members shared their strategies for managing risk and contingency planning. At BCS Community CU, Wheat Ridge, discussions focused on how small credit unions can improve efficiency and thrive by utilizing the CUSO, something that enables the six-person staff of the credit union to provide services similar to those of institutions many times its size. “No one should doubt that credit unions from thousands of miles away have more in common with each other than we do with a local banker around the corner,” Dill added. “The long standing partnership between Colorado and Ecuador is proof positive that the ‘people helping people' philosophy knows no boundaries, no geography and no limits.“

Pa. assoc. to explain Better Choice program to FDIC

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WASHINGTON (10/20/09)--Mike Wishnow, senior vice president of the Pennsylvania Credit Union Association (PCUA), will discuss the Credit Union Better Choice program Thursday at the Federal Deposit Insurance Corporation’s (FDIC) Advisory Committee on Economic Inclusion’s Strategic Planning Subcommittee meeting at the FDIC headquarters in Washington, D.C. The meeting, which is closed to the public, will focus on how small-dollar loan programs can be scaled across mainstream financial institutions. As part of a panel, Wishnow will discuss the success of the Better Choice program and how credit unions have helped members with short-term loans rather than using payday lenders (Life is a Highway Oct. 19). The Better Choice program, which grew out of a collaborative effort between PCUA and the Pennsylvania Treasury Department, offers short-term loans that help people make the transition away from high-cost payday loans to fairly priced credit union services (News Now April 10). Several executives from other banks nationwide also will participate on the panel, which will be moderated by Rae-Ann Miller, special adviser to the director, Division of Insurance and Research for the FDIC. This is the second presentation PCUA has made to the FDIC on the program. In March 2007, Norb Kaczmarek, CEO of Erie FCU and then board chairman of the PCUA, was joined by Wishnow to make a presentation on the payday lending alternative program to the FDIC Advisory Committee on Economic Inclusion. The committee was established by FDIC Chairman Sheila C. Bair and the FDIC board of directors and includes high-ranking banking officials, regulators, educators, and business and community leaders.

CU System brief (10/19/2009)

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* WICHITA, Kan. (10/20/09)--Credit Union of America, Kansas’ second-largest credit union, plans to open three new branches by the end of 2010. The openings will cost the credit union more than $2 million (Wichita Business Journal Oct. 15 and The Wichita Eagle Oct. 16). The credit union also plans to open a student-run branch Oct. 27 at a local high school that will be open for about two hours per day due to students’ schedules. The three new branches will bring the credit union’s branch network to 11, and create about a dozen jobs in the area. Strong member, loan and deposit growth over the past few years has allowed the credit union to expand despite a struggling local and national economy, Credit Union of America President Bob Thurman told The Wichita Eagle ...

Two Kansas CUs seek merger

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TOPEKA, Kan. (10/20/09)--Two Topeka, Kan.-based credit unions have asked their members to approve a merger. If the merger garners approval from members and state regulators, the $95 million-asset Credit Union 1 of Kansas and the $141 million-asset Credit Union United will combine under a new name (The Kansas City Star Oct. 17). “This is a strong consolidation of two healthy credit unions,” Vickie Hurt, president/CEO of Credit Union 1, said in an announcement. “By joining forces as one organization, members of the new credit union will be able to take advantage of the economies of scale that will promote efficiency, as well as favorable rates and fees.” Employees at both credit unions will keep their jobs, the announcement said. On Nov. 4, members of each credit union will vote on the merger at a special meeting, the newspaper said. Official at the credit unions expect the merger to be finalized in April, the paper added.

Additional nomination received for CUNA Board

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MADISON, Wis. (10/20/09)--The Credit Union National Association (CUNA) has received one final nomination for its 2009-2010 board elections. The new nominee and district category is: Jon Hernandez, Cal Com FCU, Torrance, Calif., District 6, Class A. Already nominated are:
* Dennis K. Tanimoto, Hawaii Credit Union League, Honolulu, Hawaii, District 6, Class D; * Robert M. Cashman, Metro CU, Chelsea, Mass., District 1, Class C; * Kris J. Mecham, Deseret First CU, Salt Lake City, Utah, District 5, Class B. * Laida Garcia, Florida Central CU, Tampa, Fla., District 3, Class B. * Dennis E. Pierce, CommunityAmerica CU, Kansas City, Mo., District 4, Class C; * John A. Graham, Kentucky Employees CU, Frankfort, Ky., District 2, Class A; * Marla S. Marsh, Kansas Credit Union Association, Wichita, Kan., District 5, Class D; and * Susan Steifel, Woodstone CU, Federal Way, Wash., District 6, Class A.
The deadline for nominations was Oct. 16. Nominations were accepted in eight categories:
* District 1, Class C; * District 2, Class A; * District 3, Class B; * District 4, Class C; * District 5, Classes B and D; and * District 6, Classes A and D.
Eligible candidates must be an employee or voting board member of the nominating credit union. Nominations must be in writing and seconded in writing by two other credit unions of the same size group from the district. Only two seconds will be recorded for each candidate. Upon request, a list of credit unions by size group and district will be furnished to candidates to assist in obtaining seconds. To be an eligible league candidate for a CUNA Director position, individuals must be a league president and be nominated in writing by their league, with a second in writing by at least one other league from the district. CUNA’s Corporate Governance Committee will verify eligibility of each candidate, the credit union's affiliation, size group and district, and date/time of receipt. Voting will begin Friday and close Dec. 18. For more information, use the link.