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CU System

Data breach victims at 4 x greater fraud risk--study

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SAN FRANCISCO (11/3/09)--Consumers who received a data-breach notification within the past year are four times more likely than typical consumers to have been victims of identity fraud, says new research. However, consumers rarely attribute the fraud to their data breach exposure. "Data breach notifications are intended to help consumers take protective action," said Mary Monahan, managing partner and research director at Javelin Strategy & Research, which conducted its third annual survey of nearly 5,000 U.S. consumers. "Notification is critical because consumers are over four times more likely to encounter actual fraudulent transactions if they receive a data-breach notification," Monahan said in a press release. "But our research shows a disconnect between breach notifications and consumer awareness of risk, which results in individuals not being adequately protected." During the past three years, roughly 11% of consumers received a breach notification, said the report. More than one-third of breach victims experienced exposure of their Social Security numbers, and 15% had their ATM personal identification numbers (PINs) compromised. Despite almost 20% of breach victims suffering some kind of fraud in the past year, only 2% attribute their fraud to the breach. "Consumers who receive notification of breaches need to be better protected by resolving the disconnect between breach notification and consumer awareness of actual fraud risk," said Javelin's Risk, Fraud and Security Analyst Robert Vamosi. Vamosi told SCMagazineUS.com that results are not a blip. In 2007 and 2006, Javelin saw a similar pattern. He noted the correlation between receiving a breach notification letter and the increased risk of suffering an actual identity theft may be do to the fact that alerts many times are sent only to people severely impacted by a breach.

IComputerworldI CU shrinking its data center

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DENVER (11/3/09)--Credit Union of Colorado's information technology (IT) department is shrinking its data center footprint from 45-by-15-feet to 12-by-12 to help the credit union with its space needs in a tight economy, reports Computerworld (Nov. 2). Tom Gonzalez, senior network administrator at the Denver-based credit union, told the publication that the data center is "returning" some of its space to the company and doing more with less. Computerworld noted that other IT managers are helping their companies by making their data centers smaller by using virtualization, high-density and multifunction hardware, alternative energy sources and modular design techniques. These make a data center more efficient and less costly. At the credit union, server virtualization helped lower space required from 40 boxes stored to just a couple. Twelve racks of information will consolidate to four, freeing up space for the credit union's departments that provide "member-facing services." For the $881 million asset Credit Union of Colorado, shrinking the data center eliminated 33 power ports and two circuits, said Gonzalez. However, the credit union doesn't have power-measurement tools so it can't quantify the actual energy and cost savings. The biggest challenge in downsizing a data center is planning and making sure every last piece fits and there's no wasted space, said Gonzalez. He also noted that a smaller data center doesn't reflect on the skills or work his team performs. "We're judged on how well we do our job, not on how much area we consume," he told the publication.

Delayed retirements a succession-planning opportunity

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MADISON, Wis. (11/3/09)--Credit unions look like they'll be in a good position when their current CEO retires. Roughly 63% of credit unions with $100 million or more in assets have a succession plan in place that specifies how the CEO will be replaced, says the Credit Union National Association's (CUNA's) recently released 2009-2010 CEO Total Compensation Survey. Among credit unions in that asset group, 19% of credit union CEOs plan to retire in the next five years, down from 29% in 2008, says the new CUNA report. CEOs across the nation are delaying retirement, either because they experienced a loss in retirement savings or they are invested in seeing their organization through these trying times. "Although the number of CEOs planning to retire in the near future has decreased, it is crucial that credit unions have a succession plan in place so that they are prepared for the CEO's departure," said Beth Soltis, senior research analyst for CUNA. "Credit unions' performance will suffer if they do not have the right talent in place," Soltis added. "Considering today's shortage of qualified leaders, leadership development and succession planning should be a top priority for every organization." The survey provides nationwide CEO compensation data for credit unions $100 million plus in assets. Results are categorized by asset size, region and other points of comparison to help credit unions attract or retain top CEO talent. The report--available in print or PDF format--also provides the monetary value of the total compensation package to help measure the bottom-line value of CEO compensation packages compared with other credit unions. Those who purchase the report may also receive a discount on the CEO Total Compensation: Self-Selected Peer Analysis, a customized analysis that reveals CEO salaries, health plans, contract terms, bonuses, retirement plans and more for 10 or more credit unions that meet a credit union's own peer criteria. Each report is presentation ready. For more information, use the resource link.

