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State regulator OKs First Jersey CU charter expansion

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WAYNE, N.J. (12/1/11)--The New Jersey Department of Banking and Insurance granted approval to First Jersey CU in Wayne, N.J., to expand its charter, the credit union announced.

"This approval is a very exciting step for First Jersey," Christopher Davis, First Jersey CEO, told the New Jersey Credit Union League (The Daily Exchange Nov. 29).

"Currently, our area of membership includes anyone who lives, works, worships or attends school in Passaic County," he added. "We are now permitted to expand our field of membership to include Bergen, Essex, Hudson and Union counties. As individuals in those counties become new members, we will be able to offer credit union membership to their family members as well."

The expanded charter will allow First Jersey to offer its financial services to a base of roughly 1.5 million potential new members, Davis said. The credit union has 8,653 members. First Jersey's deposit rates are higher and its loan rates are lower than nearly every other financial institution in its market area, Davis noted.

First Jersey's approval is the first state-charter expansion granted in the past five years, the league said. The credit union has more than $124 million in assets.

GCUA survey Holiday shoppers remain frugal

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DULUTH, Ga. (12/1/11)--Georgia residents remain frugal in the face of holiday shopping, according to the most recent "Paying Attention" quarterly report issued by Georgia Credit Union Affiliates (GCUA).

The report indicated 45.1% of respondents said they intend to keep their holiday shopping budget between $100 and $500. GCUA polled more than 6,000 Georgia credit union members and collected data from credit unions statewide.

"For several years in a row, shoppers have trimmed their budgets, and we believe Georgia consumers will be frugal again this year," said Mike Mercer, GCUA president/CEO. "Many Georgians are trying to avoid going into debt, and that includes cutting back on purchases throughout the year, including during the holidays."

Other key findings of the report:

  • About 51% of Georgians plan to spend the same this holiday season as last year;
  • Savings deposits at Georgia credit unions increased 9.55% during the first nine months of the year; and
  • Credit card balances of Georgia credit union members decreased by 2.15% this year.
Consumers still are hesitant to borrow money, according to savings and loan data from more than 150 credit unions in the state. Georgians are choosing to put their savings in short-term savings accounts rather than longer-term certificates of deposit--even as interest rates hover around historic lows, GCUA said. Consumers are waiting for interest rates to increase before locking into longer-term accounts, GCUA data suggest.

For more information about the poll, use the link.

Earlier this month, results from a Consumer Federation of America (CFA)/Credit Union National Association (CUNA) nationwide survey indicated 8% of respondents plan to spend more on gifts and holiday items, with 41% of respondents saying they would spend less this holiday season. The results, announced Nov. 21, are nearly identical to the two groups' 2010 consumer predictions, when the CFA/CUNA survey found that one in 10 consumers would increase their holiday spending, and 41% at that time said they would cut their holiday spending. To read the News Now article about the survey, use the link.

Also, Black Friday sales on the day after Thanksgiving increased 6.6% from a year ago, according to ShopperTrak--a retail data and consulting firm that relies on equipment placed in stores to measure traffic (News Now Nov. 29).

CMG MI details why PMI bankruptcy wont hit its operations

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SAN FRANCISCO (12/1/11)--CMG Mortgage Insurance Company's (CMG MI) leadership Wednesday said the company's operations remain strong, and its focus on credit unions' mortgage insurance needs is unaffected by the Nov. 23 announcement that The PMI Group Inc. (TPG), had filed for Chapter 11 federal bankruptcy protection.

PMI Mortgage Insurance Co. (PMI), a subsidiary of TPG, currently owns a 50% stake in CMG MI, with the other 50% owned by Madison, Wis.-based CUNA Mutual Group. CMG MI is a stand-alone, incorporated entity with its own capital and dedicated staffing from its shareholders.

Kim Shaul, CMG MI senior vice president and general manager, said the bankruptcy filing affects only PMI's holding company and will have no impact on CMG MI's operations or claims-paying activities.

Key factors supporting CMG MI's solid financial position are:

  • As of Sept. 30, the last available reporting period, CMG MI's risk-to-capital ratio was roughly 20:1. It had the industry's lowest portfolio delinquency ratio at 5.5%.                             
  • As of that date, CMG MI's liquidity-to-reserves ratio was strong, with claims-paying resources backed by cash and readily marketable securities of $330 million. This liquidity compares favorably to the company's $168 million in loss reserves for claims at the end of third quarter, CMG MI said.
  • As a separate legal entity, CMG MI's financial strength ratings--BBB (adequate protection parameters) from Standard & Poor's (S&P) and BBB (satisfactory) from Fitch Ratings--are based primarily on CMG MI's own capital, operations performance and loss mitigation, and capital support, staffing, and operational arrangements with its parents, CUNA Mutual Insurance Society and PMI. CMG MI's S&P rating was reaffirmed in September. The Fitch rating was affirmed in July.
  • CUNA Mutual Insurance Society's statutory capital grew to $1.4 billion through September, up $40.6 million from year-end 2010. The company holds an "A" (excellent) A.M. Best financial strength rating with a Stable Outlook.
TPG's federal bankruptcy filing followed a Nov. 22 action by the Superior Court of Arizona to uphold the Arizona Department of Insurance's interim control of PMI pending a hearing on the appointment of a receiver over PMI. CMG MI executive management continues to work with the Arizona Department of Insurance to ensure appropriate support for its operations, the company said.

