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Altura CU reports good 3Q in hard-hit Inland Empire

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RIVERSIDE, Calif. (10/30/09)--Altura CU, located in the Inland Empire, Calif., an area hit hard by the economy, reported Thursday a significant improvement in its bottom line results for third quarter 2009, compared with the third quarter of 2008. Altura's assets total $889.7 million and it has $1.8 million in net income, a substantial increase, the credit union said. While still reporting a loss from operations through the first nine months of the year, the third-quarter results suggest economic conditions in the region are beginning to show improvement, said Altura CEO/President Mark Hawkins. "While we remain in a very tough environment, we are pleased with our third quarter results and believe we are positioned for success in the coming year," Hawkins said. The credit union raised its capital ratio from 7%--considered "well capitalized" by regulators--to 7.42%. "The key to protecting our capital is preserving the safety and soundness of our real estate portfolio. We have been enduring the worst loan losses in our history; a national phenomenon that has been particularly bad in the Inland Empire where our unemployment rate (14.5%) is far higher than the national average," Hawkins said. However, the credit union took steps to help members through the troubled times, with "an aggressive program of loan modifications and debt workouts for our members to help them stay in their homes. We have extended the hours of our loan servicing staff, and we're working closely with members to help them understand their options." The result, he said, shows in the third quarter performance results and the increase in the capital ratio. Altura also reported a 12.2% growth in total member share/deposits in the past 12 months, and it reduced its operating expenses for third quarter by 8.1% from third quarter 2008. Hawkins is cautiously optimistic about fourth quarter. "Although I believe the Inland Empire isn't out of the woods yet, I think better times are coming." He noted that the credit union's focus on the needs of its members through the "economic cataclysm" has helped protect Altura.

CU first in Michigan to allow e-mortgage closings

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EAST LANSING, Mich. (10/30/09)--Michigan State University FCU is the first credit union in Michigan to allow members to close on their mortgages electronically, says the Michigan Credit Union League. Members of the $1.7 billion, East Lansing-based credit union can apply for a mortgage online and share their documents with attorneys and family members through a secure website (Michigan Monitor Oct. 26). The members then complete the process on a touch screen computer at the credit union, where they receive a flash drive or CD containing all the documents to take home and store for future use. "Giving our members electronic access to online applications, closing documents and the convenience of an e-closing all enhance our members' experience with the credit union," said Jeffrey Benson, MSU FCU vice president of operations. "We want to be the first lender our members think about when it comes to financing their homes, vehicles and other things necessary to their lifestyle. Being a leader in electronic services enhances our relationship with our members." The credit union offered a demonstration Thursday at its headquarters.

