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CU System Archive

CU System

Kentucky court DFI cant grant community charters

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FRANKFORT, Ky. (11/3/08)—A Kentucky appeals court judge dealt a blow to credit unions recently when he sided with a lower court with a ruling that, in effect, says the state Department of Financial Institutions (DFI) can’t grant community charters. The case was brought by Home Federal Savings and Loan Association against the DFI in May 2006. The bankers argued that state law does not permit community-based FOMs for state-chartered credit unions. The bankers claimed the DFI has violated the separation of powers doctrine in the Kentucky constitution by approving community-based FOMs for state-chartered credit unions, Kentucky Credit Union League (KCUL) President Wendell Lyons explained when the league joined the suit in 2007. On Oct. 25, 2007, the Kentucky Circuit Court for Franklin County sided with the plaintiff and ruled that the DFI exceeded its statutory authority when it approved geographic fields of membership for six state-chartered credit unions between 2000 and 2005. The Credit Union National Association (CUNA) joined the suit in appeal in April of this year by filing an amicus brief that argued, in part, that the lower court incorrectly applied federal administrative law precedent, instead of Kentucky administrative law, to deny the DFI judicial deference. And the court further erred, CUNA argued, because, if correctly applied, the federal precedent would have compelled the court to back the state regulator under judicial deference. CUNA General Counsel Eric Richard said CUNA got involved in the case because the lawsuit was part of a pattern in which bankers have been challenging community charters in state courts around the country. In addition to Kentucky, Richard noted, multiple cases have been brought in Missouri, since resolved by state legislation, and in Pennsylvania. KCUL’s Lyons said of the ruling Friday, “We are obviously disappointed in the Appeals Court ruling. We will keep all options on the table. We will be gathering our legal team and then we'll decide on the best course of action for Kentucky's state-chartered credit unions.” Richard added, "We will work with the Kentucky League and the affected credit unions to analyze the court's opinion and assess options that protect consumers' right to choose credit union service. The impact of this case will likely be limited to Kentucky because the Kentucky Credit Union Act has unusual field of membership language that is not very close to the language of other laws around the country."

CO-OP Network Consumers can avoid ATM fees

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ONTARIO, Calif. (11/3/08)--ATM surcharges may be at an all-time high at banks, but consumers can avoid them if they join a credit union that belongs to the CO-OP Network. Stan Hollen, president/CEO of CO-OP Financial Services, made the statement in response to a Bankrate.com survey on rising bank fees (News Now Oct. 31). The survey had concluded that fees, particularly ATM surcharges, at 249 large banks in 25 metropolitan districts were at an all-time high. "Why pay bank fees when credit unions have access to over 28,000 surcharge-free ATMs?" asked Hollen. CO-OP Network, which is owned and operated by CO-OP Financial Services, based in Ontario, Calif., provides more than 2,000 participating credit unions and their members access to more than 28,000 ATMs. Those ATMs are free, he said. Other surcharge-free ATM networks serving credit unions include Allpoint, Credit Union 24 and MoneyPass. That means that most credit union members have a way to avoid heavy surcharges from bank networks. "Credit union fees are not only lower than banks, but despite the rise in bank ATM networks resulting from recent mergers between the largest banks, credit unions still offer the largest number of surcharge-free ATMs in the country," Hollen said. Many credit unions are also members of CO-OP Shared Branching, which provides their members the same transaction privileges at over 3,400 participating or "shared branches" nationwide that they would get at their own local credit union, he added. "Credit unions offer modern, innovative products and services that rival any bank, including check imaging (depositing checks from home using a scanner and Internet connection), mobile and home-based banking. Credit unions are not only a viable alternative to banks, we are also better in terms of convenience and accessibility."

CU System briefs (10/31/2008)

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* NILES, Mich. (11/3/08)--Two men pleaded guilty to armed robbery at a credit union in which a third robbery suspect was killed during a gunfight with a guard (wsjm.com Oct. 30). The men, Travis Lamar Curry and Glenn Maurice Porter, both 22 and from Indiana, pleaded guilty to bank robbery and weapons charges stemming from the Jan. 18 robbery of the Niles, Mich. branch of St. Joseph, Mich.-based Berrien Teachers CU. Devarence Kimbrough, the third suspect, was shot twice and died in surgery afterward. Porter was also wounded in the gunfire exchange (News Now June 20). Curry and Porter will be sentenced in federal court on Dec. 5 … * WHITE HALL, Mich. (11/03/08)--HarborLight CU, Whitehall, Mich., has teamed up with Montague High School to open the first White Lake area student-run credit union branch. A ribbon-cutting ceremony was held Oct. 16. The branch will have several student-employees selected by the school principal and Sheryl Hogle, HarborLight CU’s youth educator. The credit union has been involved with area school systems by conducting classroom presentations on financial education for the past several years. Here, HarborLight CEO Linda Wood completes the first transaction with student teller Alaina Moreau (Photo provided by HarborLight CU) ... * SOUTH JERSEY, N.J. (11/03/08)--Rep. Frank LoBiondo (R-2), a credit union supporter, met with the Shore and South Jersey chapters of the New Jersey Credit Union League last week (Weekly Exchange Oct. 27). He is a co-sponsor of the Credit Union Regulatory Improvements Act. He is favored to win an eighth term Tuesday, said the league. At the meeting, LoBiondo discussed the economy and the government’s efforts to stabilize the markets. Pictured are: Steve Schlundt, president, Atlantic City Firemen’s FCU and league board chairman; Carol Muessig, South Jersey Chapter president and president of Bay Atlantic FCU; Paul Gentile, league president/CEO; LoBiondo; and John DiNofrio, director, Jersey Shore FCU and league director. (Photo provided by the New Jersey Credit Union League) ... * PITTSFIELD, Mass. (11/3/08)--Greylock FCU has committed $90,000 to support fuel assistance and senior nutrition programs in Berkshire
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County, Mass. The funds will be provided to Berkshire Community Action Council (BCAC) for its fuel assistance fund and to Elder Services of Berkshire County for its "Meals on Wheels" program. The five-year pledges by Greylock will steer $18,000 annually to the two programs. Greylock President Angelo Stracuzzi said the $1 billion asset credit union made the multi-year pledges because of the difficult economy and the missions of the two agencies. The credit union boosted its commitment "knowing that the rocky economic times may hit many families for months or even years to come," he said. From left are: Don Atwater, executive director, BCAC; Stracuzzi; and Robert Dean, executive director, Elder Services. (Photo provided by Greylock FCU) …