RACOM members OK merger into DuTrac

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DYERSVILLE and DUBUQUE, Iowa (12/1/11)--The membership of $16 million asset RACOM Community CU, Dyersville, Iowa, evening overwhelming voted Tuesday to approve a proposed merger between RACOM and $501 million asset DuTrac Community CU, Dubuque.

DuTrac Community CU will be the continuing credit union, with Andrew Hawkinson serving as president/CEO.

The newly combined organization, with $517 million in assets, will serve more than 42,000 members with 11 branches throughout a 14-county region bordering the Mississippi River and serving the tri-state region of Iowa, Illinois and Wisconsin.

The merger vote took place after preliminary approval from the Iowa Division of Credit Unions and the National Credit Union Administration.

The merger is to be completed by year end.

The RACOM name will remain on the Dyersville location for the next two years with signage incorporating the look and feel of the DuTrac logo along with the words "A division of DuTrac Community CU."

VolCorp members vote to merge with W.Va. Corporate

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NASHVILLE, Tenn. (12/1/11)--Members of Volunteer Corporate CU (VolCorp) in Nashville, Tenn., approved a proposed merger with West Virginia Corporate FCU in Parkersburg, W.Va., at a special meeting held Nov. 22.

More than 50% of VolCorp's members voted, with 94% of those voting supporting the merger, said VolCorp.

Earlier in November, the Tennessee Department of Financial Institutions approved the merger, subject to a favorable review by the National Credit Union Administration (NCUA) and votes of the membership of both credit unions. Both are expected to take place in January.

"The consolidated entity will continue to meet all of NCUA's regulatory requirements, providing for a stronger corporate going forward," said Rick Veach, VolCorp president/CEO.

CU is fully independent of airlines bankrupt parent

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FORT WORTH, Texas (12/1/11)--Although its primary sponsor has filed for Chapter 11 bankruptcy, American Airlines FCU, with $5.9 billion in assets, is reassuring its members that the credit union is "well capitalized and financially strong."

The parent company of American Airlines, AMR Corp., followed a strategy that its rivals took earlier in the decade: filing for bankruptcy to rid itself of debt and reduce labor costs (New York Times Nov. 30).

"While we share the same name, and AMR is our largest partner company, our financial statements and decision-making capacity remain independent," American Airlines FCU said in a message on its website.

The credit union said it has "a very diversified membership" due to its "once-a-member, always-a-member" policy.

Less than one third of the credit union's members are AMR employees, according to the credit union.

"We stand ready to assist our members with their individual financial situations," American Airlines FCU said on its website.

AMR competitors Delta Air Lines and United Air Lines have emerged from bankruptcy more profitable after reorganizations, said the The New York Times.

CU Strategic Planning launches Native division

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KAMUELA, Hawaii. (12/1/11)--CU Strategic Planning, a provider of U.S. Treasury Community Development Financial Institution grant writing services to credit unions, has launched a new division to assist credit unions that serve Native American populations, including Native Americans, Native Alaskans and Native Hawaiians.

Alycia Juvik will lead the division as director of native initiatives. Juvik, also sits on the advisory board for the Native Hawaiian Revolving Loan Fund for Office for Hawaiian Affairs. She joins CU Strategic Planning from her position as community development director for Hawaii FCU, Honolulu.

Juvik's responsibilities will be divided between outreach to credit unions serving Native populations, and coordination of an effort with the National Federation of Community Development Credit Unions to continue increasing the number of CDFI awards and developmental services that credit unions provide to distressed communities and members in need, CU Strategic Planning said.

CU Cherry Blossom Run lottery begins today

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WASHINGTON (12/1/11)--The registration lottery for the 2012 Credit Union Cherry Blossom 10 Mile and 5K Run-Walk begins today at 10 a.m. ET

The lottery runs through11:59 p.m. Dec. 9 and guarantees participants a starting time in the event.

The 40th running of the Credit Union Cherry Blossom run will take place on April 1.

Entrants will be selected electronically for the Cherry Blossom run after the lottery registration period closes. The results of the selection process for both events will be posted on the event website Dec. 13.

"We first implemented a lottery system for the 2010 event, and found it to be a very fair and straightforward way to deal with the fact that more people want to participate in our races than the streets of Washington, D.C., can accommodate," said Race Director Phil Stewart.

Last year, about 30,000 runners applied for spots on the starting line.

The organizers announced a new policy that will guarantee entries to runners who applied but were not selected to participate via the lottery in 2010 and 2011. Eligible runners have been notified and have until Nov. 30 to register. In addition, "streakers"--individuals who completed the race 10 or more times--are eligible for guaranteed entries.

