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Study Big banks more apt to require arbitration in disputes

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WASHINGTON (12/3/12)--Big banks are forcing consumers to use arbitration in account disputes instead of taking a dispute to court, according to a new report by Washington, D.C.-based Pew Charitable Trusts. Credit unions surveyed did not do this.

The report, "Banking on Arbitration: Big Banks, Consumers, and Checking Account Dispute Resolution," examined the 100 largest financial institutions' resolution clauses-- including 92 checking account agreements for 85 banks and seven credit unions.

The study focused only on what was disclosed in the agreements, not additional rules and procedures required by private arbitration agreements. It also surveyed 603 consumers about their attitudes toward mandatory arbitration in checking accounts.

Of the 92 large financial institutions studied,  64% restricted dispute resolutions and 43% contained mandatory binding arbitration clauses. The percentage increases to 47% when considering only banks. None of the large credit unions studied include an arbitration clause in their account agreements, the report said.

The banks also banned class-action lawsuits, required waiving rights to a jury trial, restricted damages and shortened statutes of limitations on consumers' actions in potential disputes.

Of the checking account holders surveyed, more than two thirds said they should have a choice between taking a dispute to arbitration or to court, and 94% said that if arbitration is required, they should have a say-so on who arbitrates the dispute.  However, most consumers also said arbitration can protect against frivolous lawsuits.

"A checking account is the most widely used financial product in the U.S., and many bank customers become bound by a mandatory arbitration agreement when they open their account," said Susan Weinstock, Pew's project director. "We found that most consumers were not aware that their right to go to court is often limited if they have a dispute with their bank."

Of consumers surveyed, 57% did not know or could not remember whether their agreements included mandatory arbitration.

Other findings:

  • The larger the financial institution, the more likely an account agreement will require mandatory binding arbitration. Over half of the 50 largest financial institutions surveyed have such clauses, while 30% of the next 50 institutions contain the clauses.
  • Seventy-five percent of banks with arbitration clauses also include a ban on class action lawsuits.
  • More than half of the account agreements contained clauses where consumers waived the rights to a jury trial.
  • Roughly two-thirds of the agreements do not require the arbitrator to have a law degree.
  • Nearly nine in 10 of consumers surveyed disapprove of the procedural components of arbitration. Many found these features unacceptable: ongoing relationships between arbitration companies and financial institutions; the limited opportunity to appeal an arbitrator's decision; and the requirement that the consumer pay the bank's legal fees regardless of the outcome of the dispute.
  • Despite overwhelming dissatisfaction with the arbitration process, half supported the overall goal of arbitration: to be a simpler, less costly alternative to court.
Credit unions in the survey were:

  • Navy FCU, Vienna, Va.;
  • State Employees' CU, Raleigh, N.C.;
  • Pentagon FCU, Alexandria, Va.;
  • Boeing Federal (BECU), Tukwila, Wash.;
  • Schools First CU, Santa Ana, Calif.;
  • Alliant FCU, Dubuque, Iowa; and
  • The Golden 1 CU, Sacramento, Calif.
For the full report, use the link.

Fairwinds CU replaces bank as official campus FI

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ORLANDO, Fla. (12/3/12)--Orlando-based Fairwinds CU has become the official campus financial institution of University of Central Florida (UCF), replacing SunTrust Banks Inc., whose 10-year contract expired earlier this year.

It is the first time that a credit union has been the official banking partner of UFC (Orlando Sentinel Nov. 29).

Fairwinds, a $1.7 billion asset credit union, signed a contract for five and a half years. It will open a branch in a former SunTrust branch on campus in January.

University officials, in noting Fairwinds beat out big banks, said it became clear that the credit union sought to be more than a business partner and recognized it would be investing in students who are future community leaders.

Although many colleges work with their own employee credit unions, Fairwinds is one of a few to land an official university partnership, Mike Bridges, vice president of marketing and communications at the League of Southeastern Credit Unions, told the Sentinel. The university has 60,000 students--a big opportunity for membership growth, he said.  He noted that Florida and Alabama credit unions have gained 199,000 members in the past 12 months, the largest single year expansion in decades.

UCF banking professor Stanley D. Smith, a SunTrust customer, told the newspaper that the bank didn't believe it could meet its profitability targets based on the kinds of services the university wanted.  The credit union's nonprofit structure made it a better fit for what the university wanted in a partner, Smith said.

For the full article, use the link.

CU employees assaulted shots fired reward offered

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FORT WAYNE, Ind. (12/3/12)--Authorities are offering a $5,000 reward for information about three gunmen who entered a Fort Wayne, Ind., credit union Thursday morning, roughed up three employees and fired weapons before they fled with cash.

The incident occurred at ProFed CU just after 8 a.m. Thursday. Three men wearing sweatshirts with hoods pulled over their heads ambushed an employee as she arrived for work and forced her inside at gunpoint (The Journal Gazette Nov. 30 and News-Sentinel Nov. 29). Two other employees were inside.

The men battered the three employees and bound their hands and ankles. The men fired their weapons inside the building before fleeing. None of the employees required medical attention.

No members were inside the credit union at the time. However, a member waiting at the drive-through outside witnessed the robbers fleeing at the rear of the building and called 911.

A police dog led offices behind the credit union to a residential area but lost the scent. It was Fort Wayne's 13th robbery of a financial institution this year.

The Indianapolis office of the Federal Bureau of Investigation is offering the reward for information leading to the robbers' arrest.

BluCurrent CUs no-interest holiday loans popular

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SPRINGFIELD, Mo. (12/3/12)--BluCurrent CU in Springfield, Mo., is offering a zero-interest-rate Holiday Loan for a limited time that has proved to be in high demand.

Within the first seven days of offering the loan, BluCurrent's branches have disbursed 86 loans, totaling $138,000.

The loan includes:

  • Up to $1,000 at a 0% annual percentage rate with approved credit;
  • Twelve-month repayment period; and
  • Weekly or monthly repayment options for as little as $19.24 per week.
"When making the decision to offer this loan, our priority was to provide an option that would ease the stress that a tight budget can often bring during the holidays," said Randall Bettis, BluCurrent senior vice president of lending.  

"Many turn to high-interest credit cards or payday loans, especially this time of year," he added. "Being a local financial institution, we're fortunate that we have more freedom to offer unique types of loans to help save people money."

"We started offering the Holiday Loan the Monday before Thanksgiving, and since then we've seen loan volume in all of our branches increase significantly over this time last year," said Brad Christman, BluCurrent director of branch services.

"While $1,000 may not seem like a lot of money to some people, it's a big deal to those going through a rough patch during the holiday season," Christman added. "It's so rewarding to know that we can help them buy gifts for their kids; help them as they get back on their feet. That's what the holiday season is truly about."

Calif law CUs must report central site for legal process

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SACRAMENTO, Calif. (12/3/12)--As of Jan. 1, certain credit unions in California, like other financial institutions in the state, will be required to provide their regulator with information about locations designated to receive certain legal notices involving accounts.

Gov. Edmund G. Brown Jr.  signed Assembly Bill 2364 into law. It requires financial institutions to provide the California Department of Financial Institutions (DFI) a list of one or more central locations that would be served notices of levy or attachment against deposit accounts, the contents of safe deposit boxes, and other property held by institutions.

"This new law applies to all banks, credit unions and corporations engaged in safe deposit businesses with branches or offices in California, whether they are licensed by the DFI, federally chartered, or headquartered in another state," said DFI's Monthly Bulletin (October).

Specifically, credit unions and financial institutions with 10 or more California branches or offices must designate one or more central locations for service of the legal process, said the DFI. "Failure to designate a central location will result in all of the institution's branches or offices being deemed as central locations," the DFI said.

Those institutions with fewer than 10 branches or offices in the state have the option to designate one or more central locations as their legal process service location.

The state statute requires the DFI to maintain the information. DFI is also mandated to make the information accessible to the public by providing it to anyone who requests it or by posting the information online.

DFI is developing an electronic form to collect the information, which would include the address and hours of operation of the designated locations.  DFI licensees will receive an e-mail to their designated e-mail address with a link to a secure form to fill out.  Institutions not licensed by DFI may receive an e-mail with the link by subscribing to the "AB2364" e-mail top on DFI's subscription manager. Use the link.

San Diego County CU Poinsettia Bowl set for Dec 20

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SAN DIEGO (12/3/12)--The eighth annual San Diego County CU Poinsettia Bowl, a college football game, is set for Dec. 20.

The game--to be played in Qualcomm Stadium in San Diego, home to the National Football League's San Diego Chargers--will pit the hometown San Diego State Aztecs, with a 9-3 record, against the 7-5 Brigham Young University Cougars, whose campus is in Provo, Utah.

San Diego County CU is San Diego's largest locally owned financial institution, serving three local counties. It has $5.8 billion in assets and more than 240,000 members.

The credit union has been the bowl's title sponsor since the bowl was established in 2005. It has received nationwide media attention as the title sponsor over the years.

NerdWallet highlights 11 CUs money market accounts

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MADISON, Wis. (12/3/12)--NerdWallet has highlighted 11 credit unions that it says have good and sometimes unique money market accounts.

NerdWallet.com is a personal finance and credit card comparison website launched in March 2010. It delivers recommendations on credit cards, personal finance options, discounts and gas prices. It also reports on credit card industry news and politics while providing financial advice and travel tips. The site's features include tools for comparing credit cards, online stores, gas prices, interest rates and credit unions. 

"Just like a savings account, a money market account is a deposit account that pays interest on your balance and limits you to a set number of withdrawals per month," NerdWallet said. "What's different? Money market accounts typically offer higher yields than savings accounts, and many of them give you the ability to write a limited number of checks as well. They'll also require you to maintain a high minimum balance to avoid a monthly fee.

"You'll be happy with a money market account if you already have a high savings balance and want a risk-free, interest-bearing account that allows you to access your money occasionally," NerdWallet added. "If that sounds like you, you know where to go: your local credit union."

NerdWallet singled out these credit unions for having worthy money market accounts:

  • Partners FCU, Burbank, Calif.;
  • Diamond CU, Pottstown, Pa.;
  • Trona Valley Community FCU, Green River, Wyo.;
  • Dover (Del.) FCU;
  • Space City CU, Houston;
  • Landmark CU, Danville, Ill.;
  • Ashland (Ky.) CU;
  • Penobscot County FCU, Old Town, Maine;
  • Chessie FCU, Cumberland, Md.;
  • Big Dutch Fleet CU, Holland, Mich.; and
  • Linn-Co FCU, Lebanon, Ore.
Several of the credit unions--Trona Valley Community FCU, Landmark CU, Penobscot County CU and Chessie FCU--offer tiered interest rates or tiered accounts.

Also, several of the credit unions offer money market checking accounts.   

To read the article, use the link.

Malware extorting ransom money under IC3 name

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WASHINGTON (12/3/12)--Cybercriminals using the Citadel malware platform to deliver Reveton ransomware are deploying a new extortion technique. The most recent version of the ransomware uses the name of the Internet Crime Complaint Center (IC3) to frighten victims into sending money to the perpetrators.

Besides creating a fear of prosecution, the malware claims the user's computer activity is being recorded with audio, video and other devices, IC3 said. IC3 is an interagency website that tracks cybercrimes and frauds.

The malware lures the victim to a drive-by download website, and installs the ransomware on the user's computer. Once installed, the computer freezes and a screen displays a warning that the user has violated U.S. federal law. The message declares that a law enforcement agency has determined that a computer using the victim's Internet provider address has accessed child pornography and other illegal content.

To unlock the computer, the user is instructed to pay a fine with prepaid money card services. The geographic location of the user's personal computer determines what payment services are offered. In addition to installing the ransomware, the Citadel malware continues to operate on the compromised computer and can commit online banking and credit card fraud.

"This is not a legitimate communication from the IC3, but rather is an attempt to extort money from the victim," said IC3's website. Users receiving such messages or something similar they should not follow payment instruction.

Instead, IC3 suggested they should:

  • File a complaint at www.IC3.gov ;
  • Keep operating systems and legitimate antivirus and antispyware software updated; and
  • Contact a reputable computer expert to assist with removing the malware.

CU System briefs (11/30/2012)

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  • CONCORD, N.H. (12/3/12)--Prince Sage, 28, of  New York and Laconia, N.H., was sentenced to five years in prison for his role in a December robbery of Northeast CU, Manchester, N.H. Sage pleaded guilty to robbing the credit union. He was the second defendant to be sentenced last week in the U.S. District Court for the District of New Hampshire for the robbery. Walter Williams, 44, Compton, Calif., received a 20-year prison sentence for several jewelry store holdups and the credit union robbery. Others arrested included Shyloe Johnson, who pleaded guilty to aiding and abetting a robbery, and Delano Nelson, whose trial will be in January (Federal Information & News Dispatch Inc. Nov. 29) …
  • IRONDALE, Ala.  (12/3/12)--Corporate America CU's new president/CEO, Pete Pritts, has begun his first week on the job. Pritts took over the helm of the $3 billion corporate during Thanksgiving week. He spent his first day meeting with employees, attending a chapter meeting as guest speaker and meeting some of the Irondale, Ala.-based corporate's long-time members in North Alabama.  Pritts also is planning to attend other chapter meetings to meet more credit unions served by the corporate credit union.  "We have loyal and dedicated people here," Pritts said. "It's obvious to me our staff cares very much about our membership, and I want that to continue as we move forward." (Photo provided by Corporate America CU) …
  • RALEIGH, N.C. (12/3/12)--
    Click to view larger image Click for larger view
    The Statesville, N.C., branch of Raleigh based State Employees' CU (SECU) kicked off its Supports the Troops campaign by displaying student artwork from Statesville Middle School. The visual art students used mixed media to create art inspired by the lyrics and songs of Bruce Springsteen's album, "The Rising."  Titled "The Illustrated Springsteen," the 24-piece collection included poems, pictures and word collages illustrating Springsteen's music in response to the aftermath of the Sept. 11, 2011 terrorist attacks.  The Supports the Troops campaign collection period ran from Sept. 15 to Oct. 31. SECU branches display local schools' artwork as part of an ongoing project established in 2003 to provide art teachers a venue to feature their school's programs and student artists. Originally launched with elementary school artwork, the project was so well received that SECU expanded it to include middle and high school students' artwork.  (Photo provided by State Employees' CU) …
  • TACOMA, Wash. (12/3/12)--Dave Olson, former manager and treasurer of Tacoma Telco FCU (now Sound CU) in Tacoma, Wash., died Nov. 27. He was 95 years old.  Olson led the credit union from 1969 through 1981. Before accepting that role, he served on the board of directors from 1953 to 1968.  He was chairman of the board for 11 years, vice chairman for three, and a director for two years. He previously was president of the Pierce County Chapter of Credit Unions. That organization recognized him with a lifetime achievement award in 1996. "Dave Olson was a true leader in the credit union movement," said Sound CU President/CEO  Richard Brandsma. "He took great pride in his service to the credit union and his contributions will not soon be forgotten."  Olson is survived by his son, Douglas Olson …

iBelong commercials premiere in four Pa cities

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HARRISBURG, Pa. (12/3/12)--
Chatting after the initial premier of Pennsylvania's iBelong commercials Thursday were, from left, Tim Ames, CEO of York, Pa.-based Heritage Valley FCU, and Pennsylvania Credit Union Association President/CEO Jim McCormack. (Photo provided by the Pennsylvania Credit Union Association)
The first premiere of new iBelong commercials for 2013 was Thursday for 17 Pennsylvania credit union attendees, said the Pennsylvania Credit Union Association (PCUA).

The new spots position credit unions as the best resource for loans said PCUA in its newsletter, Life is a Highway (Nov. 30).  Each spot ends with the tagline "Get the Credit You Deserve."

PCUA's service corporation, Pacul Services Inc., provided funding for the new commercials.

The credit unions attending were from the Harrisburg-Lancaster-Lebanon-York media market. More premieres will be conducted this week in Altooona/Johnstown, Pittsburgh and Erie media markets.

Next week the Lehigh Valley/Berks and Wilkes-Barre Scanton media markets will see the ads for the first time.

Three years later PolishSlavic FCU grows in Chicago

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CHICAGO (11/30/12)--Less than three years ago Brooklyn, N.Y.-based Polish & Slavic FCU (PSFCU) began establishing three branches in Chicago. Thursday it announced those branches have attracted more than $100 million in deposits, nearly 9,000 new members, and more than $72 million in personal and mortgage loans.

The growth far exceeded the nation's largest ethnic credit union's expectations, PSFCU said in a press release Thursday.

The $1.5 billion credit union long had confined its branch operations to the New York metropolitan area until January 2010, when it opened two branches in the Windy City. A year later, it opened a third branch in the Polish community of Bridgeview, outside Chicago's southern border.

"Opening new branches in Illinois was a natural step forward in the growth of our credit union," said Marzena Wierzbowska, chairperson of the PSFCU board of directors. "With the changing dynamics of the Polish population in the U.S., we needed to start expanding to new markets and Chicago was an obvious choice."

The credit union attracted 8,600 members by introducing modern branches in Mt. Prospect, Norridge, and Bridgeview. It quickly became a visible presence at various Polish cultural events and parades; it organized and financed numerous children's programs; and it instituted a scholarship program for high school and college students.

"The efforts by PSFCU to serve the growing needs of the Polish American community in the Chicago area have been nothing less than outstanding," said Michael Fryzel, board member of the National Credit Union Administration.  The growth "is a clear indication of their vision and analysis of the need for credit union services for thousands of individuals. When I attended the opening of their first Chicago branch, I knew that the credit union would be successful." He noted it has proven is abilities beyond his expectations and he expects continued growth and success due to the credit union's efforts and commitment."

In addition to the three Chicago branches, PSFCU has 12 branches in New York or New Jersey.

"We still have more work to do and I'm confident that this is only the beginning of our success," said Zbigniew Rogalski, vice president and head of the Midwest district for the PSFCU.  "It really is astonishing what we've accomplished in such a short period of time.  It's a testament to our people and our organization."

Global scammers in Australias largest data breach busted

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SYDNEY, Australia, and BUCHAREST, Romania (11/30/12)--An international syndicate based in Romania, and which allegedly committed the largest theft of credit card data in Australia's history, was busted this week.

Seven arrests were made among the 16 people picked up by the Australian National Police and Romanian National Police. Among those picked up was international martial arts and Greco-Roman wrestling champion Gheorghe "The Carpathain Bear" Ignat, said Australian Broadcasting Corp. (ABC) News and Herald Sun (Nov. 29).

Authorities allege that Ignat had traveled to Australia and had a hand in creating fake credit cards from stolen credit-card details. However, he was not placed under arrest.

The gang allegedly accessed more than 100 small retail outlets and stole the personal information of 500,000 credit card holders in Australia.  So far, about 30,000 of the cards were used to make fraudulent purchases of more than $30 million.

Thousands of counterfeit transactions have been made in Europe, Hong Kong, Australia, and the U.S., said authorities (The Advertiser Nov. 30).  Agencies in 13 other countries were involved in the 18-month investigation, said ABC News.

Australian banks and credit unions have already reimbursed consumers for the losses. Louise Petschler, CEO of Abacus Australian Mutuals, the trade association for the nation's credit unions and a member of the World Council of Credit Unions, told The Advertiser that the arrests showed how cybercrime had evolved into a global enterprise.  "We all have a role to play to ensure credit card transactions are safe and secure," she said.

Small CU adopts PFM tool

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MIDLAND, Texas (11/30/12)--My Community FCU in Midland, Texas, is hoping to get its members to adopt a personal financial management (PFM) application from MoneyDesktop.

MoneyDesktop compiles account information from more than 10,000 financial institutions and provides services that include budget creation, debt management, expense tracking and visual reports on a consumer's financial state (American Banker Nov. 28).

The $255.2 million asset credit union will place PFM on its online banking site landing page and use it as a component for promoting its mobile banking services, the Banker said.

My Community calls the PFM application its "sticky service" because the credit union's members can locate all their financial information in one place, and not have to go beyond the credit union for different financial information, Susie Marsten, My Community senior vice president and chief operating officer, told the Banker.

She especially likes MoneyDesktop PFM's BubbleBudgets, which allow users to view graphics in which bubbles indicate differing spending levels that change colors in relation to how well a consumer is sticking to a budgeting plan, Marsten told the Banker.

Federation webinar addresses CDFI microfinance training

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NEW YORK (11/30/12)--There is still time for credit unions to sign up for a National Federation of Community Development Credit Unions Dec. 6 webinar that will provide more information about how to participate in three "Scaling Up Microfinance" training sessions next year.

The webinar will be at 3:30 p.m. ET Dec. 6. (Use the link to register).

Scaling Up Microfinance is part of the Community Development Financial Institutions  (CDFI) Fund's Capacity Building Initiatives. The federation has partnered with Opportunity Finance Network to provide the program of specialized training and technical assistance for credit unions engaged in or working to build their microfinance or small business lending programs.

The program offers opportunities for collaboration between loan funds and community development credit unions offering microfinance products.

The curriculum is based on four themes:

  • Innovative Business Models;
  • New Microfinance Products;
  • Technology to Improve Performance and Efficiency; and
  • Developing a Culture of Innovation and Talent Management.
The Scaling Up Microfinance training sessions will be held Jan. 17-18 in New York City; Jan. 31-Feb. 1 in San Francisco, and Feb. 25-26 in Atlanta.

Use the links for more information.

Illinois foundation grants 45k in third round

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NAPERVILLE, Ill. (11/30/12)--The Illinois Credit Union Foundation has awarded $45,100 in grants in a third and final round of funding in 2012, bringing the total awarded for the year to more than $125,300.

The grants include Small Credit Union Development (SCUD), Community Service, Marketing and Business Development, and Financial Independence & Revitalization Effort (FIRE) grants.

SCUD grants for this cycle totaled $12,603. They were awarded to 10 credit unions and one chapter. The grants are for computer and other office equipment. The recipients were:

  • Alton Bell Community CU, Alton;
  • Ambraw FCU, Lawrenceville;
  • CTA C&M FCU, Chicago;
  • Fairmont Village CU, East St. Louis;
  • Israel Methcomm FCU, Chicago;
  • Oak Lawn Municipal Employees CU, Oak Lawn;
  • Peoria City Employees CU, Peoria;
  • Peoria Hiway CU, Peoria;
  • Processors Industrial Community CU, Granite City; and
  • St. Mark CU, Chicago.
The Chicago Metro Chapter also received a SCUD grant to establish a "Supply Pantry" to help small credit unions in the chapter share commonly used office supplies and help reduce their cost of those items.

The foundation also awarded seven Community Service Grants at $500 each. The program encourages and rewards chapter or credit union participation in local community projects. Credit unions and chapters can qualify for grants by hosting an established event, creating an event, or volunteering at an established event. Recipients included:

  • DHCU Community CU, Moline;
  • Landmark CU, Danville;
  • Midwest America FCU, Danville; and
  • North Side Community FCU, Chicago.
Three chapters--Danville Area, Egyptian, and Southern Illinois--also received Community Service Grants for several projects, including North Side Community's effort with a local social service agency to teach people how to prepare healthy meals on a limited budget and stretch their food budget. The workshops will be open to the community.

In addition, five credit unions received Marketing and Business Development grants that totaled $15,865. The recipients were:

  • Elite Community CU, Bourbonnais;
  • IBEW Local 146 CU, Decatur;
  • Jeff-Co Schools FCU, Mt. Vernon;
  • Peoria Hiway CU, Peoria; and
  • SDC Employees CU, Kankakee.
Established in 2006, the grants help credit unions with assets of up to $30 million to start or expand outreach efforts. The maximum grant award is $5,000 per credit union per year.  Grant requests this round were for membership outreach efforts.

Three credit unions were recipients of FIRE grants. They included: Members First Community CU, Quincy; North Side Community FCU, Chicago; and South Division CU, Evergreen Park. 

The FIRE Program provides assistance so credit unions can expand their ability to build and maintain viable communities by providing credit and financial services to residents and businesses in low-income and underserved areas of Illinois. Members First will use its grant to expand its reach to junior high and high schools and students in four counties with the Banzai financial education program.

Ernst and Young People change FIs because of high fees

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NEW YORK (11/30/12)--Financial institutions' members/customers are changing their behavior and demanding lower fees for higher levels of service or other improvements, according to Ernst & Young's 2012 global consumer banking survey.

If their demands are not met, consumers increasingly are likely to shop around at other financial institutions for competitive rates for services and products.

Consumers are taking control of their banking relationships, are increasingly likely to change financial institutions and expect to be able to choose among a range of service levels and costs, the survey said.

About 28,560 banking customers across 35 countries were surveyed. It indicates that consumers also expect to be financially rewarded for their loyalty. Research was conducted between February and March, using an Internet questionnaire.

The survey suggests that for financial institutions, including credit unions, to remain competitive they must:

  • Make promises and service offers more transparent so consumers can choose;
  • Rebalance fee structures for the clarity and sustainability required by regulators and investors;
  • Improve how they provide information and advice, recruit online affinity groups and develop flexible loyalty programs;
  • Develop models around consumers' needs by reprioritizing spending, increasing the use of low-cost digital models and using more innovative technology.
"Customers are sending banks a very clear message--'we are taking control,'" said Pierre Pilorge, Ernst & Young's financial services advisory markets leader for Europe, Middle East, India and Africa. "In response, banks must re-evaluate customer trends region by region to prioritize products, enhance services, and ultimately give customers what they want."

Worldwide, 44% of consumers surveyed say their financial institution adapts products and services to meet their needs. Also, 70% of consumers would disclose personal information if it improved the services and products they were offered.

Loyalty reward plans are on the rise. Twenty-seven percent of consumers are enrolled in these, up 50% from 2011. However, most agreed that if they are offered three products or more with a bank they should get better service (86%), and be charged lower fees or given better rates on their savings accounts (91%).

Consumers also are becoming less loyal and increasing the number of financial institutions they use, the study indicated. Those who use only one financial institution have fallen to 31% from 41%. The number planning to change financial institutions has risen to 12% from 7% year on year and attrition rates have increased in several major markets.

Poor branch experience (31%) and lack of personalized contact or service (26%) are climbing the list of reasons for changing providers, although dissatisfaction with high fees continues to be the most commonly cited driver (50%) of attrition.

"Pricing remains critical to customer satisfaction, but most customers have no idea how much they pay each year," Pierre said. "As they start to take control of their banking relationships, clearer communication about fees is customers' most sought-after improvement. People are more willing than ever to shop around and want control over what they pay for the service they receive. Banks need to respond--pricing and service promises need to be transparent if banks are to deliver something customers value."

Financial institutions have made progress in improving their communication channels, said Ernst & Young. Both call center and mobile banking services have improved, with consumer satisfaction up 8% and 16% respectively, year on year. However, the power of the consumer voice has overtaken financial institutions' communication channels. Personal recommendations from family and friends are the top source of information about banking products, with 71% of consumers relying on that information as their primary source.

Fifty-five percent of consumers refer to online communities or social networks for advice and a third who use social networking use it to comment on the service they receive from their financial institution.

"Customers prefer turning to other sources than their bank for financial advice and to find the best deals. Comparison websites, relatively unknown five years ago, are now the second major source of influence, ranking higher than banking advisers, and the use of social media as a source of banking information is amplifying customers' voices, giving them greater power as advocates or critics," Pierre concluded.

Study CUs lead in mobile satisfaction

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ANN ARBOR, Mich. (11/30/12)--Credit unions are at the top of a mobile satisfaction index that measures satisfaction of consumers' experience with apps and websites from credit unions, banks, credit cards and brokerage companies.

Credit unions, measured in aggregate, scored 80 on the 100-point scale of the ForeSee Mobile Satisfaction Index. The results are based on 4,500 consumers' experience with mobile apps and websites of 17 major financial services companies.

Only credit unions met the threshold for "excellent," said ForSee, an Ann Arbor, Mich.-based technology-driven customer service analytics firm.

After credit unions, American Express and Wells Fargo each scored 79 in the banking industry section. Also, American Express and Discover topped the credit card industry with the same score, 79.  Charles Schwab, at the top of the brokerage industry, also scored 79.

The overall aggregate score for the financial services index is 77.  Mobile banks and credit unions scored 78; credit cards, 76; and brokerages, 77.

Another key finding:  Apps provided a superior experience when compared with mobile websites.  Apps may be the key to competitive differentiation and growth, said ForeSee. However, it noted all companies have some distance to go before providing a compelling mobile experience. Traditional websites (on personal computers) still provide the best customer experience for financial services companies, ForeSee said.

"As consumers put the power of the Internet in their pockets and purses in record numbers, there is no doubt that the future of customer engagement is mobile," said Eric Feinberg, ForeSee's director of mobile, media and entertainment. "The mobile experience represents the biggest opportunity--and the biggest challenge--for financial services companies because consumers are getting more comfortable managing their finances via mobile devices." He noted that the company that best understands how to meet mobile consumers' needs will succeed, "and that's going to require the right kind of insight. Right now, it's anyone's game.