Spike in fraud alerts is no Halloween prank

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WASHINGTON (10/30/09)--This week saw several government warnings and alerts about financial frauds as well as several credit unions reporting other scams that could spook some accountholders. But these are no Halloween pranksters. Keesler FCU reported that at its base in RAF Mildenhall, England, about 100 members saw fraudulent charges on their accounts this month (Stars and Stripes Oct. 28). All affected accountholders had visited Spain sometime this year, Michelle Foster, a loss prevention manager for Keesler told Stars and Stripes. The losses were from Visa debit cards. Visa said it is aware of a possible security issue in Spain but said the investigation was ongoing and it couldn't comment. Visa Europe contacted several affected banks and credit unions when the fraud was discovered. One Keesler member reported charges of $539.16 from boutiques in Chicago suburbs. She said the only time she used her debit card while in Spain was at a mom-and-pop store near the beach. Another credit union , Service CU, which has 15 locations in Germany and 17 in the U.S., saw less than one-half of 1% of members' cards compromised by the breach, the newspaper said. In another situation, the Federal Deposit Insurance Corp. (FDIC) Thursday issued an alert warning financial institutions of an increase in schemes to recruit individuals to receive and transmit unauthorized electronic funds transfers (EFTs) from deposit accounts to individuals overseas. The recruitees or "money mules" are solicited on the Internet by criminals who have gained unauthorized access to the online deposit account of a business or consumer. The criminal will originate an EFT from a victim's account to a money mule's deposit account. The money mule is told to quickly withdraw the funds and wire them overseas after deducting a "commission" of 8% to 10%. The schemes often occur in the context of online job posting websites, advance fee scams, mystery shopping jobs, and social networking sites. Some hesitant money mules have been threatened by their criminal "employers" if they don't make the transactions quickly and secretly, said the FDIC. The personal identifiable information provided by the money mule may be used later to commit identity theft or account takeover. FDIC cited several examples of events may indicate money mule account activity:
* A deposit account opened with a minimal deposit soon followed by large EFT deposits. * Deposit customers who suddenly begin receiving and sending EFTs related to new employment, investments, business opportunities or acquaintances (especially opportunities found on the Internet). * A newly opened deposit account with an unusual amount of activity, such as account inquiries, or a large dollar amount or high number of incoming EFTs. * An account that receives incoming EFTs and then shortly afterward originates outgoing wire transfers or cash withdrawals about 8%-10% less than the incoming EFTs; and * A foreign exchange student with a J-1 Visa and fraudulent passport opening a student account with a high volume of incoming/outgoing EFT activity.
Other frauds noted:
* Credit unions in Western Pennsylvania opened accounts for a man who deposits bad checks into the new account and withdraws the funds before they are returned as a "closed account." Sandy Shenk, PaCUSC state coordinator, has warned credit unions on the shared-branching network to establish procedures for allowing new members access to shared branching services. "This is a perfect example of why we suggest that credit unions require new members establish a relationship with them before allowing them to use other locations (Life is a Highway Oct. 29). * The FDIC issued a warning Tuesday about fraudulent e-mails appearing to be from the FDIC. The e-mails ask recipients to download and open a "personal FDIC insurance file" to check their deposit insurance coverage. The subject line includes the wording, "check your Bank Deposit Insurance Coverage." The message asks recipients to "visit the official FDIC website" by clicking on a hyperlink that appears to open forms. The hyperlink instead downloads an executable file that may try to obtain personal and confidential information, the FDIC said. * A debit/credit card scam has targeted shoppers at Hancock Fabrics in Stevens Point and Marshfield, Wis., and the account information has been used for unauthorized transactions at ATMs in the Milwaukee area (Stevens Point Journal Oct. 17). Police said the scam might be traced to old credit card readers at the fabrics stores.

CU takes steps to protect staff from germy cash

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HARRISBURG, Pa. (10/30/09)--With as many as 5.7 million Americans infected with the H1N1 virus between April and late July and many more cases expected, some credit unions are taking precautions. One credit union in Pennsylvania was featured Wednesday on a local television station discussing its flu strategy. Staff at First Capital FCU, West Manchester Township, Pa., were interviewed by Fox 43 WPMT-TV about what it is doing to avoid handling germy money during the flu season. Its employees are wearing latex gloves when they handle cash or pay slips, said the station. The credit union also has made available antibacterial wipes and increased cleaning schedules. Human Resources Manager Linda Thompson told the station she sees how easily germs can spread. "It's on cash, withdrawal slips, everything. Especially at the end of the week when we are dealing with a high amount of transactions. We're taking steps to keep our employees and members healthy." Money is considered a fomite--a material that can hold onto germs and transfer them. The fact that money isn't washed and changes hands frequently make cash especially germy. Even ATMs are covered in germs, according to Dr. Jonathan Schwab of Northampton, Mass. ( Oct. 29). He advises washing hands frequently and carrying a small bottle of hand sanitizer when one can't get to a sink. The U.S. Centers for Disease Control and Prevention researchers used computer models to estimate the number of people who have contracted the swine flu. They don't have an update beyond July 24 (Reuters Oct. 29). They estimated that 1.8 million to 5.7 million Americans had the virus between April and July 23, sending between 9,000 to 20,000 people to the hospital. About 6% of people who were hospitalized with the virus died, researchers said. For information about stopping germs at work and planning for a pandemic, use the resource links.