Dupaco Holiday Club deposits payout totals 3.3 million

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DUBUQUE, Iowa (11/3/09)--More than $3.3 million was injected into Dubuque, Iowa’s local economy when Dupaco Community CU paid out this season’s Holiday Club deposits to more than 3,400 Dupaco members. The funds were deposited into members’ share draft checking or savings accounts on Saturday. Members traditionally open Holiday Club accounts in November with small deposits made into the account weekly or bi-weekly throughout the year. On or about the following Nov. 1, all savings, plus accumulated dividends, are paid out automatically to the depositor. Dupaco Holiday Club accounts are the perfect way for individuals to learn the art of thrift and avoid a post-holiday “financial hangover,” according to Dupaco Community CU President/CEO Bob Hoefer. “The habit of systematically saving money is a core principle of Dupaco and its Money Makeover,” Hoefer said. “This regular practice of thrift through a Holiday Club account--which also earns daily dividends year round--better prepares members when the holidays arrive.” Dupaco began offering its Holiday Club account in 1954. Since 1999, Dupaco members have saved more than $33 million through the program. The average Holiday Club payout this year is $971--up $65 from $906 during 2008. However, Hoefer pointed out the larger average Holiday Club payout doesn’t necessarily mean people will spend more on gifts this year. “Based on our experiences, concerns about the economy mean Dupaco members are approaching the holidays with a more disciplined approach to spending,” he said. “Some will use holiday savings to purchase necessities. Overall, we’ll see consumers will rely less on credit cards to purchase holiday gifts.” Dupaco expanded the “save for your goals” thrift concept in 2000 when it launched a variation of the Holiday Club called “You-Name-It” savings accounts. The You-Name-It accounts allow members to save for specific goals--such as a vacation, furniture or a child’s braces--and automatically set aside money into an account and name it whatever they choose, such as “2010 Family Vacation to Florida,” “New Red Leather Couch,” or “Jimmy’s Braces.” Members can open an unlimited number of these accounts with no minimum balance, Dupaco said.

MECU pays loan interest rebate early--for holidays

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BALTIMORE (11/3/09)--Municipal Employees CU (MECU) of Baltimore Thursday paid its members loan interest rebates totaling $1.14 million, a month earlier than usual. MECU has paid its members a cash bonus with loan interest rebates and extraordinary dividends every year since 1981. In 2007, the MECU board of directors decided to pay half the bonus in June and the second half in December, a practice that continues today. “We decided to pay our members the loan interest rebate early this year to help families shopping for the holidays,” said MECU’s Board Chairman Herman Williams Jr. “This has been a tough year for some of our members, and I’m glad we’re in a position to do something to help.” “MECU will also pay our members an extraordinary dividend at the end of December, when it’s usually paid,” said Bert J. Hash Jr., MECU president/CEO. “That will be approximately another million dollars returned to our members. It’s at times like this that the benefits of credit union membership really stand out.” MECU has $956.2 million in assets.

IN.Y. TimesI notes CUs aggressive ads vs. giant banks

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MADISON, Wis. (11/3/09)--Some credit unions are using aggressive marketing campaigns to differentiate themselves from big banks, The New York Times business section noted Monday. The Times interviewed Edward Speed, CEO of Texas Dow Employees CU in Lake Jackson, Texas, about the credit union’s campaign to persuade consumers to take their cash out of banks, such as Wells Fargo, and turn it over to smaller, homegrown institutions like his credit union. Speed saw an opportunity to capitalize on public outrage that resulted from taxpayer- funded bailouts that rescued big national banks, the newspaper said. One of his ads targeting national banks reads: “Real Texans bank locally. We respectfully suggest they head on back home and make their profits where they live.” Launching a website, bankwithtexans.org, Speed implores consumers to switch their financial accounts from “out-of-state carpetbaggers” to local institutions, such as credit unions, that have eschewed the risky investments that have beset Wall Street. Credit unions have remained loyal to practices such as accepting deposits and making old-fashioned loans, Speed told the paper. To read the full article, use the resource link. The issue also had a four-page advertorial on credit unions in its business section that features prominent credit union leaders including Credit Union National Association President/CEO Dan Mica. News Now will include a report on it in Wednesday's issue.

L.A. Council OKs bank development districts for CUs banks

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LOS ANGELES (11/3/09)--The Los Angeles City Council decided Friday to draft an ordinance that would benefit credit unions by creating districts for banking development throughout the city, according to a local business journal. The Los Angeles Business Journal reported Friday that the ordinance, which was proposed in May, would provide property tax relief and expedite land-use approval for credit unions and banks to open branches in underserved areas. The ordinance is modeled after a similar measure passed in New York City. The ordinance would guarantee municipal deposits for credit unions and banks. The city treasurer also will create a task force to work with department heads and council members to determine how to model the Los Angeles program after the New York City program. Councilmember Richard Alarcon introduced the ordinance in response to the high number of payday lenders and check-cashing outlets in low-income areas of Los Angeles. The lenders and outlets outnumber credit unions and banks and charge customers unnecessary fees. Each year, unbanked families pay more than $100 million in fees because they don’t have access to local banks, Alarcon said. Los Angeles has more than 1,200 check-cashing outlets and payday lenders, according to Pew Charitable Trusts.