The study also compared highly satisfied users (those who scored their experience 80 or above) of mobile websites and apps to less satisfied users (69 or below). It found that highly satisfied visitors are more likely to prefer the brand, recommend the mobile channel, use that channel again, or use the mobile channel before any other information resource.

"Apps are an important tool for serving financial services customers, but the mobile website is going to be more important as a mobile channel for serving prospective customers," said Larry Freed, ForeSee president/CEO.  He noted this underlies the importance of measuring customer satisfaction to help improve customers' experience.

CU members shopped more on Thanksgiving same on Friday

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RANCHO CUCAMONGA, Calif., and FRANKLIN, Mass. (11/30/12)--Holiday shoppers, including credit union members, didn't wait until Black Friday to hit the malls or the Internet this year. Many began shopping on Thanksgiving Day, says a debit card-transactions analysis by CO-OP Financial Services and Saylent Technologies.

"It appears that shoppers in growing numbers are taking advantage of the trend by stores to open during the evening of Thanksgiving Day, rather than waiting until early the next morning," said Stan Hollen, president/CEO of CO-OP Financial Services. "The resulting activity increase over both days compared to last year should be encouraging to retailers heading into the holiday season."

Members of credit unions recorded roughly the same buying activity this past Black Friday as they did in 2011. However, they dramatically increased their transaction and spending levels on Thanksgiving Day for the same period.

Black Friday 2012 transactions by credit union debit card holders actually decreased by 0.2%, and total dollars spent decreased 3.5%, compared with 2011 transactions. In a similar survey conducted last year, CO-OP and Saylent found that shoppers made 10.1% more transactions and spent 8.1% more during Black Friday than in 2010.

It was a much different story on Thanksgiving Day, said CO-OP and Saylent. Thanksgiving transactions increased 18.8%, and dollars spent rose even more, 30.7%, in 2012 compared with the year before.

For the entire two-day period of Nov. 22-23, 2012, total transactions and dollars spent rose modestly year over year--a 6.25% rise in transactions, and a 6.5% rise in dollars spent.

The analysis of sales is not an estimate but is based on more than 5.1 million actual transactions made during the two days. Drawn from debit card transactions across credit unions processed by CO-OP Financial Services, the year-over-year comparison was performed through an advanced analytics solution, CO-OP Total Revelation, powered by Saylent Technologies, and was conducted by Saylent's Insight360 consulting team.

The study's sample of consumer activity represented both brick-and-mortar and Internet transactions.

Otherl key findings include:

  • Thanksgiving Day spending may have increased significantly, but there is no danger of Black Friday being overtaken as the busiest shopping day of the year. Black Friday transactions exceeded that of Thanksgiving Day by 95.1%, while 140.3% more dollars were spent on Black Friday compared to Thanksgiving Day.
  • The CO-OP and Saylent analysis broke down transaction and spending activity in 20 different types of retail outlets. For Black Friday, the category seeing the highest level of growth was record shops, which included iTunes, Amazon Online Services and Amazon Kindle purchases. Record shops showed a 36.5% increase in transactions, and a robust 25.25% increase in dollars spent.
  • Discount stores led all retail outlets on Black Friday in terms of transactions and spending, as they did last year. However, transactions were down 13.2% and spending was down 9.7% compared to 2011, suggesting a renewed consumer interest in specialty retailers, said CO-OP and Saylent. One such example is Women's Ready-to-Wear Stores, which showed increases of 12.5% in transactions and 13.2% in sales, year over year.
For more information, use the link.

CU System briefs (11/29/2012)

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  • HARRISBURG, Pa. (11/30/12)--Credit union members whose phone numbers are located in the 814 area code are reporting receiving fraudulent text messages on their mobile devices, according to the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Nov. 29).  The text message states, "THE CREDIT UNION CENTER NOTICE: Your ATM/CARD has been DEACTIVATED. Please call the 24 hour Account Reactivation Line (814) 321-5079."  PCUA said that credit unions located in the affected area should be on alert for similar messages to their members. The 814 area code serves 27 counties in the northwestern and central regions of Pennsylvania …
  • MIDLAND, Texas (11/30/12)--A former loan officer of the Midland, Texas, branch of My Community FCU pleaded guilty of defrauding the credit union of $4 million in a fraudulent loan scheme involving more than $29,000 in kickbacks (Odessa American Nov. 28). Michael Ross Franco, who was a loan officer at the credit union from May 22, 2006, through Oct. 22, 2008, pleaded guilty Tuesday in a U.S. District Court in Midland on charges of conspiracy to commit bank fraud.  He allegedly approved about 487 fraudulent auto loans worth a total of $7 million without verifying loan documents or in some cases without receiving the loan application first. The dealership and Franco's contact there have not been identified. The credit union released a statement pointing out that the incident is more than three years old and is under investigation. The funds are federally insured and bonded and the credit union is "financial strong," the credit union said …
  • RICHMOND, Calif. (11/30/12)--A credit union president/CEO who was elected to the City Council in Richmond, Calif., on Nov. 6,  remains hospitalized with miningitus, according to Contra Costa Times (Nov. 27).   Gary Bell,  president/CEO of the $103 million asset Cooperative Center FCU, Berkeley, was diagnosed in the weeks before his Nov. 6 election. He was hospitalized before the election and again on Nov. 10 to undergo two surgeries to relieve swelling of the brain. Bell was elected to the city council with 15% of the vote, earning him the third and final vacant seat.  City staff agreed to waive penalties related to late campaign finance reports in light of his hospitalization, said the newspaper  …
  • CONCORD, N.H. (11/30/12)--A Compton, Calif., man was sentenced by a federal court in New Hampshire to 20 years in prison for a string of robberies that included the Manchester, N.H. branch of  Portsmouth-based Northeast CU.  Walter Williams, 44, pleaded guilty to that robbery as well as to two jewelry store holdups in Manchester and Tilton.  Williams was also sentenced to three years of supervised release.  Others arrested in relation to the credit union robbery included Williams' then-girlfriend, Shyloe Johnson, who pleaded guilty to aiding and abetting two robberies and was sentenced earlier this year; and Prince Sage, Brooklyn, N.Y., who pleaded guilty to the credit union robbery and is scheduled to be sentenced today. A fourth person, Delano Nelson, also of Compton, Calif., was indicted in the jewelry store robberies and will be tried in January.  Several others were charged in a state court with lesser offenses related to the heists  (Federal Information & News Dispatch Nov. 27) …

CUNA Mutual sues firm over RMBS losses

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SEATTLE, Wash., and MADISON, Wis. (11/29/12)--CUNA Mutual Group has asked a federal court in Seattle to help it obtain documents related to the underwriting of 15 residential mortgage-backed securities (RMBS) that are at the center of its lawsuit against RBS Securities Inc.

CUNA Mutual asked the Seattle court to enforce a subpoena against Bellevue, Wash.-based Watterson Prime LLC, one of the firms that provided due diligence information that corroborated to CUNA Mutual that the $72 million MBS pool it bought from RBS between 2004 and 2007 followed preapproved underwriting guidelines. Watterson, one of several third-party companies that performed due diligence on the securities, has denied all requests for the documents, CUNA Mutual confirmed to News Now.

The company filed its lawsuit against RBS in a U.S. District Court in the Western District of Wisconsin (Madison) on Jan. 17 as for rescission of its purchases. The suit alleges CUNA Mutual bought 15 RMBS in 10 separate offerings from RBS after RBS made representations about the credit quality of the mortgage pools collateralizing those securities, including representations about Loan-to-Value Ratios, CLTV ratios, owner occupancy rates, credit ratings and the originators' adherence to stated underwriting standards.

"Each of these representations was material to CUNA Mutual, because it was likely to and did induce a reasonable investor to purchase the certificates for the purchase price at the relevant yield," said the complaint filed. "Each of these representations was false at the time it was made," the company said, adding that had it known they were false it would not have purchased the certificates.

"This action continues to be an issue of righting a wrong and is being taken in the best interests of CUNA Mutual Group and its policyholders," said Phil Tschudy, media relations manager at CUNA Mutual Group. "RBS falsely represented products it sold us between 2004 and 2007 and, as a result, we are seeking recompense. Because this issue is in litigation, we cannot comment further on the lawsuit," he told News Now.

Tropical Financial CU Low rates boost auto loans

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MIRAMAR, Fla. (11/29/12)--Tropical Financial CU in Miramar, Fla., is offering low rates for auto financing that have been a boon to the $574 million asset credit union's business.

This week, Tropical Financial is offering loans with as low as 1.49% interest on new or used vehicles, and refinancing rates as low as 2.5% (The Star-Ledger Nov. 25).

In the past year, the credit union has seen a 46% rise in consumer loans, propelled by the increase in auto loans, Helen McGiffin, Tropical Financial chief operating officer, told the newspaper, adding that is a "pretty hefty increase."

Because automakers are subsidizing low interest loans at dealerships, with some charging no interest, lenders realize they must offer inexpensive loans to stay competitive, McGiffin told the paper.  

Consumers currently are accustomed to 0% loans, she added.

Wis electric co-op plans alliance of CUs other co-ops

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CENTURIA, Wis. (11/29/12)--A Wisconsin electric cooperative is leading efforts to form an alliance of credit unions, and food, legal and other co-ops serving northwest Wisconsin to build awareness and collaboration about cooperative businesses in Polk and Burnett counties (Wisconsin Ag Connection Nov. 27).    

Polk-Burnett is a member-owned, not-for-profit electric cooperative in Centuria, Wis., established by members in 1938 to bring electricity to rural families, farms and businesses. It delivers electricity and energy services to 20,000 members, and provides propane services to 4,000 customers.

In October, Polk-Burnett partnered with a credit union, a law co-op and a newspaper publishing co-op to place the alliance's first ad in a local newspaper, Ag Connection said.

The goal is to bring 12 additional area co-ops into the alliance--including businesses in dairy, farm supplies, food and insurance, the publication said.

Although the idea of forming a regional co-op had been floating around for a few years, a suggestion to build relationships with other co-ops as a means to celebrate the International Year of Cooperatives in 2012 inspired Polk Burnett to take action, Joan O'Fallon, the co-op's communications director, told the publication.

Merchants vs interchange settlement file appeal notice

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NEW YORK (11/29/12)--True to their word, some retailers and merchant trade associations filed a notice of appeal in federal court in New York Tuesday to request a stay of a proposed class action $7.5 billion settlement offer in the antitrust lawsuit against Visa and MasterCard over credit card interchange fees.

The National Association of Convenience Stores, National Cooperative Grocers Association, National Grocers Association, the National Restaurant Association, D'Agostino Supermarkets Inc. and six others filed a notice of appeal in the U.S. Court of Appeals for the Second Circuit.

Home Depot separately filed a similar appeal in the same court.

Also on Tuesday, U.S. District Judge John Gleeson gave preapproval to the settlement.

In a letter to the judge, the plaintiffs requesting the stay wrote: "The appeal addresses that portion of the order that 'enjoins the members of … the Rule 23(b)(2) Settlement Class … from challenging in any action or proceeding any matter covered by this Class Settlement Agreement or its release and covenant not to sue provisions'…"

The plaintiffs added that the court "committed reversible error by imposing an immediate and facially overbroad injunction on a provisional mandatory (b)(2) class without engaging in the required heightened scrutiny as to whether such a class can be certified without violating the due process rights of absent class members."

Credit unions are not involved in the lawsuit, but they and other financial institutions would be affected by the settlement's terms. The $7.5 billion settlement would require a reduced interchange rate fee (IRF) of 10 basis points for an eight-month period, likely beginning in mid-2013, and would apply to all card issuers, including credit unions (News Now Nov. 1).

If the total credit IRF reduction is $1.2 billion, credit unions with credit card programs would lose about $50 million in total revenues, or about 0.5 basis points on their total assets, Credit Union National Association (CUNA) said. The loss would be concentrated among a relatively small number of credit unions with very active credit card programs.

Interchange revenue enables credit unions to provide "essential and cost-effective credit card services" to members, CUNA President/CEO Bill Cheney has said. "We also know that the temporary reduction in interchange revenue that credit unions will experience will not likely find its way into the pockets of consumers, but will more likely into those of merchants," Cheney said.

Barclays tells court NCUAs MBS suit filed too late

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KANSAS CITY, Kan. (11/29/12)--Barclays has asked a federal court in Kansas to dismiss the National Credit Union Administration's (NCUA) lawsuit against it over $555 million in mortgage-backed securities sold by a Barclays unit to U.S. Central FCU and the Western Corporate FCU in 2006 and 2007.

NCUA's suit, filed Sept. 25 in the U.S. District Court for the District of Kansas, Kansas City, alleges that Barclays Capital Inc., BCAP LLC and Securitized Asset Backed Receivables LLC made misleading statements about the MBS that contributed to the failure of the two corporates.

Barclays' motion filed Monday with the court alleges the case should be dismissed because:

  • The court is not the proper venue for NCUA's claims;
  • NCUA's claims are barred by the statute of limitations and statue of repose, which means Barclays' is arguing NCUA did not file its lawsuit in time; and
  • NCUA did not plead any actionable misrepresentations or omissions in the offering materials.  Barclays said the offering materials accurately disclosed the risk profiles of the certificates; the NCUA didn't plead that the materials reflected misrepresentations regarding underwriting guidelines; statements about LTV ratios are non-actionable opinions; and the agency had not pleaded that owner occupancy representations were false when made.
The corporate credit unions were liquidated by NCUA in 2010.  Barclays' motion argues that federal law requires NCUA to file claims within a year after the alleged violations were, or could have been, discovered.

ACIPCO FCU members receive rebate for 20th year

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BIRMINGHAM, Ala. (11/29/12)--For the 20th consecutive year, ACIPCO FCU, based in Birmingham, Ala., announced its 7,300 members will receive a rebate totaling more than $1.7 million.

The interest rebate/bonus dividend is the largest rebate ever offered by the $130 million asset credit union to its members.  Its board of directors approved the rebate/dividend for 2012 at 35%.

"We're extremely fortunate to be able to offer such a large rebate with the economy in such an unstable state," said ACIPCO FCU CEO Mike Harrell.  "The credit union doesn't take credit for this rebate; we owe our success to our loyal members."

The dividend--distributed to members based on interest earned and dividends received between Jan. 1 and Sept. 30--will be deposited into members' accounts by Dec. 15.

ACIPCO FCU has offered a rebate since 1993 and has paid out more than $25 million to members during the past 20 years. It serves employees of the American Cast Iron Pipe Co. and their families.

CUANY hosts 12 days of giveaways for Facebook users

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ALBANY, N.Y. (11/28/12)--The Credit Union Association of New York (CUANY) is hosting a 12 Days of Giveaways promotion to thank New York credit union supporters who have "liked" its Facebook page.

The event, which is exclusively on the association's Facebook page, runs Dec. 3-14. (Use the link).

Member credit union employees or volunteer leaders who are 16 years or older and who have "liked" the association's page are eligible to enter. Those who haven't yet "liked" the page will be prompted to do so before entering.  Entrants fill out and submit a short form on the page by Friday to be entered in all 12 prize drawings.

The giveaways include:

  • Dec. 3:  Starbucks travel mug/ $25 Starbucks gift card;
  • Dec. 4:  Gray cashmere throw from Red Envelope;
  • Dec. 5:  Kindle Paperwhite;
  • Dec. 6:  Golfer's cooler bag from Red Envelope;
  • Dec. 7:  Harry & David Hot Rock Cocoa gift set;
  • Dec. 8:  Thirteen-inch, hi-res digital photo frame from NIX Digital;
  • Dec. 9:  Camel heather cashmere scarf from Banana Republic;
  • Dec. 10: Silicone spatula set and $50 gift card from Williams-Sonoma;
  • Dec. 11:  Harry & David Founders' Favorites Gift Box;
  • Dec. 12:  A Sharper Image wireless Steering Wheel Bluetooth Speakerphone;
  • Dec. 13:  A stocked Red Envelope picnic basket; and
  • Dec. 14:  A Photo Cube Printer.
 

CUANY will post each day's winner on its Facebook page by 10 a.m. ET and contact the winner by e-mail.

"Social media has become an integral part of our communications process," said CUANY President/CEO William J. Mellin.  "We wanted to recognize and thank our members who have chose to receive and share some of their information through our Facebook page, and thought a promotion of this kind was a great way to do so."

CUs grab first third fourth spots in top college cards

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WASHINGTON (11/28/12)--Three credit unions are among the top 10 college credit card agreements with the largest number of new college card accounts opened in 2011.

According to an annual report on college credit cards, submitted in October by the Consumer Financial Protection Bureau (CFPB) to Congress, the University of Illinois Employees CU (UIECU) opened the largest number of new college credit card accounts during 2011. UIECU 's partner in the venture is the University of Illinois Alumni Association.

During 2011, the credit union opened 3,452 new accounts, which moved it up four notches to the top spot. That compares to 779 new accounts it opened in 2010, when it ranked fifth in the nation.

UIECU's affinity card is marketed to the university's alumni, fans and credit union members, but not students (News-Gazette.com Nov. 27). The credit union received the contract for the card on July 1, 2010, replacing a long-term relationship between the alumni association and Bank of America.

Purdue FCU, working with the Purdue Alumni Association was in the No. 3 spot, with 2,877 new accounts in 2011, compared with 2,642 accounts in 2010, when it ranked No. 1.

The third credit union in the top 10--at the No. 5 spot--was Michigan State University FCU, working with Michigan State University.  It opened 1,115 new accounts in 2011, compared with 302 in 2010, when it ranked 24th on the list.

Rounding out the Top 10 list were:

  • Barclays Bank Delaware (working with the Harvard Alumni Association);
  • FIA Card Services, N.A., which had four spots on the list for its programs at University of Notre Dame, Auburn Spirit Foundation, Alumni Association of the University of Michigan and Phi Theta Kappa International Honor Society;
  • Capital One, N.A., working with Georgia Tech Alumni Association; and
  • USAA Savings Bank, working with the Association of Graduates of the U.S. Air Force Academy.
The 10 agreements account for roughly 35% of all new college credit cards opened last year. They opened a total of 15,041 new accounts, compared with 9,065 accounts in 2010.

For the full report, use the link.

Post-BTD coverage continues focus on CU growth

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DENVER (11/28/12)--Colorado credit unions are seeing a rise in new memberships, more than a year after Bank Transfer Day (BTD).

In the past year, credit union membership in the state has risen by 2.4% to 1.46 million--the first increase in three years and the largest since 2001 (The Denver Post Nov. 26).

That increase is nearly identical to the national trend, the Mountain West Credit Union Association, which represents credit unions in Arizona, Colorado and Wyoming, told the newspaper.   

Credit unions finally are getting their due as the community-involved, member-focused organizations they always have been, Dan Kester, president/CEO of the $262 million asset Sooper CU in Arvada, Colo., told the paper.

A Credit Union National Association survey conducted in February indicated three out of four people surveyed think credit unions look out for the "little guy" compared with 18% who feel the same way about banks, the paper said.  

The article also mentions Ent FCU in Colorado Springs and Bellco CU in Greenwood Village, Colo.

To read the article, use the link.

IC3 lists top nine frauds impacting eCommerce

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MADISON, Wis. (11/28/12)--The Internet Crime Complaint Center's (IC3) most recent Scam Alert issue Monday listed the top nine types of fraud impacting eCommerce.

The report, based upon information from law enforcement and complaints submitted to the IC3, details recent cybercrime trends and new twists to previously existing cyber scams.

IC3 said a payment management company created the list, which also identified the frequency of attack and revenue loss.

In ranked order, the top nine fraud attacks identified were:

  1. Clean Fraud--The term describes the willingness and ability of thieves to provide more and better personal information in card-not-present transactions, information that in isolation gives the appearance of legitimacy to the transaction (electran.org).
  1. Account Takeover--Account takeover is one of the more prevalent forms of identity theft. It is becoming increasingly prominent and is a growing point of financial exposure for businesses and consumers. The takeover occurs when a fraudster obtains an individual's personal information such as an account number, password, username or Social Security number and changes the official contact information (mail/email address) or adds another user to an existing account. By doing this, the fraudster establishes an opportunity to make transactions without the victim's knowledge (kount.com).
  1. Friendly Fraud--Also known as "friendly fraud chargeback,"  this fraud occurs when  consumers make an Internet purchase with their own credit card and then issues a chargeback through the card provider after receiving the goods or services. When a chargeback occurs, the merchant will always be responsible for loss of funds, regardless of what it did to verify the transaction. There is no way to verify the authenticity of the transaction, which is in fact legitimate, because the consumer is the one who is not legitimate (wikipedia.org).
  1. Identity Theft--Identity theft is a when someone pretends to be someone else by assuming that person's identity, typically in order to access resources or obtain credit and other benefits in that person's name (wikpedia.org).
  1. Affiliate Fraud--In this type of fraud, bogus activity generated by an affiliate attempts to generate illegitimate, unearned revenue. Fraudulent activity by affiliates comes in both automated and non-automated varieties. Automated scripts attempt to mimic the activity of legitimate, human visitors. Non-automated schemes may involve coordinated efforts by humans actively generating excess clicks or registrations (softwareprojects.com).
  1. Reshipping--In reshipping, or postal forwarding, scam victims typically are offered an at-home job that involves repackaging stolen goods--frequently consumer electronics--and forwarding them, often outside the U.S. Scammers ask victims to pay their own shipping charges, and pay reimbursement and compensation with a fake check. In addition to seeing their own paychecks bounce, those who fall for reshipping scams may be liable for shipping charges and even the cost of goods purchased online with stolen credit cards (monster.com).
  1. Botnets--A botnet is a collection of compromised computers under the remote command and control of a criminal "botherder." Most owners of the compromised computers are unwitting victims. They have unintentionally allowed unauthorized access and use of their computers as a vehicle to facilitate other crimes, such as identity theft, denial of service attacks, phishing, click fraud, and the mass distribution of spam and spyware. Because of their widely distributed capabilities, botnets are a growing threat to national security, the national information infrastructure, and the economy (fbi.gov).
  1. Phishing/Pharming/Whaling--Phishing (also called pharming or whaling) e-mails trick people into sending money or providing personal information such as usernames, passwords, credit card details, and Social Security numbers to unauthorized individuals who hijack their information and use it to commit identity theft (dos.ny.gov).
  1. Triangulation Schemes--Triangulation is another method of credit card fraud. The fraudsters operate from a website and offers goods at heavily discounted rates and with shipping before payment. The fraudulent site appears to be a legitimate auction or traditional sales site. The customer must provide information, including name, address and valid credit card details, to the site. Once the fraudsters receive the details, they order the goods from a legitimate site using another stolen credit card number and apply for the goods with the customer's name and address. The fraudsters then go purchase other goods with customer's credit card numbers. This process causes initial confusion for authorities so the fraudulent Internet company can operate long enough to accumulate a vast amount of goods purchased with stolen credit card numbers (people.exeter.ac.uk).
Several legitimate direct sales companies have seen a large surge in fake orders placed with their consultants. The consultants are contacted through the legitimate "find a consultant" link located on sales websites.

In each instance, the suspects place large orders and agree to pay by check. The consultant receives the check for a much larger amount than the total cost for the products. The consultant is instructed to cash the check and send the difference back to the buyer via wire transfer. The IC3 has received several complaints filed by consultants from companies affected by this scam.

CU System briefs (11/27/2012)

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  • WESTBURY, N.Y. (11/28/12)--NEFCU, a credit union based in Westbury, N.Y.,  and serving all of Long Island, is partnering with Roslyn's Educational Advancement and Development Foundation (READ) to help boost funding for the district. For the first time, NEFCU is introducing a Visa Platinum loyalty credit card program. The card will give a 1% cash rebate to the READ Foundation, a not-for-profit organization that funds programs and capital projects within the Roslyn School District. The READ Loyalty Credit Card Program will give residents, families and supporters of the district the opportunity to apply for the loyalty program. NEFCU will automatically donate 1% of card users' total purchases to READ. The card, designed by NEFCU specifically for the program, will feature the READ and Roslyn bulldog logos ...
  • OTTUMWA, Iowa (11/28/12)--Philip Van Mersbergen, president/CEO of  Ottumwa, Iowa based Community 1st CU, has been appointed to serve on the Iowa Credit Union League's Governance Task Force for 2013. Van Mersbergen joined the $400 million asset  Community 1st CU in 2008 as chief financial officer and was appointed president/CEO in 2011.  By serving on the league's task force, he represents the collective interests and future of Iowa's 125 credit unions and nearly one million members. He will be working with other Iowa credit union leaders to develop initiatives that will better serve members and advance the industry, Van Mersbergen said …

Money Rules book by Chatzky available from NCUF

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MADISON, Wis. (11/28/12)--Copies of the new book "Money Rules: The Simple Path to Lifelong Security" by personal finance author Jean Chatzky are available from the National Credit Union Foundation (NCUF).

"Money Rules" contains a set of rules that will help readers to work toward financial security and eliminate their stress about money, said NCUF.

Chatzky will be one of the keynote speakers at The Credit Union National Association's upcoming 2013 Governmental Affairs Conference, Feb. 24-28.

Through the special initiative sponsored by NCUF, credit union organizations can order the book for a reduced rate to distribute to:

  • Staff;
  • Members;
  • Attendees of community events, particularly financial education-related events; and
  • Teachers/libraries/resource centers in each school of the districts in which they serve.
"'Money Rules' is a simple yet powerful money management book," said Bucky Sebastian, NCUF executive director. "People of almost any age can pick it up, read from any page and learn something profound from Jean Chatzky's simple but important rules. It's a great handbook to help consumers achieve financial freedom and we hope it spreads throughout the credit union movement."

"In these trying economic times it is more important than ever to learn all we can about our personal finances," Chatzky said.

Orders of 1,000 or more will also include the donor organization's name on a sticker on the front cover. Each book already comes with "Compliments of: NCUF" printed on the cover. Books can be ordered on a non-returnable basis, for promotional purposes only and not for resale.

An award-winning journalist and best-selling author, Chatzky is the financial editor for NBC's Today, the host of Money Matters with Jean Chatzky on RLTV, and director of education for SavvyMoney. Among other achievements, Chatzky was honored by the Consumer Federation of America with the Betty Furness Consumer Media Service Award for nearly two decades of pioneering personal finance education.

For more information on the book, use the link.

CUAid total tops 230K for hurricane victims

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MADISON, Wis. (11/28/12)--More than $230,000 has been raised so far through CUAid.coop for credit union people affected by Hurricane Sandy, said the National Credit Union Foundation (NCUF) Tuesday morning. Damage estimates from the storm rose Monday to more than $71 billion.

The $230,000 compares with the more than $185,000 that had been raised through CUAid, the credit union movement's disaster relief fund, by Nov. 15. NCUF administers the fund for credit unions. The relief funds are distributed to credit unions' employees, volunteer leadership and members impacted by the storm.

"We continue to work with the New Jersey Credit Union League and Credit Union Association of New York to distribute the funds to those who need assistance," said Christopher Morris, NCUF director of communications.

The National Credit Union Administration has estimated that 818 credit unions were impacted by the Oct. 29 and Oct. 30 storm, mostly in closures due to power outages.

Hurricane Sandy was downgraded to a tropical cyclone on Oct. 29, just before it made landfall south of Atlantic City, N.J., and destroyed the coastline in New Jersey and New York. New Jersey, New York and Connecticut were heaviest hit.

Damage estimates released this week indicated that the storm caused more than $71 billion in damages--higher than the $50 billion estimated right after the storm.

New York Gov. Andrew Cuomo said damages in his state totaled $42 billion. The estimate includes $9 billion for prevention expenses for future storms. The state will request federal disaster aid, he said (Voice of America Nov. 26.)

New York City Mayor Michael Bloomberg estimated that the city suffered $19 billion in damages, which are included in Cuomo's statewide estimate (Christian Science Monitor Nov. 26).

Last week New Jersey Gov. Chris Christie estimated that state sustained $24 billion in damages, while Connecticut Gov. Dannel Malloy said more than $360 million in damages were sustained by businesses, homes and public property in his state.

More than a month after the huge storm, people were still homeless, with some sleeping in tents where their homes used to be.

Sandy was particularly damaging because it combined with a cold front from the northwest and a high pressure storm system moving in from Greenland. The result was a monster storm that encompassed an 800- to 1,000-mile wide stretch of high sustained winds and flooding across several states in the North East.  It also flooded lower Manhattan in New York City, cut power to an estimated 6 to 8 million people, and destroyed shorelines in New Jersey and New York.

Wis voter poll 80 support raising MBL cap

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PEWAUKEE, Wis. (11/28/12)--Eighty percent of Wisconsin voters polled support raising credit unions' member business lending (MBL) cap, according to the Wisconsin Credit Union League, which conducted the poll.