New Jersey league asks CU inclusion in state rescue plan

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TRENTON, N.J. (11/3/08)--The New Jersey Credit Union League is encouraging the state’s Gov. Jon Corzine to include credit unions in a broad economic rescue plan to help guide the state out of the national economic downturn and credit crunch. The plan proposes to use state pension and cash-management funds to purchase certificates of deposit in community banks, and to provide small-business loan guarantees to spark economic development and job creation, said the league (The Weekly Exchange Oct. 27). A similar proposal that includes credit unions was made by the governor of Illinois. The league said it is encouraging Corzine to include credit unions in a manner similar to the Illinois plan. “If ever there were a time for a comprehensive, non-partisan economic plan by New Jersey’s elected officials, it is in today’s circumstances,” Corzine said. “The unprecedented and evolving financial crisis of the past several months has already significantly weakened America’s, and the state’s economies. It undoubtedly will bring more severe challenges in the months ahead.”

St. Louis CUs reach out to Bosnian community

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ST. LOUIS (11/3/08)--A group of 17 St. Louis-area credit unions are working with U.S. Rep. Russ Carnahan (D-3) to conduct outreach to the growing Bosnian community in the area.
From left, Mirela Seferovic, First Missouri CU, St. Louis; Sandra Jakovlejevic, staff member for U.S. Rep. Russ Carnahan (D- 3); Tim Stephens, Health Care Family CU, Richmond Heights; and Jana Wolfe, First Missouri CU, discuss ways credit unions can help the Bosnian community. (Photo provided by the Missouri Credit Union Association)
Many of the credit unions have tellers that speak Bosnian and have developed a brochure printed in both English and Bosnian (The Missouri Difference Oct. 29). Representatives from First Missouri CU, St. Louis, and Health Care Family CU, Richmond Heights, met Oct. 27 with Sandra Jakovlejevic, Carnahan’s Bosnian-speaking staffer, to discuss issues facing the Bosnian-American community and ways credit unions can help. Many Bosnians lost their savings during the war in their country. That means Bosnian immigrants are more vulnerable to the economic crisis, Mirela Seferovic, First Missouri teller and Bosnian immigrant, told the Missouri Credit Union Association. “If someone lives here in the U.S. now who had that bad experience in Bosnia, they might be more frightened than other people about the economic news,” Seferovic said. The credit unions provided Jakovlejevic with several hundred copies of the brochures, which highlight the credit union difference. The credit unions plan to participate in future Bosnian community events through Carnahan’s office. “I would estimate that 25% of new members at our credit union are Bosnian,” says Steve Ogolin, First Missouri president. “We want to make sure more people realize that credit unions are a financial option for them.”

Homes for Our Troops arrives in Missouri

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ST. LOUIS (11/3/08)--Missouri credit unions officially introduced the Homes for Our Troops (HFOT) effort in the state with the help of Army Specialist Scott West and HFOT Founder John Gonsalves.
John Gonsalves, Homes for Our Troops president and founder, traveled to Missouri to meet with Army Specialist Scott West for the kick-off meeting to introduce the program to the state Oct. 24.
Missouri credit unions and HFOT are cooperating to build a specially adapted home in Branson, Mo., for West, who lost both legs below the knee in an explosion in while serving in Iraq. Gonsalves, West and representatives from 10 participating credit unions met in St. Louis Oct. 28 (The Missouri Difference Oct. 29). They also announced the effort to Branson media Wednesday. West said he is excited for the project to begin. “With a new home on the way, there are no words that can describe how I feel,” he told the Missouri Credit Union Association (MCUA). “None of it would be possible without Homes for Our Troops, Missouri credit unions and the many people who prayed for me.”
Credit union representatives discuss plans to build disabled Army Specialist Scott West a home in Branson, Mo. (Photos provided by the Missouri Credit Union Association)
The initial step in the process is to secure land and a general contractor for the Branson home, the association said. MCUA is sending credit unions a packet of information about the project, including a pledge form. Mid Missouri CU,Fort Leonard Wood, which includes military members within its field of membership, is serving as the lead credit union for the Branson home's development, said MCUA (The Missouri Difference Oct. 31). Missouri credit unions have committed to raising $100,000 to build the homes for Specialist West, with plans for other specially adapted homes to follow.