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Federal Appeals Court Retailers to pay for replacement card insurance

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BOSTON (10/28/11)--Retailers could be could be responsible for replacement payment cards and identity-theft insurance in the event of data breaches under a federal appellate panel ruling made Wednesday.

In Anderson v. Hannaford Bros. Co., U.S. Court of Appeals First Circuit reversed a decision that dismissed negligence and implied contract claims arising out of a 2007 breach of grocer Hannaford's electronic payment processing system, which resulted in the theft of 4.2 million credit and debit card numbers.

The First Circuit's decision suggests credit and debit card payment processors could be at a higher risk than previously thought of facing class action claims in the wake of data breaches (Oregon Business Report Oct. 27).

A Maine Supreme Judicial Court ruled in September 2010 that victims of the massive data breach that hit Hannaford Bros. supermarkets in 2008 cannot sue for damages if they did not suffer financial losses, physical harm or identity theft (News Now Sept. 23, 2010).

The Hannaford breach occurred between Dec. 7, 2007, and March 10, 2008, when cyber criminals hacked into the grocery store chain's system and accessed card numbers used at 165 Hannaford supermarkets in the Northeast and 106 Sweetbay stores in Florida. Of the four million cards compromised, at least 1,800 numbers stolen were used for unauthorized fraud. The breach was discovered Feb. 27, 2008, and made public March 17, 2008 (News Now April 3, 2009).

The breach caused many credit unions to reissue credit cards to members whose information was compromised. It also resulted in more than 24 lawsuits filed against Hannaford and its parent company, Delhaize America Inc. The cases were consolidated into one central complaint. Attorneys had sought damages for time and money lost as well as damages because Hannaford allegedly knew about the breach three weeks before it was made public. The delay, said attorneys, exposed consumers' accounts to more fraud (News Now Aug. 1, 2008, and April 3, 2009).

Media blitz on CUs benefits to consumers includes Cheney in WSJ

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MADISON, Wis. (10/28/11)--The efforts of credit unions nationwide to accommodate consumers who are tired of higher existing fees and more new fees from large banks continue to garner media attention across the country. Consumers should to look to credit unions to provide what consumers want, Bill Cheney, president /CEO of the Credit Union National Association (CUNA), told The Wall Street Journal in a Thursday article "Beating Those Debit-Card Fees."

"When free checking at banks seems to be disappearing, our survey shows eight out of 10 credit unions still offer at least one free checking account with no minimum balance requirement and no maintenance or activity fees," Cheney told the Journal. The article also mentioned that Beth Page (N.Y.) FCU has gained 1,500 members since Bank of America announced its debit card fee. To read the article, use the link.

In addition to CUNA's own extensive and ongoing outreach to the media, other credit union activities mentioned in the media are:

  • More than 7,000 credit unions nationwide are seeing a surge in new members since Bank of America announced in September its $5 monthly debit fee ( Oct. 24). Deposits have been flowing into Chicago Patrolman's FCU, Scott Arney, CEO, told ABC News. The credit union is on pace to go 40% above its normal rate of new checking account and debit-card activity in October, he added. To read the article, use the link.
  • Co-op Services CU, a $401.5 million asset, Livonia, Mich.-based CU with 52,000 members, will give new members $105 to shred their  bank debit card and open a checking account with direct deposit at the credit union (e-Banking and Payments News). The move is in response to Bank of America's $5 monthly debit fee.
  • "Bank Transfer Day began as a grassroots movement launched from a laptop by a woman who couldn't take another bank fee," said the introduction to a Dan Rather Reports segment on people moving from large banks to credit unions. "The movement is growing day by day--helping average Americans send the big banks a message by 'un-banking'--taking their business to smaller banks and credit unions."  To view the video clip, use the link.
  • The Maine Credit Union League said it is seeing an increase in members in October ( Oct. 21). It's too early to tell how many of those members are opting for credit unions as a result of a national movement--Bank Transfer Day--to induce people to leave big banks for credit unions by Nov. 5, but it's evident more consumers are shopping around, league President John Murphy told the station. "What we're pleased to see is that consumers know they have a choice, and that we believe credit unions are the best choice for consumer financial services," Murphy added.
  • The Disclosures, the credit union industry's thrift rock duo, Christopher Morris and Chad Helminak, have recently posted videos that credit unions can use to highlight the credit union difference in advance of Bank Transfer Day, Nov. 5. Morris is director of communications for the National Credit Union Foundation. Helminak is the web and member development strategist at the Wisconsin Credit Union League. To view the videos, use the link.

Mid-Atlantic CorpVACORP announce NCUA merger approvalbr

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MIDDLETOWN, Pa. and LYNCHBURG, Va. (10/28/11)--Mid-Atlantic Corporate FCU, Littletown, Pa., and VACORP FCU, Lynchburg, Va., announced today that the National Credit Union Administration (NCUA) unanimously approved their merger plan at the agency's closed board meeting Thursday.

"Both corporates performed extensive due diligence, and undertook many months of planning and operational review before submitting our merger plan," said Jay Murray, president/CEO of Mid-Atlantic Corporate. "With the consent of the NCUA board, we can now move ahead with a vote by the memberships of both of our corporates."

Members of both corporates will vote on the proposed merger and the results will be announced at VACORP's special meeting scheduled for Nov. 15. If members vote to approve combining the two institutions, the formal merger date is expected to be March 31.

