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CU System briefs (10/27/2009)

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* TULSA, Okla. (10/28/09)--A man who hid in the bushes until an employee of Oklahoma Members First FCU arrived for work robbed the $21 million asset, Tulsa-based credit union Thursday, said police. When the employee opened the door, the masked man jumped out and pressed an object that felt like a gun to the employee's head and forced her inside. He stole money from the vault and fled. Police found pieces of a broken replica gun inside the credit union (Associated Press Newswires (Oct. 22) … * KAUNAKAKAI, Hawaii (10/28/09)--A former teller pleaded guilty of embezzling $218,293 from the Molokai Community FCU, based in Kaunakakai, Hawaii. Daniel K. Mahiai, 32, of Molokai, pleaded guilty to one count of embezzlement by removing funds from his teller's drawer. He replaced $55,982 before the thefts were discovered, said the U.S. attorney's office. Mahiai covered up the theft by making false entries in members' accounts and placed some accounts on "no mail" status, which prevented the credit union from sending members' statements reflecting the withdrawals. He faces a maximum 30 years in prison and a fine of up to $1 million (Honolulu Advertiser Oct. 24) … * ALLENTOWN, Pa. (10/28/09)--Two men were sentenced to prison for their roles in a Sept. 17, 2007, robbery of First Class FCU, Allentown, Pa. Asharif Tansmore, 36, of Philadelphia, and Terrance T. Meitzler, 31, of Allentown were sentenced Oct. 20 to three to six years each in state prison after pleading guilty to robbery and criminal conspiracy to commit robbery. They also were ordered to pay more than $67,000 in restitution. Three other co-defendants received prison sentences earlier: Adrian Galsgow, 32, sentenced to five to 10 years in prison; Chris Mason, 33, sentenced to 5 1/2 to 11 years; and Gregory Brown, 37, sentenced to seven to 14 years. During the holdup, one robber struck the credit union CEO on the head with what was believed to be a gun. Brown's sentence also involved charges of holding up Paragon FCU, Bethlehem, Pa., on Nov. 7, 2006. (Allentown Morning Call (Oct. 21) … * RICHARDSON, Texas (10/28/09)--Texans CU has received the 2009 Employers for Education Excellence (EEE) Gold Award from the Texas State Board of Education. The award honors employers who implement a policy to encourage and support employees actively participating in school activities. Texans CU won based on its employee dedication and commitment to Junior Achievement. The award will be presented during the November State Board of Education meeting in Austin. During the past three years, more than 100 employees have affected the lives of at least 3,200 students by teaching the Junior Achievement curriculum in the classroom. They logged nearly 650 total hours in the classroom, plus an additional 650 hours of travel time to and from the schools … * SOUTH BOSTON, Va. (10/28/09)--Rev. William J. Coleman has been hired as the new president/CEO of Tri-County Community Action Agency Inc. and Halifax County Community FCU, a $9 million asset credit union in South Boston, Va. He began his duties on Oct. 19. Coleman replaces William E. Coleman, who served as president/CEO for more than 42 years before retiring this fall. The newly appointed Coleman has worked in several top management positions, including as CEO of his own accounting firm. He most recently served as human resources director of a retirement community in Lynchburg, business auditor for the Campbell County Commissioner of Revenue's office and as finance officer for the Southside Community Services Board in South Boston. He has served as a member of the board and chairman of the delinquent loan committee of Lynchburg-based Beacon CU. The two Colemans are not related (Gazette Virginian Oct. 26) …

Sacramento CUs on leading edge with scanned deposits

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SACRAMENTO, Calif. (10/28/09)--Two credit unions in Sacramento, Calif., are on the leading edge in the field of check/share draft deposits, according to a local newspaper. Earlier this month, Sacramento-based Schools Financial CU announced its new service allowing members to scan checks at home and deposit them into their account via the Internet. The service requires the member to have a digital scanner and a computer with an Internet connection. Another credit union, Golden 1 CU, introduced scanner-based check deposits in July (The Sacramento Bee Oct. 26). Its Z@piT online deposit service has about 200 members enrolled. The service appeals to people who prefer self-service--such as parents with small children or those who don't want to visit an ATM at 3 a.m., Golden One CEO Teresa Halleck told the newspaper. Schools Financial CU included safeguards in its program to prevent abuse of the check depositing system. Members must use their secure online banking log-in, and they are limited to two transmissions a day. Users have a time limit in which to scan and deposit the check online, and checks must meet specific requirements before being "deposited." Post-dated, damaged or lightly printed checks that don't scan properly can't be deposited, the credit union told the newspaper. Its service, which is being rolled out gradually, will be available to all members who bank online by mid-November. The article also noted that a savings bank in the area is allowing its customers to deposit checks with their iPhones by taking photos of both sides of the check with the phone's camera. More than 100,000 checks totaling $61 million have been deposited via iPhone since August.

