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CU System

CU System briefs (11/15/2010)

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* WASHINGTON (11/16/10)--Yolanda Powers, 31, of District of Columbia pleaded guilty Wednesday to stealing $35,000 paid by the federal government as retirement benefits into her mother's credit union account after her mother's death. Between June 2008 and March 2009, 11 retirement annuity payments totaling more than $35,000 were deposited into the account of Carol Powers at NASA FCU, Upper Marlboro, Md. The daughter withdrew the funds using ATM withdrawals, check card transactions, checks written on the account, and telephonic transfers to a joint account. She faces up to 10 years in prison, but federal sentencing guidelines could reduce that to six to 12 months of home detention. Powers agreed to make restitution as part of the plea agreement. Sentencing has been set for Jan. 31 (Targeted News Service Nov. 12) … * POMPTON LAKES, N.J. (11/16/10)--New Jersey credit unions Friday brought a Financial Reality Fair to Pompton Lakes High School as part of the state's REAL Solutions initiative. Eighteen volunteers from throughout the state spent the day manning booths and interacting with more than 80 students to provide a hands-on experience completing a monthly budget. Five classes participated. New Jersey credit unions are hosting another fair today at Carteret (N.J.) High School, according to the New Jersey Credit Union League (The Daily Exchange Nov. 15) …

Americans expose sensitive info on social networks

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SAN DIEGO, Calif. (11/16/10)--As consumers flock to theatres to see "The Social Network," millions more are unwittingly exposing their identities and potentially critical financial information on popular social networking sites, according to a survey commissioned by ID Analytics. The 2010 Social Network Fraud Survey of 1,013 U.S. adults was conducted this month via telephone by Harris Interactive on behalf of ID Analytics, which is a CUNA Strategic Services provider. According to the survey, more than 24 million Americans age 18 or older leave their social network profiles mostly public. Millions more expose identity information, including birthdate, birthplace and current and previous addresses. Nearly 70 million people on social networking sites share their birthplace on their profiles. Birthplace is one of the most common "security questions" asked by financial institutions to verify someone's identity, said ID Analytics. "People do not realize how they are exposing their identities and potentially sensitive financial information to fraudsters on social networking sites such as Facebook," said Thomas Oscherwitz, chief privacy officer for ID Analytics. Among the other common security questions posed by financial institutions to verify identities are a pet's name, their favorite book or music, or the color of their car. Consumers should realize that social networking sites provide fraudsters with a plethora of information that is ripe for the taking and take steps to protect themselves," said Oscherwitz. Other findings:
* Nearly 20 million Americans revealed their pets' names on their social networks. * Eighteen- to 34-year-olds are most likely to reveal personal information on the sites. ID Analytics cautioned about analyzing these results due to small base sizes. * Men and women on social networking sites share similar information about themselves. However, men are much more likely to share their current address than women are, and men are almost twice as likely to share photos of their car. Women are almost twice as likely to share pet names.
Consumers can check their risk of identity fraud at MyIDScore.com, a free online service that gives consumers insight into whether their personal identifiable information is being used for fraud in obtaining assets, goods or services.

Grant to CU helps low-income families secure autos

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ROANOKE, Va. (11/16/10)—Freedom First FCU in Roanoke, Va., used an innovation grant to partner with three agencies to provide affordable transportation to low-income people. Access to transportation determines where a family a lives, where its children go to school, and what jobs family members hold. Estimates say that families can increase their income by as much as 25% with access to reliable transportation. Freedom First FCU found that one in 12 households in its region were unable to reach their maximum potential because they lacked reliable transportation. With a $25,000 innovation grant this year from the National Credit Union Foundation (NCUF), Freedom First FCU partnered with Total Action Against Poverty, New River Community Action and Enterprise Car Sales to implement the Responsible Rides Auto Loan Program to help provide affordable and dependable transportation to low-income individuals. “Freedom First FCU’s program is meeting a tremendous need in their community,” said Tom Candell NCUF deputy director, chief operating officer/chief financial officer. “It’s also a great example of partnership and ‘people helping people.’ This is one of the many ways that NCUF Innovation Grants are helping family members achieve their goals.” Loan rates for the program are 9.9% with a 60-month term that covers costs and increased risks. Pre-approved applicants are required to participate in financial education and car care maintenance classes. Qualified participants then work with the credit union to purchase vehicles for around $9,000 from Enterprise Car Sales, which provides cars below blue book value to insure equity in each deal. Responsible Auto Loan Program partners hope to make available 100 automobiles within the next two years. As of October, 42 loans had been approved--a 43% approval rate on applications that had little hope for approval just a year ago. NCUF Innovation Grants are made possible by supporters of the foundation and Community Investment Fund, a system of investments that help credit unions earn dividends while donating to national and state community development programs.