"A whopping 80%" say they support The Credit Union Small Business Jobs Bill, legislation in Congress that would add $ 408 million of new credit for Wisconsin businesses through credit unions, the league said. The bill would add $13 billion in new small business loans throughout the nation, said the Credit Union National Association (CUNA).

The legislation, H.R. 1418/S. 2231, is expected to come up for a vote by the U.S. Senate during the Lame Duck session of Congress. The session ends on Dec. 21, said CUNA.

The bill proposes to raise the arbitrary MBL cap to 27.5% of total assets, up from the current 12.25%.

The league listed these reasons that the bill has gained steam:

  • Small businesses say there's a credit cap. Research indicates 90% of small firms surveyed agree. A 2011 Pepperdine University study indicated banks deny 60% of loan applications.
  • Credit unions have done all they can.  Since the recession began in 2007, Wisconsin banks decreased their business lending by 2% while credit unions in the state grew their MBLs by 55% to compensate.
  • Credit unions' hands are tied from offering additional help. Nearly all credit unions either deny loans because of the cap or can't offer any because the cap prevents cost recovery.
  • The legislation would add jobs--Nearly 5,000 jobs in Wisconsin the first year, said the league. CUNA said raising the MBL cap would add nearly 140,000 across the nation.
  • Raising the cap helps Main Street. Half of credit union MBLs help families with incomes under $50,000.
  • It costs the taxpayers nothing. U.S. Sen. Mark Udall (D-Colorado), the bill's lead author, as well as Forbes, have called raising the cap a "no brainer."
  • Federal regulators support it. Credit unions have made safe and sound business loans. In Wisconsin, credit unions have had a lower rate of business loan delinquency and losses than banks for more than a decade and have made those loans safely for 100 years, said the league.
  • A bipartisan coalition of more than 30 organizations supports it. The coalition represents small businesses, the self-employed and the insurance, textile, realty, construction, automotive and technology industries.
  • It won't hurt banks. Banks hold 95% of U.S. business loans, said the league. Raising the MBL cap for credit unions won't dent banks' market share. Almost half of banks support the legislation, said the league.

IAutomotive NewsI Why dealer stepped up work with CUs

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VANCOUVER, Wash. (11/27/12)--Auto trade industry publication Automotive News has published a Q & A with a Vancouver, Wash.-based auto dealer who says credit unions account for more than half of its loan volume.

In the article, "Can't beat credit unions? Join 'em," (Oct. 17) , Ralph Larson, finance and insurance director with Dick Hannah Dealerships, noted that if auto buyers financed their last vehicle at a credit union, the dealership's group policy is to send the credit application for their new vehicle to that credit union first. 

Why?  Because the dealer had a high rate of cancellations on its financing and insurance products just days after people bought vehicles at the dealer. The dealership thought it might be a problem with disclosures, but when it took a closer look, it found out that the buyers were simply refinancing the car at their credit union.

The dealership also found out that working with a single credit union to offer a lower payment didn't work if the consumers were members of another credit union. "The problem is the customer's loyalty is deeper than the quarter percent," Larson told Automotive News. Some people, he said, would pay more to stick with their credit union--and often the credit union might match the offer anyway.

Now the credit union gets a first right of refusal on financing the loan, and 53% of the dealer's loans are financed through credit unions. For more information, check out the full article at the link.

FBI seeks suspects in eight CUbank heists in Wis

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MILWAUKEE, Wis. (11/27/12)--The Federal Bureau of Investigation (FBI)  is asking the public's help in identifying  serial robbery suspects in at least eight credit union and bank robberies in southeastern Wisconsin between Oct. 18 and Nov. 20.

The FBI Milwaukee Division said the suspects have hit seven credit unions and a bank--some of them twice. The dates and locations of the heists were:

  • Oct. 18:  Educators CU, Port Washington Road, Glendale;
  • Oct. 22: Landmark CU, Washington Avenue, Mount Pleasant;
  • Oct. 23: Landmark CU, Grove Avenue, Racine;
  • Nov. 5: TruStone Financial, 30th Avenue, Kenosha;
  • Nov. 6: Landmark CU, Grove Avenue, Racine;
  • Nov. 13: North Shore Bank, Green Bay Road, Kenosha;
  • Nov. 16: Landmark CU, 124th Avenue, Wauwatosa; and
  • Nov. 20: Southern Lakes CU, 60th Street, Kenosha.
In the Nov. 16 robbery in Wauwatosa, two masked men waving guns entered the credit union just before its 7 p.m. closing time, robbed several tellers at gunpoint of the contents of their teller drawers and disrupted a loan officer's meeting with members. On the way out, one robber pointed his gun at a door handle and pulled the trigger, but the gun did not go off.  They left in a stolen car that was later found abandoned and burned. Police believe the suspects are white and between 20 and 27 years old.

Another robbery involved three men wearing masks and a third robbery involved a single suspect.

CUs MBL created 100 jobs saved monument to small biz

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PORTLAND, Ore. (11/27/12)--Just how much difference can a single member business loan (MBL) make? Ask DA Hilderbrand of Portland, Ore.  The small business loan he received years ago from Portland-based Unitus Community CU has made a significant impact on the community--and created 100 jobs to boot, according to the Northwest Credit Union Association (NWCUA).

Hilderbrand saw opportunity when he purchased a dilapidated building scheduled for demolishing by the city.  "First we had to clean it out," he told NWCUA (Anthem Recap Nov. 23).  It took more than a year to haul away 120,000 cubic feet of junk and save 29 feral cats.

What attracted Hilderbrand was the building's architectural history and the opportunity to bring "Pearl District quality" to Northeast Portland, at much lower business rental rates.  What is now the Gotham Building opened in 2002 and quickly filled up with successful businesses.

However, the building next door, an abandoned "Historic Yellow Building," posed a fire hazard to the renovated Gotham Building. So Hildebrand decided to buy the property, clean it up, expand the Gotham, and create more jobs. That was in 2007. When he went looking for a loan, banks refused to provide the loan needed. But Unitus Community CU did. 

"Unitus took a lot more interest in the community aspect of what I was doing instead of just going by the numbers," Hilderbrand told the league. "Other banks never even asked why I wanted to do this."  He credited Unitus' former board chairman, the late Barbara Leonard, for championing the project and its financing. "She liked the idea of bringing more jobs back to that area. That's what they were all about."

Today, says NWCUA, the Gotham Building is a "monument to small business success." It houses design firms that land national contracts, computer software businesses, accounting businesses, a new wellness clinic and a popular restaurant. Roughly 100 people work at the businesses.

Hilderbrand told NWCUA he may ask the credit union for another MBL, this time to save an industrial warehouse to create more space for small business. He noted his adviser at Unitus visits and brings colleagues along to show off the example Gotham has set. "It speaks to more than just a financial commitment. They really are interested in what we are doing. Those are the kinds of people I want to do business with," he said.

Hilderbrand is urging Congress to pass S. 2231, the bill to raise the MBL cap for credit unions to 27.5% of assets from 12.25%, said NWCUA. Increasing the cap would generate 140,000 new jobs the first year, without cost to taxpayers, said the Credit Union National Association. What's more, it would generate $13 billion for new small business loans.

For profit bank was never an option for Lakota reservation

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KYLE, S.D. (11/27/12)--When newly chartered Lakota FCU opens here in December, it will be the first time the Pine Ridge Indian Reservation has had a federally insured financial institution in place. In a newsletter article welcoming Lakota FCU into the credit union family, the Credit Union Association of the Dakotas (CUAD) said that a "for-profit" bank was never really an option for the reservation.

"(A)  not-for-profit credit union with a philosophy of 'people helping people' is a good fit for the more than two million acre reservation, one of the largest and poorest Native American reservations in the U.S. and home to approximately 40,000 persons, of which 35% are under the age of 18," the article said.

Whitney O'Rourke is the new credit union's manager, and she has been working on the credit union's development since 2010 with Lakota Funds, a community development financial institution (CDFI) that is helping to lead an economic resurgence of the Oglala Lakota Oyate on the Pine Ridge Reservation. Lakota Funds owns the Lakota Trade Center building where the new credit union is located here.

The credit union has received three start-up grants from the U.S. Treasury Department's Native American CDFI Assistance (NACA) Program. The grants enabled Lakota to hire one additional employee: Shayna Richards will be member service representative. 

Lakota FCU's field of membership (FOM) will be comprised of those who live, work, worship, volunteer, attend school, or conduct business on the Pine Ridge Indian Reservation.  Members are not required to be Native American.

The National Credit Union Administration (NCUA) has already designated LFCU as a low-income credit union (LICU), which means that it can accept deposits from anyone--whether or not they qualify under the FOM rule.

The CUAD article noted that the new credit union may face challenges attracting deposits because the area has an unemployment rate of greater than 80% and a history of dealing in "cash-only" transactions.  But the credit union has addressed this by doing early advertising to get the word out that there will be a financial alternative for the community.  The credit union representatives will be going to schools and businesses, encouraging people to open savings accounts rather than dealing with cash. Members will be able to access their funds through "CU Money" reloadable debit cards. Share draft accounts will not be offered initially.

CU System briefs (11/26/2012)

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  • MADISON, Wis. (11/27/12)--The Filene Research Institute announced Tansley Stearns has joined the institute as its new director of innovation applied research. She will be responsible for transforming research and innovation into action, the announcement said. Stearns is a 14-year veteran of the credit union movement and most recently served as an assistant vice president of corporate strategy and government relations at Bethpage FCU in New York. Filene noted that Stearns is one of the original credit union professionals chosen to be a participant in Filene's i3 program,described by Filene as a work group of innovative, insightful and energetic credit union professionals who have not yet reached the CEO level, but are in a position with substantial responsibility. In her three years with i3, Stearns worked with other credit union executives to create two innovative projects, including Debt in Focus and SmartScore. She also has been a member of the Guiding Coalition at two credit unions, working to build and develop sales and service cultures. She is credited with helping her credit union win first place in both the Dora Maxwell and Louise Herring awards, Filene noted …
  • JACKSONVILLE, Fla. (11/27/12)--Michael Yatros has been selected by Florida Credit Union Shared Services (FCUSS) to serve as its new CEO. "Mike's extensive knowledge of the payment systems industry and his proven track record of success will propel this organization to new and exciting heights which will, in turn, bring even more value to our member credit unions," said Allan Prindle, chairman of the FCUSS Board and president/CEO of Power Financial CU. Prior to accepting his new position, Yatros served as the executive vice president of PSCU Financial Services Inc. in St. Petersburg. He led strategic planning for the client services division responsible for sales, portfolio development, relationship management, and consulting for 1,200 clients and their 18 million cardholders. …
  • SAN ANTONIO, Texas (11/27/12)--Randy M. Smith will step down from his position as CEO of Randolph-Brooks FCU (RBFCU), effective Dec. 31, and will  be succeeded as CEO by the credit union's current president, Christopher W. O'Connor.  Smith will assume the position of senior adviser to the board of directors (LoneStar Leaguer Nov. 26). After a career in public accounting and 27 years of service with the U.S. Air Force (active duty and reserve), Smith began with RBFCU in 1982 as the vice president of finance in 1982. When he became president/CEO in 1987, the credit union assets totaled about $290 million and RBFCU offered a service network of five branches, all located in the greater San Antonio area. Today, the credit union serves more than 410,000 members with more than $5 billion in assets. RBFCU's branch network includes more than 40 locations throughout South Central Texas, including multiple branches in the San Antonio and Austin metropolitan areas. "His leadership has been a determining factor in the success of our credit union," said Dr. Harry M. Edwards, board chairman of the credit union. "He is a visionary who is focused on success and results, and the credit union's growth under his guidance is based on the fact that he can see and act upon the big picture, while still remembering that people are the credit union's most valuable resource." …

St Paul Croatian FCU CEO sentenced to 14 years to repay 72M

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CLEVELAND (11/27/12)--The former CEO of the defunct St. Paul Croatian FCU has been sentenced to 14 years in prison and ordered to pay $72 million in restitution for pocketing bribes, kickbacks and cash gifts as a part of a multimillion-dollar loan scam that caused one of the biggest credit union failures in U.S. history.

Anthony Raguz, 52, the former CEO of the Eastlake, Ohio-based credit union, was sentenced Monday morning in the U.S. District Court in Cleveland (The Plain Dealer and Cleveland.com Nov. 26).  He had pleaded guilty in September to six counts of bank fraud, money laundering and bank bribery (News Now Nov. 26).

Raguz allegedly issued more than 1,000 fraudulent loans totaling more than $70 million to about 300 accountholders at the credit union and accepted more than $1 million in bribes, kickbacks and gifts from the borrowers. He has already forfeited that $1 million, said the newspaper.  Earlier accounts had said his take was more than $500,000.

The sentence was part of a plea bargain Raguz made last year. He cooperated with federal prosecutors, and more than 20 people were convicted in the collapse. However,  U.S. District Judge Christopher Boyko rejected prosecutors' request that Raguz receive punishment in the mid-range of federal sentencing guidelines. Boyko said that the damage Raguz caused outweighed his contribution to the prosecution of other defendants.

Raguz apologized  to the victims, to members of the credit union  and to the 10 employees who lost their jobs because of the crime, said the Plain Dealer.

The loan scam ring was allegedly led by Kiljo Nikolovski of Eastlake and Skopje, Macedonia, who is serving 18 years in prison for the fraud.

The National Credit Union Administration placed the credit union into conservatorship in April 2010 and liquidated it a week later in early May, saying it was insolvent. The credit union's collapse caused $170 million in losses to the National Credit Union Share Insurance Fund. NCUA has filed lawsuits against several individuals involved in the scam to try to recoup some of the losses.

IFox BusinessI report on Black Friday features Hampel CUNAs survey

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WASHINGTON (11/27/12)--Credit Union National Association (CUNA) Chief Economist Bill Hampel provided the holiday spending analysis for Fox Business Network's "Special Report" on Black Friday and also discussed how the fiscal cliff may affect spending in the future.

In the 5:19-minute interview Friday, Hampel discussed the Consumer Federation of America and CUNA holiday spending survey, taken three weeks ago, and pointed out that based on the survey's results, he expects about a year-over-year 4% increase in holiday spending this year, up from a 3.5% rise last year.

When asked if consumers were aware of the looming fiscal cliff, he noted that "consumers are paying more attention to their own financial condition and own circumstances and less to what's going on here in Washington."

However, he suspects that will change. "The fiscal news has been restricted to the financial and business news sectors, and the consumers and the general public are just beginning to latch on to" the implications of the fiscal cliff, Hampel told the network.

In the CFA/CUNA survey this year, "more people said they were better off than the previous year than those who said it last year. Last year by a 2 to 1 margin, they told us they were worse off than the year before. That margin has really narrowed and people are feeling a little better." While it won't be a fantastic holiday spending season, it is "another nudge up in the right direction from last year," Hampel said.

"Our survey is a nationwide survey and it showed on balance that people are planning to spend a little bit more this year than last," he noted.

The survey found that the number of people worried about their monthly debt fell. "One of the reasons for that is the household sector is in better condition this year than it has been for four years. The Great Recession was really destructive to the household sector," Hampel said, adding that household debt is coming down and several economic factors are moving in the right direction toward stronger shopping.

Will consumers' improved view of their finances last into the new year? "That does depend entirely on what happens with the fiscal cliff," Hampel said.  As the end of the year gets closer, "if Congress has not come to a reasonable solution, the financial market will signal to the household sector that things are bad and stock markets are tanking because Congress hasn't done anything," Hampel said.

Although consumers aren't directly connected to the stock market through mutual funds investments,  most households are indeed connected to it through their 401 (k) and defined contributions pensions plans. "That will be the mechanism that signals to consumers that  whoops--something's wrong here" if Congress doesn't present a solution, he concluded.

Croatian CU collapse Plea entered CEOs sentencing today

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CLEVELAND (11/26/12)--Another man has pleaded guilty for his role in a massive loan fraud scheme that led to the collapse of Eastlake, Ohio-based St. Paul Croatian FCU. Meanwhile the credit union's former CEO is scheduled to be sentenced today for his involvement in what became one of the largest credit union failures in history.

Marko Nikoli, 33, pleaded guilty in a U.S. District Court in Cleveland last week to two counts of bank fraud and one count of money laundering, which stem from a purchase of a $60,000 Mercedez Benz  (News-Herald.com Nov. 20). Nikoli was one of at least 19 defendants arrested in the case. Many of them were paid to apply for the fraudulent loans. His sentencing is scheduled for March 18.

Nikoli is nephew of the alleged ringleader in the scam, Koljo Nikolovski of Eastlake and Skopje, Macedonia.  Nikolovski is serving 18 years in prison for the fraud, which involved more than 1,000 fraudulent loans for more than $70 million to roughly 300 accountholders at the credit union (News Now Nov. 8).

The credit union's CEO, Anthony Raguz, also has pleaded guilty--to six counts of bank fraud, money laundering and bank bribery. He allegedly admitted issuing the loans and accepting more than $500,000 in bribes, kickbacks and gifts from the borrowers. His sentencing hearing, originally set for last Tuesday was rescheduled for today.

The National Credit Union Administration placed the credit union into conservatorship on April 23, 2010, and liquidated it a week later after determining the credit union was insolvent.  The failure cost the National Credit Union Share Insurance Fund about $170 million. NCUA has filed a number of lawsuits against the parties involved in the loan scam to try to recoup some of the losses.

Fake government disaster relief checks circulating in N E

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WASHINGTON (11/26/12)--Forged and fake Federal Disaster Assistance checks are being circulated at area credit unions and banks in the Northeast, according to Agility Recovery, a CUNA Strategic Services provider that works with credit unions and others on disaster recovery and business continuity.

Agility Recovery said it was informed by its partners at the Federal Emergency Management Agency (FEMA) and the U.S. Small Business Administration (SBA) that several checks had been passed at the financial institutions.

The Northeast and East Coast were hit hard by Hurricane Sandy on Oct. 29 and 30, and states in that area have been dealing with extensive damages to homes and businesses.

The legitimate disaster assistance checks have the words "United States Treasury" in large Old English Text letters on the top left half of the check, with a smaller Treasury seal underneath the word "States."  It also has the Statue of Liberty along the left border, facing off to the left side of the check.

The U.S. Department of Treasury checks associated with FEMA assistance will have "Disaster Assistance" identified on the lower left of the check and above the words "FEMA WASH."

Across the center of the check is financial account numbers and the Kansas City, Mo. account number, above the "Pay to the order of" designation and the name and address of the check recipient.

The right side of the legitimate check has the check number, more financial institution checking account numbers, the numerical amount of the check and a signature block in the lower right corner. The financial institution's routing number is displayed along the bottom. For more information about the checks, use the link.

The Federal Trade Commission (FTC) has also warned consumers to beware of scams that prey on disaster victims needing assistance and on generous Americans hoping to contribute to the recovery. Use the FTC  link for more information about the variety of scams.

TMG Analyze cost-benefits before implementing EMV

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DES MOINES, Iowa (11/26/12)--Credit unions should perform their own cost-benefit analysis before implementing the Europay MasterCard Visa (EMV) card standard, a new white paper from The Members Group (TMG) recommends.

The paper, titled "The EMV Roadmap: Designing Your Financial Institution's Plan," describes how major card networks have announced their initial plans for EMV migration, each outlining how merchant and issuer integration will impact liability for fraudulent transactions. Some analysts speculate, however, the target dates outlined in these plans are likely to slip as networks become more aware of challenges facing merchants and their processors.

In designing their road map for migration, credit unions should first look at their average annual fraud losses, the paper said. Delaying the migration to EMV could increase fraud losses as a result of two situations: First, domestic card fraud is on the rise and predicted to continue as global EMV dominance drives fraudsters to the U.S.; and second, non-EMV cards will not meet the networks' standards for liability, thus shifting the responsibility for fraud to the credit union.

Next credit unions should compare anticipated fraud losses with the investment required by an upgrade to EMV, the paper advised. Given the cost-benefit analysis, does the migration to EMV cards make sound business sense? Be cognizant, however, that the answer to this question may change as EMV becomes more prevalent or as cardholders demand EMV cards, TMG warned.

Transaction volume is another consideration. EMV, many believe, is key to maintaining top-of wallet positioning, especially among certain cardholders. As card issuers field an increasing number of complaints about the ineffectiveness of magnetic-stripe cards overseas, the pressure to satisfy these cardholders grows, said the paper.

Improving acceptance internationally could also increase interchange income, TMG added.

The paper recommends that credit unions segment their card portfolios to determine which sections are best positioned for EMV. Large numbers of cardholders may travel more frequently than others. Keep in mind that not only Europe has migrated; Canada and Mexico are EMV-ready now.

To download the whitepaper, use the link.

Computer virus in small biz snags Minnesota members

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LAKE NEBAGAMON, Minn. (11/26/12)--A computer virus that targets small businesses by capturing card information before it is encrypted has been linked to a business in Lake Nebagamon, Minn., and has affected some nearby credit union members.

More than two dozen cases of credit and debit card fraud were linked to Ole's Country Market, a gas and grocery store in the community (Duluth News-Tribune Nov. 21). Members of credit unions are among the victims.

A member of nearby Superior (Wis.) Choice CU (SCCU) discovered an incidence of identity theft when she went online to access her credit union account.

SCCU member Amanda Majetick of Lake Nebagamon found two charges from North Carolina and one from England on her statement during a two-day period last week--each totaling a few hundred dollars, she told the newspaper. 

Majetick immediately called the $210 million asset SCCU, which canceled her card and reimbursed her for the stolen funds, the paper said.

Wis league responds to banks misstatements

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PEWAUKEE, Wis. (11/26/12)--Brett Thompson, president/CEO of the Wisconsin Credit Union League, has issued a statement about what the league terms as the Wisconsin Bankers Association's (WBA) most recent misstatements about credit unions, made after regulators announced Wisconsin credit unions' strong third-quarter financial position.

"Credit unions are not only fulfilling their mission of serving all their members regardless of income, but they're doing it despite tremendous disadvantages," Thompson said. "You'd never know that listening to the WBA."

He said banks don't say that Wisconsin credit unions:

  • Saved Wisconsin consumers $201 million in 2011. Credit union depositors saved more than $128 million on loans, earned more than $36.6 million on savings products and paid $36.5 million less in fees than if they had used for-profit banks. WBA called this a "subsidy." Consumers call it real, significant savings, he said.
  • Earned seven top honors in seven years for helping members and communities. These accolades stem from credit unions' REAL Solutions initiative, which helps consumers save and build wealth and assists 3,000 local causes and organizations each year. WBA calls this "lost funds." Credit unions call it investing in Wisconsin, Thompson said.
  • Increased business lending without any taxpayer bailout. This is in contrast to banks that took taxpayer funds and reduced help for small businesses when they needed help the most, said the league. Since the start of the recession, Wisconsin credit unions increased their business lending by 55% while Wisconsin banks shrank theirs by 2%. WBA called this success by credit unions as "abandoning their mission." Credit unions say it's doing what's right, regardless of profit, the league added.
"Credit unions do all this in spite of far greater regulation than banks, an arbitrary cap on business lending that applies only to credit unions, and the inability to raise capital by issuing stock, which only banks can do," Thompson said.

"What's more, credit unions pay all the same taxes banks pay except corporate tax, which more than 80 Wisconsin banks don't pay either," Thompson said. "Except credit unions have that single tax exemption because consumers, not shareholders, benefit from credit unions' earnings.

"Banks just don't like the fact that by making consumers more financially successful, credit unions have become more successful," Thompson added. In 2012, Wisconsin credit unions saw the largest increase in checking accounts in more than a decade, at 6.6%, surpassing the national growth rate, he said.

Filene examines what workers want in 2012

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MADISON, Wis. (11/26/12)--Credit union values can be a powerful recruiting tool, because most employees--young and old--desire to work in a place that mirrors their values, according to a new report from the Filene Research Institute.

The brief is published as part of a partnership between the Filene Research Institute and Net Impact, a group dedicated to solving problems through the workplace. Net Impact set out to investigate how people view "impact jobs," or jobs that provide the opportunity to make a social or environmental impact.

Its survey looked at a statistically significant national sample of 1,726 university students about to enter the work force and currently employed four-year college graduates from three generations: Millennials (between the ages of 21 and 32), Generation X (between 33 and 48), and Baby Boomers (between 49 and 65).

The study found:

  • "Impact jobs" are satisfying. Slightly more than half of professionals (55%) said they are currently in a job where they can make a social or environmental impact on the world. These satisfaction levels were reinforced when digging into the ways people feel connected to impact through their jobs, too. For example, 45% of employees who say they worked directly on a product or service that makes a positive social impact report being very satisfied with their jobs.
  • College students care. Responding to the statement, "Having a job where I can make an impact on causes or issues that are important to me," 72% of college students said it was either essential or very important. That's 13 percentage points more than Millennials and 23 more than Gen Xers.
  • Impact expectations are high. A majority of students (65%) expect to make a positive social or environmental difference in the world at some point through their work. Credit unions that offer students direct ways to make a difference through their job will have a recruiting advantage, the report said.
  • Women care more than men about impact jobs. Women are much more likely than men to say making a difference is important to them. As a result, organizations that invest in impact jobs likely will have more success in recruiting women. Sixty percent of employed women say that working for a company that prioritizes social and environmental responsibility is very important to them, compared with 38% of men.
"Not every credit union is positioned to take advantage of these trends," the report concluded. "For some, the idea of a credit union movement is a memory, not a motivation. And that's just fine. But credit unions that see their differentiator as doing good by members every day should take these findings to heart and use social responsibility to attract conscientious employees. They will then become conscientious leaders."

Leftover turkey just begins CUs holiday charity

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MADISON, Wis. (11/26/12)--Credit unions have packed away the Thanksgiving leftovers, but their holiday charity efforts are just beginning.

Last week News Now noted a number of credit unions' food drives, just in time for the big turkey dinner. Credit unions give to their communities all year, but during the winter holiday season they go an extra mile to support members of their community who are low-income, have problems such as job loss, or are in need.

Among the credit unions supporting Toys for Tots this year is Saginaw, Mich.-based Catholic FCU (CFCU).  The credit union donated nine Little Tykes Cozy Coupe cars to the cause.  Showing off the cars are, from left: Jeff Jarvis, coordinator of Bay County Toys for Tots, and Bethany Dutcher, vice president of marketing at CFCU. (Photo provided by Catholic FCU)
Some of the credit unions are trying new things this year. For Westbury, N.Y.-based NEFCU, one begins today.  It is launching its "A Season of Giving Charity Donations Contest," which will take place on Facebook with a special application. "Likes" of the page can nominate and vote for their chosen charity. Eligible charities must meet certain community-based goals, NEFCU said in a press release. The organization with the most votes will receive $2,500 donated by the credit union.  Second place will receive $1,500, and third place will receive $1,000. Nominations are due by 5 p.m. ET on Dec. 9. Voting will end at 5 p.m.

"There are so many deserving charities doing great work here on Long Island. Who better to decide the winner of this contest than the Long Islanders who support and benefit from their services," said Valerie Garguilo, vice president of marketing and community relations for NEFCU.

Another new program: One month ago, the University of  Iowa Community CU (UICCU), Cedar Falls, Iowa, offered staff the opportunity to give to their favorite charities for the holiday. Employees provided the name and address of their charity of choice and the credit union donated $100 to the organization in that staffer's name. The results: 135 charities in the area received nearly $22,000 from the UICCU program (Iowa City Press-Citizen Nov. 18).

UICCU President/CEO Jeff Disterhoft told local media, "It's a neat thing because ultimately it's a small way of saying thank you to all of our employees. At the same time, it's a chance to support the charities that our employees are most passionate about."

Of the 250 UICCU employees at its nine East Iowa branches, nearly 220 selected a charity. The Ronald McDonald House Charities of Eastern Iowa and the Iowa Children's Museum were two of the most popular charities. UICCU "is a great example of a local group, a local company who really is responsible to the community, who really values being a part of this community and contributes to the community."