Maryland official supports fin lit graduation requirement

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COLUMBIA, Md. (10/28/09)--Maryland Comptroller Peter Franchot announced his support for a standalone financial literacy course as a high school graduation requirement, a goal supported by the Maryland and District of Columbia Credit Union Association (MDCCUA). Franchot made the announcement at a Maryland Board of Public Works meeting on Oct. 21. The board consists of Gov. Martin O'Malley and state Treasurer Nancy Kopp, both of whom were present at the meeting, said MDDCCUA (Focus Newsletter Oct. 26). Franchot noted that the "principles of financial literacy are essential building blocks to a lifetime of economic security, and are every bit as vital to a good education as reading, writing and math. Financial literacy needs to be taught in our schools." Dr. Charlene Dukes of the Maryland State Board of Education (MSBE) updated the public works board on the progress of the State Task Force on Financial Literacy, especially MSBE's plan to develop a K-12 state curriculum for local use. MSBE hopes to present a draft curriculum to local school superintendents by December. MDDCUA has been active in its support for financial education, saying it believes financial education should be promoted within Maryland's schools. It is a member of the Maryland Coalition for Financial Literacy and its CEO, Mike Beall, is a member of the coalition's Executive Committee. Other credit union community members of the coalition include Rob Windsor, CEO, First Financial FCU; Richard Webb, CEO, Atlantic Financial FCU; Dorothea Stierhoff, senior public affairs specialist with MECU; and Kalimah Mathews, business development manager, Signal Financial FCU. The task force has created two subcommittees, both with credit union input. Chris Conway, MDDCCUA board member and CEO of Educational Systems FCU, is a member of the Advisory Committee, and Brian Tate, MDDCCUA vice president of legislative affairs, is a member of the Design Committee.

Biz Kid beats out Disney Nickelodeon for green award

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SEATTLE (10/28/09)--Biz Kid$, the youth-focused and credit union-funded financial education show on public television, received the Environmental Media Award in the category for Children's Live Action Monday, beating out shows from Nickelodeon and Disney. Biz Kid$ won for its episode, "The Green Economy & You," which first aired on March 5. The episode teaches kids how businesses can go "green" and includes stories of young entrepreneurs, such as a 12-year-old who sells eco-friendly lunch bags. Also nominated in the category were Disney's Suite Life on Deck and Nickelodeon's iCarly. Biz Kid$ Executive Producer Jamie Hammond was thrilled to be singled out by the only awards program devoted to celebrating the entertainment industry's creative environmental efforts. "The other shows in the category are so great. We are truly honored," Hammond said. The award, presented by the Environmental Media Association (EMA) during its 20th anniversary awards ceremony, recognizes the live action children's show that best increases public awareness of environmental issues and inspires personal action on these issues. "Biz Kid$ is all about educating children about the importance of planning and responsibility. These lessons are as pertinent to financial success as they are to environmental awareness," Hammond said. Earlier this year, Biz Kid$ was honored with an Emmy Award and the credit union industry's Herb Wegner Award. Washington Credit Union Foundation Director RoxAnne Kruger helps oversee exclusive underwriting of the first three seasons of Biz Kid$ by America's Credit Unions, a coalition of nearly 200 credit unions, credit union foundations, non-profits, service providers and individuals. "From this show's inception, credit unions understood what a powerful resource it could be for educating youth. We couldn't be happier that others are seeing that value, too," Kruger said. The program, which is filmed in Seattle, began airing its second season nationwide in January. It is available to 97% of public television stations.

IUSA TodayI reports on CUs save-for-college efforts

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WASHINGTON (10/28/09)--A USA Today article published Tuesday noted credit unions’ efforts to help parents and youth save for college in a turbulent economy. The article, “Banks, credit unions offer help saving for college,” mentioned Justice FCU, Chantilly, Va., and Grow Financial FCU in Tampa for their college savings efforts. Justice offers a discount on loans to pay for college. Grow is donating money to student scholarships based on a local college football team’s “return yards”--which is how far a football player runs after receiving a punt or kick (USA Today Oct. 26). Peter Sainato, CEO of Justice FCU, also told the newspaper that “everyone is feeling the stress of the economic downturn” and that many college savings account values have decreased. “We are trying to help people through this difficult time,” he added. Justice FCU has $477 million in assets. Grow Financial FCU has $1.7 billion in assets.