Altura CU helps U. employees through furloughs

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RIVERSIDE, Calif. (11/3/09)--Altura CU has created a special loan program to help University of California Riverside (UCR) staff taking furloughs this school year. State colleges and universities have asked employees to take unpaid days during the 2009-2010 school year to deal with the state budget crisis and cuts in funding. Most UCR employees will have to take between 10 and 26 days without pay. The “UCR Furlough Loan Program” offers UCR employees tools to help them deal with what is likely to be a significant financial crisis, said Altura. It offers:
* The ability to borrow up to $10,000 from a guaranteed line of credit with rates as low as 3.49% annual percentage rate; * Repayment terms of up to 36 months, with a 12-month draw period; * Waiver of a $55 loan processing fee; * No pre-payment penalty for early pay-off; and * Online transfers to make it easy to manage draws on the line of credit and to set up recurring transfers for each pay period.
“As a partner of UCR, Altura is concerned about the impact of the recent pay cuts and furloughs on UCR employees,” said Jennifer Binkley, Altura executive vice president. “We developed a program that will allow UCR employees to borrow the amount their pay is reduced from a line of credit each pay period. The tool will allow for personal budgeting ease during a difficult time.” As Altura members, UCR employees also qualify for the VIP Checking account, which features a free interest-bearing checking account and a Visa credit card. They also can attend free financial workshops on budgeting, credit scores and investment strategies, including one at the local university branch for UCR employees. A financial fitness program with educational materials and online courses, and access to certified financial counseling are available for members on Altura’s website, Binkley added.

Maine league H1N1pandemic webinar sets record

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WESTBROOK, Maine (11/3/09)--More than 200 individuals participated in a recent Maine Credit Union League webinar last week about the H1N1 virus and pandemic planning. The 90-minute free presentation were offered to Maine’s 67 credit unions. The webinar covered H1N1 and seasonal flus in Maine, recommendations on preventing the flu, preparing for its potential impact on staff, tips for communicating information with internal and external audiences, and legal and human resource procedures and policies that credit unions should follow with staff and members. Presenting information during the webinar was Fran Simmler, business continuity planning coordinator for Synergent and the Maine league; league Jon Paradise, governmental and public affairs manager; and Robert Bower Jr., attorney with Norman, Hanson and DeTroy. After the webinar, the league unveiled a new page on its website to help credit unions with pandemic planning. The page includes a Pandemic Plan template, checklist, communications templates, a PowerPoint presentation from the webinar, and links to other resources. “One of our roles is to serve as a resource for our member credit unions and this was an opportunity to try and help provide some answers to the many questions credit unions have about this issue,” said John Murphy, league/president CEO.

CU System briefs (11/02/2009)