Runners who raise $500 or more for the Children's Miracle Network Hospitals via Credit Unions for Kids, the official event charity, also can secure a guaranteed spot on the starting line.

The Credit Union National Association, credit unions and affiliated organizations are sponsors of the Credit Union Cherry Blossom Run, which has raised over $5 million in 10 years for Children's Miracle Network Hospitals. If an organization sponsors the event, it can obtain guaranteed race entry slots at the prevailing rate, bypassing the lottery system. To become a sponsor, visit www.miracleday.org.

Also new this year: An all-time searchable database containing information about every finisher in the race since 1973, and the addition of two "social" runners, who will share their pre-race training experiences on Facebook and Twitter.

The race staging area will be on the Washington Monument grounds, and the course will trace its traditional route past Washington's cherry blossom trees. The race headquarters hotel is located at the Westin Washington DC City Center Hotel.

This year's event takes place on the second weekend of the National Cherry Blossom Festival, a five-week celebration of sporting and cultural events that commemorates the blossoming of the trees donated to the U.S. by Japan in the early 20th century.

Scam targets direct deposit ACH transactions

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MADISON, Wis. (12/1/11)--A phishing expedition for personal information and aimed at direct deposit and automated clearinghouse transactions is hitting company e-mail in-boxes.

The Credit Union National Association became aware of the attempts to reel employees' personal account information when a number of employees received an e-mail entitled "Your Direct Deposit payment ID 016698606828 was declined." The e-mail purports to be from NACHA--The Electronic Payments Association.

The message is addressed to "Attn: Financial Manager" and notifies the recipients that their latest Direct Deposit via ACH transaction was rejected due to out-of-date Direct Deposit software. The message includes a different "transaction" number than the number in the subject line. The message offers a link, which seeks more information. It also adds that recipients should refer to their financial institution to obtain an updated version of the software.

CUNA employees were advised to not open the e-mail and not to provide personal account information--standard advice given by credit unions when members report phishing attempts.

NACHA has been targeted by a number of malicious phishing attempts this year. Dynamoo's Blog reported Nov. 14 on a similar phishing attempt making the rounds and related to Direct Deposit accounts.  A link in that message went to an Internet address in Australia.

NACHA also was targeted by phishing e-mails in September related to ACH transactions, according to Spamwars.com (Sept. 8). Recipients were told their ACH transaction or wire transaction had been cancelled by another financial institution.

Protect Your ID Week efforts reached 21000 consumers

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WASHINGTON (12/1/11)--The national Protect Your Identity Week, held Oct. 16-22, reached more than 21,000 consumers with identity theft protection education, said the week's primary co-hosts  National Foundation for Credit Counseling (NFCC), National Sheriffs' Association and National Association of Triads.

Among the campaign's supporting organizations was the Credit Union National Association (CUNA). Many credit unions observed the week with special events, often offering events where consumers could shred documents to prevent theft of their personal information as well as informational materials.

Here are the highlights:

  • Organizations, including credit unions, held 87 events across the country;
  • Consumers shredded more than 700 tons of personal documents with Cintas, a document management company that provided free shredding to participants;
  • Nearly 1,000 unused cell phones were collected and sent to 911 Cell Phone Bank, which will refurbish and distribute them back into communities through law enforcement. The phones will go to those most at risk for identity theft, such as senior citizens and abuse victims.
This year's campaign theme was Child Identity Theft. ID theft protection expert AllClear ID was the presenting sponsor and provided hosts and materials for events to educate consumers about protecting children from identity theft.

All Clear ID and Cintas also hosted an educational contest on Facebook where parents shared their dreams for their children--dreams that could be deterred by child identity theft.  In addition to providing ID-theft prevention education, the contest awarded the winner  a $5,000 savings bond.

NFCC said its identity theft site, www.ProtectYourIDNow.org, will remain live throughout the year as a resource for consumers. The site contains ID theft prevention tips, instructions for victims, an active blog hosted by AllClear ID, and an identity theft risk-assessment quiz so consumers can test their ID theft knowledge.

In addition to CUNA, the campaign was supported by AFSA Education Foundation, American Bankers Association Education Foundation, American Payroll Association, Consumer Action, Consumer Data Industry Association, Consumer Federation of America, Council of Better Business Bureaus, Federal Reserve Board, Federal Trade Commission, Foundation for Financial Planning, Identity Theft Assistance Center, Identity Theft Resource Center, Jump$tart Coalition, Junior Achievement USA, National Crime Prevention Council,  National Education Association Member Benefits, Office of the Comptroller of the Currency and U.S. Social Security Administration.

"While consumers work hard to build good credit, criminals are also working hard to steal personal information and use it to their advantage," said Gail Cunningham, NFCC spokesperson. "With the holidays approaching, consumers should stay alert to the latest protection tips in order to guard against this ever-present crime."