CUs host holiday webcasts for troops families

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SAN DIMAS, Calif. (10/28/09)--Families with loved ones stationed overseas in the military can send holiday greetings through the credit union-supported Operation Best Wishes program, which kicked off Monday and will continue for eight weeks.
Western Corporate FCU (WesCorp) is again sponsoring Operation Best Wishes so families and individuals can send greetings to family stationed overseas in the military. Here, Joe Keller (left) of WesCorp, adjusts a video camera to record a video greeting at Langley FCU, Newport News, Va., where the program launched Monday. (Photo provided by Western Corporate FCU)
The program was launched at Langley FCU in Newport News, Va. Western Corporate FCU (WesCorp) of San Dimas, Calif., has a team that will travel nationwide to visit 17 credit unions in 15 states to help family members send greetings. A record number of credit unions are participating this year. WesCorp expects to send about 960 webcast recording sessions to 2,700 soldiers. Each credit union in the program will set up a mobile webcast studio with cameras, microphones and monitors to record the greetings. There is no cost, and greetings have an allotted time of 10 minutes. Some recipients will receive the greetings live and can text messages back to the studio. Operation Best Wishes is supported by each participating credit union and the Defense Credit Union Council, an organization of credit unions whose membership comprises U.S. Department of Defense personnel. Although troop withdrawals continue in Iraq, there’s still a strong interest to support soldiers who are deployed in other areas during the holidays, according to Walt Laskos, WesCorp public relations director and Operation Best Wishes manager. “It’s particularly interesting to see how several of the bases we will visit have already fully booked their recording sessions, doing so much earlier than in previous years,” he said. “Obviously the need is clearly there and families are responding to credit union invitations.”

Private insurer Cumorah acquisition benefits both CUs

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DUBLIN, Ohio (10/28/09)--Credit Union 1's acquisition of Las Vegas-based Cumorah CU is positive because it joins two organizations that can benefit from each other, according to the CEO of Cumorah's private share insurer. Cumorah was closed Friday by state regulators and its assets and deposit shares were assumed by Credit Union 1, Rantoul, Ill. American Share Insurance (ASI), a private share insurance company in Ohio, is Cumorah’s liquidating agent. “I think [the merger] is a good move,” Dennis Adams, CEO of ASI, told News Now. “The right steps were taken to preserve the credit union movement in Nevada and to preserve member service [at the credit union].” The "marriage" between the two organizations will give the credit unions an opportunity to collaborate using each other’s strengths. For instance, while Credit Union 1 specializes in more traditional lending, like auto loans, Cumorah focuses on mortgages. The move will also help them diversify risk, Adams said. “They can play off each other in a positive way,” he added. Paul Simons, CEO of Credit Union 1, agreed that the acquisition was a good opportunity. “It’s a great way to diversify what we do in Illinois,” he told News Now. “There’s a lot of opportunity [for both credit unions].” Simons was appointed interim CEO at Cumorah before the announcement was made that the $574 million asset Credit Union 1 would take over Cumorah’s deposits and assets. He said Cumorah experienced delinquencies in its commercial real estate (CRE) loans. Cumorah is a very well-run credit union that had successfully done commercial real estate lending for years, Simons emphasized. But when the housing market collapsed in Nevada, the credit union suffered losses. On Monday, when local news outlets reported that Cumorah had been closed, members called staff at the credit union to find out what happened. Call volume and branch volume were higher that day, but by 11 a.m., all was “back to normal,” Simon said. “[The members] are fine.” It’s also important that the term “Cumorah” is kept in the credit union’s name. Cumorah is currently being referred to as a “division of Credit Union 1,” Simons said. One change that Cumorah members will see involves rate structures. Credit Union 1 members, regardless of their location, pay the same rates on products and services. Nevada’s rates are currently depressed because of a struggling state economy. When the rate pricing structure is adjusted at Cumorah to match Credit Union 1’s rates, Cumorah members will benefit, Simons said. Credit Union 1 doesn’t engage in business lending and doesn’t plan to in Nevada. It will stick to single-family mortgages and auto loans, Simons said. Several out-of-state credit union acquisitions have taken place recently--such as Alaska FCU’s acquisition of High Desert CU in Apple Valley, Calif. Simons said his credit union's acquisition of Cumorah occurred under unique circumstances. “I don’t see in the future that it will be prevalent,” Simons said. “It’s a window of opportunity that closes." Despite Cumorah’s failure, ASI’s Adams said its insurance funds remain strong. While any loss event will deplete reserves, ASI’s group equity ratio will remain in a “good range,” Adams said. As of June, ASI insured 157 credit unions in nine states: Ohio, Indiana, Illinois, Idaho, Nevada, California, Texas, Alabama and Maryland. The Credit Union 1 and Cumorah acquisition is ASI’s first. Cumorah is the third credit union in Las Vegas to fail this year and the first privately insured Nevada credit union to be closed since the nation's financial crisis began (Las Vegas Review Journal Oct. 24). Cumorah, with $147 million in assets and $129 million in deposits, has 60 employees, two offices in Las Vegas and two in Henderson (Las Vegas Sun Oct. 23). Credit Union 1 now has 29 branches--four in Nevada, 23 in Illinois, and two in Indiana.