Other charity efforts:

  • Woodbury, Minn.-based Postal CU of Minnesota (PCU) has collected 368 coats at its branches throughout the year for the October Salvation Army Coats for Kids Drive. PCU Community Foundation collected $1,500 in Casual for a Cause and other fund raising efforts, and that effort will make 100 more coats for children in need. Thanks to members, staff, and the community, more than 450 children in the Twin Cities metro area will receive new or gently used coats this winter.
  • Tinker FCU in Oklahoma City, Okla., joined forces with Operation Homefront, Oklahoma/Arkansas on Veterans Day to distribute 600 blankets to military families in need. Operation Homefront provides emergency financial and other assistance to families of U.S. service members and wounded warriors. It received the blankets through donations but had no location to store and distribute the blankets.  TFCU offered its metropolitan building as a place to store the blankets and allow military families to pick them up on Veterans Day.
  • Toys for Tots, a project of the U.S. Marine Corps, will get a lot of help from credit unions around the country.  For example, Service CU, Portsmouth, N.H., just launched its first corporate initiative with Toys for Tots. The credit union collects toys and the Marines will pick up the toys and distribute them through local service agencies in New Hampshire.
  • Catholic FCU in Saginaw, Mich., has donated nine Little Tykes Cozy Coupe cars to Toys for Tots.
  • In Sacramento, Calif., The Golden 1 CU will join the campaign to collect toys for the 2012 Sacramento Sheriff's Toy Project. Until Dec. 5, members and nonmembers can drop off a new, unwrapped toy at Golden 1 branches.
  • United Financial CU in Saginaw, Mich., is collecting donations and "Wish List" items until Dec. 14 at its six locations to benefit the CAN Council and CASA of Saginaw County (Michigan Monitor Nov. 19). Both groups assist children who have been removed from their homes because of abuse or neglect.
Not all the credit union goodwill is about helping the down and out. Sometimes it's just about prompting a smile or making the holidays even better. For example, Belvoir FCU, Woodbridge, Va., will help members and non-members record video holiday eGreetings. Beginning Friday, it will offer hours on Fridays and Saturdays through Dec. 15 at its Woodbridge and Fort Belvoir branches. It will film the senders' holiday message and send the video to them so they can e-mail it to friends, family and loved ones they can't be with during the holidays.

Survey Fraud security compliance top payments issues

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NOTTINGHAM, U.K. (11/26/12)--The growth of new payment channels is the biggest challenge facing the payment industry, according to an annual survey conducted by global payments software provider Compass Plus. Also, fraud, security and compliance were seen as key issues.

Seventy percent of respondents, including financial institutions, mobile operators, payment processors and other industry professionals, were surveyed at an international payment, security and identification event.

The survey indicated 30% of respondents cite the variety of payment channels available as the primary challenge facing the payments industry today--an increase of 8% when compared with the survey results for 2011.

Other key issues included:

  • The growth of near field communication (NFC) and contactless technology (21%);
  • The need for simple user authentication (18%), and
  • The rise of non-traditional payment providers (17%).
In contrast, those surveyed broadly agreed on the speed of mobile banking adoption. Most (59%) said mobile will account for a 10% to 30% share of banking within two to three years.

Fraud, security and compliance were forecast as the top three industry issues for 2013. Internet banking hacking remains the biggest fraud threat at 27% versus 29% last year. Customer-not-present fraud is the second at 26%. Card skimming is perceived as the fastest growing threat with an increase of 7% year-over-year. Customer confusion ranked as the fourth biggest issue for 2013.

NFC represents the biggest opportunity for payment providers in 2013, according to 62% of respondents. Last year, recipients were polarized on the speed of NFC uptake. This year saw a growing consensus among respondents (67%), expecting NFC to reach mass adoption in one to three years.

"The industry still remains in a period of turbulence with technology-led disruption at its core," said Maria Nottingham, Compass Plus chief marketing officer. "Marrying innovation and speed with security and compliance is paramount for financial institutions to create an environment where they can launch new payment services quickly and cost effectively while ensuring they meet industry standards."

For the full results of the study, use the link.

CU System briefs (11/21/2012)

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  • TALLAHASSEE, Fla.(11/26/12)--First Commerce CU (FCCU) presented a $10,155 check to the Capital Region YMCA Nov. 14 in support of youth development and healthy living . FCCU and Seminole IMG Sports Marketing also provided Florida State University (FSU) fans with a chance to win behind-the-scenes access to the Seminole football program for a day.  "This promotion was all part of a plan to raise awareness and encourage the community to financially support the very important work of the YMCA," said FCCU CEO Cecilia Homison.  Winners of the exclusive pass were Susie Bryant and Frank Dennard. They will experience a "day in the life of an FSU football player" with a private facility tour, lunch in the athletic cafeteria, attendance at a live practice, photo opportunities, pre-game access and game tickets to last Saturday's FSU v. University of Florida football game. From left are: Ken Franklin, CEO of YMCA; Homison; and Hugh Tomlinson and Aaron Boyette, YMCA board members. (Photo provided by the League of Southeastern Credit Unions) …
  • RALEIGH, N.C. (11/26/12)--SECU Foundation, the charitable group of Raleigh, N.C.-based State Employees' CU, was named the recipient of the inaugural 2012 Corporate Philanthropy Award by the North Carolina Museum of History in Raleigh on Nov. 13. The award recognizes individuals and organizations for outstanding contributions to the preservation, study or understanding of North Carolina history, and honors exceptional commitment, service and support to history museums and related sites.  SECU Foundation serves as the primary education sponsor for the museum's exhibits, Mysteries of the Lost Colony and A New World: England's First View of America from London's British Museum.  The foundation's sponsorship allowed all state students, teachers and chaperones to attend the exhibit free. It also provided a $500,000 grant to help build the museum's new SECU Education Center in 2010. Pictured from left are: Lyl MacLean Clinard, Museum of History Foundation chair; McKinley Wooten, SECU Board chair; and Ken Howard, museum director.  (Photo provided by SECU Foundation) …
  • VINELAND, N.J. (11/26/12)--The Board of Directors at Bay Atlantic FCU in Vineland, N.J., have promoted Gail Marino to CEO/president, according to the New Jersey Credit Union League (The Daily Exchange Nov. 21). She has served the credit union for more than 24 years, starting as a teller. Most recently she was vice president of business development. Marino succeeds CEO/President Carol Muessig, who will retire in January. In her previous position, Marino was instrumental in expanding the credit union's field of membership and establishing a new branch. She also initiated BAFCU's youth programs. Marino currently is the president of the Southern Chapter of the league and is a member of league's Shared Branching Marketing Committee …

Survey How CU members celebrate the holidays

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MADISON, Wis. (11/21/12)--How do credit union members celebrate the holidays? TruStage, the consumer brand of CUNA Mutual Group, surveyed 750 members about their holiday celebrations and traditions that matter most to them.

The study focused on the importance of the upcoming holidays, family traditions and memories of past experiences.  Of members surveyed, 97% consider Christmas as the main holiday to be with family members. However, Thanksgiving is the most important holiday to connect with multiple generations of family members.  Half of those surveyed celebrate Thanksgiving with members of three generations.

"Part of our new consumer focus is to surface the stories and emotional mindset of how credit union members are thinking and feeling," said Susan Sachatello, senior vice president of TruStage. "Every time we talk with members, they tell us that the generations before them made

decisions that allowed them to be where they are today.

"Since this holiday season is an important time of year to get multiple generations together, we wanted to understand what traditions and celebrations matter most and are passed from generation to generation. This survey shows just how important it is for members to connect with multiple generations of their families," Sachatello said.

Although the survey found that Christmas is the "most important holiday," 79% of respondents indicated that sharing a special meal is the most important part of a holiday. In that regard, Thanksgiving ranked highest.

Another key finding:  Nearly two-thirds (64%) of members said they intend to donate to charities and organizations  this year at the same level they donated in 2011. What's more, 13% others said they plan to increase their charitable giving this year. "That might be because of the economy stabilizing, but it's remarkable to see that 77% of credit union members plan charitable donations at or above the levels they gave last year," Sachatello said.

TruStage's consumer team is always exploring what's on the minds of credit union members, she said. "The election is over, the holidays are coming and this survey indicates credit union members are looking forward to the holidays as a respite from the noise and stress the rest of the year brings and returning to focus on what really matters most to them."

For a colorful infographic available for free use and distribution, use the link.

Lending Council discusses Fannies quality assurance

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MADISON, Wis. (11/21/12)--A new white paper from the CUNA Lending Council discusses how having a quality assurance (QA) system in place is about more than credit risk and making loans; it's about developing better working relationships with examiners.

During the past several years, considerable emphasis has been placed on mortgage lending and the internal policies and eligibility/underwriting processes lenders use, according to "Fannie Mae Quality Assurance: Understand and Comply with Requirements for a Stronger Loan Portfolio."

Lenders requesting approval to sell loans to Fannie Mae must have a QA system in place and must agree the system will remain in place as long as the lender does business with the government-sponsored enterprise.

Fannie Mae acknowledges there's no single, preferred plan that will satisfy every credit union's needs. Fannie encourages credit unions to think creatively and use a broad risk management perspective when developing or changing their approaches to QA, said the council paper.

To help credit unions think creatively about their QA systems, the paper identifies:

  • Minimum requirements for a credit union's QA system;
  • How to develop quality control policies and procedures;
  • How to examine policies for QA gaps;
  • How to make changes when existing policies fall short; and
  • How to build good working relationships with examiners.
The paper also includes three case studies of credit unions experienced with the Fannie Mae QA process.

The paper is available online. Use the link.

Listerhill CUs new youth initiative-a magazine

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MUSCLE SHOALS, Ala. (11/21/12)--In an age when 140 online characters is the standard for communication among young people, Listerhill CU, Muscle Shoals, Ala., has made the bold move of publishing its own print magazine to reach the youth market.

SET will also be published online, Anderson said. "SET's online home will be constantly refreshed with news, articles and opinions on the things important to youth in this area because they will generate the content," Anderson added.

The magazine and website will cross-reference each other with ads in the magazine, driving readers to content exclusive to each.

Listerhill will print 10,000 of the free publication monthly and distribute them throughout its branches, to local establishments frequented by young people, and to local universities and community colleges, Mashburn said.

Listerhill will host monthly launch parties for SET to highlight the theme of the magazine's feature story along with the edition's contributors.

"SET will allow us to positively reinforce our brand, promote the credit union philosophy of cooperation, and further our mission of financial literacy," said Brad Green, Listerhill CU president/CEO. "It will also give us the opportunity to create engaging contests and bolster both our social media and online presences."

As the only advertiser in the magazine, Listerhill CU can brand The Hill Account in a more targeted fashion, and eliminate the "noise" that Gen Y typically tunes out.

"This demographic is a savvy group when it comes to marketing," said Mashburn. "They are quickly able to distinguish who is being real and who is simply trying to sell them something."

iNerdWalleti interviews CUs mascots on saving

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MADISON, Wis. (11/21/12)--NerdWallet's Credit Card blog recently "interviewed" five credit union mascots to learn more about saving money.

Interview subjects included a penny, a tree, a monster, a dinosaur and an eagle.

They included:

  • Penny Saved, president, Super Saver Club for Kids, Vantage West CU, Tucson, Ariz.;
  • Reddy the Redwood, mascot and financial literacy expert, Redwood CU, Santa Rosa, Calif.;
  • Moola Moola the Magical Monster, president, Moola Moola Savings Club, Philadelphia (Pa.) FCU;
  • Max the Dinosaur, president, MoneyKids Program, Michigan First CU, Detroit; and
  • Cash the Eagle, president, Cash's Club, Texas Trust CU, Mansfield, Texas.
The mascots were each asked five questions:

  • What do you like most about being a mascot? "There is nothing more fun than teaching kids about money in a way that makes them laugh and smile," said Max the Dinosaur.
  • Why is it important to save money? The earlier in life you begin saving money, the more financially healthy you'll be when you grow up, Moola Moola advised readers.
  • What should you buy with the money you save? Penny Saved suggested readers always keep some for long-term savings, but the money they spend should go toward something meaningful.
  • When you have a question about money, whom do you ask? "If I have money questions, I always ask someone at my credit union," said Reddy the Redwood. "Because credit unions are focused on people (and trees), I know that they've got my best interests in mind," he added.
  • If you had a million dollars, what would you do with it? Cash the Eagle said he would spend some of the money on his friends and family, but he would talk to his credit union financial adviser to set up a structured savings plan for the rest of the money.

CUs food drives take on new meaning after Sandy

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Click to view larger image Staff at Andrews Federal's Mt. Laurel, N.J., branch prepared more than 30 food bags to support the Hurricane Sandy Relief Effort. (Photo  provided by Andrews FCU)
MADISON, Wis.  (11/21/12)--Some credit unions' annual Thanksgiving food drives this year have taken on an extra dimension--besides providing a Thanksgiving dinner for the needy--because of people suffering losses in the aftermath of Hurricane Sandy. Other credit unions continued to make sure that the needy in their local areas will be fed on Thanksgiving and during the holidays. 

Some examples are:

  • Andrews FCU in Suitland, Md., held a food drive at each of its branches and headquarters to assist with the physical needs of Hurricane Sandy victims. In addition to collecting food items, donations included blankets, clothing, juice, water and grocery gift cards. The $897.3 million asset credit union also provided extra help to its members who were impacted by the devastation caused by Sandy. Members with an Andrews FCU home loan who experienced property damage could call the credit union to explore financial options to assist with the extenuating circumstances created by the storm. "We know that natural disasters can leave families in an uncomfortable place," said Jim Hayes, Andrews interim CEO. "Superstorm Sandy certainly left an enormous impact on our communities, which is why Andrews Federal readily assisted the physical and financial needs of those affected by the storm."
  • Click to view larger image Helping to distribute food and food vouchers to more than 1,000 California families during Kinecta FCU's  39th Annual Holiday Food Drive are, from left: Nix Financial Branch Manager Dana Collins; Carson City Councilman Mike Gipson; California State Senator Curren D. Price Jr.; "Sweet" Alice Harris, executive director, Parents of Watts; and Kinecta CEO Keith Sultemeier.  (Photo provided by Kinecta FCU)
    More than 1,000 local California families identified by community-based organizations as in need during the holiday season received bags of traditional Thanksgiving food items, along with a $75 gift certificate, through  Kinecta FCU's 39th annual Holiday Food Drive. In the annual event, employees of the $3.14 billion asset, Manhattan Beach, Calif.-based Kinecta FCU and its subsidiary Nix Financial collaborate with more than 35 non-profit organizations and churches in the county to provide temporary relief to deserving families. More than $53,000 was raised through member, employee and customer donations at Kinecta and Nix locations, and at corporate sponsors, including NuVision FCU in Huntington Beach, Calif.
  • As part of the ongoing MADTAG campaign, the Credit Unions of South Carolina donated 150 turkeys to the Miracle Hill Rescue Mission for their annual turkey fry in Greenville, S.C. Volunteers gathered at the mission Tuesday to fry, roast and smoke more than 300 turkeys that will feed the homeless at several Miracle Hill shelters in South Carolina. Dozens of additional turkeys will be distributed to local shelters and organizationsto use for their Thanksgiving dinners. "This donation is a true blessing" said a representative with Miracle Hill. "We started with only 40 turkeys this year, but thanks to the generosity of the credit unions so many more hungry men, women and children will have a hot meal this Thanksgiving." It's estimated that more than 2,000 people will be fed through the Miracle Hill turkey fry this year. Local radio celebrities joined dozens of volunteers Tuesday morning to assist with the turkey fry.
  • After spending an afternoon packaging 4,050 pounds of potatoes, many
    Employees from the Michigan Credit Union League pack potatoes in five-pound bags for distribution by Forgotten Harvest, a nonprofit company that provides food access to those in need in Michigan. (Photo provided by the Michigan Credit Union League)  
    employees from the Michigan Credit Union League were not interested in dining on French fries or mashed potatoes, but they were glad to have helped Forgotten Harvest process the spuds to help feed the poor and hungry people who count on Forgotten Harvest, a nonprofit company that provides food across the area (Michigan Monitor Nov. 12). The group was the second from the league to work at Forgotten Harvest's Southfield warehouse. Another group of employees from the league, CUcorp and CU Solutions Group worked an afternoon two weeks earlier and packed more than 2,500 pounds of beef jerky, tomatoes and yogurt chips. The organization "rescues" tons of food--most of which would otherwise be thrown away--from organizations such as restaurants, grocery stories and food processors. It then distributes the food to the needy. Forgotten Harvest counts on volunteer groups to package the food.
  • Credit Union Link sponsored the 2012 WDVD/WDRQ Canned Film Festival to benefit Gleaners Community Food Bank of Southeastern Michigan (Michigan Monitor Nov. 19). Through the program, people who brought five or more canned food items to a participating MJR Theatre on Nov. 14 received free admission to the movie of their choice. The sponsorship, part of additional fall advertising opportunities funded by CUcorp, allowed CU Link to be part of a community project and included announcements in radio spots, two e-newsletters for listeners and press releases about the event. The CU Link logo was also used on posters and radio station websites.

Texas CU exec helps hurricane victims

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FARMERS BRANCH, Texas (11/21/12)--Mark Massey, president/CEO of My CU, Fort Worth, Texas, is among the volunteers assisting victims of Hurricane Sandy in the North East.

Click to view larger image Mark Massey, president/CEO of My CU, Fort Worth, Texas arrived in Long Island, N.Y., Nov. 12, as part of Southern Baptist Disaster Relief, to assist victims of Hurricane Sandy.
Massey arrived in Long Island, N.Y., Nov. 12, as part of Southern Baptist Disaster Relief, a group he works with as a chaplain, the Texas Credit Union League (TCUL) said (LoneStar Leaguer Nov. 19.) Among Massey's duties is assessing damage to the homes of Hurricane Sandy victims.

Most homes on south Long Island were flooded with five to six feet of water. Volunteer Southern Baptists are helping tear away debris, wet sheetrock, insulation and furniture to prepare for contractors to make repairs, said the league.

"There is still much more work to be done," Massey told the league. "There is a back log of victims to help who have not been able to stay in their homes due to the mold smell. We could definitely use more volunteers."

With the support of his credit union board of directors, Massey is using two weeks of vacation to serve in Long Island. After long days of volunteer work, Massey returns in the evening to an area church, where he sleeps on a cot.

Click to view larger image Volunteer Southern Baptists are on in Long Island to help tear Hurricane Victims tear away debris, wet sheetrock, insulation and furniture to prepare for contractors to do repairs. (Photos provided by Texas Credit Union League)
Massey visited Bethpage (N.Y.) FCU on Friday. The $5 billion credit union was just out of flood range, and held a food-and-clothing drive the day Massey visited.

Massey has volunteered in many different capacities, in the credit union movement, and in his church and community. He served on Credit Union Resources' board of directors, and is an advisory board member to the Fort Worth Chapter.  He also serves on TCUL's International Relationships Committee, and on the State Affairs Working Group of TCUL's Governmental Affairs Committee.

He is a chaplain for the Euless, Texas, police department, and is starting a chaplain program for another police department and a local mission network. At his church, Massey leads a financial class, helps with church safety, and is a deacon.

CU System briefs (11/20/2012)

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  • HOUSTON (11/21/12)--News Now recently reported that fraud rings are becoming family affairs (Nov. 15). That must go for robberies, too.  Three suspects--a father, adult son and adult daughter--are in jail on charges related to a pair of robberies in Houston, including a credit union, and possibly five robberies in the Portland, Ore., area where they used to live (CNN Wire Nov. 18). They are: Ronald Scott Catt, 50; his son Hayden Scott Catt, 20; and his daughter Abigail "Abby" Catt, 18. The father and son are charged with disguising themselves in fake mustaches, painter's masks, sunglasses, hats and orange traffic vests with an "X" on the back and robbing Katy, Texas-based First Community CU on Oct. 1. Surveillance videos showed two men pointing guns inside the credit union and emptying money from the vault. Abby Catt was charged with being the getaway car driver. Authorities traced them through purchases of painter outfits, masks and the vests from two area Home Depots …
  • GAINESVILLE, Fla. (11/21/12)--Louise Hinton, former CEO of the former Campus FCU in Gainesville, Fla., died Nov. 6 after major surgery. She was 87. Hinton started out as an accountant at the credit union and worked her way up to CEO, a position she held until she retired in 1990. Hinton was known as a pioneer for women in the world of business, said a feature about her life in The Gainesville Sun (Nov. 19).  Former credit union board member Winton "Skip" Williams told the publication Hinton was a generous woman who was passionate about the credit union. "Louise saw it as friends helping other friends," he said. "It was the mutual part of the credit union that appealed to her." …
  • ALBANY, N.Y. (11/21/12)--Nino Montani, former New York Credit Union Hall of Fame member and lifelong credit union leader, died Saturday at the age of 90. He was a devoted credit union advocate since 1952, when he helped initiate the process that led to the establishment of Hooker Employees FCU (now Niagara's Choice FCU), Niagara Falls, N.Y. He served for 25 years as the credit union's treasurer, as well as volunteer secretary, vice president and president of the board. Montani was president of the Niagara Chapter and a board member of the Credit Union Association of New York (CUANY). He was inducted into the Hall of Fame in 2002. "Nino dedicated a great measure of his life to the betterment of credit unions, and he made a lasting impact on our statewide movement," said William J. Mellin, president/CEO of CUANY. Earlier this year, Montani retired as board member and was unanimously elected to the newly created position of director emeritus. He is survived by his wife Mary, three children, five grandchildren and five great-grandchildren …

AACUL presents Thompson with Eagle Award

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WASHINGTON (11/21/12 ) --
Brett Thompson, right, president/CEO of the Wisconsin Credit Union League and former American Association of Credit Union Leagues (AACUL) chairman, was presented AACUL's highest honor--the Eagle Award--last week at AACUL's Annual Meeting by Bill Mellin, left, AACUL chairman and president/CEO of the Credit Union Association of New York. (Photo provided by the American Association of Credit Union Leagues
The American Association of Credit Union Leagues (AACUL) has bestowed its highest honor--the Eagle Award--on Brett Thompson, president/CEO of the Wisconsin Credit Union League and former AACUL chairman.

The presentation was made during the AACUL 2012 Annual Meeting  held  Thursday-Saturday.

Also at the meeting, the association re-elected its executive board for 2013.

The Eagle Award has been presented only 18 times in the award's 32-year history. It is bestowed on a league president who:

  • Has an outstanding record of achievement at the league level;
  • Is willing to speak out and take a stand on critical, controversial issues;
  • Demonstrates leadership beyond the league level;
  • Is innovative in creating or implementing new ideas; and
  • Maintains an unremitting dedication to credit union and personal principles, and an unflagging focus on important issues.
Mike Mercer, president/CEO of the Georgia Credit Union Affiliates and chairman of the Credit Union National Association (CUNA) Board, serves as chair of the Eagle Committee. In presenting the award, Mercer cited Thompson's outstanding advocacy work in the Wisconsin state capitol of Madison, and before Congress. He cited specific undertakings, including:

  • The Wisconsin league's "1 with The League" on-going public relations and advocacy campaign that has trained more than 1,100 credit union activists;
  • Creation of Wisconsin Credit Union House; and
  • Thompson as one of the top personal contributors to CULAC.
"Under Brett's leadership, the Wisconsin league has had far-reaching efforts to engage youth in credit unions," said Bill Mellin, chairman of AACUL and president/CEO of the Credit Union Association of New York. "Wisconsin credit unions now supervise 100 in-school, student-run branches with $3 million on deposit; has provided resources to help 405 teachers at 350 high schools achieve state teaching standards for personal finance; and the creation of an innovative personal finance game, Money Mission, which is being used by young people in 48 states to learn basic money management.

"I cannot think of better person to receive this high honor from our association," Mellin added.

Thompson's work beyond Wisconsin includes several leadership positions with AACUL, CUNA, and the Minnesota & Wisconsin Cooperatives.

"Brett has shaped many of AACUL's initiatives over the past 10-plus years.  I can't think of anyone more deserving of this recognition," noted Susan E. Newton, AACUL executive director.

Also during the three-day meeting, AACUL re-elected Mellin to another term as AACUL chairman.  Other members of the Executive Board elected include:

  • First vice chairman Wendell Lyons, CEO, Kentucky Credit Union League;
  • Second vice chairmanTracie Kenyon, CEO, Montana Credit Union Network;
  • Treasurer John Radebaugh, CEO, North Carolina Credit Union League;
  • Secretary Mark Cummins, CEO, Minnesota Credit Union Network;
  • Immediate past chair Thompson; and
  • Newton.

CUNA closed Thursday-Friday no INews NowI (11/20/2012)

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WASHINGTON and MADISON, Wis. (11/21/12)--The Washington D.C. and Madison, Wis., offices of the Credit Union National Association will be closed Thursday and Friday in observance of the Thanksgiving holiday.

News Now will not publish a Thursday or Friday edition but will resume regular publication on Monday.

NEW Thompson presented AACUL Eagle Award exec board re-elected

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WASHINGTON (Filed at 10:30 a.m. ET 11/20/12)--
Brett Thompson, right, president/CEO of the Wisconsin Credit Union League and former American Association of Credit Union Leagues (AACUL) chairman, was presented AACUL's highest honor--the Eagle Award--last week at AACUL's Annual Meeting by Bill Mellin, left, AACUL chairman and president/CEO of the Credit Union Association of New York. (Photo provided by the American Association of  Credit Union Leagues)
The American  Association of Credit Union Leagues (AACUL) bestowed its highest honor--the Eagle Award--on Brett Thompson, president/CEO of the Wisconsin Credit Union League and former AACUL chairman, during the AACUL 2012 Annual Meeting held Thursday-Saturday.

Also at the meeting, the association re-elected its executive board for 2013.

The Eagle Award has been presented only 18 times in the award's 32-year history. It is bestowed on a league president who:

  • Has an outstanding record of achievement at the league level;
  • Is willing to speak out and take a stand on critical, controversial issues;
  • Demonstrates leadership beyond the league level;
  • Is innovative in creating or implementing new ideas; and
  • Maintains an unremitting dedication to credit union and personal principles, and an unflagging focus on important issues.
Mike Mercer, president/CEO of the Georgia Credit Union Affiliates and chairman of the Credit Union National Association (CUNA) Board, serves as chair of the Eagle Committee. In presenting the award, Mercer cited Thompson's outstanding advocacy work in the Wisconsin state Capitol of Madison, and before Congress. He cited specific undertakings, including:

  • The Wisconsin league's "1 with The League" on-going public relations and advocacy campaign that has trained more than 1,100 credit union activists;
  • Creation of Wisconsin Credit Union House; and
  • Thompson as one of the top personal contributors to CULAC.
"Under Brett's leadership, the Wisconsin league has had far-reaching efforts to engage youth in credit unions," said Bill Mellin, chairman of AACUL and president/CEO of the Credit Union Association of New York. "Wisconsin credit unions now supervise 100 in-school, student-run branches with $3 million on deposit; has provided resources to help 405 teachers at 350 high schools achieve state teaching standards for personal finance; and the creation of an innovative personal finance game, Money Mission, which is being used by young people in 48 states to learn basic money management.

"I cannot think of better person to receive this high honor from our association," Mellin added.

Thompson's work beyond Wisconsin includes several leadership positions with AACUL, CUNA, and the Minnesota & Wisconsin Cooperatives.

"Brett has shaped many of AACUL's initiatives over the past 10-plus years.  I can't think of anyone more deserving of this recognition," noted Susan E. Newton, AACUL executive director.

Also during the three-day meeting, AACUL re-elected Mellin to another term as AACUL chairman.  Other members of the Executive Board elected include:

  • First vice chairman Wendell Lyons, CEO, Kentucky Credit Union League;
  • Second vice chairman Tracie Kenyon, CEO, Montana Credit Union Network;
  • Treasurer John Radebaugh, CEO, North Carolina Credit Union League;
  • Secretary Mark Cummins, CEO, Minnesota Credit Union Network;
  • Immediate past chair Thompson; and
  • Newton.

CU System brief (11/19/2012)

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  • HOUSTON (11/20/12)--News Now recently reported that fraud rings are becoming family affairs (Nov. 15). That must go for robberies, too.  Three suspects--a father, adult son and adult daughter--are in jail on charges related to a pair of robberies in Houston, including a credit union, and possibly five robberies in the Portland, Ore., area where they used to live (CNN Wire Nov. 18). They are: Ronald Scott Catt, 50; his son Hayden Scott Catt, 20; and his daughter Abigail "Abby" Catt, 18. The father and son are charged with disguising themselves in fake mustaches, painter's masks, sunglasses, hats and orange traffic vests with an "X" on the back and robbing Katy, Texas-based First Community CU on Oct. 1. Surveillance videos showed two men pointing guns inside the credit union and emptying money from the vault. Abby Catt was charged with being the getaway car driver. Authorities traced them through purchases of painter outfits, masks and the vests from two area Home Depots …

WEOKIE member hits 35-yd field goal wins 25K

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OKLAHOMA CITY, Okla. (11/20/12)--A randomly selected WEOKIE CU member kicked a 35-yard field goal Saturday and won $25,000, compliments of the Oklahoma City, Okla.-based credit union.

James Liles, 32,  an electrician from Mustang, Okla., kicked the field goal in WEOKIE's "Kick for Cash" promotion with Oklahoma State University Athletics while attending the Oklahoma State University vs. Texas Tech game at Cowboy Stadium in Stillwater.

He and his wife Ginger have three children. Liles, a huge Cowboys fan, said the kick was an "opportunity of a lifetime." WEOKIE President/CEO Brent Taylor was present on the field to congratulate Liles and said that "WEOKIE is committed to changing the financial lives of its members."