StretchPay now offered at 170 branches

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COLUMBUS, Ohio (10/30/09)--StretchPay, the short-term loan program offered by credit unions as a salary-advance alternative, is now offered at 170 branch locations in six states and in Washington, D.C. Collectively, credit unions offering StretchPay have made 66,000 advances totaling more than $24 million through Sept. 30--a slight increase over the same period last year, said the Ohio Credit Union League (eLumination Newsletter Oct. 28). Credit unions made 85,090 StretchPay advances totaling $32.4 million through year-end 2008, the league added. Changes have been made to the program to make it compliant with the federal Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009. As of Sept. 15, StretchPay no longer is a 30-day, short-term loan product. It now is a short-term revolving loan with repayment due dates, ranging from 28 to 60 days, said the league (News Now Sept. 18).

IForbesI media broadcast positive CU card study

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NEW YORK and BOSTON (10/30/09)--Forbes and the Boston Globe are among the media that have broadcast positive news about credit unions' credit card behaviors from a study by Pew Charitable Trusts. Forbes asked in a headline, "Want a Better Credit Card? Consider a Credit Union, Study Says" ( Oct. 28). The article begins: "Sick and tired of high credit card fees? A piece of credit union-issued plastic may be the answer. That's because credit unions offer cards on terms that are significantly better for consumers than those issued by big banks, according to a newly released study…" The Boston Globe reported that in contrast to banks' procedures: "Pew found that the 12 largest credit unions, which have just 1% of the market, have lower interest rates, lower fees, and less punitive policies Most still have contracts that allow them to change the terms at will or take other actions the law will prohibit. But even when credit unions use such practices as penalty rates or overlimit fees, they tend to be less expensive than banks, the study said. For instance, credit unions offer cards with average late and overlimit fees of $20, versus $39 for banks." The study gathered information on about 400 credit cards issued by the 12 largest banks and the 12 largest credit unions. It concluded that credit cards offered by credit unions provide their members with more reasonable annual percentage rates, cash advance fees, late fees, and other fees. It also found that penalty fees at the largest credit unions were nearly half of those assessed by the larger banks (News Now Oct. 29). Credit Union National Association President/CEO Dan Mica noted that the study "is another example of an independent third party which has confirmed that credit unions, on their own and without prompting from regulators, provide their members with honest, fair deals." It also is evidence, he said, "that all the new regulations coming down on financial services are unlikely to change the behavior of credit unions since they are already doing the right things."

Grant implements payroll card program for unbanked

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COLUMBUS, Ohio (10/29/09)--The National Credit Union Foundation (NCUF) awarded a $15,525 Innovation Grant to Seven Seventeen CU of Warren, Ohio, to implement a payroll card program for unbanked workers, says the Ohio Credit Union League. The $759 million-asset credit union will offer the outreach program through its business partners, who can directly disburse wages onto Visa-branded prepaid cards for its employees (eLumination Newsletter Oct. 28). The payroll card will provide workers who lack depository relationships with financial institutions benefits that are similar to direct deposit. The goals of the project are to provide unbanked consumers with:
* A low-cost alternative to check-cashing outlets; * A convenient way to access their funds; and * A way to encourage member savings.