Public funds legislation introduced in Ohio

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COLUMBUS, Ohio (10/28/09)--As expected, legislation was introduced Oct. 16 in the Ohio House of Representatives to allow Ohio credit unions to be eligible depositories for public funds under state law. House Bill 317, jointly sponsored by Majority Floor leader Tracy Heard (D-Columbus) and State Rep. Peter Ujvagi (D-Toledo) and 20 additional co-sponsors, would include credit unions as eligible depositories for the state, communities, schools and other public systems (InfoSight Compliance eNewsletter Oct. 26). The bill also would allow credit unions to participate in the Ohio Department of Development’s Minority Business Enterprises Program and Capital Loan Program for small businesses. Under the provisions of H.B. 317, members would have access to linked deposit programs from the Ohio Treasurer through their credit union. “The ability of credit unions to participate in these programs would benefit the citizens, businesses, communities and public entities in Ohio,” said John Koslowski, general counsel for the Ohio Credit Union League. This is the second time the league has tried to pass legislation so credit unions can accept public deposits. The last attempt was in 2004. The league wants to help credit unions accept public deposits because many local communities, schools, municipalities and townships have come to the state’s credit unions looking to do business, the league said (News Now Oct. 19).

New York league president testifies at state hearing

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ALBANY, N.Y. (10/28/09)--Credit Union Association of New York President/CEO William J. Mellin testified on behalf of the credit union community at a state Assembly Banks Committee hearing Friday in New York City.
Credit Union Association of New York President/CEO William J. Mellin testifies on behalf of the credit union community at a state Assembly Banks Committee hearing Friday in New York City.
The hearing was called to determine what level of regulatory authority the state should exercise to protect its financial service entities and consumers. Also addressed was the possible enactment of federal legislation that would create a new Consumer Finance Protection Agency. Others testifying included Richard Neiman, superintendent of the state Banking Department and Michael Smith, CEO of the state bankers association. During his testimony, Mellin emphasized the unique and important role New York credit unions play in the financial services marketplace and their ability to help New Yorkers recover from the current economic challenges. He also reminded the committee that credit unions' cooperative, not-for-profit structure and mission of creating financial independence for their members prevented them from contributing to last year's financial crisis. "Credit unions take great pride in truly knowing their members," Mellin said. "As a result, our mortgages are not packaged and overseen by an institution in a far-off state. In fact, many of our institutions hold substantial mortgage portfolios. It is not a coincidence that credit unions have been lauded as the example of what is right with the financial services industry throughout this downturn in the economy," he added. When asked about the future of the dual chartering system, Mellin said "the dual regime of state and federal regulators, as well as charter choice, allows for competition, diversity and innovation--elements that remain critical for our state's consumers and financial institutions." He also referenced President Barack Obama's March 2009 recommendations to Congress (Financial Regulatory Reform: A New Foundation) and encouraged the committee to reaffirm those recommendations. In the report Obama recognized the value of credit unions' dual chartering system and recommended maintaining state supervision, dual chartering and an independent credit union regulator. "While there is no question that enhancing consumer protection is a laudable goal given the economic climate, it must be accomplished in a manner that builds on existing regulatory success without undue regulatory burden for financial institutions," Mellin concluded. After his testimony, he said, "The hearing was an excellent opportunity to again highlight the credit union difference and how we are helping millions of New Yorkers in communities across our great state."

Iowa foundation homeowner ed receives state award

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DES MOINES, Iowa (10/28/09)--The Iowa Credit Union Foundation (ICUF) was recognized by state Attorney General Tom Miller and the Iowa Home Ownership Education Project (IHOEP) for ICUF's efforts to provide home ownership education.
The Iowa Credit Union Foundation (ICUF) received an award for its efforts to provide home ownership education from the state and from the Iowa Home Ownership Education Project (IHOEP). From left are Iowa Attorney General Tom Miller, ICUF Executive Director Marybeth Foster, and Stephanie Preusch, IHOEP executive director. (Photo provided by the Iowa Credit Union Foundation)
The recognition was made during IHOEP's Annual Fall Conference in Des Moines. Marybeth Foster, ICUF executive director, accepted the award on behalf of the foundation. The foundation's primary focus is to eliminate poverty in the state by helping Iowans build wealth, responsibility and independence through its programs, grants and scholarships. It offers an individual development account (IDA) program through the state's credit unions. IDAs are matched savings accounts where the depositor's savings are matched by a grant from another organization. The saver earmarks the savings and matching funds to purchase a specific asset--such as a home, a new or expanded business, education or training, or a vehicle to get to work. Participants must meet income guidelines to qualify and must participate in financial education seminars. "Home ownership is the most popular asset choice in the IDA program," said Foster. "The money saved in an IDA can be used toward down payment, closing costs and other fees associated with buying a home."