The $870 million asset credit union received 1,874 entries for the "Kick for Cash" promotion, which began in September. The promotion with OSU featured WEOKIE's 1.99% auto loan rate and gave those entering a chance to kick at the Cowboys' home game.

U S PIRG bank-fee study Go to a CU or small bank

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MADISON, Wis. (11/20/12)--Free checking is alive and well among credit unions and small banks, but not so at large bank with more than $10 billion in deposits. Only one-fourth of the big banks offer it, according to a new survey from the U.S. Public Interest Research Group (U.S.PIRG).

For its 2012 survey report, "Big Banks Bigger Fees: A National Survey of Fees and Disclosure Compliance," PIRG staff visited 250 bank branches and 116 credit union branches in 17 states and the District of Columbia to determine if compliance with the Truth in Savings Act requirement that "prospective customers" have the right to "complete" schedules.

Fewer than half the banks (48%) complied easily with the request. After two or more requests, eventually a total of 72% complied with the law. Credit unions had the highest percentage with complying with fee disclosure requests on first request --64% compared with all bank branches' 48%--and on the second, successive requests, if needed. They also gave the least partial or wrong information--6% compared with all banks' 16%.

Researchers found a variety of free or low-cost checking options, with 60% of credit unions providing totally free checking. That compares with  24% for big banks and 63% for small banks do.  In a survey of just the banks (credit union data will be the subject of a separate report), small banks had lower average checking account fees, overdraft fees and foreign or off-us ATM fees and lower minimum required balances to avoid the fees. U.S. PIRG said it was surprised to learn that one-fourth of small banks no longer charge regular checking account customers the off-us ATM fees. This, said the report, undercuts one of the major benefits often cited by large banks--access to large no-cost ATM networks.

Other findings:

  • Free checking remains widely available at small banks and credit unions. While the biggest banks are raising fees and eliminating free checking, most continue to offer free checking with direct deposit.
  • Free accounts are widely available at credit unions and small and regional banks, a finding that has been obtained by others, the survey noted.
The report did note that some credit unions could explain the basic terms better in their disclosures but that they generally had "fewer and lower fees than banks."

In detailed tips to consumers, the report listed as its first tip: "Choose to bank at a credit union instead of a bank."  In explaining, it noted credit unions' structure, services, and said that "average interest rates for loans are lower at credit unions than banks, and average rates for deposits are higher. That is a better deal both ways."  Its second tip was "Choose a local or regional bank."

Among the report's advice: "Shop around. Look for better accounts. Bank at a credit union, not at a bank. Credit unions are member-owned, lower-cost alternatives to banks and often offer the same variety of services. It is easier to qualify for membership than most consumers think. Certainly, consider banking at a small bank, not a big bank. Consider moving your money by voting with your feet."

J P Morgan files to delay NCUA suit over MBS

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KANSAS CITY (11/20/12)--J.P. Morgan Chase has asked a U.S. District Court in Kansas City to delay proceedings or a decision in the National Credit Union Administration's (NCUA) lawsuit against it over residential mortgage backed securities (RMBS) it sold to corporate credit unions until after an appeals court in the Tenth Circuit in Denver has ruled on whether NCUA filed a similar lawsuit in time.

The Kansas case against J.P. Morgan's securities and brokerage firms and other securities firms involves the same arguments used by NCUA in seven cases, including against RBS Securities and Wachovia Capital Markets. The RBS and Wachovia cases were consolidated by U.S. District Court Judge Richard D. Rogers in Denver.  On July 25, Judge Rogers denied in part the RBS defendants' motions to dismiss the consolidated action, ruling that an Extender Statute to the statute of limitations in the case was applicable and "tolled" NCUA's claims, which meant NCUA had filed its suit within the timeframe allowed by law.

On Sept. 19, Rogers certified two issues for appeal: whether the Extender Statute applies to the state of repose as outlined in the Securities Act and whether it applies to federal and state statutory claims. On Nov. 6, the Tenth Circuit Court of Appeals granted an appeal.

"The extender statute issues currently before the Tenth Circuit are identical to the extender statute issues raised here," said J.P. Morgan.  If the appeals court reverses the decision "it will, at a minimum, require the dismissal of federal claims relating to 11 of the 34 RMBS certificates and two of the five defendants in the case," said J.P. Morgan's petition for the stay.

The petition, which asks that the proceedings don't progress and a r mentioned that there is "unsubstantial uncertainty as to whether RBS was properly decided," citing a set of decisions in the U.S. District Court in the Central District of California that  concluded the extender statute did not apply to the statutes of repose.

NCUA's lawsuits allege that the banks in question made numerous misrepresentations and omissions of material fact in the RMBS documents presented to U.S. Central FCU, Western Corporate FCU, Members United Corporate FCU and Southwest Corporate FCU. The RMBS investments contributed to the corporates' collapse and NCUA sued as the corporates' liquidating agent.

CUs new building to open for community needs

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ODESSA, Texas (11/20/12)--Complex Community FCU in Odessa, Texas, opened a new building that eventually can be used for community meetings.

The new facility, opened near the main branch of the $350 million asset credit union in Odessa, will be used for training employees, accounting, collections, data processing, information technology and a phone center (Odessa American Nov. 18).

Construction of the building is complete, and employees have moved into the facility, Jason Berridge, Complex Community president/CEO, told the newspaper. 

Once the employees get settled in, the credit union intends to make a room available to the community, Berridge added. It will have visual and sound capabilities.

Maines awareness campaign begins early

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PORTLAND, Maine (11/20/12)--The Maine Credit Union League has begun airing television advertising spots for its 2013 Statewide Awareness Campaign.

Because production and editing were completed ahead of schedule, spots aired a week earlier than previously planned, the league said (Weekly Update Nov. 16).

A 30-second lending spot began airing on Nov. 8.

"Recently, we have heard from a number of credit unions in different parts of Maine that they want to do more loans, so we will support the efforts of credit unions on the local level by having the Statewide Awareness Campaign focus on lending between now and Christmas," said John Murphy, Maine league president.

The new lending spot will appear more than 900 times through Dec. 31.

The entire campaign package will be sent to all credit unions in the state in early December after he final 2013 media buy is finalized.

The lending spot has been posted on YouTube. Use the link.

The five new spots are designed "to build upon the momentum that the previous commercials have generated, and reflect the products and services, convenience and access that credit unions offer consumers," said Debra Trautman, the league's corporate marketing manager.

Robbery suspect shot dead by intended victim at ATM

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ORLANDO, Fla. (11/20/12)--A suspected robber was shot dead Friday by his intended victim at a drive-through ATM  at the Fern Park, Fla., branch of Orlando, Fla.-based Fairwinds CU.

Justin Slivinski, 24, was shot to death when he and a 19-year-old accomplice, Austin Lee Harvey, allegedly brandished knives and tried to rob a man in a truck at the ATM drive-through lane of the $1.68 billion asset credit union, the Seminole County Sheriff's Department said (Orlando Sentinel Nov. 18). 

When Slivinski and Harvey allegedly showed their knives, the intended victim pulled out a handgun and fired, hitting Slivinski twice, said the Sheriff's Department. Slivinski was taken to a local hospital where he died, the newspaper said.

Harvey fled on foot, but a tipster led authorities to him. He was arrested Saturday afternoon and charged with attempted armed robbery and murder charges, the paper said. The member who fired the shots will not be charged, said the sheriff's department.

New CU to help underserved open within 18 months

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SAN FRANCISCO (11/20/12)--People's Reserve CU in San Francisco, which registered in California one year ago, is about a year to 18 months away from coming to fruition as a credit union.

"Our mission is to help the underserved--as well as our working-class and middle-income San Franciscans--by providing them with opportunity to create a community development credit union that is state-based," Brian McKeown, business development officer and one of the founders of People's Reserve, told News Now.

Two life experiences helped create the impetus for People's Reserve, McKeown said.

"I studied microfinance at Grameen Bank in Bangladesh in 2008 to 2009," he explained. "It has projects in 140 countries worldwide, and it makes loans to poor women to start businesses. It's really amazing. I was just in awe of the way it was run and its impact on communities and women's lives and people in general."

The other factor is that McKeown was a small business owner, an entrepreneur for most of his adult life. "I was dealing with the one-percenters, and the Occupy Movement came on the scene, so I joined that movement in San Francisco, along with other people who were mad at being 'rolled' by big financial institutions. We decided we needed to start something."

Currently, the credit union is in the fundraising mode, which began last month. "We haven't submitted yet [for a credit union charter to the California Department of Financial Institutions or the National Credit Union Administration]," McKeown said. "We're just concentrating on raising money before we file.

"I've talked with other credit union CEOs and we're definitely ahead of the game," he added. "The biggest challenge is raising money because we can't promise a return. A lot of people don't understand a credit union and--how it will help them. It is hard to get general donations, and there are not a lot of foundations for this."

So far, some board management is in place for People's Reserve, surveying in the community is being conducted and the credit union is aligning with some nonprofit groups. "We have a pretty strong board," McKeown said.

The credit union is sending some staff to City College of San Francisco to learn about the fashion and clothing industry, McKeown said. People's Reserve is looking to help people in the clothing industry get started--not necessarily through owning stores, but rather by making the clothes.

"People here will spend money to buy locally produced goods through existing stores, outlets and co-ops," he added.

The credit union plans to offer microloans of $5,000 or less to working poor and homeless people, subsidize student loans at low interest rates and cultivate community projects. 

One of those projects is to finance a local food co-op that serves neighborhoods.

"We're working with other groups on how to actually do that," McKeown said. "The 'slow food' movement has been picking up over the past few years. I am not a fan of 'Franken-food.' People need an alternative to prevent obesity and diabetes. Food co-ops work well with other nonprofits. And lots of people want to see them and will help us."

People's Reserve is working with local co-ops and an organization called the Business Alliance for Local Living Economies (BALLE).

"We're looking to see what the local small businesses' needs are and what we can do to meet them," McKeown explained. "Getting to know businesses helps you stand apart from the competition.

"The key is surveying--talking to businesses and getting to know them and their needs," he concluded.

Michigans Save to Win prize structure changes

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LANSING, Mich. (11/20/12)--Save to Win, a prize-linked savings program for Michigan credit unions, has a new prize structure.

Six grand prizes of $10,000 each will be awarded at the end of the program year in February 2014, said the Michigan Credit Union League (MCUL) (Michigan Monitor Nov. 19). The league will award between 50 and 75 prizes of $50 each month. Credit unions interested in participating in the 2013 program will contribute a per-entry fee to will help fund a prize pool of $100,000.

Members participating in Save to Win in 2011 had an average savings balance of more than $2,000, compared with an average balance of $1,871 and total savings of $30 million in 2010 (News Now Feb. 23)

Also, the league introduced a new product to complement the Save to Win Share certificate. SaveUp is a member rewards program, designed to incent members to save money and pay down debt. Members earn credit for each positive behavior and use those credits to play games and win prizes.

SaveUp recently partnered with CU Solutions Group, an MCUL affiliate, to bring new a product to Michigan credit unions. After a successful pilot conducted by the Filene Research Institute, which also helped create the Save to Win product, SaveUp is being offered to credit unions nationwide.

CUNA receives final nominations for board seats

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MADISON, Wis. (11/20/12)--A final nomination has been submitted for the Credit Union National Association (CUNA) board positions.

The nomination was made in District 2, Class A for Joe Thomas, president/CEO of Fairfax (Va.) County FCU.

There will be one contested election for the CUNA board, for the District 2, Class A position.  All other nominees will be elected by acclamation and will take office on Feb. 25 in Washington, D.C.

Ballots for the 2A position will be sent out Wednesday.  Voting will continue through Jan. 4, with results to be announced Jan. 9.

In addition to Thomas, nominees are:

  • District 1, Class C: Robert Cashman, president/CEO, Metro CU, Chelsea, Mass.;
  • District 3, Class B: Brad Green, president/CEO, Listerhill CU, Sheffield, Ala.;
  • District 6, Class D, for Troy Stang, president/CEO, Northwest Credit Union Association, Federal Way, Wash.;
  • District 4, Class C: Dennis Pierce, CEO, CommunityAmerica CU, Lenexa, Kan.;
  • District 6, Class A: Susan Streifel, president/CEO, Woodstone CU, Federal Way, Wash.;
  • District 5, Class D: J. Scott Sullivan, president/CEO, Nebraska Credit Union League, Omaha, Neb.;
  • District 5, Class B: Incumbent Roger Heacock president/CEO, Black Hills FCU, Rapid City, S.D.; and
  • District 2, Class A: Incumbent John Graham, president/CEO, Kentucky Employees CU, Frankfort, Ky.
 Positions up for election are:

  • District 1, Class C;
  • District 2, Class A;
  • District 3, Class B;
  • District 4, Class C;
  • District 5, Class B;
  • District 5, Class D;
  • District 6, Class A; and
  • District 6, Class D.

Aging members part of national trend

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WASHINGTON (11/19/12)--Credit unions' membership is growing older and many of their  strategic plans include marketing to new demographic groups such as youth and Hispanic markets to help stem the tide of time.

The average age of credit union members is 47, but that figure doesn't quite put the dilemma for credit unions into perspective.  The share of householders who are age 75 years or older is now 10%, compared with 6% in 1960, according to the Texas Credit Union League in LoneStar Leaguer (Nov. 16), citing statistics from  America's Families and Living Arrangements: 2012, which includes tables from the 2012 Current Population Survey for the nation.

Looking at the older end of the demographics indicates the seriousness of the issue, but so does what credit unions themselves are already experiencing.

For example, Sunmark FCU, a $376 million asset credit union based in Latham, N.Y., with nearly 46,000 members, recently told The Business Review (Nov. 16) that it loses more than 100 members a month because they die. Bruce Beaudette, CEO, told the publication that's why he reads the obituary columns every day.  His credit union, like many others, is seeking younger members. (See related News Now story: CUs look to young members to counter aging population).

In 1960 roughly 32% of U.S. households were headed by people aged 30 to 44 years old. That percentage has dropped to 26% today, after a peak at 34% in 1990, says the survey cited by the Texas league. The share of households headed by older adults expanded as the number of 45- to 64-year olds shrank in the 1980s and 1990s but began growing again in 2000 as baby boomers grew older.

Credit unions wanting to take a deeper look at the demographics to determine their marketing strategies also need to look at the  living arrangements of today's households. The survey notes that more older people live alone today. Of those aged 75 or older this year, more than half live alone. That compares with nearly one-fourth of householders under age 30 who do so.

Other findings from the America's Families survey:

  • In 2012, roughly 27% of households contained one person, up from 17% in 1970.  On average, American households contain 2.55 people.
  • The largest concentration of households with five people or more was among the 30-to- 44 age group, who were most likely living with children younger than 18.
  • Married households continue to decline--to 49% in 2012 from 71% in 1970.
  • Households with unmarried couples living together more than doubled--to 7.8 million in 2012 from 2.9 million in 1996. Forty percent of unmarried partners have children younger than 18.
  • The median age for a first marriage today is 28.6 for men and 26.6 for women.
  • White non-Hispanic adults now head 69% of households--down from 75% in 2000.
  • Households headed by 55- to 64-year olds rose to 19%, from 13% in 1990, while those headed by adults younger than 30 dropped to 13% from 16%.
  • Households with both spouses in the work force dropped to 52% from 56%.
  • Stay-at-home parents increased for those with children younger than 15. Stay-at-home mothers increased to 24% from 20% in 1994. However, this year's estimate is not significantly different from last year or from 2007 before the recession began.
  • Ninety-six percent of stay-at-home parents are mothers. However, stay-at-home fathers more than doubled between 1994 and 2012, from 76,000 to 189,000.
  • The percentage of children who live with two parents: 85% of single-race Asian children; 77% of singe-race white non-Hispanic children; 66% of Hispanic children and 38% of single-race black children.
  • Of the 73.8 million children in the U.S., 9.7% or 7.1 million lived with a grandparent.

CU System briefs (11/16/2012)

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  • WASHINGTON (11/19/12)--The Internal Revenue Service (IRS) is warning consumers of a new tax scam that mimics its e-Services online registration page on its website, www.irs.gov. The actual IRS e-Services page offers Web-based products for tax preparers, not the general public. The phony web page looks almost identical to the real one, said the IRS, which added it receives many reports of fake websites like this. "Criminals use these sites to lure people into providing personal and financial information that may be used to steal the victim's money or identity, said the alert. Credit unions can remind their members that IRS' official site address ends in .gov--not in .com, .net, .org, or other designations …
  • ST. LOUIS (11/19/12)--Suspicious staffers at a credit union in St. Louis helped foil a scam after a woman allegedly tried to cash a dead man's tax refund check by posing as the man's representative, said the St. Louis Post-Dispatch (Nov. 3). Patrina Rochelle Taylor, 44, of Creve Coeur was charged in the incident. The report did not name the credit union. The $7,497 check was issued to an "Ann Hoang" as a personal representative of "Billy Mobley." Both Hoang and Mobley are deceased, according to Internal Revenue Service (IRS) databases. Authorities believe the incident may be linked to a scheme in which dozens of returns worth hundreds of thousands of dollars in refunds were filed under the names of recently deceased people. IRS is warning financial institutions and businesses to beware of people trying to cash Treasury checks payable to someone else or who engage in suspicious activity. Last year, about 940,000 returns used identity theft to claim or try to claim roughly $6.5 billion in refunds. Law enforcement authorities have filed charges against several groups operating similar schemes …
  • MONROE, Mich. (11/19/12)--Sharon Broadway, 61, of Toledo, Ohio, pleaded not guilty Thursday to embezzlement and racketeering stemming from the theft of $2.1 million from United Catholic CU in Temperance, Mich. Broadway was the manager, secretary, board member and sole employee of the credit union, which was closed on Aug. 9. The National Credit Union Administration was appointed as receiver. The embezzlements allegedly occurred since 1985 under a complex money laundering scheme involving multiple aliases and forged checks to hide the thefts. Broadway is accused of using the money as personal funds. The theft was discovered during a routine examination by the Michigan Office of Financial and Insurance Regulation, said a Toledo newspaper (The Blade Nov. 16). News of the charges prompted the Michigan Credit Union League to reassure members and the public. "Members of credit unions across Michigan should rest assured that their money is safe and sound, and that credit unions are well-run, sophisticated financial institutions that typically have adequate checks and balances to avoid this type of event," said Michigan Credit Union League & Affiliates CEO David Adams. "Credit unions and regulators go to great lengths to ensure that proper safeguards are in place so our members' money is safe. Our association stands ready to assist authorities in any way we can to get to the bottom of this incident, which is an aberration, and to ensure that it doesn't happen again."  …
  • PORTLAND, Maine (11/19/12)--Robert Walker, long-time manager/treasurer Monmouth (Maine) FCU, died last week at the age of 92, according to the Maine Credit Union League (Weekly Update Nov. 16). He spent 50 years serving the credit union, including 30 years as manager. After he retired, he served on the credit union's board of directors. He also served on the league's board. In 2009, he received the Alexander Ferguson Award for Outstanding Credit Union Volunteer. In 2002, Monmouth FCU's new facility was dedicated to Walker and his wife, Jean, and named the Walker Building …

Dodge Central CU to merge into Landmark CU

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NEW BERLIN, Wis. (11/19/12)--Two Wisconsin credit unions have announced they plan to merge, pending regulatory approval and a vote by the merged credit union's members.

Dodge Central CU, a $52 million asset credit union based in Beaver Dam, will merge with Landmark CU, a $2 billion asset credit union in New Berlin. The boards of both credit unions have already approved the merger. Dodge Central CU's members will also vote on the proposal.

The credit unions said they expect the merger to be completed Dec. 31, with Dodge Central's member accounts combined into Landmark's computer system in the spring or summer of 2013.

"This merger allows us to strategically expand our branch locations and better serve all members in the area," said Landmark President Jay Magulski. "We continue to execute on our brand promise, which is to bring consistent value and convenience to our members," he said.

"We do this with great rates on loans and deposits and excellent customer service.  And, we continue to offer free checking accounts and products and services with no or low fees. We work hard so our members can truly benefit from the value that only a credit union delivers," Magulski added.

Dodge Central CU President/CEO Barbara Campbell will join Landmark CU as a regional president and continue working from the Beaver Dam location. "Our two credit unions share a belief in excellent customer service as well as a focus on employee satisfaction and a commitment to community involvement," she said, noting that Dodge Central members would benefit from the "expanded list of products, services and locations that Landmark brings."

Landmark will add locations in Beaver Dam, Juneau, Mayville and Fall River, and the merger will widen its charter to include Columbia, Marquette and Fond du Lac counties.  Dodge Central CU also has an in-school branch at Beaver Dam High School.

Dodge Central has 9,750 members and 33 employees. Landmark has 489 employees who serve more than 196,000 members at 25 locations in Southeastern Wisconsin. The merger will bring its locations up to 30.

GCUA Georgians surveyed wont increase holiday spending

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DULUTH, Ga. (11/19/12)--Most Georgia residents surveyed plan to spend the same or less than they did a year ago on holiday shopping, according to the most recent poll conducted by Georgia Credit Union Affiliates (GCUA).

The survey revealed:

  • 70.1% of Georgia respondents plan to use cash this holiday season;
  • 12.4% plan to pay for most purchases with a credit card, down from 15.9%  last year;
  • 57.5% report their holiday spending will be at or below $500;
  • 48.2% plan to spend the same as in 2011; and
  • 48.5% plan to spend less than they did a year ago.
Retail sales for the holiday season are expected to grow 4.1%, which is less than the 5.6% increase experienced in 2011, according to the National Retail Federation.

However, growth projections may not reflect an accurate picture for most U.S. citizens. A survey conducted by American Express and the Harrison Group found that while the top 10% of the population will spend nearly 22% more on gifts than they did last year, overall gift giving will be down.

Holiday loans have been in high demand for the past several years, and Grace Lollar, president/CEO of Richmond Community FCU in Gracewood, Ga., expects this year to be no different, she told GCUA.

"Wages have not risen for most of our membership, but the cost of living has gone up," Lollar said. "Most of our members rely heavily on holiday loans to pay for their purchases."

The trend of scaling back will continue for most people, Lollar added. Consumers seeking to trim their holiday spending should immediately start making a "Santa's list," she added.

"Write down everyone you will be shopping for and set a dollar amount for each gift," Lollar said. "Then do your level best not to exceed those amounts."

Consumers will have a difficult time staying within their budgets due to rising costs of consumer goods, Lollar said. She encouraged people to be proactive next year and save a little at a time in a Christmas club account or other special savings account.

"Even if you save only a minimal amount each paycheck, it will add up over the course of the year," she concluded.

The Consumer Federation of America and the Credit Union National Association will release results of their annual national holiday spending survey on Wednesday.  See related story: "CFA-CUNA to reveal consumers' 2012 holiday spending plans this week."

CUAid disaster relief collections total 185K

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MADISON, Wis. (11/19/12)--More than $185,000 has been raised for disaster relief by credit unions and credit union-related organizations through CUAid,  the credit union movement's Disaster Relief Fund, the National Credit Union Foundation (NCUF) announced Thursday.

"This is the result of donations ranging from $5 to $10,000 demonstrating the collective power and philosophy of the credit union movement," said Christopher Morris, NCUF director of communications. 

In New Jersey, the state Department of Banking and Insurance (NJ DOBI) is requesting information about how state credit unions are responding Hurricane Sandy, said the New Jersey Credit Union League .

Alloya Corporate FCU, Albany, N.Y., is providing a special fixed term loan, below market interest rates to its members affected by Hurricane Sandy, according to the New Jersey league (The Daily Exchange Nov. 16).

To date, two member credit unions have taken advantage of the special rate, Alloya said.

The National Credit Union Administration (NCUA) and other federal financial regulators have urged financial institutions to "consider all reasonable and prudent steps" to help members and customers impacted by Hurricane Sandy (News Now Nov. 15).

The Federal Reserve, the Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency joined the NCUA in releasing supplemental guidance to their Oct. 30 statements about financial institutions and borrowers affected by the storm.

Bankruptcy filings up 16 in October

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ALEXANDRIA, Va. (11/19/12)--Total U.S. consumer bankruptcy filings in October increased 16% from September, the American Bankruptcy Institute (ABI) said.

October bankruptcy filings--commercial and noncommercial--totaled 101,278, up from the 87,522 filings in September, according to Epiq Systems.

The 96,498 total noncommercial filings for October represented a 16% increase from the September's total of 83,493, ABI said. Commercial filings for October totaled 4,780--a 19% increase from 4,029 filings in September.

Commercial Chapter 11 filings also increased with 704 filings last month-- a 3% percent rise from the 681 in September.

Despite the uptick, total bankruptcy filings for the year remain on pace for about 1.2 million new cases, the lowest total since before the financial crisis, said ABI Executive Director Samuel Gerdano (SubPrimeNews.com Nov. 7) .

He said sustained low interest rates and weak spending as households deleverage are helping to keep bankruptcy filing rates down.

October's 101,278 total bankruptcy filings were a 9% decrease from the 111,533 filings registered in October 2011, ABI said.

Total commercial filings for October were 4,780, or a 16% decrease from October 2011. The commercial Chapter 11 filing total of 704 constituted a 23% drop from last October.

Consumer filings for October marked a 9% drop from the October 2011 noncommercial filing total of 105,814.

The average nationwide per capita bankruptcy-filing rate through the first 10 months of 2012 was 3.96 (total filings per 1,000 per population). Average filings per day in October totaled 3,267, a 9% decrease.

HR metrics topic of CUNA HRTD Council paper

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MADISON, Wis. (11/19/12)--The use of human resources (HR) metrics by credit unions is attracting more interest as a means to assess the impact of an organization's "human capital" on operations and financial performance, and as overall strategic development support, according to a new white paper from the CUNA HR/TD Council. 

The paper, "HR Metrics: The Numbers in Support of Strategic and Operational Initiatives," discusses how HR professionals may benefit by learning how to gather data and analyze it through metrics, which formulas are most useful to achieve specific aims, and how using metrics fits into the strategic vision and development of the corporate culture.

It also makes a case for collecting and analyzing crucial data to measure the impact of the credit union's most essential aspect: its employees. It presents results of a recent survey on how credit union HR executives are using metrics, examples of common formulas, and case studies of credit unions in various stages of putting metrics to work in their organizations. 

In May, the council surveyed credit unions on how they are using quantitative and qualitative assessments of their human capital. The survey garnered 64 responses from current council members and points to some industry trends.

Among the results:

  • Asked to rank their experience and expertise using HR metrics on a 1–10 scale, with 1 representing "no experience/expertise" and 10 "extremely experienced/expert," 64% of respondents rated their expertise as a five or lower.
  • Asked how important collection and analysis of HR metrics was to their organization, with 1 representing "not at all important" and 10"extremely important;"  59% rated metrics at a six or higher.
  • Roughly 85% of those surveyed said turnover was the metric they currently tracked or used. Other leading choices were involuntary turnover rate and voluntary turnover (63% each), cost of benefits (59%), average length of employment (51%), employee satisfaction (44%), promotions (37%), absenteeism (34%), transfers (34%), and employee demographics (32%).
  • Most respondents (81%) said they had used HR metrics professionally for 10 or less years
  • About half reported using either internal or industry benchmarks to monitor performance.
  • In terms of how HR metrics are shared, 28% said the results stay in the HR department,63% share with the CEO, 39% with the rest of the C-suite [the most important company senior executives], 25% with the board, and 26% with managers with reporting staff.
  • Over half of respondents calculated metrics and ran reports monthly; 40% also generate annual reports, 37% go with quarterly reports, and 26% produce them "as needed."
  • Eighty-seven percent of respondents produce their HR metrics without support from specialized software or vendors.
 To obtain the paper, use the link.

CU board member is Maine House minority leader

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PORTLAND, Maine (11/19/12)--Rep. Ken Fredette (R), a board member at Sebasticook Valley FCU, Pittsfield, Maine, has been selected as the new minority leader of the Maine House of Representatives.

Fredette, who was elected to his second term in the Nov. 6 General Election, was a strong advocate and leader on credit union issues during the last legislature, according to the Maine Credit Union League (Weekly Update Nov. 16).

"Having someone who so intimately understands issues of importance to credit unions and the impact of legislation on credit union operations is a real plus when we discuss pieces of legislation," said league President John Murphy. "Ken was a go-to leader on many of our issues in the last legislature, and we look forward to working with him in his new leadership position."

Of the five leaders selected in the Maine house, four were endorsed by the league. Rep. Alexander Willette (R) was selected as assistant house minority leader. Rep. Mark Eves (D) was selected as speaker of the house. Rep. Seth Berry was selected as house majority leader.

CUs look to young members to counter aging population

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ALBANY, N.Y. (11/19/12)--Three New York state credit unions are appealing to Gen Y consumers with strategies that combine technology, location, products and special programs. 