September CU loans rise less than expected

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MADISON, Wis. (10/30/09)--Credit union loan balances rose a less-than-expected 0.09% in September, down from last year's pace of 0.53%, according to a Credit Union National Association (CUNA) economist’s analysis of CUNA’s monthly sample of credit unions. “Consumer credit demand remains weak in the face of serious adverse economic headwinds,” Steve Rick, CUNA senior economist, told News Now. “Job insecurity, stagnant wages, falling employment and high debt levels will weigh on loan growth into the first half of 2010.
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“Credit union fixed-rate, first-mortgage loan balances rose 1.1% in September, buoyed by low mortgage interest rates and the first-time homebuyer tax credit,” he added. “For the first nine months of the year, loan balances rose only 1.9%, down from 5.7% for the similar time period last year.” Following were unsecured personal loans (0.6%), other mortgages (0.5%), used-auto loans (0.3%), and credit card loans (0.2%). Home equity loans decreased 0.2%, and adjustable-rate mortgages and new-auto loans declined 0.4% and 0.7%, respectively. Credit union savings balances increased 0.1% in September and 8.6% during the first nine months of 2009. Individual retirement accounts for the month increased 2.1%, followed by regular shares (0.9%) and money market accounts (0.7%). One-year certificates and share drafts decreased 1.0% and 4.6%, respectively.
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“With loan growth so far this year less than half last year’s pace, deposit growth is almost double last year’s pace,” Rick said. “Credit union savings balances are up 8.6% in the first nine months of 2009, up from 4.8% last year. Credit union members are parking funds in money market accounts--18.2% growth year-to-date--and regular share accounts--9.8% year-to-date--rather than reinvesting their funds in certificate of deposits at the current low market interest rates. “This is helping to reduce credit union funding costs and boost net interest margins as higher-cost certificates of deposit roll into lower-cost core deposits,” he added. The movement’s overall capital-to-asset ratio increased to 10% in September. The total dollar amount of capital is $89 billion. Credit union 60+ day delinquencies increased to 1.8% during the month. “Credit quality continued to deteriorate with credit union loan delinquency rates rising over 1.77% in September, up from 1.69% in October and 1.01% last September,” Rick said. “With the economy still shedding a couple hundred thousand jobs each month, we can expect the delinquency rate to remain on its upward trajectory for the next few quarters.” The loan-to-savings ratio increased to 78.1%. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained constant at 19%.

Four CUSOs discuss back-office collaboration

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GRAND RAPIDS, Mich. (10/30/09)--Four credit union service organizations (CUSOs) recently gathered to discuss back-office collaboration and a cross-network approach to servicing credit union owners and clients. The group, which met in Grand Rapids, Mich., discussed standardizing product offerings, sharing workflow best practices, and identifying new a la carte service opportunities, including back-office consulting. The meeting was hosted by CUSO Xtend Inc. in Grand Rapids. Besides Xtend, participants included CU*Northwest, Spokane, Wash.; CU*South Inc., Mobile, Alabama; and CUbyDesign, Portland, Ore. Each CUSO performs back office services for credit unions, but each provides a different scope. The group said they thought that an opportunity exists for the group to benefit from a brainstorming session. The CUSOs also use the CU*BASE core data processing suite from CU*Answers Inc., and seek to identify new software enhancements to the system during the meeting.

Sarasota Coast members back a merger

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SARASOTA, Fla. (10/30/09)--Members of Sarasota (Fla.) Coastal CU voted Sunday during a special member meeting to merge with Achieva CU, Largo, Fla., on Monday. More than 86% of members voted in favor of the merger. The resulting credit union will have more than $800 million in assets and more than 90,000 members in seven counties--Pinellas, Pasco, Hernando, Hillsborough, Manatec, Sarasota and Charlotte (Herald Tribune Oct. 28). The contributed strengths of Achieva and Sarasota Coastal will provide even greater benefits to members, Gary Regoli, Achieva president/CEO, told the newspaper. The credit unions’ operations will begin merging early next year, with completion expected by the third quarter. Achieva and Sarasota Coastal have been discussing a merger since April. The two signed a letter of intent to merge July 31.

