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CU System Briefs(3)

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  • GAINESVILLE, Fla. (11/1/13)--A Gainesville, Fla., man was arrested Monday and indicted on three felony charges of fraud, grand theft and money laundering, for an alleged global scheme that involved local credit unions (The Gainesville Sun Oct. 29). Alachua County Sheriff officials accuse Elijah Lashawn Brown, 22, of opening a Sunstate FCU account on Oct. 16, and using it to help a man who called himself Ben Shao launder money from Hong Kong. Brown allegedly told investigators the account was set up so Shao could pay him to help intermittently launder $25 million. The Gainesville resident is also accused of opening accounts at Bank of America and Vystar CU for the scheme. He allegedly gave Shao personal banking information for the Sunstate FCU account after initial attempts to transfer money failed. Shao then, allegedly, sent about $5,000 daily to the Sunstate account. Brown is accused of sending the money via Western Union to accounts in Paris and Nigeria. He allegedly accumulated $14,844 in his Sunstate FCU account. Vystar CU has $4.9 billion in assets and is based in Jacksonville, Fla. Sunstate FCU has $298 million in assets and is based in Gainesville, Fla. ...
  • MIDDLETOWN, Pa. (11/1/13)--Mid-Atlantic Corporate FCU donated 5,101 pounds of food and water to the Central Pennsylvania Food Bank in conjunction with the charity's food drive effort. "This number more than doubled the 2,500-pound goal the corporate set out to achieve," said Janice Appleby, senior vice president, human resources. "In addition, 13 Mid-Atlantic Corporate employees volunteered their time at the food bank." The gift provided the equivalent of 4,250 individual meals across central Pennsylvania. Mid-Atlantic Corporate FCU, based in Middletown, Pa., serves more than 800 credit unions. The Central Pennsylvania Food Bank distributes more than 20 million pounds of food products to more than 600 soup kitchens, shelters and food pantries in 27 central Pennsylvania counties. (Photo provided by Mid-Atlantic Corporate FCU) ...
  • LOS ANGELES, Calif. (11/1/13)--Charles Bumbarger, president/CEO of University CU, is planning to retire at the end of 2013 after leading the credit union for 37 years. When Bumbarger started, University CU had $8 million in assets and seven employees. It now has $482 million assets, 33,000 members, and 95 employees, both full-time and part-time. University CU serves employees and students at the University of California, Los Angeles. The credit union's board of directors has formed a search committee to find a successor ...

Mellin Op-ed: Taxing CUs a Problem For Everyone

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ALBANY, N.Y. (11/1/13)--Credit unions use their tax status to benefit all Americans, and changing that status would have devastating effects on many of the nation's 96 million credit union members, William Mellin, president/CEO of the Credit Union Association of New York,  wrote in an opinion-editorial piece that appeared in Thursday's Buffalo News.

"In fact, for every $1 of income tax on a credit union, each member would lose about $10 in financial benefits," Mellin wrote in the editorial, "Another Voice: Taxing credit unions is a problem for everyone."

"That's $6 billion to $10 billion taken out of the U.S. economy every year--an amount that far outweighs the estimated $500 million to $800 million that would be collected annually by taxing credit unions," he added. "Further, New York credit unions already pay hundreds of millions of dollars a year in a variety of taxes, from payroll taxes to school and property taxes."

Credit unions are exempt from federal corporate income taxes because they are member-owned, democratically operated, not-for-profit cooperatives managed by volunteer boards, Mellin explained. "The value and service credit unions provide to their members and their local communities is why, through good times and bad, Congress has always reaffirmed their federal tax exemption," Mellin wrote.
 
Credit unions provide economic benefits and much-need member services that would be lost if the tax status changed, he added.
 
To read the editorial, use the link.

ITCU Combines Fin. Literacy With Basketball

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PLANO, Texas (11/1/13)--A credit union in suburban Dallas is planning on taking a few "bank shots" this basketball season, all in the name of financial literacy.

The Plano, Texas-based InTouch CU will partner with the Texas Legends--an NBA Development League team and affiliate of the Dallas Mavericks--for a season-long program combining youth financial literacy with basketball.