The credit unions are employing the strategies to counteract the effects of an aging population. Nationally, the average credit union member is 47 years old. (See related News Now story, Aging members prt of national trend.)

In recent years SEFCU, based in Albany, has opened branches at the University at Albany, Skidmore College in Saratoga Springs, Rensselaer Polytechnic Institute in Troy and Binghamton University (The Business Review Nov. 16) .

Students who visited branches on Oct. 25 wearing their school colors were eligible to win iTunes gift cards

Sunmark FCU, with $372 million in assets, Latham, N.Y., does not have any on-campus branches, but it has joined a shared branching network and has launched a private student lending program. The lending program has first-year volume of $1 million, according to CEO Bruce Beaudette told the Review.

CapCom FCU, with $972 million assets, Albany, also offers a College Bound program for prospective students. The program includes two college planners who work with students as a free member service.

CapCom offers a youth program it recently took over from First Niagara Bank. Through the program, the credit union accepts deposits from elementary school students. The credit union had 4,000 youth accounts through the end of September, said Paula Stopera, president/CEO of CapCom FCU.

N C league honors retiring state regulator

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RALEIGH, N.C. (11/19/12)--Credit unions and representatives of the North Carolina Credit Union League were among those honoring state regulator Jerrie K. Jay, who will retire at the end of the year after 17 years of service as the state's Administrator of Credit Unions.

North Carolina Credit Union League President/CEO John Radebaugh, left, presents state Administrator of Credit Unions Jerrie K. Jay with a state flag that flew over the state Capitol in appreciation for 17 years of service. Jay will retire on Dec. 31. (Photo provided by the North Carolina Credit Union League).
Credit unions, the league and staff of the North Carolina Credit Union Division gathered on Nov. 6 to honor Kay at a dinner, said the league (The Weekly Conversation Nov. 9).

"The dinner was an opportunity to say thank you," said John Radebaugh, league president/CEO. "North Carolina has one of the strongest and most progressive state charters in the country, and Jerrie has stood watch and fought for state charters for the past 17 years. We appreciate her work and wish her well in retirement."

Jay noted she is "proud of North Carolina credit unions--large and small. The managers and volunteers work tirelessly to enhance the lives of the citizens of North Carolina.

"North Carolina is fortunate to have bright, energetic leaders dedicated to working in the best interests of the member-owners," she said, noting she is "proud of the legacy I leave to future administrators."

The Administrator of Credit Unions is appointed by the state Secretary of Commerce. No replacement has been named yet.

Earlier this year the state regulator and the National Credit Union Administration (NCUA) expressed differences about the disclosure of a credit union's CAMEL rating by the credit union and the use of dual examinations for state chartered, federally insured credit unions. NCUA treats the CAMEL rating as confidential information. The state regulator authorized the credit union, State Employees' CU, to release its state-issued rating. NCUA discontinued coordinating exams with the state regulator and opted to begin separate exams. The league has been active in seeking a dialogue with both regulators on the matter (News Now Feb. 7).

CU System briefs (11/15/2012)

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  • CEDAR HILLS, Utah (11/16/12)--A former mayor of Cedar Hills, Utah, has been sentenced to one year and a day in prison after pleading guilty for his role in a loan fraud ring.  Eric Richardson also was ordered by U.S. District Judge David Nuffer to repay no more than the $10,000 received for allegedly lending his name for a falsified loan application. Richardson resigned as mayor on June 25, two days before he was charged with defrauding the Heritage West CU of $330,000. He allegedly signed a blank vehicle application in 2010 for more than $57,0000 to buy a Land Rover, while his partners falsely claimed he earned $15,000 a month more than he did. The sales price was less than the loan. Convicted ringleader Christopher D. Hales is serving a prison term related to the frauds (Salt Lake Tribune Nov. 13) …
  • DUBUQUE, Iowa (11/16/12)--DuTrac Community CU, based in Dubuque, Iowa, recently paid out nearly $2 million in Christmas Club deposits to 1,800 thrifty members participating in its club savings account. "With DuTrac's Christmas Club saving account, participating members are able to fill their holiday stockings without emptying their wallets," said Andy Hawkinson, president/CEO. "In addition, club members' savings benefit local area retailers by providing shopping dollars for the holidays." The Christmas Club helps members alleviate some of the holiday shopping stress by knowing they are saving throughout the year, said the $550 million asset credit union  …

Study 10000 ID theft rings bring surprises

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SAN DIEGO (11/16/12)--More than 10,000 identity theft rings exist in the U.S., and for many they are a family matter, targeting bankcard, wireless and retail card industries, according to a new study released Wednesday by San Diego-based ID Analytics.

The research dispels some stereotypes about who is involved in identity theft rings and where the rings are located.

ID Analytics' ID:A Labs defines a fraud ring as a group of people--two or more--collaborating to commit identity theft. The study examined more than one billion applications for bankcards, wireless services and retail credit cards and found the rings attacking all three industries, with wireless carriers hit the most, aid a company press release.

Georgia and South Carolina were hotbeds of fraudulent activities in all three industries. Two bankcard rings in Gainesville, Fla., and in Orlando each filed 200 applications, said the company.

Among the study's findings:

  • States with the highest number of fraud rings were Alabama, the Carolinas, Delaware, Georgia, Mississippi and Texas.  Three-digit ZIP codes with the most fraud rings were in these areas: Washington, D.C.; Tampa, Fla.; Greenville, Miss.; Macon, Ga.; Detroit; and Montgomery, Ala.
  • A surprisingly high number of frauds were also found in rural areas of the country.
  • While some  involve the stereotypical organized-crime types, many identity theft rings involved families working together, even using each other's Social Security numbers and birthdates. However, rings were more commonly made up of friends having different last names, said Stephen Coggeshall, chief technology officer of ID Analytics and author of the study.
In an interview with Networkworld.com (Nov. 15), Coggeshall said he was surprised that while lone individuals involved in fraud tend to come from urban areas, the fraud rings tended to be in the rural Southeast. He attributed some of the increase in number to a poor economy and the fact that arrests and prosecutions are low.

The study spanned the decade but emphasized the past three years.  It found that two thirds of fraud attempts are shut down before they do any damage. That leaves a third that pose threats to credit unions and other financial institutions, and to members and other consumers.

CUNA outlines CU card benefits to Bankrate Fox

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WASHINGTON (11/16/12)--The Credit Union National Association (CUNA) outlined the benefits of credit cards offered by credit unions for a Bankrate.com article that also was carried in Fox Business as well as on Yahoo!Finance in Canada.

CUNA Chief Economist Bill Hampel is quoted extensively in the article, which discussed the ins and outs of credit unions' credit cards.

Hampel pointed out that one of the most flattering feature of a credit union card is the annual percentage rate (APR), which is often several percentage points below those offered at big banks. The average APR for credit union rewards cars was 9.38% as of Nov. 1, compared with 12.89% for big banks, said the article, quoting Informa Research Services.

Credit unions also offer a variety of options such as secured cards, rewards cards and platinum cards, he noted.

Credit unions don't engage in egregious practices such as double-cycling billing and retroactive rate increases and are bound by provisions of the Credit Card Accountability, Responsibility and Disclosure Act, just like big banks, he said.

Hampel pointed out that credit unions take fewer financial risks so credit limits may be lower at first than bank limits, but if the consumer consistently pays on the card every month, credit unions will quickly increase the limit.

He also said that membership requirements aren't a deterrent. "Everybody can typically find three to five credit unions that they're eligible to join."

Ondine Irving, owner of Card Analysis Solutions, a credit union consulting firm, also noted in the article that credit unions don't typically charge balance transfer fees and they have lower late fees. They also provide a longer grace period for late payments (five days vs. one day at big banks) and won't raise an interest rate after one late payment.

To access the full article, use the link.

S C gov orders protections after massive data breach

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COLUMBIA, S.C. (11/16/12)--A massive data breach at South Carolina's Department of Revenue has prompted an order for cabinet-wide cyber security measures from state Gov. Nikki Haley, as well as warnings to members from credit unions about the breach.

Cyber criminals stole more than 3.5 million Social Security numbers and information from 387,000 credit and debit cards in September from the state's collection agency, said the governor's press release Thursday.  The breach exposed the records of anyone who had paid taxes in the state since 1988. It affects 77% of the state's population.

Credit unions were alerted to the breach, which was announced Oct. 20 and was a topic among CUNA Technology Council members. Some credit unions placed a notice on their website that directs members to free credit monitoring services.

For example, $232 million asset SC Telco FCU, based in Greenville, placed an update on its website warning members about the breach. It said 16,000 of the debit and credit card numbers were not encrypted. Although the credit union does not know if its members were directly impacted, it noted it will continue monitoring the situation and stay "in constant contact with Visa to determine any proactive measures that may be needed. The protection of our members' personal information is our top priority."

The credit union made four recommendations to members.

  • Use the free credit monitoring set up by the state.
  • Check credit reports and report any discrepancies to the credit reporting bureau.
  • Diligently monitor banking accounts.  Because the breach occurred at the department of revenue "all financial institutions are at risk of having their customers/members' information exposed," said the credit union.  SC Telco provided information for checking accounts and transactions  and said to contact the credit union immediately if there is a suspicious or fraudulent transaction.
  • Take advantage of e-mail alerts that notify the consumer when the account has activity.
In a press conference Wednesday, Gov. Haley indicated her order directs the state's cabinet agencies to work with the Division of State Information Technology (DSIT) to implement network monitoring  24/7 as well as intervention and interruption of unusual events or viruses. She also encouraged all non-cabinet agencies to work with DSIT to identify weaknesses in their current monitoring and to implement stronger monitoring if needed.

When a potential threat or attack is identified, the agency's IT staff will be asked to remove the infected computer from the network and begin remediation action.

The state has been scrambling to help consumers affected by the breach. Credit reporting bureau Experian set up a call center to assist the state's taxpayers. As of Wednesday morning it had received more than 775,000 calls and signed up 789,500 callers for its ProtectMyID program, the governor said.

A slew of mergers in the works

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MADISON, Wis. (11/16/12)--A plethora of credit union mergers nationwide have occurred or have been put in motion during the past several weeks.

Here are the latest changes:

  • Piedmont Advantage CU, a $226 million asset credit union based Winston-Salem, N.C., has acquired East Coast CU in Wilmington, N.C., with $8.3 million in assets, effective at the end of November. Piedmont has nine branches, and East Coast has one branch that serves a nine-county area (The Business Journal of the Greater Triad Area Online Nov. 15).
  • Prior Lake, Minn.-based South Metro FCU, with $84.5 million in assets, acquired North Country Cooperative FCU, based in Minneapolis, with $6.4 million in assets (The Jordan, Minn., Independent Nov. 5).
  • United Food and Commercial Workers Local 880 CU in Cleveland, with $10.3 million in assets, closed its doors Nov. 2 and merged Nov. 5 into Firefighters Community CU (FFCCU), a $184.3 million asset credit union based in Cleveland. With the merger, FFCCU has $195 million in assets and serves about 27,500 members.
  • Macon, Ga.-based Smith & Sons Employees CU, with $417,000 in assets, merged Oct .1 into Atlanta (Ga.) Postal CU, which has more than $2 billion in assets, 106,000 members and eight branches.
  • The Pennsylvania Department of Banking approved the merger of $27.8 million asset Bucks County Community College (BC3) Employees FCU in Doylestown, Pa., into Trevose, Pa.-based TruMark Financial CU, with $1.38 billion in assets, on Oct. 1.
  • St. Luke Parish FCU, with $8.9 million in assets, in Dayton, Ohio, merged into $77 million asset Incenta FCU in Englewood, Ohio, effective Nov. 13. Incenta now has more than $85 million in assets and 11,000-plus members.
  • Members of the $20.2 million asset Mercy CU in Miami voted Nov. 5 to merge into $133.8 million asset JetStream FCU in Miami Lakes, Fla. The merger will become effective Dec. 31. The combined credit union will have more than $150 million in assets, eight branches and more than 19,000 members in Miami Dade County and Puerto Rico.
  • San Jose (Calif.) CU, with $130 million in assets, will merge into National 1st CU, based in Sunnyvale, Calif., with more than $210 million in assets (Investment Weekly News Nov. 17). The merger has been approved by the National Credit Union Administration and the California Department of Financial Institutions. About 90% of San Jose CU members voted in favor of the merger.
  • Members of Berlin, N.H.-based Woodlands CU, with $91 million in assets, voted Oct. 27 to merge into Portsmouth, N.H.-based Northeast CU, with $726 million in assets (New Hampshire Union Leader Nov. 6). The merger will take effect Jan. 1. The proposed merger sparked protests from some members, but 60% of Woodland members voted in favor of it.

Members more confident on economy finances than nonmembers

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RIVERWOODS, Ill. (11/16/12)--Credit union members are  more confident in the economy and their personal finances than consumers who don't belong to credit unions, according to data released Thursday from the credit union member demographic of the Discover U.S. Spending Monitor.

Credit union members are also more optimistic than they were at this time last year, said the study.

Credit union members rated the economy more favorably than non-credit union members, though both groups were more positive than last year. Other findings include:

  • In October, 19% of credit union members surveyed rated the economy as "excellent" or "good," a 14-point improvement from the same period last year. By comparison, 16% of non-credit union members rated the economy as "excellent" or "good," a nine-point increase year-over-year.
  • The number of credit union members that rate the economy as "poor" fell 21 points in October, compared with the same period last year, versus a 16-point decrease for non-credit union members.
  • Credit union members who expect the economy to get "better" increased 25 points in October 2012 to 38% , versus the same time last year.
Credit union members rate their personal finances higher than last year, similar to non-credit union members. Survey findings include:

  • Credit union members rating their personal finances as "excellent" or "good" increased eight points to 41% in October from 32% in October 2011. Non-members increased seven points during the same time last year to 35% from 28%.
  • The number of credit union members who believe their personal finances are getting "better" increased 13 points year-over-year, to 30% (versus a 12-point increase to 27% for non-members). Members who believe their finances are getting "worse" declined seven points to 46%, during the same time.
  • More than half (55%) of members survyed expect to have money left after paying bills, while 50% of non-credit union members reported the same this month.
Spending intentions varied by category for credit union members. Overall intentions to spend more next month increased members to 31% in October from 24% in October 2011.

Other findings included:

  • Intent to spend more on household expenses next month rose seven points to 46% in October. This also is an eight-point increase quarterly, from 38% in July.
  • Credit union members' intentions to spend less on household improvements dropped two points to 48% from the same time last year; however, this is a seven-point increase from last quarter.
  • Also, intentions to spend more on discretionary entertainment (up four points to 10%) and major personal purchases (up 1 point to 12%) were up year-over-year in October 2012, but down when compared to last quarter (two points and five points, respectively).

CDFI CUs offered training on MBLs microfinance

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NEW YORK (11/16/12)--The National Federation of Community Development Credit Unions is partnering with Opportunity Finance Network (OFN) to provide small business and microfinance training to credit unions.

The "Scaling Up Microfinance" training series is part of the national Community Development Financial Institution (CDFI) Fund's Capacity Building Initiatives. The training exposes microfinance CDFIs to best practices in the field, and offers tools to take successful strategies to scale. The structure and experience of credit unions has been integrated into all components of the series. The training will provide opportunities for collaboration between loan funds and community development credit unions offering microfinance products.

The curriculum focuses on four themes integral to scaling microfinance operations:

  • Innovative business models;
  • New microfinance products;
  • Technology to improve performance and efficiency; and
  • Development of culture of innovation and talent management.
In January and February, eligible credit unions can participate in one of the two-day Scaling Up Microfinance training in New York, San Francisco and Atlanta.

After the initial training, credit unions can access up to 20 hours of free one-on-one technical assistance with experts from OFN, the federation, FIELD at the Aspen Institute, the Center for Financial Services Innovation, and Resources for Leadership Inc. Attendees can also participate in mentored working groups to develop solutions to challenges that may impede growth in  microfinance programs

"This effort builds on the federation's experience over the last 20 years of fostering and supporting microfinance in underserved communities across the nation," said Cathie Mahon, federation president/CEO. "That these resources are being made available at this historic moment, when we are seeing a dramatic expansion of credit unions serving low-income communities, will open the door to a vast source of lending capital to stimulate small business development and growth."

Credit unions are urging Congress to pass legislation that would raise credit unions' member business lending cap to 27.5% of assets from the current 12.25%. The Credit Union National Association says that raising the MBL cap would help inject $13 billion in new small business loans and 140,000 new jobs into the economy, at no cost to taxpayers.

To register for the training, use the link.

Catalyst poll CU CEOs expect more loan demand

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PLANO, Texas (11/16/12)--Expectations for loan demand among credit union CEOs increased to their highest level in three years, according to Catalyst Corporate FCU's Third Quarter 2012 CU CEO Confidence Survey.

Catalyst said loan expectations have been trending upward in its surveys since first quarter 2011, when they registered -1.02. However, the most recent mark of 19.18 was a jump of more than six points from the previous quarter. The last time loan expectations approached that level was when they hit 20.65 in third quarter 2009, said the corporate, based in Plano, Texas

Credit union CEOs appear to be in a holding pattern regarding overall confidence in the economy. The index, based on a survey taken before the national elections, inched up by less than a point in the second quarter, to 24.03 from 23.25.

The survey indicates that expectations for both the financial condition of their institutions--which declined overall in confidence from last quarter--and the financial condition of their members--which increased from last quarter--to be better in six months than it is today.

"With loan growth up about 4% through the first three quarters of 2012, it isn't surprising that many CEOs are encouraged," said Brian Turner, Catalyst Strategic Solutions director/chief strategist.

"Peer data suggest that growth might be limited to larger credit unions, which have greater perceived risk appetites and capacity. Still, most credit unions with assets greater than $100 million did experience an increase in non-revolving credit this year. Loan growth in 2012 may not compare historically, but it is welcome news compared to last year's 1.2% growth and 2010's 1.4% decline," Turner said.

Marginal spreads between asset yields and funding costs continue to narrow, Turner said. "Fortunately, improvements in loan delinquency have offset much of the decline, helping to boost bottom lines," he added. "With the Federal Reserve reiterating the intent to retain overnight rates at their current level until mid-2015 and most credit unions retaining strong liquidity profiles, there will be little upward pressure on cost of funds over the next 12 months. In fact, credit unions should remain proactive in lowering share rates even further."

The principal driver to the current recovery is the employment sector, Turner said. "Job insecurity has squashed consumer spending--which represents two-thirds of the nation's gross domestic product (GDP)--over the past couple of years," he added. "Unstable consumer spending creates volatility in economic growth and impacts demand for loans. Employment is projected to improve slightly over the next 12 months, yet GDP estimates remain around 2.2%, slightly higher than 2012's 1.8% pace. GDP in 2013 should reflect improvement in consumer spending that hopefully will translate into higher loan demand, particularly for consumer loans."

Halliburton Employees' FCU in Duncan, Okla., said loans put on the books increased significantly throughout the year.

"At this time, we expect the trend to continue," said Chris Bower, president/CEO of the $118 asset credit union. "Following the lull in 2010 and 2011, many folks are now purchasing new cars. Plus, with all the publicity about 'historic low rates,' members have been inquiring whether this is the right time to refinance."

The credit union has also seen activity in direct and indirect auto lending, Bower said.

To capitalize on the lending increase, the credit union introduced a marketing campaign that provides incentives to members and employees when a loan from another institution is refinanced at the credit union.

"Loan officers actively monitor reports of member loans, and when they see paydowns, they contact the members to find out if they have refinanced elsewhere and if they are interested in bringing the loans back to the credit union," Bower said. "In 60% to 70% of the cases, we offer a better deal than they received elsewhere."

Bower said he believes that the severe loan underwriting restrictions of the past three years are beginning to loosen, as people who fell behind on payments gain better control of their finances, and that this will contribute to more loans in the future.

In other survey results, credit union CEOs indicated they believe share deposit growth will be flat during the next six months.

Begun in 2004, Catalyst Corporate's quarterly survey measures CEO confidence in the economy from very negative to very positive (-100 to +100) in six key areas.

The areas CEOs to evaluate include:

  • Current financial condition of members;
  • Current financial condition of the credit union;
  • Anticipated financial condition of members in six months;
  • Anticipated financial condition of the credit union in six months;
  • Anticipated loan demand at the credit union in six months; and
  • Anticipated share deposit growth at the credit union in six months

NEFCU named small-biz loan expeditor for Sandy victims

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WESTBURY, N.Y. (11/16/12)--The National Credit Union Administration (NCUA) has approved NEFCU's designation as a Small Business Loan Expeditor. NEFCU, which serves all of Long Island, can now expedite business loans and lines of credit to help those recovering from the devastation of Hurricane Sandy.

With $1.9 billion in assets and nearly 150,000 members, NEFCU is headquartered in Westbury, N.Y., and has branches and a shared branch network throughout Nassau and Suffolk Counties.

"We know that Hurricane Sandy brought significant losses to many of our members, neighbors and communities," said Edward P. Paternostro, NEFCU president/CEO. "Being selected as a Small Business Loan Expeditor affords us the opportunity to make funds immediately available for restoration and rebuilding."

The Small Business Loan Expeditor designation allows NEFCU to streamline the loan application and underwriting process with the goal of making business loans and lines of credit as readily available to members as possible. "We appreciate that our business partners may have significant liquidity needs at this time, and we stand ready to support them with our special programs," Paternostro said.

Also, NEFCU was one of the first financial organizations to offer Hurricane Relief programs to consumers. For more information, contact Andrew Saluk at NEFCU at 516-714-2965.

CU System briefs (11/14/2012)

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  • ST. PAUL, Minn. (11/15/12)--Ninety-three percent of candidates supported by Minnesota's credit unions were successfully elected to the Minnesota Legislature, says the Minnesota Credit Union Network (MnCUN).  The winning candidates were supported by MnCUN's Credit Union Volunteer Fund (CUVOL), which ensures that the credit union voice is heard at the state Capitol.  CUVOL contributed to 71 candidates during the 2012 election, with 48% donated to Democrats and 52% to Republicans. Of those, 66 won their elections. Minnesota credit unions also worked in campaign efforts to elect credit union-friendly candidates. MnCUN and credit union supporters participated in literature drops, door knock events, political action committee check presentations and legislative panels. MnCUN Vice President-Governmental Affairs said MnCUN and the state's credit unions are pleased with the results. "With a 93% success rate, our election efforts help to build the foundation for solid credit union support at the state Capitol." …
  • TOPEKA, Kan. (11/15/12)--A former employee of Enterprise (Kan.) CU has pleaded guilty to embezzling $817,167 from the credit union.  Pamela Emig, 36, of Solomon, allegedly admitted to the embezzlements, which occurred from 2005 to 2011 and involved kiting checks among accounts to cover up the thefts and shortages (LoanSafe.com Nov. 13).  Sentencing has been set for Feb. 11 …
  • SIOUX FALLS, S.D. (11/15/12)--Sioux Falls (S.D.)  FCU  has awarded Adopt-a-Classroom grants to seven area teachers to help them teach financial literacy to their students. "We feel that it's incredibly important to provide students in our community with the opportunity to learn how to manage money and how to make wise financial decisions," said Sioux Falls FCU President/CEO Fran Sommerfeld.  The grants went to teachers of special education, seventh grade math, two fifth grades, second grade, first grade and kindergarten …

Fake chat boxes part of pop-up scams

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FARMERS BRANCH, Texas (11/15/12)--Fake chat boxes are a part of the pop-up scams in the latest variation of the Citadel banking Trojan scheme designed to part unsuspecting consumers from their personal information and money while  making online banking transactions.

News Now reported Wednesday about browser malicious software (malware) that can inject fake pop-ups on online banking sites. The fake pop-ups trick users into re-entering their bank and credit union account logins and passwords. (See related News Now article: Fake pop-ups injected into online banking transactions).

The Association of Certified Fraud Examiners (ACFE) has more information about a slightly different twist on the pop-up scams--messages posing as chat boxes from the institution's online banking site, according to the Texas Credit Union League (LoneStar Leaguer Nov. 5).

The league explained how the fake chat boxes work. The Internet user is on the credit union or bank's website when a pop-up message flashes. It says, "We are running a security check." The live chat box then pops up with a message that informs the user a representative will be available shortly.  Then the "representative"--the scammer--begins a live online chat session with the unsuspecting victim, who discloses confidential account information.

ACFE says scammers target computers that have had previous malware infections, which victims download unknowingly through fake Web links or attachments.  After the malware downloads, it stays dormant until the victim opens the online banking site.

The same advice works for both the fake pop-ups and the fake chat boxes. ACFE advises using updated software to prevent malware from embedding itself in a computer.  Credit unions can reemphasize that financial institutions never ask for personal identification information because they already have the information.

ACFE said anyone who encounters the scam should turn off the computer and call the financial institution.  Consumers also should run a security check for other viruses or malware.

Texas CU shares hurricane recovery story

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GALVESTON, Texas (11/15/12)--Coastal Community CU in Galveston, Texas, understands what credit unions in the Northeast are going through as they rebuild from the devastation caused by Hurricane Sandy, said President/CEO Carol Gaylord Purdy. The $43.5 million asset credit union was all but destroyed when Hurricane Ike struck Southeast Texas in 2008.

Hurricane Ike was reported to be the third-costliest hurricane ever to make landfall in the U.S., and Hurricane Sandy is expected to be one of the top 10 costliest hurricanes on record in the U.S (LoneStar Leaguer Nov. 14).

Sandy made landfall at 8 p.m. Oct. 29 near Atlantic City, N.J., packing 80-mile-per-hour winds and causing massive flooding along the state's shoreline and in New York City. More than 7.9 million homes and businesses were without power, from North Carolina to Maine.

Hurricane Sandy's impact on the economy may result in $10 billion to $20 billion in total economic damages and $5 billion to $10 billion in insured losses, according to early estimates from catastrophe-risk modeling company Eqecat (News Now Nov. 1). Since then, estimates have gone up to $60 billion.

In Hurricane Ike, Coastal Community's main office took in eight feet of flood water from the Galveston Ship Channel, Purdy told the Texas Credit Union League. The credit union's 69th Street branch received four feet from the Gulf of Mexico. Also, the wind caused extensive roof and air conditioner damage. In total, Purdy says Hurricane Ike caused half a million dollars in damage for the credit union. For six months, the credit union's main office was closed for repairs.

Despite the damage, the credit union was there for its members. Within one week of Hurricane Ike destroying the Coastal Community CU's main branch, Purdy set up shop at the San Luis Hotel.

Galveston residents were not allowed to return to the island for two weeks, Purdy remembered.

"We received police escorts to the island each day to bring tellers and cash to the San Luis each day and served everyone regardless of membership," Purdy said. "Cash was the only tender and we were the only fully operational financial institution on the island."

Purdy said this allowed her to begin the clean-up and get the disaster-recovery unit ready for its grand opening before the residents returned.

"Our disaster-recovery trailer was the first trailer on the island (before the red tape)," Purdy said. She noted the credit union opened 100 new accounts from its disaster recovery trailer within a month and assets grew $10 million within three months.

For those credit unions that were in the path of Hurricane Sandy, Purdy says, "I truly believe that the best in people comes out in the worst of times."

To help breathe life back into their branch, Purdy recommends bringing in lots of plants. She also suggests that credit unions celebrate and reward staff for their hard work during difficult times.

"You have to rebuild lives before you rebuild buildings," says Purdy. "The credit union is not a building; it's a family."

Retail opponents to interchange settlement to appeal

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ALEXANDRIA, Va. (11/15/12)--Retailers who opposed the $7.2 billion interchange antitrust lawsuit settlement  that received a preliminary approval Friday from a U.S. District Court in Brooklyn, N.Y., announced they are filing a notice of appeal against the ruling.

The National Association of Convenience Stores said most of the 19 plaintiffs opposing the settlement with Visa, MasterCard and large banks will ask the U.S. Court of Appeals for the Second Circuit to deny the preliminary approval due to "fatal legal defects" in the settlement proposal.

The lawsuit was over swipe fees in credit card transactions.

Mortgage delinquencies down for third straight quarter

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CHICAGO (11/15/12)--The national mortgage delinquency rate--the rate of borrowers 60 or more days past due on payments--declined slightly for the third consecutive quarter, dropping to 5.41% in the third quarter from 5.49% in the second quarter, according to credit reporting agency TransUnion.

Year-over-year, the mortgage delinquency rate decreased nearly 8% from 5.88% in third quarter 2011.

TransUnion provides ongoing quarterly analyses of credit-active U.S. consumers and how they manage mortgages, credit cards and auto loans.

U.S. credit unions' overall loan delinquency rate at the end of the second quarter (the most recent data available) was 1.2%--down from 1.6% at the end of 2011, according to data compiled by the Credit Union National Association's (CUNA) Economics and Statistics Department.

During that time frame, credit unions' delinquencies declined to 1.61 % from 2.22% for first mortgages; and to 1.23% from 1.43% for second mortgages. Also, net charge-offs as a percentage of average loans fell to 0.76% from 0.91%, CUNA said.

