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CU System Briefs (10/23/2013)

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  • WILKES-BARRE, Penn. (10/23/13)--A man who pleaded guilty to robbing a credit union in Hazleton, Penn. and two banks in the area faces a sentence of up to 60 years in a federal prison and fines of $750,000. Shawn Luther Kelly, 35, allegedly stole $1,140 from a Choice One Community FCU branch on April 20, 2012. He also was charged with robbing a PNC Bank branch in Hazle Township, taking $3,980 on April 16, 2012, and a Citizens Bank in West Hazleton, taking $1,420 on April 24, 2012. The case against Kelley was initially being pursued by state and local law enforcement until the FBI joined the investigation. Kelley was caught by a combination of a tracking device placed in one of the bags he allegedly used to steal the money, surveillance footage, and cell phone tracking data (The Wilkes-Barre Times Leader Oct. 21) ...
  • PRINCETON, N.J. (10/23/13)--Amid the federal government shutdown, Americans reported being most pessimistic about quality of life in the U.S. since the last major budget dispute in Washington. Gallup's average Standard of Living Index was measured at 31 for the week ending Oct. 13, equaling the low that the metric reached at the end of the fiscal cliff dispute in January. The index reflects a composite of Americans' current satisfaction and expectations about future living conditions, with the latter being responsible for the majority of the index's eight point decline since mid-September. The index has a maximum of 100 and a minimum of -100, but the highest it has been since it was first measured in 2008 is 45, which occurred in May 2013. It reached a low of 12 during the global financial crisis in the fall of 2008 ...

International Credit Union Day: In Pictures

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MADISON, Wis. (10/23/13)--Credit unions celebrated the theme Unite for Good on International Credit Union Day, and nothing added a brighter light to the celebration than the way credit unions engaged their members promoting the credit union difference.
 
Click for slide show The administrative team of Pelican State CU, Baton Rouge, La., volunteered at the Holy Grill, a local soup kitchen, on International Credit Union Day (ICU Day). The Holy Grill is sponsored by the Interfaith Federation of Great Baton Rouge, and food is served at the Cadillac Street Park Recreation Center in Zion City. Local volunteers help the federation serve free lunch to those in need. (Photo provided by Pelican State CU)
The Credit Union National Association urged credit unions to emphasize their International Credit Union Day celebrations Oct. 17 by sharing their stories on social media, and credit unions responded with stories and photos from around the world that highlighted the creativity and imagination of credit unions and the enthusiasm of their members.
 
International Credit Union Day, celebrated on the third Thursday of October since 1948, also brought proclamations from lawmakers and agencies that that say credit union unions embrace the "people helping people" philosophy by pooling personal resources and leadership abilities for the good of the cooperative, "empowering members to improve their financial futures and untied to help those in need."
 
This year's theme, "Credit Unions Unite for Good," built on CUNA's Unite for Good campaign, which has united credit unions to work to remove barriers, create awareness of the good credit unions do for members and their communities, and foster service excellence to encourage Americans to choose credit unions as their best financial partner.
 
Here news New Now presents a slide show that offers a small sample of how credit unions celebrated ICU Day throughout the world.

Dwolla Partners With FIs To Test Real-Time Payments

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DES MOINES, Iowa (10/23/13)--Dwolla, a person-to-person payments provider, has initiated a credit-based instant payments capability, which will be built in part on its partnerships with credit unions and banks.
 
The financial institutions vet merchants and consumers for real-time payments, allotting each party specific credit limits. Financial institutions have granted credit from $1,000 to $16,000 so far, said Dwolla CEO Ben Milne in a blog post.
 
The service will provide credit to consumers that they can use when shopping online by selecting a new Dwolla funding source at the time of checkout.
 
Dwolla charges 25 cents for transaction of more than $10. Transfers less than $10 are free. Before the real-time payments launch, users of Dwolla had to wait two to three days for a bank transfer to use money sent to them (PaymentsSource Oct. 22). 
 
Dwolla will initiate a three- to four-week test period with several e-commerce merchants. Eventually Dwolla will introduce the instant payments feature to all of its merchant clients, Milne said.
 
Forty merchants who already accept Dwolla on their sites have announced support for Dwolla Credit, and more will be added in time as the service moves from beta phase to its public release.
 