The 2013-2014 "Bank to Achieve" program includes five events on Saturday mornings throughout the Legends' current campaign, with the first on Nov. 9 and the last on March 29. The public will meet players, avail themselves of complimentary refreshments, receive free tickets to Legends games and financial workbooks for children and teens, and enter contests for other prizes.
 
"InTouch CU works tirelessly to promote the necessity of financial literacy, not only for children, but for our entire community," said Diane Gerstner, ITCU executive vice president. "We are excited to see how interest has grown for this program over the last few years, drawing families from all other North Texas with some attending all of the events."

ITCU is an official sponsor of the Texas Legends, and this basketball season marks the fourth consecutive year that the two have partnered to organize "Bank to Achieve."

It's likely that some Legends players will go on to become household names, with 30% of all NBA players currently having some experience playing in the NBA Development League, said the credit union.

TMG's Manus: Financial Literacy Still a Challenge For Consumers

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DES MOINES, Iowa (11/1/13)--While an economic recovery is underway, financial literacy remains a challenge for consumers, Shazia Manus, CEO of The Members Group, told The Des Moines Register in an interview published Oct. 25.
 
Manus, who previously served as CEO of Greater Iowa CU, Ames, Iowa, before taking over the leadership of TMG in 2011, said among her most difficult decisions was declining loans to members who were overextended financially and in need of assistance.
 
Consumers must learn to balance needs versus wants, she said.
 
Regulators and business must also understand the importance of balance, she said. Coming out of the financial crisis regulators must understand the necessity of balancing the need for proactive oversight with a view toward unintended consequences, Manus told the Register. Business holders must weigh the desires of stakeholders with the needs of the constituents they serve.
 
Manus said she did not the view the economic downturn as only a crisis, but also as an opportunity to provide leadership.
 
During that downturn, she learned the credit union "people-helping-people" philosophy can make a difference in assisting people who are faced with challenges. At Greater Iowa, she made a difference by fostering the credit union's role as a financial educator.
 
At TMG, the company took the time to listen the challenges facing credit unions and helped its clients fight through a time when consumers were spending less.
 
Change is constant, Manus said. By making hard decisions, and opening members' eyes to the reality of their financial decisions, credit unions are positioning themselves--and their members--for a sustainable future.

Fourth Nominee Received For CUNA Board Elections

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A fourth nomination has been received by the Credit Union National Association for the CUNA Board of Directors elections, which has eight board positions open.
 
Nominations will be accepted through Nov. 26.
 
The latest nominee is Rick Pillow, president of the Virginia Credit Union League in Lynchburg, for the District 2, Class D position on the board.
 
Other nominees so far include:
  • District 1, Class A--Edwin L. Williams, president of Discovery FCU, Wyomissing, Pa.;
  • District 1, Class D--William J. Mellin, president of the Credit Union Association of New York, Albany, N.Y.; and
  • District 5, Class C--Tony C. Budet, president of University FCU, Austin, Texas.
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.
Nominees must be an employee or a voting board member of the nominating credit union, and the nomination must be seconded in writing by at least two other credit unions from the same district and class.
 
Nominees to be elected by leagues must be a league president and be nominated in writing by that league,  with the nomination seconded in writing by at least one other league from the district.
 
Ballots for contested elections will be sent Dec. 2, with voting continuing through Jan. 10.  CUNA will announce the results of contested elections Jan. 15.  Directors elected will take office upon the adjournment of CUNA's Annual General Meeting in Washington, D.C., on Feb. 24.
 
For more information, use the link.

CU's Purchase Of Bank OK'd By Maryland Regulator

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BALTIMORE, Md. (11/1/13)--The purchase and assumption of a bank by Municipal Employees CU of Baltimore--which would be the first of its kind in Maryland--has been approved by Maryland Commissioner of Financial Regulation Mark Kaufman.
 
Kaufman announced Thursday his approval of MECU's purchase and assumption of the assets and liabilities of Advance Bank, a federally chartered mutual savings bank located in Baltimore. The move is still subject to approval by the bank's depositors at a meeting on Nov. 15, said the Baltimore Business Journal (Oct. 31).
 