"Continued declines in mortgage delinquency rates are a welcome sign and reflect that relatively more homeowners are able and willing to make their mortgage payments each month," said Tim Martin, group vice president of U.S. Housing in TransUnion's financial services business unit. "However, we still have a long way to go to reach more 'normal' conditions of a delinquency rate in the 1%-2% range for the U.S. average."

Twenty-two states saw improvement in their mortgage delinquency rates from last quarter. Forty-two states improved from last year.

Forty-nine percent of metropolitan areas experienced quarterly improvement in their mortgage delinquency rates in the third quarter. That is a significant departure from the previous two quarters, when 76% in second quarter and 73% in first quarter of the metropolitan statistical areas improved, TransUnion said.

Arizona and California, two of the states most negatively impacted by the mortgage crisis, experienced the greatest improvement in mortgage delinquency rates on a year-over-year basis. Since the third quarter of 2011, Arizona's has dropped nearly 25% to 5.62% from 7.46%. California has dropped nearly 24% in that same time, to 5.56% from 7.29%.

Currently, only two states remain with double-digit delinquencies--Florida at 13.09% and Nevada at 10.93%--and both showed improvement year over year.

The District of Columbia experienced the largest year-over-year increase in mortgage delinquency rate--up over 11%-- to 6.10% from 5.47%. Eight states also experienced year-over-year increases, with New Jersey registering both the highest overall rate of the group at 8.33% and the largest increase, up nearly 10% year over year.

TransUnion said it expects the mortgage delinquency rate to fall again in the fourth quarter, but only slightly.

"It's generally tough to expect improvement in delinquency rates in the fourth quarter of the year given the extra demands on household income that many experience during the holiday season," said Martin. "However, we saw some improvement in the housing market in the third quarter with regard to house prices, home sales and increased refinance activity, and we believe we will start to see these numbers reflected in improved mortgage delinquency next quarter. As such, we forecast the year-end delinquency rate to improve to something in the 5.25% to 5.35% range."

TransUnion's forecast is based on several economic assumptions, such as gross state product, consumer sentiment, unemployment rates, real personal income and real estate values. The forecast would change if there are unanticipated shocks to the economy affecting recovery in the housing market or if home prices fall more than expected.

CUANY NCUA reps meet on post-Sandy strategies

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ALBANY, N.Y. (11/15/12)--Credit Union Association of New York (CUANY) staff met with National Credit Union Administration (NCUA) representatives Friday to discuss the impact of Hurricane Sandy on New York credit unions.

Rebecca Paliwodzinski, associate regional director of operations for NCUA, and Jon Flagg, NCUA supervisory examiner, talked with CUANY about lessons learned, short-term challenges for credit unions and their members, and long-term priorities.

At a meeting Friday to discuss Hurricane Sandy's impact on New York credit unions were, from left, Rebecca Paliwodzinski, associate regional director of operations at the National Credit Union Administration (NCUA); Jon Flagg  NCUA supervisory examiner; and William J. Mellin, president/CEO of the Credit Union Association of New York. (Photo provided by the Credit Union Association of New York) 

NCUA confirmed that all New York credit unions are now operational--although a small number are delivering services from limited or alternate branches.

Paliwodzinski and Flagg shared their pre- and post-hurricane strategies. The NCUA team reached out to roughly 881 credit unions in New York and New Jersey before the hurricane to verify key contact information, said Paliwodzinski. "This was a huge positive for us, as it facilitated rapid-fire contact when the storm hit," she added.

Sandy made landfall at 8 p.m. Oct. 29 near Atlantic City, N.J., packing 80-mile-per-hour winds and causing massive flooding along the state's shoreline and in New York City. More than 7.9 million homes and businesses were without power, from North Carolina to Maine.

Hurricane Sandy's impact on the economy may result in $10 billion to $20 billion in total economic damages and $5 billion to $10 billion in insured losses, according to early estimates from catastrophe-risk modeling company Eqecat (News Now Nov. 1). Since then, estimates have gone up to $60 billion.

Flagg, a Long Island resident, served as supervisory examiner in New Orleans during and after Hurricane Katrina. Referring to his experiences from that time, he noted that New York credit unions are in much better shape overall than the credit unions impacted by Hurricane Katrina in 2005.

Paliwodzinski praised credit unions for their cooperative efforts during Sandy's aftermath, CUANY said.

CUANY President/CEO William J. Mellin asked about NCUA's plans regarding credit union disaster preparedness. Paliwodzinski confirmed that examiners look at credit unions' disaster recovery plans during examinations. However, both Paliwodzinski and Flagg said the agency has no plans to conduct special or early evaluations.

"Confirming that credit unions are operational was our first priority, and we may also need to look at recordkeeping later if issues arise," explained Paliwodzinski.

The group also acknowledged that impacted credit unions may face potential loan servicing issues. "We will be looking to assist credit unions with methods for recording deferrals and extensions, but we would handle that on a case-by-case basis," said Flagg.

As for potential capital challenges, Paliwodzinski emphasized that NCUA's requirement for achievable net worth restoration plans is firm, but assistance and guidance are available to credit unions facing challenges.

"Our examiners are trained to look at the big picture," she said. "As always, we encourage credit unions to communicate with their examiners and share any issues or concerns they may have."

CUANY will continue to dialogue with NCUA about credit unions' post-hurricane recovery.

"Regulatory advocacy is an essential part of the work we do for New York credit unions, and this is just an extension of that advocacy," said Mellin. "Meetings like these allow us to hear the agency's perspective, share the challenges our credit unions are facing and work together toward the fullest recovery possible."

Joining Mellin for the meeting were Michael Lanotte, CUANY senior vice president/general counsel; Ronald McLean, senior vice president of association services; Tracy Conner, CUANY vice president of member services; Michael Carter, CUANY compliance director; and Edward Kovalefsky, chief operating officer of CUC Mortgage Corp.

See today's related stories in News Now: "Regulators issue more guidance for FIs to help Sandy-stricken borrowers" and "N.J. CUs continue struggles from Sandy's aftermath."

N.J. CUs continue struggles from Sandys aftermath

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HIGHTSTOWN, N.J. (11/15/12)--The New Jersey Credit Union League is encouraging its member credit unions impacted by Hurricane Sandy to apply for CUAid Disaster Relief Fund grants. New Jersey's credit unions are still dealing with the aftermath of the Oct. 29-30 superstorm.

CUAid is the credit union movement's national Disaster Relief Fund maintained by the National Credit Union Foundation (NCUF). The movement has now raised more than $178,000 to aid credit union staff, volunteers and members affected by the storm, according to Christopher Morris, NCUF director of communications.

"The devastation in New Jersey has impacted millions of people's lives. We continue to deal with a gasoline shortage, lack of basic necessities for those who have lost their homes, and many are still without power," said league president/CEO Paul Gentile (The Daily Exchange Nov. 14).

Gentile noted he was "touched by the outreach we have received from credit unions and credit union system organizations throughout the country. It is so valuable to have a fund like CUAid available to concentrate fundraising efforts."

Because of issues related to Hurricane Sandy, some credit union attendees at the New Jersey Credit Union League's Lending Roundtable Tuesday--such as  staffers from Atlantic FCU--participated in the roundtable via video conference call. (Photo provided by the New Jersey Credit Union League)
The league also noted that in the wake of the storm, credit unions are stepping up to make unique loans to help members in need. At the league's Lending Roundtable on Tuesday, credit union lending professionals shared some ideas for Sandy relief.

They included:

  • Unsecured loans with deferred payments of 60 or 90 days;
  • Holiday loans at lower interest rates; and
  • Skip-a-payment options. Credit unions often offer skip-a-payments at certain times of a loan term, but some have offered the option also for November and December if the member requests it.
Attendees at the roundtable also learned about CUAID and were provided information about grant fulfillment procedures and applications found on the league's website. The meeting took place at the league's office with two remote locations videoconferencing in to accommodate credit unions affected by Sandy.

Sandy hit the East Coast after being downgraded from a Category 1 hurricane to a tropical storm. However, it combined with a cold front moving from the northwest and a high pressure system moving in from Greenland to land as a superstorm that impacted 881 credit unions, mostly in New Jersey, New York and Connecticut. It was about 800 miles wide, its winds reaching to the Great Lakes.

The storm, which created unprecedented flooding in lower Manhattan and power outages for about six million people, created havoc from North Carolina to the New England states. At least 56 people in the U.S. and 67 in the Caribbean were killed (The Atlantic.com Nov. 1).

Early damage estimates ranged as high as $60 billion.  Claims Journal reported Wednesday that the storm damaged or destroyed more than 65,000 recreational boats, resulting in about $650 million in damage, making the storm the single-largest industry loss since the Boat Owner's Association of the U.S. began tracking losses in 1966.

DCUC sponsors video greeting cards for military families

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WASHINGTON, D.C. (11/14/12)--Operation Best Wishes, the national program that provides military families an opportunity to connect with loved ones during the holiday season, will be sponsored by the Defense Credit Union Council and its members for the ninth consecutive year.

Operation Best Wishes provides the military and their families free access to a mobile, video recording studio. There they record personal greetings for animated holiday video greeting cards that are distributed over the Internet.

The studio, complete with cameras, lights and a technician, has the technology to superimpose families over animated backgrounds, giving their special holiday greetings an appeal distinct from Skype or other communication platforms used at home.

Loved ones and relatives then watch the holiday video greeting card on the Operation Best Wishes website, after entering a password that allows viewing access only to them.

"The holiday season is an opportunity for all to spend time with family and loved ones," noted Arty Arteaga ,president/CEO of the Washington, D.C.-based Defense Credit Union Council, "but, for many of our military, it's a time they'll continue to spend at their post, keeping an ever-vigilant watch as they safeguard our liberties.

"Through Operation Best Wishes, our hope is to help our members, the military and their families, spend a few moments together during the holidays, in a way they'll remember and cherish for a lifetime."

This year the national tour of Operation Best Wishes will cover eight states, serving those from Hanscom AFB and Fort Drum in the East, to Travis AFB and Joint Base Lewis-McChord in the West. The tour will kick off in Southern California on Tuesday and will conclude four weeks later at Joint Base Andrews in Maryland.

For more information, use the links.

Council paper Team up on mobile payments strategy

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MADISON, Wis. (11/14/12)--Credit unions' marketing, business development and information technology departments must work together in planning their mobile payments strategies, says a new white paper from the CUNA Councils.

The departments must work together to determine how and when mobile payments will be appropriate for their membership, to position their credit union for present-day relevance and future gains in market share, said "Mobile's Moment: Payments Breakthrough Provides Opportunities for CUs."

The paper is offered by CUNA Marketing & Business Development Council nd the CUNA Technology Council. It outlines main mobile payments players, examines credit unions' current approach to mobile payments, and provides technology and marketing strategies for making the transition to mobile payments.

Mobile payments range from recurring loan and utility payments, to point-of-sale and online purchases, to person-to-person transfers, said the councils.

Some credit unions are introducing mobile payments to members or enhancing existing mobile services to include payments by working with vendors adapting their offerings to accomplish this. There's evidence of the wisdom of this strategy for many more credit unions during a year dominated by announcements of new mobile payments ventures by credit unions' competitors, the paper said.

For example:

  • Slightly more than one-third of all U.S. adults own a smart phone, the chief device for accessing mobile services, according to a Pew Internet & American Life Project survey.
  • Consumers who use online financial services--including credit union members and potential members--now interact with their financial institutions via the digital branch more than any other way--about 10 times per month, according to a recent internal study by Intuit Financial Services, Woodland Hills, Calif., of its clients' online customers.  When mobile access is added, users interact roughly 19 times per month.  And, those using online banking, mobile banking and tablet banking access their accounts approximately 30 times per month.
In terms of market share and new market segments, the Federal Reserve says 80% of mobile banking users are under age 45, and minorities are disproportionately more likely to use mobile banking. Meanwhile, the average age of credit union members is 47--or 10 years older than the U.S. median, according to the Credit Union National Association.

CUNA Council members are eligible to receive complimentary copies of the paper and of more than 300 other white papers. Non-council members may purchase white papers for $50 per copy. To access the paper, use the link.

CUAid donations tally at 175K says NCUF

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MADISON, Wis. (11/14/12)--In the past week, the donations through CUAid to provide disaster relief to victims of Hurricane Sandy have more than doubled, said the National Credit Union Foundation (NCUF) Tuesday.

More than $175,000 has been raised for disaster relief by credit unions and credit union-related organizations through CUAid,  the credit union movement's Disaster Relief Fund, said NCUF.  The fund aids credit union staff, volunteers and members directly impacted by the hurricane which hit the East Coast Oct. 29 and 30.

A week ago, on Nov. 5, credit unions had already raised $82,000 as the extent of the damage, especially in New Jersey and New York, were made known. Most credit unions in the areas impacted were closed due to flooding and power outages, many for several days. More than 800 credit unions were affected.

"NCUF continues to receive online donations and checks from credit unions across the country, which is truly inspiring," said NCUF Director of Communications Christopher Morris.

Morris was interviewed late last week with CUbroadcast. In it he talks about CUAid and the range of support received.  Use the link to access the video.

Fake pop-ups injected into online banking transactions

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MADISON, Wis. (11/14/12)--The latest version of the Citadel banking Trojan malware has something malware analysts have never encountered before:  a browser malware that launches fake pop-ops during online banking transactions and tricks online users into re-entering their bank and credit union account logins and passwords.

The risks for credit unions and banks, as well as their members/customers, are obvious. And it means that credit unions and others will need to offer crash courses to their members about defending themselves from the advanced Trojans (Bankinfosecurity.com Nov. 12). Otherwise, financial institutions will see even greater losses due to fraud.

The Citadel, which is an advanced mutation of the infamous Zeus Trojan malware, was discovered in "underground" forums in January. It is a keylogger that steals online banking authorization credentials by capturing the computer user's keystrokes (Bankinfosecurity.com Nov. 12). The Trojan was the topic of a number of warnings to credit unions and banks in August by the Federal Bureau of Investigation (FBI) and the FBI's Internet Crime Complaint Center.

The latest version uses social engineering tools to create the pop-ups, even on legitimate banking sites. And that will confuse consumers making online transactions at their credit union's site.

In the underground forums, Citadel developers are claiming they have infected computers with the new version of the Trojan. They allege they have infected computers relying on Microsoft Security Essentials, McAfee and Norton. The new development has upped the price of the Trojan on the cybercrime market. Several months ago, it went for $3,000. Now it is worth $4,000, say malware researchers (bankinfosecurity.com Aug. 21).

Malware researchers said credit unions and banks should consistently educate users about emerging online and mobile security threats. Explain the variations of the attacks, such as the new pop-up feature, so consumers know what to watch for when online.  Also, train staff to identify more quickly suspicious transactions, including withdrawals and wire transfers.

Other advice:

  • Avoid using out-of-date software versions that have vulnerabilities easy to exploit. Software companies issue patches and updates; use them. Out of date Java software in particular has been a gateway for the Trojan infection, say researchers;
  • Run  full-system virus scans at least once a week;
  • Use caution when entering user names and passwords and enter these slowly to give time to back out if something seems odd;
  • Regularly visit the FBI's Internet Crime Complaint Center for updates about Citadel;
  • Have a computer expert remove any malware. Even if you succeed in unfreezing the computer, keyloggers and other malware may still be operating in the background; and
  • Never pay money or provide personal information to a suspicious online entity.

Illinois state award winners announced

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NAPERVILLE, Ill. (11/14/12)--The Illinois Credit Union League has announced its statewide award winners, including two credit unions that placed in the national contests.

In the Desjardins Youth Financial Education award competition, Illinois' first-place winners and their respective asset categories were:

  • 1st MidAmerica CU, Bethalto--$150 million to $500 million in assets;  and
  • Great Lakes CU, North Chicago--More than $500 million.
The Desjardins Adult Financial Education first-place winners included:

  • NuMark CU, Joliet--$150 million to $500 million in assets; and
  • Scott CU, Edwardsville--More than $500 million.
The Desjardins awards recognize leadership within the credit union movement on behalf of youth and adult financial literacy. The award is named after Alphonse Desjardins and emphasizes the movement's long-time commitment to youth and financial literacy.

Dora Maxwell Award  first-place winners are:

  • Rock Valley CU, Loves Park--$50 million to $100 million in assets. The credit union also placed first in the national competition, presented by the Credit Union National Association.
  • Streator Onized CU, Streator--$100 million to $200 million. The credit union also placed in second in nationals.
  • 1st MidAmerica CU -- $200 million to $500 million; and
  • Great Lakes CU --$500 million to $1 billion.
The Dora Maxwell Award is part of a national recognition program to honor credit unions for their outstanding efforts in community projects and activities.

The Louise Herring Award for Philosophy in Action first-place recipient was Great Lakes CU-- $250 million to - $1 billion in assets. The award was established in 1990 to commend credit unions that make exceptional efforts to include credit union philosophy in their daily operations and member service.

CU System briefs (11/13/2012)

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  • NAPA, Calif. (11/14/12)--Alfredo Pedroza, branch manager of Redwood CU's  (RCU) Sonoma branch, was recently elected to the Napa (Calif.) City Council. His priorities as a city councilmember will include job creation, making Napa affordable for families, promoting a healthy business environment, and improving Napa's transportation infrastructure. "We are extremely proud of Alfredo and are confident he will be a great asset as a city council member  for the people of Napa," said Brett Martinez, RCU president/CEO. "RCU is very committed to the communities we serve, and we are supportive of RCU employees taking on leadership roles in local government and on nonprofit and community boards." Pedroza has worked in financial services since 2005, and joined RCU in 2009 as assistant branch manager of the Napa branch, before becoming branch manager of the Sonoma and Glen Ellen branches ...
  • LANSING, Mich. (11/14/12)--Biz Kid$, the credit union-supported PBS program where kids learn about money and business will be highlighted at the eighth annual Michigan Jump$tart Coalition for Personal Finance Educators Conference Dec. 11, said the Michigan Credit Union League (Michigan Monitor Nov. 12). The conference is designed for K-12 educators who teach personal finance topics in the classroom. Danielle Brown, Biz Kid$ program coordinator for the National Credit Union Foundation, will conduct a live webinar for attendees to showcase the program and supplemental classroom materials. All attendees will receive a DVD copy of a Biz Kid$ episode along with a printed lesson plan for use in the classroom …
  • SAN ANTONIO (11/14/12)--San Antonio-based Security Service FCU donated $205,830 to the Leukemia and Lymphoma Society's South Texas chapter recently.  SSFCU employees across Texas, Colorado and Utah collected the funds for the nonprofit's annual Light the Night Walk.  More than 400 employees walked in the event. This is the third year SSFCU has served as national partner for the society. The funds raised broke last year's record donation by more than $20,000.  Through volunteerism and employee fundraising, SSFCU has donated nearly $1 million for blood cancer research the past 11 years. Pictured are, from left, Mike Martinez, SSFCU senior vice president of member service; Michelle Mergele, SSFCU member service administrative assistant; Emma DeGoes, honored hero; and Kathy Griesenbeck, executive director of the society's South Texas chapter. (Photo provided by Security Service FCU) …

IWSJI CUs banks work with Visa on digital wallets

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TAMPA, Fla., and FOSTER CITY, Calif. (11/14/12)--Card Services for Credit Unions (CSCU) and Visa Inc. announced an agreement Tuesday to promote V.me--a new digital wallet service from Visa--to all of its member credit unions, and The Wall Street Journal has reported on the new service.

The agreement represents more than 11.5 million accounts, with more than one million included in the November roll out.

Earlier, Visa had announced the service will be made available to more than 50 credit unions and banks and that it would be available to cardholders using MasterCard, American Express and Discover Financial Services, said The Wall Street Journal (Nov. 13).

Credit union cardholders will be able to sign up for V.me to make online purchases, without repeatedly entering account number, bill-to and ship-to information, said CSCU.

CSCU is a credit union industry advocate in total payment solutions. Created by and for credit unions, it serves its nearly 3,000 member credit unions.

CSCU credit unions engaged with V.me include:

  • SECU, Linthicum, Md;
  • Directions CU, Toledo, Ohio;
  • MECU,  Schaumburg, Ill.;
  • SCE FCU, El Monte, Calif.;
  • Community First CU of Florida, Rockledge, Fla.;
  • Michigan State University FUC, East Lansing, Mich.; and
  • Credit Union of Colorado, Denver.
Cardholders at CSCU's member credit unions can enroll their existing credit union Visa cards and other payment card accounts into V.me, and make purchases online by entering a user name and password at checkout. As V.me acceptance gains momentum at more eCommerce merchants, Visa will work with CSCU to deliver the digital wallet service to consumers.

V.me can help issuing credit unions strengthen account holder relationships, said CSCU, by offering a new service that addresses the growing trend towards shopping online. Through credit union branding and Visa-backing, account holders can shop and check out knowing they're protected by layers of security within Visa's network.

Mayor advocates for MBLs honored by CUs

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PEWAUKEE, Wis. (11/14/12)--Madison, Wis., Mayor Paul Soglin, who advocated passing a resolution at the U.S. Conference of Mayors supporting federal legislation to ensure small businesses can access member business loans (MBL) through credit unions, has been honored by Wisconsin credit unions.

The Credit Union Small Business Jobs Bill (S.B. 2231/H.R. 1418), which the resolution supported, would increase the ability of credit unions to extend additional credit to small businesses at no cost to taxpayers.

The bill would raise credit unions' MBL cap to 27.5% of assets from the current 12.25%. The Credit Union National Association says that raising the MBL cap would help inject $13 billion in new small business loans and 140,000 new jobs into the economy. In Wisconsin it would provide $458 million in new credit and create almost 5,000 jobs, said the Wisconsin Credit Union League.

Soglin became aware of credit unions' desire to fill the void for small business credit through conversations with Kim Sponem, president of Summit CU, Madison, and Paul Kundert, president of University of Wisconsin CU, also of Madison.

Sponem presented Soglin with a plaque and expressed appreciation for his work to gain the bipartisan support of 187 mayors nationwide to pass the resolution.

"Mayor Soglin understands that credit unions can fill today's huge void for business credit because they have billions available to lend, a 100-year history of making business loans safely, the support of federal regulators and the support of 84% of Wisconsin voters who, like Forbes magazine, see this as an absolute no-brainer," said Brett Thompson, president/CEO of the league.

The Conference of Mayors joins a bipartisan list of more than 30 organizations supporting the MBL measure, including groups representing small businesses, the self-employed and the insurance, textile, realty, construction, automotive and technology industries. Only the for-profit banking industry has opposed the bill.

First CU in N.J. obtains municipal depository eligibility

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TRENTON, N.J. (11/14/12)--Credit Union of New Jersey in Ewing is the first credit union in the state to secure eligibility as a municipal depository, according to the New Jersey Credit Union League.

The credit union filed its Governmental Unit Depository Protection Act (GUDPA) application Oct. 10 and received its official Notification of Eligibility Friday (The Daily Exchange Nov. 13).

League-backed legislation was enacted in 2011 and implementation rules were published in September to allow credit unions to enter the $15 billion market.

New Jersey credit unions can apply to be included on the list of eligible depositories for the state's more than 1,400 local government entities, including 21 counties, 566 municipalities and 611 school districts. The approval process takes about a month, said the league.

Most local government entities approve depositories for the coming year at their annual reorganization meeting in early January.

The league encouraged interested credit unions to file a GUDPA application early so that they can be included among potential public depositories.

Momentum has been building in several states to include credit unions as public depositories. States that have have been successful in recent years include Oregon, Washington and New Jersey. Minnesota and Wisconsin were successful in getting credit unions included in CDARS-type (Certificate of Deposit Account Registry Service) programs.

Also, several cities are adopting Responsible Banking Ordinances, which would provide credit unions more opportunities to accept municipal deposits (News Now June 29). San Diego adopted an ordinance in September. The Northwest Credit Union Association helped get an ordinance passed in Portland, Ore.

States warn consumers of unlicensed online lenders

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FEDERAL WAY, Wash. (11/14/12)--Five states have filed a statement of charges against five unlicensed online lenders.

Washington is the latest state to file the charges against the five lenders, all owned by Martin Webb. Colorado, Maryland, Missouri and Florida have also taken legal action against the same entities for making loans without a license and for offering rates of interest that violate the various state interest rate limits, according to the Northwest Credit Union Association said (The Anthem Nov. 9).

The Federal Trade Commission (FTC) has taken legal action against the entities as well, alleging illegal collection practices, said the league.

The five lenders are:

  • Western Sky Financial LLC;
  • Payday Financial LLC, d/b/a Big Sky Cash and Lakota Cash;
  • Great Sky Finance LLC, d/b/a Great Sky Cash;
  • Green Billow LLC, d/b/a Four Seasons Cash; and
  • Red Stone Financial LLC, d/b/a Red Stone Cash.
The unlicensed lenders have made thousands of loans to Washington state residents online at rates between 89.68% and 1,825%--rates that would be illegal even if the entities held licenses from the state Department of Financial Institutions (DFI).

The maximum rate of interest allowed under RCW 19.52, the state of Washington's usury statute, is 12%. The maximum rate of interest allowed for licensees under the Consumer Loan Act is 25%.

The unlicensed lenders, located on the Cheyenne River Sioux Tribe Indian Reservation in South Dakota, are owned and operated by Martin Webb as an individual tribal member rather than by the Cheyenne River Sioux Tribe or any of its political subdivisions, said the association.

After receiving at least 22 complaints against the entities from state residents, Washington's DFI issued a consumer alert in August 2011 warning consumers that Western Sky Financial and Lakota Cash were not licensed to make loans in Washington.

The Consumer Loan Act authorizes the DFI director to file charges against companies and individuals believed to have violated the act. The charges are not a conclusive finding or order that violations of the act have occurred. The named lenders have the right to request an administrative hearing on the charges, said the association.

Filene advises young pros on leadership careers

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MADISON, Wis. (11/14/12)--A new report from the Filene Research Institute offers advice for credit unions seeking to identify, encourage and promote future leaders.

The report, "Young Professional Leadership and Career Development in North American Credit Unions," provides a step-by-step guide for concerned leaders, human resources professionals, or young strivers to fill in the blanks they feel they are missing in their professional development. It is built on three case studies from career development networks of three credit unions and checklists that encourage action.

The report advises that to be most effective, personal goals must align with credit union goals. If they don't, then even well-intentioned projects will not likely attract the attention or support they need.

Rising leadership groups are among the ways today's young credit union leaders are aligning professional development with their credit unions' strategic goals, according to the report.

The report offers advice for forming a leadership group, including:

  • Assess what's out there. Don't reinvent the wheel if adding to, or simply joining, an ongoing initiative will do. Also, evaluate the human resources and external business environments into which the credit union wants to introduce the group.
  • Establish a goal. Clearly define, in as few statements as possible, what the group seeks to accomplish.
  • Get a few people on board. Build relationships with peers and superiors that can help sustain the initiative.
  • Find a sponsor. A current leader who is interested in the project and has the clout to sustain it is invaluable.
  • Spread the word. Formal and informal channels are key, and a small passionate group can be better than a diffuse cluster.
  • Build partnerships. Look for internal and external partnerships to help the group maintain momentum and grow.
  • Evaluate, evaluate, evaluate. Use initial goals as a guide, but don't be afraid to switch, narrow, or expand the group's focus.
To download the report, use the link.

NYCUFs disaster fund total at 70K

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ALBANY, N.Y. (11/14/12)--
At a fundraising lunch Friday for Hurricane Sandy victims were, from left: William J. Mellin, Credit Union Association of New York president/CEO; Lori M. Valentini, CUNA Mutual Group sales executive; Edward Kovalefsky, CUC Mortgage Corp. chief operating officer; and Marc Inger, UsNet chief operating officer.
New pledges have brought the total amount of funds raised to $70,000 for the New York Credit Union Foundation's statewide Disaster Relief Fund to benefit Hurricane Sandy victims in the state.

The Credit Union Association of New York's (CUANY) affiliate companies, CUC Mortgage Corp., Covera and Universal Sharing Network (UsNet), pledged a total of $25,000. CUNA Mutual Group is contributing $10,000, said CUANY's press release.

The funds create a pool of much-needed funds for New York credit unions, credit union employees and volunteer leaders, and members impacted by Hurricane Sandy, which ripped through the East Coast on Oct. 29 and 30.

"Helping comes naturally to credit union people. That inclination is even stronger when you know that an individual you have served on a committee with, hiked the Hill with or attended a credit union roundtable with is the one who needs your help," said Vicki O'Neill, president/CEO of ACMG FCU, Syracuse, and chairperson of the foundation's board of trustees.

"Occasions like this present us with the opportunity to remind ourselves of what it means to be part of a unique and meaningful movement," she said.