Mississippi announces Maxwell Desjardins winners

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Click to view larger image Keesler FCU received the Mississippi Credit Union Association’s Dora Maxwell Social Responsibility Award for its participation in the American Cancer Society’s Relay for Life. The credit union created a special t-shirt for the event and raised $16,000.
Click to view larger image The Mississippi Credit Union Association awarded Keesler FCU, Biloxi, Miss., with the Desjardins Youth Financial Education Award for its MoneyTalks program, which teaches high school students about money. The program has gone international, with a debut in the United Kingdom. (Photos provided by the Mississippi Credit Union Association)
JACKSON, Miss. (10/30/09)--Keesler FCU, Biloxi, Miss., received first place in Mississippi’s Dora Maxwell Social Responsibility Award and the Desjardins Youth Financial Education Award competitions, according to the Mississippi Credit Union Association (MSCUA). The awards were sponsored by MSCUA and the Credit Union National Association. The Dora Maxwell award recognizes a credit union for its community involvement in an activity that helps others or strengthens the structure of the community. The Desjardins award recognizes credit unions that support youth financial education. Keesler was recognized for its participation in the 2009 American Cancer Society’s Relay for Life. The credit union created a special T-shirt for the event and was recognized as the top fundraising team for raising $16,000. Keesler also was recognized for its four-week MoneyTalks program, which teaches high school students how to manage their money, and other financial education programs, including classroom presentations to youth in the Mississippi Gulf Coast area. Keesler has $1.8 billion in assets.

CU System briefs (10/29/2009)

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* ALBUQUERQUE, N.M. (10/30/09)--Representatives of the Credit Union Association of New Mexico (CUANM) met earlier this month with U.S. Rep. Ben Ray Lujan (D-N.M.) to discuss some issues of concern to credit unions (CUANM Network October). Lujan was knowledgeable about the credit union position on interchange fee legislation, Community Reinvestment Act extension to credit unions and the proposed Consumer Financial Protection Agency, said the association. He said he is opposed to interchange fee legislation. He also sees a need for data security legislation. Credit unions are advocating on the national and state levels to require merchants to discard any personal or credit card information gathered from consumer. From left are Juan Fernandez Ceballos, CUANM vice president of governmental affairs; Scott Connely, CUANM Governmental Affairs Committee chairman and CEO of Sandia Area FCU; Sylvia Lyon, CUANM CEO; and Lujan. (Photo provided by the Credit Union Association of New Mexico) … * ONTARIO, Calif. (10/30/09)--The California Credit Union League's Mt. Diablo, San Francisco, North Bay and Wine Country Chapters
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raised more than $36,000 for Children's Hospital & Research Center Oakland and UC Davis Children's Hospital at their Third Annual Golf Tournament in Vallejo. Helping sponsor the event were CO-OP Financial Services, Visa, Financial Service Centers Cooperative, the Credit Union National Association, Travis CU, Redwood CU, CUDL, Executive Compensations, the Moore, Brewer, Jones, Tyler & North firm; San Francisco Fire CU, Pacific Funding, San Francisco FCU and American Home Life. Holding the check are Redwood CU CEO Brett Martinez (middle front) and other tournament coordinators Karen Introcaso, Spectrum FCU; Samantha Paull, Redwood CU; Steve Stapp, San Francisco FCU; Rob Greaff, Delta Schools FCU; Jeanie Widemann, lst Pacific CU; Andy Anderson, Travis CU; and John Pamer, Diablo Valley FCU. They are shown with representatives of Children's Miracle Network and the two hospitals. (Photo provided by the California Credit Union League) … * SANTA ROSA, Calif. (10/30/09)--Redwood CU has been selected for
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the fourth consecutive year as one of the "Best Places to Work" in the North Bay, Calif., area by the North Bay Business Journal, a weekly business publication for Sonoma, Napa and Marin counties. Winners were based on several criteria including an employer questionnaire, employee survey ratings, number of employee responses and employees' written comments. Pictured are, from left: Redwood CU employees Lyn Ly-Spelman, Richard Calenius, President/CEO Brett Martinez, Senior Vice President of Employee Relations and Development Kristina Derkos, Karen Boudrie and Bob Browne. (Photo provided by Redwood CU) …