Dwolla has also partnered Alliance Data Systems Corp (ADS), a provider of branded credit card programs. ADS will provide a cardless, private label credit product through Dwolla's network.
Milne would not reveal the financial institutions it has partnered with to make the feature possible, but the company has a relationships with credit unions.

Hope CU CEO Bynum Wins Aspen Institute's McNulty Award

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WASHINGTON (10/23/13)--Hope CU President/CEO William Bynum was named the winner of the 2013 Aspen Institute's John P. McNulty Award for innovation and leadership in social entrepreneurship.
 
Bynum is co-founder of the Jackson, Miss.-based cooperative.
 
"Our goal is to ensure that hardworking people have access to the tools they need to buy homes, start businesses, educate their children and otherwise support their families regardless of their station in life," said Bynum. "Hopelessness in a community is when there isn't a clear path to a better future. At HOPE, we provide a vehicle for people to work together and boost each other up to that next rung on the economic ladder."

Bynum, who has advised Presidents Clinton, Bush and Obama on community development issues, founded Hope CU in 1995 with Aspen Institute fellow Henry Crown. The cooperative provides financial services to impoverished communities throughout the south, with branches in Mississippi, Louisiana, Arkansas and Tennessee.

After the global financial meltdown of 2008 caused credit markets around the country to contract significantly, Hope expanded from three to 15 branches and increased its membership by over a factor of three--from 9,000 to 28,000. It closed more than 7,200 mortgages, and small business and consumer loans worth over $260 million since 2008.
 
An example of the credit union's work, Hope launched a program in April 2011 to expand access to fresh food in blighted New Orleans neighborhoods by granting $14 million in forgivable, low-interest loans to supermarkets and grocery stores pledging to relocate (News Now April 4, 2011).
 
A panel of judges, including former Secretary of State Madeleine Albright, African diplomat Olara Otunnu and international development expert Brizio Biondi-Morra chose the 2013 winner.

Finishing runners-up to Hope were India Leadership Initiative Fellow Manoj Kumar, representing Araku Originals Ltd., Catto Fellow Adam Lowry of the Ocean Plastic Project in San Francisco, Calif., and Henry Crown Fellow Chinwe Onyeagoro of FundWell, also based in San Francisco.

Bynum, who was a finalist for the prize in 2008, will be honored at a reception in New York City on Nov. 6.

Government Shutdown Offers Savings Lessons

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MADISON, Wis. (10/23/13)--During the federal government shutdown, the value of a solid savings plan was underscored for more 400,000 furloughed federal workers.
 
According to a recent poll by the Consumer Federation of America, about half of all American families have heeded the warnings brought on by tough economic times and have a traditional savings account with a median balance of $2,400 (creditunionsonline Oct. 11).
 
Research shows that families are often faced with emergency situations, ranging from a car repair to a medical bill to a traffic violation, , CFA Executive Director Stephen Brobeck noted, adding a savings account is the best way--easiest and least expensive--for many families to pay for those unexpected expenses.  He said, especially for those with few financial resources, relying on a credit card, payday loan, or even friends or families are usually much less desirable options.
 
Saving for between three to nine months-worth of expenses  is about the average amount that will allow most families to increase financial security. And going to a credit union may be the best place to begin, Brobeck said.
Savings and financial literacy are among the principles credit unions stress to their members. Credit union financial educators reached 400,097 students in 12,243 classrooms presentations during the 2012 school year, according to the National Youth Involvement Board (News Now Aug. 22).
 
Also, credit unions' cooperative ownership structure allows them to offer generally higher savings rates than their for-profit competitors.
 
Research conducted and reported by GoBankingRates.com this year found that credit unions had the best savings account interest rates in the nation for 2012, according to a study of savings accounts at more than 4,000 banks and credit unions.  Eight of the Top 10 U.S. Savings Account Rates were held by credit unions. Use the resource link to read about the study.

Space Coast CU Agrees To Dismiss Lawsuit with Barclays Capital, State Street

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NEW YORK (10/23/13)--Space Coast CU has agreed to dismiss its lawsuit against Barclays Capital and State Street Corp. over collateralized debt obligations (CDOs) Barclays sold to now-defunct Eastern Financial Florida CU, a Space Coast attorney confirmed to News Now Tuesday.
 