Kaufman's office said the proposed transaction is expected to be completed by the end of 2013, subject to any remaining regulatory approvals. The deal's financial terms were not disclosed.
 
The bank has two branches and total assets of about $54 million. MECU is the third largest credit union in the Baltimore area, with $1.2 billion in assets and nine branches, said the Journal.
 
In February the bank reached an agreement with the Office of the Comptroller of the Currency to develop a three-year business plan, review loans for possible credit risk and improve its lending procedures.  MECU told the Journal the agreement would not impact the merger plan. When the deal was announced, Advance Bank CEO John Hamilton said the bank's customers would benefit by having access to a wider array of services, including smartphone banking and auto loans.
 
MECU will convert Advance Bank's two branches to MECU branches and keep the bank's 20 employees, the credit union told the Journal.
 
Maryland's Office of the Commissioner of Financial Regulation oversees state-chartered financial institutions, including credit unions and banks.

CUs, FIs In Idaho Team Up For Unbanked

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BOISE, Idaho (11/1/13)--Two credit unions are among the Idaho financial institutions that are helping the state's unbanked population rejoin the financial services mainstream.
 
The Bank On program, which launched in August in partnership with the United Way of the Treasure Valley and Idaho Department of Finance, will offer a checking account to people who take five financial literacy classes at any of the 10 financial institutions participating in the program (Idaho Business Review Oct. 21) .
 
Icon CU, Boise, and Simplot Employees CU, Caldwell, are participating in the Bank On program.
 
"We have a strong relationship with the United Way," Connie Miller, Icon CU president/CEO, told News Now. "They approached us and asked us if we wanted to participate. Because education is such a key component of what we do, we were all over it."
 
Members and customers with unpaid fees or negative balances are often referred to ChexSystems, a consumer-reporting agency similar to a credit reporting agencies. ChexSystems notifies financial institutions when an account-holder has a history of account mishandling.
 
Once a person is flagged by ChexSystems, opening a checking account can be a challenge, Miller said.
 
Icon CU already has programs in place to offer second-chance opportunities for members who had problems with loans and checking accounts in the past, Miller said.
 
"That philosophy is part of who we are," she added.
 
The Bank On program won't remove people's names from ChexSystems, but it will give them access to a checking account at any of the credit unions or banks participating in the program.
 
Bank On offers five classes designed by the Federal Deposit Insurance Corp. that can be taken in-person or online. Class topics include using a checking account responsibly, preparing a personal budget and saving money for long-term goals. The ten financial institutions supplied funding for the program as well as staff who will volunteer to teach classes.
 
More than 60 other Bank On projects are working in the U.S.
 
Icon CU is advertising the program in its branches and financial classes, and at events for Big Brothers/Big Sisters, which it sponsors. One of the biggest challenges will be promoting the program, but Icon CU is in it for the long haul, Miller said.
 
"When we look at the various social challenges that we have in our culture, almost all of them have this financial component," Miller said. "If we can tackle the financial side, how many other issues will it help alleviate in our society?"

CU Goes Above, Beyond To Assist Member In Need

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FREMONT, Mich. (11/1/13)--Volunteers from Gerber FCU stepped up to assist a member whose only source of income is his Social Security disability check. And--as is often the case with credit unions--staff went above and beyond normal service expectations to help.
 
Volunteers from Fremont, Mich.-based Gerber FCU helped dismantle an old deck and build a new entry deck for the home of a member in need. The credit union helped him get into a program that enabled Gerber to modify his mortgage to help meet living expenses. (Photo provided by the Michigan Credit Union League)
The member, Robert Cooley, worked with one of the Fremont, Mich.-based credit union's certified credit union financial counselors, Char Morris, to obtain a grant from the Step Forward Michigan program administered by the Michigan State Housing Development Authority (MSHDA), according to the Michigan Credit Union League (Michigan Monitor Oct. 28).
 
Morris assisted Cooley with the application process and was his main liaison with MSHDA. When she began working with him, his mortgage payment consumed all but $30 of his benefit check.
 