"I believe our members will find this to be a very beneficial merger," said Don Chapman, president/CEO of VACORP. "From the outset, it has been very important to VACORP to seek a partner that offers high-quality programs and can ensure full-service continuity. Mid-Atlantic Corporate hit the mark on both of these requirements. Further, our member credit unions will be able to take advantage of a wider array of products and services--something very important to ensuring their success going forward."

Pinellas FCU acquires POC FCU in merger

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LARGO, Fla. (10/28/11)--Pinnellas FCU, Largo, Fla., has acquired the assets of POC FCU, St. Petersburg, Fla., in a merger.

The $82.6 million asset Pinellas added $500,000 in assets and roughly 650 members to its 12,554-member existing base from the merger with POC (Tampa Bay Business Journal Oct. 21).

The Aug. 31 merger is one of at least six credit union mergers in Florida so far this year, the Journal said.

In the U.S., between Jan. 1 and Sept. 29, there were 125 reported mergers, according to the National Credit Union Administration.

POC pursued a merge following the loss of its sponsorship from the Pinellas Opportunity Council--a network of 1,100 private nonprofit and public community action agencies, the Journal said.

Ohio CU foundation reserves support CU initiatives

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COLUMBUS, Ohio (10/28/11)--The Ohio Credit Union Foundation Board of Trustees approved allocating money from reserves--its endowment fund--to meet rising demand for grants to continue its tradition of supporting educational and outreach initiatives that strengthen Ohio's credit unions and their communities.

Donations received by the foundation during a calendar year are used to create the ensuing year's grant-making budget. In 2010, $177,000 was donated by individuals, credit unions and business partners. However, the 2011 grant-making budget was nearly depleted by the end of September. Meanwhile, the grant assistance needs of Ohio's credit unions continue to grow, the foundation said (e-Lumination Newsletter Oct. 5).

"As a result, the foundation board proactively allocated grant dollars from its endowment fund," said Board Chair Tom Furrey. "The foundation will now be able to fund grants beyond its original 2011 grant-making budget, and further help credit unions meet their training, outreach, and financial education needs for the balance of 2011."

So far in 2011, grants awarded include: student-run credit unions, financial reality fairs, Biz Kid$ production, state and national professional development opportunities, scholarships for post-secondary education, and disaster relief.

Dominican CUs learn lobbying lessons

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SANTO DOMINGO, Dominican Republic (10/28/11)--Credit unions must approach legislators with a single, unified message. This is the message a Wisconsin Credit Union League (WCUL) contingent conveyed during a governmental affairs training program for 13 credit unions in the Dominican Republic.

A three-person Wisconsin Credit Union League (WCUL) delegation last week traveled to the Dominican Republic in a visit arranged through the World Council of Credit Unions' (WOCCU) International Partnerships Program. Here, WCUL and AIRAC representatives examine farmer David Kreh's aji pepper crop. From left, WCUL President/CEO Brett Thompson; AIRAC President/CEO Virginio Gerardo and Business Manager Teresa Cruz; Kreh; and COOPCENTRAL's Regional Manager Francisco Cedano and Risk Manager Efrain Lugo. (Photo provided by the Wisconsin Credit Union League)
The three-person Wisconsin delegation last week traveled to the Caribbean island nation to provide education and visit credit unions serving agricultural members.

World Council of Credit Unions (WOCCU) arranged the visit through its International Partnerships Program, which first paired WCUL with the Asociación de Instituciones Rurales de Ahorro y Crédito (AIRAC), the country's credit union trade group, in 2007. Immediately following the visit, a delegation of 15 credit union volunteers and executives from the Dominican Republic visited WOCCU's Madison headquarters, WCUL's offices and credit unions in southern Wisconsin to study operations and other activities.

The Wisconsin delegation was encouraged by AIRAC's enthusiasm for the topics covered in the Oct. 18 workshop on lobbying techniques, according to WCUL President and CEO Brett Thompson.

"Crafting the right message is critical to any successful lobbying effort," said Thompson, who was accompanied by Tom Liebe, WCUL's governmental affairs vice president; Patricia Wesenberg, president/CEO of Central City CU in Marshfield, Wis., and board secretary for Credit Union National Association,; and Joshua Fetting, WOCCU International Partnerships officer. "We're pleased that our seminar was greeted with such an enthusiastic response," Thompson added

The one-day workshop attracted 35 attendees representing 13 of AIRAC's 15 member credit unions. Liebe and others urged participants to establish an advocacy position based on the benefits credit unions provide their members and to speak in a united voice when addressing government officials.

German Robles, assistant director of IDECOOP, the Dominican Republic's financial regulator, opened the workshop with his remarks.

In addition to the workshop, the delegation traveled to Las Matas de Farfán to visit COOPCENTRAL, a credit union serving the local agricultural community. The group also visited two farms growing aji peppers and other crops in operations funded by credit union loans.

Participation in the Dominican Republic workshop and the subsequent visit to Wisconsin offered extensive lessons in ways to make credit unions more successful, according to Alfredo Dorejo, president/CEO of Cooperativa Mamoncito, who was part of both activities.

"The lobbying workshop provided many tools we can use to more successfully lobby on behalf of credit unions," Dorejo said. "We also learned a little bit about public relations and the need to focus on member education to help our credit unions grow."

The Dominican Republic delegation visit, which ends this week, was arranged through the new WOCCU Customized Learning Program.