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* PENROSE, N.C. (11/3/09)--Carolina Mountains CU (CMCU), based in Penrose, N.C., has merged with Durham, N.C.-based Self-Help CU, effective Sunday. "For 35 years our first priority has always been to provide outstanding financial service to our members. By merging with Self-Help CU, we remain dedicated to that mission. We believe wholeheartedly that the decision to merge will not only increase the financial stability of CMCU, but also expand the ability of CMCU to serve communities throughout Western North Carolina," said CMCU CEO Diane Rogers. CMCU has four branches serving more than 7,000 western North Carolina residents and assets of $43 million. It will operate as a division of Self-Help, joining three eastern North Carolina credit union divisions: Cape Fear CU, Scotland Community CU and Wilson Community CU. The merger will give Self-Help a balanced presence of full-service credit unions in western and eastern parts of the state, the credit unions said … * RALEIGH, N.C. (11/3/09)--Nearly 1,000 members attended State Employees' CU's 2009 Annual Meeting Oct. 20 in Greensboro, N.C. SECU 2008-2009 Board Chairman Shirley Bell noted that more than 3,000 volunteers serve the Raleigh-based credit union. Three volunteers--Grady Cooper, Charles Koonce and William Locus--were honored with a video tribute and board resolutions for their cumulative volunteer service of more than 100 years. Irv Ellington and Dr. Al Wentzy were honored by the North Carolina National Guard for their commitment to several of the credit union's initiatives supporting National Guard families in the state. The credit union also elected a new board. Officers include Jim Barber, chairman; McKinley Wooten, vice-chairman, and Jim Johnson, secretary-treasurer. (Photo provided by State Employees' CU) … * SLIDELL, La. (10/3/09)--Adept thieves broke into an ATM at ASI CU Saturday after 11 p.m. by drilling into the combination lock to the ATM's safe. Slidell, La., police said the thieves disabled the ATM's video cameras around 11:30 p.m., and did not force their way into the ATM. The suspects either had a key to the machine or they picked the exterior lock. Then they drilled into the safe's combination lock, opened the door and took an undetermined amount of money. Police estimate the heist took about nine minutes (St. Tammy News Nov. 2) … * RICHLAND, Wash. (11/3/09)--HAPO Community CU donated funds so a children's football team could receive awards after $3,000 of the team's funds went missing. The Kennewick Huskies Grid Kids team bookkepper, Charity A. Smith, 35, of Kennewick, has been charged with second-degree theft. The money was collected to pay for expenses throughout the year, including game and practice jerseys, T-shirts, hats and sweatshirts for 90 players and their families. HAPCO said Friday it would donate $250 to cover the cost of the T-shirts (Tri-City Herald Oct. 31) … * FORT WAYNE, Ind. (11/3/09)--A former CEO of General CU, an $83.4 million asset credit union based in Fort Wayne, Ind., was sentenced to two years in a state prison for embezzling more than $1.57 million from the credit union. David L. Thieme, 50, of Huntertown, pleaded guilty in September to the felony. He was CEO of the credit union from 2004 until he was fired in April 2008. He had been with the credit union since 1988. Thieme also was sentenced to two years of probation and restitution of the $1.57 million. He repaid $982,000 to GCU within a week of his dismissal, said The News-Sentinel (Oct. 31). Court records indicated that Thieme made more than 6,000 unauthorized loan transactions, many of which violated GCU policies and in several instances Indiana law. The theft resulted in losses to GCU from underperforming or nonperforming loans of nearly $2.5 million. His actions included masking loan delinquencies by using general-ledger funds to make payments on them; pulling the trigger on undocumented, interaccount transfers or loans involving unrelated parties or trusts; and approving account maintenance transactions such as modifying obligation dates or delaying payment dates to avoid a loan review, said the article … * AUGUSTA, Maine (11/3/09)--Maine credit unions kicked off the Eighth Annual Ending Hunger Walking Tour Friday at Maine State CU in Augusta. Representatives
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joined Brenda Davis, executive director of Cross Roads Ministries, an Old-Town-based hunger agency that serves Eastern Maine, who will make the month-long journey. The walk is expected to encompass more than 650-750 miles and visit a record 62 communities as well as every county. At each credit union she visits, Davis will pick up a contribution from the Maine Credit Unions Campaign for Ending Hunger, which as pledged nearly $25,000. Pictured at the kick-off are from left, Cindy Barnes of Maine State CU, Davis and the Wompkee, the longest- running, continuous character in the Macy's Thanksgiving Day Parade. Credit unions have partnered with the Wompkee and are selling finger puppets and DVDs to benefit the end-hunger campaign. (Photo provided by the Maine Credit Union League) …

N.Y. CUs meet on Young Adult Outreach Initiative

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ALBANY, N.Y. (11/3/09)--Participants in the Credit Union Association of New York’s Young Adult Outreach Initiative recently held their final session at the association’s Albany headquarters. The session was the culmination of a five-month program focused on the young adult market.
Click to view larger image The Credit Union Association of New York recently wrapped up its Young Adult Outreach Initiative. From left are: Kip Summerlin, Columbia Greene FCU; Jennifer Habecker, Family First FCU; Teri Mulverhill, North Franklin FCU; Jody Carpenter, UFirst FCU; and Megan Armstrong, Sunmark FCU. (Photo provided by the Credit Union Association of New York)
In partnership with the Filene Research Institute and through REAL Solutions, the association offered the free program to New York credit unions interested in pursuing the young adult market to grow membership, and recruiting and retaining talented young professionals and volunteers. The youth program began in June with an informational webinar by Ben Rogers, research director for the Filene Research Institute. Rogers led the program’s live webinars and in-person meetings. “Credit unions that look beyond the membership challenge to provide great opportunities for young professionals and young volunteers will innovate faster and position themselves as financial institutions of choice for consumers,” Rogers said. Forty-five individuals from 28 credit unions participated in the program. They focused on assessments, brainstorming ideas about young adult issues, goal setting, identifying and/or creating transaction products and loan products for the young adult market, and using social media. During the final session, participants presented the findings of their young adult focus groups, their goals, what they’ve accomplished and their young adult outreach plans for 2010 and beyond. Each credit union recognized the importance of product bundling to attract its target audience and using parents, who are already loyal credit union members, to reach the youth market. Participants also found that credit unions of various sizes and memberships can use the same principles to attract youth. Participants also reported that their credit union CEOs and board members were more supportive of their young adult initiatives after seeing findings and future outreach plans they created as part of the program. “We felt the Filene program on youth outreach hit all of the important aspects that credit unions are searching for within this demographic,” said Sue Siegel, Sunmark FCU senior vice president of marketing and retail operation. “Credit unions are making huge strides in reaching out to the youth marketplace.”