He does not have a phone in his home or reliable transportation, said the league, so Morris made numerous trips to Cooley's home to deliver documents, gather information and obtain signatures during the application process. Her concern about the safety of the home's entrance grew with each visit, and she spent hours trying to find an agency with funding for a project to help. 
 
Holton United Methodist Church and the United Way of the Lakeshore each promised funding. Morris' search for volunteers led to Chuck Whitman, a member of the Fremont Rotary Club, who builds ramps as a volunteer. Other volunteers from the credit union also steeped up.
 
Cooley was approved for a $30,000 grant, which allowed Gerber FCU to modify his mortgage and bring his payment down to less than 45% of his income.
 
The group of volunteers rebuilt his main entry deck and repaired a second set of steps to create a temporary safe egress in and out of the home during the construction project.
 
One group of volunteers, including Gerber President/CEO John Buckley, demolished the deck in an hour. A second set of volunteers constructed the new deck two days later.
 
"We were able to assist a member in need, and our volunteers feel honored to be part of the project that truly improved the well-being of our member," Buckley said.
 
"It is hard to find the words to say how grateful I am to the agencies who put up the money and how surprised I am that so many people cared enough to come together to help," Cooley said.  "Thank you so much Gerber FCU, Holton United Methodist Church, United Way of the Lakeshore and Fremont Rotary."
 
Fostering service excellence is one of the tenets of the Credit Union National Association's and state leagues' Unite for Good campaign. In that campaign, credit unions increase awareness of their value to the community and their members, foster service excellence, and remove barriers to their strategic vision of Americans choosing credit unions as their best financial partner. For more, use the link.

Lakota FCU Passes 1,000 Member Mark

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KYLE, S.D. (11/1/13)--International Credit Union Day had special significance for the Pine Ridge Lakota Reservation this year. On Oct. 17, Lakota FCU, the only federally insured financial institution serving a reservation that spans wide swaths of South Dakota and a corner of Nebraska, announced that it surpassed the 1,000 member mark.

Since it opened its doors last November, three months after receiving its charter from the National Credit Union Administration, Lakota FCU has accumulated 1,008 members, offering vital services to one of the most impoverished regions in the country.

It has dispensed more than $480,000 in loans, offering lines of credit to residents who had previously been preyed upon by payday lenders, check-cashers and title loan lenders. The credit union has also launched education programs designed to get children on the reservation--some 35% of its population--to avoid exploitative financial institutions and services that have kept their forefathers ensnared in destitution.
 
Lynn Dubray, a Pine Ridge resident from Kyle, S.D. and Lakota FCU member since November 2012, said that prior to the credit union's opening, she had to drive for an hour on rarely maintained roads to access a financial institution. Lakota FCU is located less than a mile from where she works, and since becoming a member, Dubray said she has received a car loan from the cooperative, and has opened savings accounts for her seven children and grandchildren (Indian Country Today Media Network Oct. 16).
 
Lakota Funds, a non-profit that helped Lakota FCU get on its feet, is also working with the credit union to promote youth financial education by matching the savings of 25 grade school students in the Child Development Account Program.

"These kids are going to grow up knowing how to use financial tools and are going to be comfortable walking into any financial establishment as they mature," Tawney Brunsch, Lakota Funds executive director, and Lakota FCU board chair, told ICTMN. "This is an opportunity that the adult generation here on the reservation was never given--until recently."

The opportunity appears to have been sorely needed. Lakota FCU's membership represents about 2.5% of the entire Pine Ridge population. When Lakota opened its doors a year ago, Credit Union Association of the Dakotas said that a traditional "for-profit" bank wasn't really an option for the 40,000 people of the two-million-acre reservation. The unemployment rate on Pine Ridge has recently been higher than 80% (News Now Nov. 27, 2012).

Community leaders had worked to open Lakota FCU since January 2009. It has received three start-up grants from the U.S. Treasury Department's Native American Community Development Financial Institution Assistance Program. As a designated low-income credit union, it can accept deposits from anyone, whether or not they fall within its field of membership--those who live, work, worship, volunteer, study, or conduct business on Pine Ridge or whether or not they're Oglala Lakota Oyate--the part of the Sioux Nation, for whom the reservation was initially designated.