The credit union has "resolved the case" and is "pleased with the result," said David Bishop, an attorney with the law firm Kirby McInerney LLP in New York, who represented Space Coast.
 
Space Coast, based in Melbourne, Fla., acquired Miramar, Fla.-based Eastern Financial Florida CU in June 2009 in an emergency merger approved by state regulators.
 
As "successor in interest" for Eastern Financial Florida, Space Coast filed a lawsuit in the U.S. District Court for the Southern District of Florida, in Fort Lauderdale. The case involved 12 CDOs sold to Eastern Financial between 2005 and 2007. 
 
The original suit involved instruments underwritten by Merrill Lynch, Pierce and Fenner Inc., J.P. Morgan Securities LLC, UBS Securities LLC and Barclays Capital, and rated by ratings agency The McGraw Hill Cos. (Standard & Poor's) and Moody's Investor Services.
 
Space Coast CU's suit against the other firms is still pending.
 
Space Coast CU was allowed to amend its complaint in March of this year "by alleging in detail, and with a plausible factual basis" the alleged fraud committed by defendants after a federal court judge dismissed without prejudice the credit union's $100 million lawsuit against Wall Street banks and ratings agencies over CDOs sold to Eastern Financial Florida CU. The lawsuit with Barclays Capital and State Street Corp. was carved out of the original lawsuit.

CUNA Opens 2013-14 Board Of Directors Elections

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WASHINGTON and MADISON, Wis. (10/23/13)--The Credit Union National Association is seeking nominations for eight positions on CUNA Board of Directors.
 
Nominations will be accepted through Nov. 26.
 
Positions up for election are:
  • District 1, Class A;
  • District 1, Class D;
  • District 2, Class B;
  • District 2, Class D;
  • District 3, Class C;
  • District 4, Class A;
  • District 5, Class C; and
  • District 6, Class B.
An individual must be an employee or voting board member of the nominating credit union to be an eligible candidate elected by credit unions and the nomination must be seconded in writing by at least two other credit unions from the same district and class.
 
To become an eligible candidate to be elected by leagues, an individual must be a league president and must be nominated in writing by his or her league, and the nomination must be seconded in writing by at least one other league from the district.
 
For contested elections, ballots will be sent Dec. 2, with voting continuing through Jan. 10.  Results of contested elections will be announced Jan. 15; and
 
Directors will take office upon the adjournment of CUNA's Annual General Meeting on Feb. 24.

Nomination packets are available by calling 800-356-9655, ext. 4013; using the resource link or e-mailing thanson@cuna.coop.

NCB Reports Top Co-op Revenue Earners

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WASHINGTON (10/23/13)--The National Cooperative Bank (NCB) Tuesday released its annual "NCB Co-op 100" report listing the nation's top 100 revenue-earning cooperative businesses, and ranked among them were three credit unions.
 
In this most recent report for 2012, cooperative businesses posted revenue totaling $226.4 billion, a 5% increase from the $215.6 billion reported in 2011, which itself was an 11% jump from 2010.
 
The three credit unions appearing in the top 100 list were $52 billion-asset Navy FCU, Merrifield, Va.; $25 billion-asset State Employees' CU, Raleigh, N.C.; and $15.5 billion-asset Pentagon FCU, Alexandria, Va.
 
Navy FCU reported 2012 revenues of $3.6 billion and placed 12th on the list, up a couple of ticks from 14th in 2011. State Employees' CU had revenues of $946 million, placing 60th on the list, down slightly from 52nd. And Pentagon FCU, with $717 in revenues, placed 82nd on the list, down a little from 76th last year.
 
Charles E. Snyder, president/CEO of NCB, said his organization--a cooperative as its name states--releases its annual report during National Co-op Month as another way it "strives to educate and promote the importance of (the cooperative) sector."
 
"Our report is just one of the many ways we work to inform the public on the advantages of cooperatives in all fields of enterprise," he said, adding, "Whether it is bringing fresh, local food through a food co-op, affordable financial services through a credit union or affordable homeownership through a housing cooperative, cooperatives help strengthen communities."
 
Use the resource link to access the NCB report.