PCUA directors to be elected by asset classes

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HARRISBURG, Pa. (11/16/10)--The Pennsylvania Credit Union Association Board of Directors approved a change in its bylaws during its meeting last week to allow directors to be elected based on asset classes rather than by district. The change will be implemented in 2012. The number of directors will remain at nine, with three elected from credit unions with less than $30 million in assets, three from $30 million to $100 million in assets, and three from credit unions with greater than $100 million in assets (Life is a Highway Nov. 15). The new governance model will be phased in over the course of three years, beginning with the May 2012 election cycle. Also, the board approved a $10,000 contribution to the Pennsylvania Credit Union Foundation: $5,000 from the association, and $5,000 from Pacul Services, Inc.

Study pinpoints what prompts a switch in FIs Free checking

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LOMBARD, Ill. (11/16/10)--Offering a free checking account is the top reason consumers say they would switch financial institutions, according to new research by Raddon Financial Group. Of consumers surveyed, 39% said they would switch if free checking changed. "Forget about deposit rates, loan rates, NSF (nonsufficient funds) fees, online banking, ATM or branch locations," said Raddon in its report. "Consumers indicated that they don't care about those things nearly as much as they value their free checking accounts. More precisely 39% of consumers indicated that they would switch financial institutions if you messed with their free checking." The study noted that the nation's biggest banks eliminated truly free checking accounts, but "each still offers consumers a way to get to 'free.' Whether it is through relationship- or channel-based activity, consumers are able to avoid service fees and retain their highly coveted free checking by giving the institution something in return. Requirements such as direct deposit, a minimum number of monthly debit card transactions or combined balance minimums are often easy for many consumers to meet." The research group, based in Lombard, Ill., noted that financial institutions that elect to keep their free checking product "may find themselves at a competitive advantage over their counterparts." Other changes that would prompt consumers to switch financial institutions include:
* Service quality, 35%; * Convenient branch locations, 29%; * Fair overdraft/NSF service charges, 20%; * Access to surcharge-free ATMs, 19%; * Convenient branch hours, 19%; * Deposit rates, 17%; * Online banking technology, 16%; * Large ATM network, 16%; * Overdraft coverage for checks, 14%; * Loan rates, 14%; * Overdraft coverage for ATM/debit, 13%; * Range of products/services, 11%; * Mobile banking technology, 6%; and * Other, 5%.

Dakotas elections mean CU advocates will be busy

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BISMARCK, N.D. (11/16/10)--The Credit Union Association of the Dakotas will have to become acquainted with new legislators because the elections earlier this month saw a shift in power in the U.S. Senate and House seats in North Dakota and South Dakota. Heading into the Nov. 2 election, Democrats held five of the six federal congressional seats in the two states--including three of four in the Senate and both at-large House seats. After election night, the Republicans picked up three seats--one Senate seat in North Dakota and the two lone at-large House seats in both states to take control of four of the six congressional seats. In the North Dakota state legislature, there will be 28 new legislators this session, the association said. Of the 28 new legislators, the association said it was able “to reach out and engage” 15 of the new lawmakers through legislative chapter meetings or credit union-sponsored events. In South Dakota, Republicans gained seven seats in the state senate for a 29-6 advantage. In the state house, Republicans gained three seats and will have a 49-21 edge in members. Although it was able to reach out to some candidates during the campaign season, the association said it will have to quickly provide other new legislators with information on important credit union matters and issues.