Credit Union Association of New York and Alloya Corporate FCU staff at a fundraising lunch  raised nearly $1,400 for the New York Credit Union Foundation's Disaster Relief Fund for Hurricane Sandy victims. (Photos provided by the Credit Union Association of New York)
CUANY hosted a lunch fundraiser last Friday for its staff and staff from Alloya Corporate FCU, raising nearly $1,400 for the fund. CUNA Mutual Group was also represented there.

CUANY has matched all funds donated by association staff through last Friday, including the lunch. Total funds raised by the association and staff reached nearly $6,000.

"Hurricane Sandy has created numerous challenges for impacted credit unions, including financial hardship among their staff and their members," said CUANY President/CEO William J. Mellin. "As credit unions work to address these changes, the association is committed to providing as much support as possible."

All donations to the fund will be used to help impacted New York credit unions and their employees, volunteer leaders and members who do not receive financial assistance from CUAid, the disaster relief system headed by the National Credit Union Foundation.

See related News Now story: "CUAid donations tally at $175 for Sandy victims, says NCUF."

Ohio league 2013 board elections completed

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DUBLIN, Ohio (11/14/12)--The Ohio Credit Union League has announced results of its 2013 board of director elections. The balloting concluded Oct. 15.

Bill Burke, CEO  of Day Air CU, will continue to represent Membership Category C, credit unions with 24,000 members or more (eLuminations Newsletter Oct. 31).

Three other directors were elected by acclamation in August:

  • Jay Young of Fiberglas FCU, Newark, Membership Category B;
  • Tim Boellner of AurGroup Financial CU, Fairfield, for District II; and
  • Stan Barnes of Canton School Employees FCU, Canton, for District IV.
They will serve three-year terms, beginning in February.

SEC files suit against Her Majestys CU

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DENVER and WASHINGTON (11/13/12)--The Securities and Exchange Commission (SEC) has filed a legal complaint against a company the regulator claims has offered fraudulent and unregistered "purported certificates of deposits (CDs)" under the name Her Majesty's CU (HMCU).

The complaint was filed Nov. 8 in the U.S. District Court for the District of Colorado. The SEC names as defendants Stanley B. McDuffie (formerly known as Stanley Roberson and Stanley Battle) and Jilapuhn, Inc. (doing business as Her Majesty's CU and HMCU).

Her Majesty's CU is based in the Virgin Islands with an office in Colorado and has stirred up concerns among credit union organizations and regulators for years.

The National Credit Union Administration (NCUA) in June 2011 prohibited Stan Roberson from future work at any federally insured financial institution. Roberson was the former CEO of the HMCU and, the NCUA prohibition said, was convicted of contempt of court and sentenced to 180 days in jail. Roberson was sentenced to one year in jail for contempt of court and failing to produce documents for a securities investigation by the Colorado Division of Financial Services.

The SEC, in its newly filed lawsuit, charges that from 2008 through September 2012 McDuffie (aka Roberson) and HMCU used the HMCU website to "lure investors" by offering CDs with above-market rates. The SEC also alleges Duffie used the site to make misleading statements and omissions to portray HMCU as a "genuine, secure credit union that was regulated and that held insurance covering investor deposits."

The SEC's lawsuit points out that, in reality, HMCU has never been a federally or state-chartered credit union, has never been regulated as a credit union by any government authority, has never held insurance covering its investor deposits, and has never been insured by Lloyd's of London as it has claimed.

Instead, HMCU is the trade name of a for-profit corporation that is controlled by McDuffie. Rather than loaning or investing CD deposits, as would be the case with a legitimate credit union, McDuffie and HMCU deposited investor funds into financial institution accounts held by HMCU, and then allegedly misappropriated the funds for personal and business expenses, causing investors to lose most of their principal, and rendering it impossible for HMCU to make required interest payments.

Michael McLain, CUNA's assistant general counsel and senior compliance counsel, stated, "CD deposits from legitimate credit unions would not be considered securities because they are issued by federally regulated financial institutions which are subject to comprehensive regulations and the CDs are protected by federal or other deposit insurance."

The SEC suit seeks to "restrain and enjoin" the defendants from such alleged violations as:

* Offering and selling unregistered securities, obtaining money or property on the basis of misleading statements and omission, and making misleading statements and omissions; and

* Engaging in schemes to defraud and violating sections of the Securities Act.

The SEC asks the court for relief in the form of a finding that the defendants committed the violations and that unless restrained will continue to do so; enter and injunction permanently restraining and enjoining the defendants from violating the laws as alleged against them in the SEC complaint, order defendants to "disgorge" any and all illegal gains and pay civil money penalties, as well as any other relief the court my deem appropriate.

Regulators have investigated the credit union in an attempt to determine whether it is legitimate or a fraud. However, as former NCUA Director of Public and Congressional Affairs John McKechnie explained to News Now at the time of an earlier agency investigation, "This is a Virgin Island-licensed, uninsured entity. They call themselves a 'credit union' and Virgin Island authorities are apparently unable to do anything about this. They aren't advertising as federally insured and [make] no references to NCUA so we have no authority."

The credit union is not chartered by the Colorado Division of Financial Services nor the NCUA.

CUNA open today no INews NowI due to holiday

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WASHINGTON and MADISON, Wis. (11/12/12)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association (CUNA) will be open Monday, which is Veterans Day, a federal holiday. News Now will not publish a Monday edition, but will resume regular publication Tuesday.

FHLB offers 1B in disaster relief funding

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HIGHTSTOWN, N.J. (11/13/12)--In response to the extensive damage caused by Hurricane Sandy, the Federal Home Loan Bank of New York (FHLBNY) is making $1 billion in disaster relief funding available to nearly 340 community-based lenders, including credit unions, to help rebuild communities in New Jersey and New York designated by FEMA as disaster areas.

The funds are being made available by the FHLBNY through its Community Lending Programs (CLP) to be used as immediate gap financing, the New Jersey Credit Union League reported Friday.

"Hurricane Sandy brought unprecedented destruction to cities and towns across New Jersey and New York," said Alfred A. DelliBovi, FHLBNY president/CEO. "We now begin the long process of recovering and rebuilding. The $1 billion in funding we are making available will help our members--the local lenders serving these communities--make a long-term, positive impact on recovery, relief and rebuilding efforts."

The $1 billion CLP commitment can be used for any residential lending activity for households whose incomes are at or below 115% of the area median income, and all small business and economic development lending in FEMA-designated disaster areas, and bridge financing. The low-cost loans can be used by the FHLBNY's member-lenders to support critical disaster relief financial activities, and meet the short-, medium-, and long-term funding needs of affected communities in New Jersey and New York.

Last year, the FHLBNY announced a $500 million CLP commitment in response to the massive scope of damage created by Hurricane Irene.  Home Loan Bank members tapped this funding to make small business loans in the wake of that storm.

Other aid efforts for New Jersey credit unions continue. The National Credit Union Administration collected clothing and non-perishable food items from its employees that were delivered to New Jersey Credit Union League offices Friday. The donations will are available for credit union employees, volunteers, members, and communities affected by Hurricane Sandy.

VisaMasterCard deal granted preliminary approval

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NEW YORK 11/13/12)--A federal judge on Friday granted preliminary approval of $7.5 billion antitrust settlement among Visa, MasterCard and several big banks, despite the objections of retailers.

The plaintiff's motion for class settlement preliminary approval was granted by Judge John Gleason and a motion by retailer Home Depot for interlocutory appeal was denied in U.S. District Court for the Eastern District of New York

A group of large retailers filed a brief Nov. 2 requesting that the proposed settlement be rejected. The retailers, representing 19 companies, roughly 17,000 separate retail outlets and more than $150 billion in annual sales, argued the settlement could not legally be certified as a class action because it attempts to force a one-size-fits-all solution onto a diverse group of merchants (News Now Nov. 5).

Retailers also argued that a provision barring all retailers--including those who opt out of the settlement--from filing future lawsuits over swipe fees is impermissibly broad under federal law.

The ATM Industry Association (ATMIA) also announced Friday that it has filed an amicus ("friend of the court") brief in the U.S. District Court of Eastern New York, in conjunction with other opponents of the proposed class-action settlement between merchants and MasterCard/VISA. Although credit unions were not part of the litigation, they would be affected by temporary reduction in credit card interchange, surcharging and buying groups.

The $7.5 billion settlement would require a reduced interchange rate fee (IRF) of 10 basis points for an eight month period, likely beginning in mid-2013, and would apply to all card issuers, including credit unions (News Now Nov. 1).

If the total credit IRF reduction is $1.2 billion, credit unions with credit card programs would lose about $50 million in total revenues, or about 0.5 basis points on their total assets, the Credit Union National Association (CUNA) said. The loss would be concentrated among a relatively small number of credit unions with very active credit card programs.

The proposed settlement also calls for Visa, MasterCard and the banks to create a $6.05 billion fund to repay retailers for past fees charged and says retailers would be permitted to assess "check out" fees or surcharges on credit card purchases, which has previously been prohibited by Visa and Mastercard rules.

The surcharging aspect of the settlement--as well as the provision that consumer-owned credit unions would see a reduction in interchange revenue--are signs that the settlement does nothing for consumers, CUNA President/CEO Bill Cheney has said. Interchange revenue enables credit unions to provide "essential and cost-effective credit card services" to members. "We also know that the temporary reduction in interchange revenue that credit unions will experience will not likely find its way into the pockets of consumers, but will more likely into those of merchants," Cheney said.

Illinois Maine report positive election results

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NAPERVILLE, Ill. and PORTLAND, Maine (11/13/12)--Maine and Illinois credit unions reported positive results for the roster of candidates they supported in last week's general election.

Nearly 91% the Illinois Credit Union League's (ICUL) Credit Union Political Action Council's (CUPAC) contributions were directed toward winning candidates. Among the winners were Bill Enyart (D-12) who defeated Jason Plummer for an open Congressional seat.  Enyart recently visited credit unions in the Metro East area. Those in attendance for a meeting that took place at Shell Community FCU, Wood River, Ill.; are, from left: Mike Frye, chairman, Shell Community FCU and CUPAC board member; Alan Meyer, executive vice president/chief operating officer, 1st MidAmerica CU, Bethalto, Ill.; and ICUL director, Class C, District 1; Enyart; Frank Padak, CEO, Scott CU, Edwardsville, Ill., and CUPAC board member; Keith Sias, ICUL vice president of governmental Affairs; and Greg Lyons, CEO, Shell Community FCU. (Photo provided by Illinois Credit Union League)
Nearly 91% the Illinois Credit Union League's Credit Union Political Action Council's (CUPAC) contributions were directed toward winning candidates.

CUPAC supported 31 candidates, with 28 winning their elections, including 14 of 16 winning candidates in the state Senate. On the Illinois House side, 14 of 15 winning candidates were backed by CUPAC.

Maine credit unions also enjoyed success in last week's elections. Independent Angus King, who was endorsed by the Maine Credit Union League, won Maine's open U.S. Senate seat. King, who won his race by 25 percentage points, will replace the retiring Sen. Olympia Snowe (R) in January.

In Maine's Second Congressional District, Rep. Mike Michuad (D), a former credit union board member, was re-elected to a sixth term by a 58% to 41% margin.

In Maine's First Congressional District, Rep. Chellie Pingree (D) captured her third term by a margin of 65% to 35%.

"Congressman Michaud and Congresswoman Pingree have been strong supporters of our important issues, including raising the cap on member business lending, and ATM disclosure legislation," said John Murphy, Maine league president.  "In the U.S. Senate, we look forward to continuing and building upon the solid relationship we have with Angus King, having worked well with him during his eight years as governor."

Southeastern CUs expected to receive dues rebate in 2013

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BIRMINGHAM, Ala., and TALLAHASSEE, Fla. (11/13/12)--The League of Southeastern Credit Unions (LSCU) & Affiliates announced Nov. 8 that it will offer affiliated credit unions in Alabama and Florida a dues rebate in 2013.

With less than two months remaining in 2012, the LSCU said it is shaping up to have another great financial year. Several factors contributed to the success, including strong LSCU and LEVERAGE--the League Service Corporation-- earnings, as well as an efficiently run organization, said LSCU.

"Through consolidation we've been able to streamline our operations," said League of Southeastern Credit Unions & Affiliates president/CEO Patrick La Pine. "That means that the league is running more efficiently. LEVERAGE has had a very good year financially and we feel it's important to have our credit unions share in our success in the form of a dues rebate."

LSCU Board Chairman Mary Ott Wood, who also is the CEO of Florida West Coast CU in Brandon, said, "It's important that our credit unions in Alabama and Florida know that the LSCU & Affiliates is not only working for them to advance our industry, but we understand the challenges they are still facing back at home."

She noted "This is the first dues rebate ever offered in either state."

Even though the economy is beginning to show signs of a recovery, many credit unions in Alabama and Florida continue to struggle to increase earnings and they are feeling regulatory pressure to cut operating expenses. Since consolidation, and with the support of the boards and credit unions, the LSCU & Affiliates have met and exceeded earnings the last two years and is on track to do so again this year, the league noted in a release.

A final LEVERAGE dividend and LSCU dues rebate will be announced once the books close on 2012, which is expected to be around mid-February. The dues rebate would be funded by a combination of the net income derived from the league, with the remaining amount funded through the dividend from LEVERAGE to the league.

Credit unions will pay their full 2013 dues as scheduled. The dues rebate will be returned to member credit unions in the form of paper check around the end of the first quarter. The following restrictions will apply:

1) Any credit union that did not remit dues by March 31, would not be eligible for a dues rebate;

2) Any credit union granted a dues waiver or reduction in 2013 would not be eligible for a dues rebate;

3) Credit unions that were not affiliated in previous years would be eligible to receive a dues rebate in 2013, but the previously mentioned restrictions would apply

Credit unions should still budget for their league and Credit Union National Association dues, based on the estimated dues invoice that the league sends out each September.

"A dues rebate illustrates how the financial success of LEVERAGE is vital to the long-term sustainability of the league," said La Pine. "By credit unions purchasing products and/or services through LEVERAGE, it has a direct correlation to the dues they are being asked to pay. Credit unions need to know that there's no guarantee a dues rebate will be declared every year. Level of affiliation, net income for the league and LEVERAGE as well as identified priorities, will play key factors in our future decisions."

SACU announces sponsorship with U. of Texas-San Antonio

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SAN ANTONIO (11/13/12)--San Antonio FCU (SACU) has announced a sponsorship with the University of Texas at San Antonio (UTSA) to become the "Official Financial Institution for Roadrunners Athletics."

"UTSA and SACU's missions of service to the San Antonio community are well aligned and we are thrilled to formalize our partnership," said Laura Johnston, SACU chief marketing officer.

As UTSA's financial institution athletics sponsor, SACU will have marketing rights at UTSA athletics events, such as home football and basketball games. Also, SACU will sponsor the UTSA student section during regular season football games and will be included in UTSA athletics media promotions.

The sponsorship opportunity also allows UTSA and SACU to jointly offer a series of programs to UTSA students on the importance of responsible financial management. Also, SACU's pledge for excellence will allow the university to allocate financial resources to students for scholarships, academic programs and other opportunities over a five-year period.

To mark the partnership, Frank Burk, chairman of the board of SACU, tossed the coin at the Roadrunners Oct. 27 home game against the Utah State Aggies.

Two more CUNA board nominations received

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MADISON, Wis. (11/13/12)--Two more nominations have been submitted for the Credit Union National Association (CUNA) board positions.

The nominations were made in District 1, Class C, for Robert Cashman, president/CEO, Metro CU, Chelsea, Mass., and in District 3, Class B, for Brad Green, president/CEO, Listerhill CU, Sheffield, Ala.

Other previous nominations include:

  • District 6, Class D, for Troy Stang, president/CEO, Northwest Credit Union Association, Federal Way, Wash.
  • District 4, Class C: Dennis Pierce, CEO, CommunityAmerica CU, Lenexa, Kan.;
  • District 6, Class A: Susan Streifel, president/CEO, Woodstone CU, Federal Way, Wash.;
  • District 5, Class D: J. Scott Sullivan, president/CEO, Nebraska Credit Union League, Omaha, Neb.;
  • District 5, Class B: Incumbent Roger Heacock president/CEO, Black Hills FCU, Rapid City, S.D.
  • District 2, Class A: Incumbent John Graham, president/CEO, Kentucky Employees CU, Frankfort, Ky.
Positions up for election are:

  • District 1, Class C;
  • District 2, Class A;
  • District 3, Class B;
  • District 4, Class C;
  • District 5, Class B;
  • District 5, Class D;
  • District 6, Class A; and
  • District 6, Class D.
A nominee must be an employee or voting board member of the nominating credit union to be an eligible candidate elected by credit unions. The nomination must be seconded in writing by at least two other credit unions from the same district and class.

League candidates must be a league president and nominated in writing by their league, and seconded in writing by at least one other league from the district.

Nominations are due through Nov. 16. For contested elections, ballots will be sent Nov. 21, with voting continuing through Jan. 4. Results of contested elections will be announced Jan. 8.

Directors will take office upon the adjournment of CUNA's Annual General Meeting on Feb. 25 in Washington, D.C.

Nomination packets are available by calling 800-356-9655, ext. 4013; using the resource link; or e-mailing thanson@cuna.coop.

Wis. N.C. CUs host Dominican Fellows through WOCCU program

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International Credit Union Leadership Program participant Gervis Portes Nina met with U.S. Rep. Trey Gowdy (R-4) of South Carolina during his internship with SC Telco FCU in Greeneville S.C.

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WASHINGTON (11/13/12)--Credit unions in Wisconsin and North Carolina have hosted Dominican Republic fellows through a World Council of Credit Unions (WOCCU) International Credit Union Leadership Program (ICULP) during the past few weeks.

After four weeks away from their homes and families, Gervis Portes Nina, regional business manager for Coopcentral in Las Matas de Farfán, Dominican Republic, and Gelson Rodriguez, loan officer for Cooperativa Maimon in Maimon, Dominican Republic, completed the final week of their U.S. credit union internships last week at the Professional Fellows Congress in Washington, D.C.

Nina and Rodriguez are part of a group of more than 200 professional fellows from 51 countries are meeting at the event to discuss topics such as entrepreneurship, women's empowerment and worldwide legislative issues. The Professional Fellows Congress is sponsored by the U.S. Department of State, Bureau of Educational and Cultural Affairs, Office of Citizen Exchanges, and includes participants from WOCCU and the 16 other Professional Fellows Program grantees.

Nina spent the past month with SC Telco CU in Greeneville, S.C., where he studied the credit union's policies, procedures and best practices. Each of the credit union's departments shared with Nina their challenges and keys to success. Nina also visited a Spanish class at Landrum High School in Landrum, S.C., where he discussed life and culture in the Dominican Republic. Later in the month, Nina met with U.S. Rep. Trey Gowdy (R-4).

Click to view larger image Gelson Rodriguez, loan officer for Cooperativa Maimon in Maimon, Dominican Republic, focused on lending products and procedures at Dane County CU in Madison, Wis. Pictured, from  left are: Carla Wolf, human resources manager; Katie Kruger, branch manager; Crystal Brandt, member service representative; Rodriguez; Bridget Brei, underwriter; and Marshall Arehart, lending manager.
"These exchanges build bridges of understanding and friendship throughout the worldwide credit union movement," said John Radebaugh, North Carolina Credit Union League president/CEO. "They also show staff at North Carolina credit unions that they are part of something larger. It was a pleasure to see our credit unions embrace this program and provide a transformational learning experience to their Dominican guests and the staff members who worked alongside them."

While Nina interned in South Carolina, Rodriguez was working at Dane County CU in Madison, Wis. Rodriguez focused primarily on loan processes and procedures and the way in which Dane County CU serves its members with credit builder loans and one-on-one credit report reviews. Like Nina, Rodriguez had the opportunity to participate in other activities such as a Wisconsin Credit Union League event and a visit to WOCCU headquarters in Madison.

"We appreciated the opportunity to visit once again with our international colleagues and discuss credit union awareness, advocacy and other important issues," said Brett Thompson, president/CEO of the Wisconsin Credit Union League, which has had an official partnership with the Dominican Republic's credit union association, AIRAC, though WOCCUs International Partnerships Program since 2007.

"The knowledge and perspective we gain through this partnership is invaluable, and we'll look forward to continuing to foster our relationship with credit unions in the Dominican Republic," Thompson added.

Rodriguez and Nina are among the nine fellows that traveled to the U.S. through WOCCU's International Credit Union Leadership Program (ICULP), sponsored by the U.S. Department of State, Bureau of Educational and Cultural Affairs, Office of Citizen Exchanges. In coordination with the Wisconsin Credit Union League and North Carolina Credit Union League, WOCCU paired each participant with a U.S. credit union for the duration of the internship. Participants will return home with new ideas and strategies to improve their credit unions and promote growth in the Dominican credit union system.

International Credit Union Leadership Program participants,  from left: Claudio Wolters, Coopmedica manager; Naty Lamourthe, Coopmedica training manager; and Gelson Rodriguez met with World Council of Credit Unions (WOCCU) President/CEO Brian Branch at WOCCU headquarters in Madison, Wis. (Photos provided by the World Council of Credit Unions) 

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"This program directly aligns with World Council's vision to build a global community," said Brian Branch, WOCCU president/CEO. "It provides an opportunity to directly connect our member associations, AIRAC in the Dominican Republic and Credit Union National Association in the U.S., to exchange ideas, experiences and best practices in an effort to positively influence credit unions in both countries."

Wisconsin credit unions participating in the program were Summit CU, Madison, Wis.; Taylor CU, Medford, Wis.; Glacier Hills CU, West Bend, Wis.; and Dane County CU, Madison, Wis. Participating North Carolina credit unions were Latino Community CU, Durham, N.C.; State Employees CU, Raleigh, N.C.; Coastal FCU, Raleigh, N.C.; and United Services CU, Asheville, N.C. SC Telco CU, Greeneville, S.C., also participated in the program.

Dominican fellows also met with National Credit Union Administration representatives to hear a regulatory perspective of the U.S. credit union system.

WOCCU is accepting applications through Nov. 16, from U.S. credit union employees interested in participating in the next ICULP opportunity in the Dominican Republic. WOCCU will select 11 U.S. participants to travel to the Dominican Republic for a two-week internship with one of 15 WOCCU-affiliated credit unions, Jan. 13–16, 2013.

For more information on ICULP and an application, use the link.

New Jersey CU League launches search process for new CEO

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HIGHTSTOWN, N.J. (11/13/12)--After notifying its membership that its president/CEO, Paul Gentile, is leaving at year-end to join the Credit Union National Association (CUNA), the New Jersey Credit Union League (NJCUL) lost no time in launching a national search to find its next leader.

CUNA announced last week that Gentile will fill a newly created position at CUNA as Executive Vice President, Strategic Communications and Engagement starting Jan. 7. In that role, Gentile will develop and implement an overarching, company-wide communications and marketing strategy to enable CUNA to more completely and comprehensively engage all of its key audiences and stakeholders.

In announcing its search plans, the NJCUL said its search committee is currently evaluating search firms and plans to hire a firm by Nov. 19. NJCUL said it will appoint an interim CEO from outside its own ranks.

"The search committee will move aggressively to find our new CEO. Communication with the membership will be key. We plan to provide status updates where appropriate," said NJCUL Chairman and Garden Savings FCU CEO Lou Vetere.

Vetere noted that NJCUL has a number of important initiatives in the works that will not lose momentum during the transition. These include the launch of a new home energy efficiency loan program in partnership with the State of New Jersey; new creative media for NJCUL's popular "Banking You Can Trust" consumer awareness campaign; the push to bring Electronic Lien Titling to New Jersey, which NJCUL spearheaded in 2012; and more.

"All of these initiatives bring tremendous member value and we will work to ensure they stay on track," Vetere said.

Of Gentile's new position with CUNA Vetere said: "We wish Paul all the best in his new position and thank him for his valuable contribution to NJCUL's success over the past five years."

Cameron announces retirement from Idaho CU

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BOISE, Idaho (11/13/12)--Idaho Credit Union League President/CEO Alan Cameron has announced his plans to retire on June 30. He informed the league's board of directors on Nov. 8.

Cameron has served as president/CEO of the league and its wholly owned subsidiary League Services Inc., since 2000 and as the league's retained legal counsel and lobbyist since 1977.

During his tenure, Cameron has fought for the rights of more than one-half million Idaho credit union members and their credit unions, and served national and international members through the league's partnership with the credit unions of the Solomon Islands. He has served on several committees and task forces for the Credit Union National Association (CUNA).

Cameron served as chair of CUNA's Consumer Protection Subcommittee and as chair of the State Issues Advocacy Committee of the American Association of Credit Union Leagues. He was as a member of the Federal Reserve Board's Consumer Advisory Council for three years. In Idaho, Cameron served as treasurer of the Hispanic Financial Education Coalition, treasurer of the Consumer Information Council, and was on the board of the Consumer Credit Counseling Service of Idaho for more than 20 years.

The league's board and staff have thrived under Cameron's leadership, the league said. His passion for credit unions and their members has been a beacon during a time of increasing regulatory burden and financial upheaval, the league added. In announcing its leader's retirement the league called Cameron a trusted friend and voice of reason to state government, business owners, regulators and credit union leaders.

"Alan has done a tremendous job representing the Idaho Credit Union League and the credit unions in Idaho and at the national level," Idaho Department of Finance Director Gavin Gee said in his remarks to the league board this week. "He enjoys an outstanding reputation and has been a pleasure to work with."

NEW Cameron to retire as head of Idaho CU League in June

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BOISE, Idaho (11/13/12)--Idaho Credit Union League President/CEO Alan Cameron has announced his plans to retire on June 30. He informed the league's board of directors on Nov. 8.



Cameron has served as president/CEO of the league and its wholly owned subsidiary League Services Inc., since 2000 and as the league's retained legal counsel and lobbyist since 1977.

During his tenure, Cameron has fought for the rights of more than one-half million Idaho credit union members and their credit unions, and served national and international members through the league's partnership with the credit unions of the Solomon Islands. He has served on several committees and task forces for the Credit Union National Association (CUNA).

Cameron served as chair of CUNA's Consumer Protection Subcommittee and as chair of the State Issues Advocacy Committee of the American Association of Credit Union Leagues. He was as a member of the Federal Reserve Board's Consumer Advisory Council for three years.  In Idaho, Cameron served as treasurer of the Hispanic Financial Education Coalition, treasurer of the Consumer Information Council, and was on the board of the Consumer Credit Counseling Service of Idaho for more than twenty years.

The league's board and staff have thrived under Cameron's leadership, the league said.  His passion for credit unions and their members has been a beacon during a time of increasing regulatory burden and financial upheaval, the league added.  In announcing its leader's retirement the league called Cameron a trusted friend and voice of reason to state government, business owners, regulators and credit union leaders.

"Alan has done a tremendous job representing the Idaho Credit Union League and the credit unions in Idaho and at the national level," Idaho Department of Finance Director Gavin Gee said in his remarks to the league board this week. "He enjoys an outstanding reputation and has been a pleasure to work with."

Wisconsin CUs have net income growth of 96

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MADISON, Wis. (11/9/12)--Wisconsin credit unions increased net income by 96% in the first three quarters of 2012, compared with the same period in 2011, according to data compiled by the Wisconsin Department of Financial Institutions (DFI).

Net income totaled $164.7 million, up from $84 million in 2011. The rise in net income was fueled in large part by a 26% improvement in "other income" that includes things such as income from mortgage-lending activities.

"Wisconsin credit unions have returned to pre-recession levels of strength," DFI Secretary Peter Bildsten said. "Continued strong growth in net income is having a positive impact on return on assets (ROA) and net worth."

Through Sept. 30, Wisconsin's 188 state-chartered credit unions:

  • Posted ROA of 0.98%, up from 0.59% in 2011 and the highest since 2005;
  • Grew net worth to 10.09%, the best since 2008; and
  • Increased total assets by 5.5% to $23.1 billion, due in part to loan growth of 2.9%.
Bildsten noted that the number of state-chartered credit unions declined to 188 from 194 in the third quarter as "industry consolidation and merger activity continues."

"Credit unions' loan quality continues to show steady improvement," said Ginger Larson, director of the Office of Credit Unions--the DFI division that oversees state-chartered credit unions. "The provision for loan losses is down nearly 16% through the third quarter. In addition, the ratio of delinquent loans is 1.50% and trending down."

Use the resource link below to read the News Now story on CUNA economist's analysis of September's monthly sample of credit union data.

CUNA open Veterans Day no INews NowI

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WASHINGTON and MADISON, Wis. (11/9/12)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association (CUNA) will be open Monday, which is Veterans Day, a federal holiday.

News Now will not publish a Monday edition, but will resume regular publication Tuesday.

2012 Community CUs of the Year named

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MADISON, Wis. (11/9/12)--The Credit Union National Association (CUNA) presented the 2012 Community Credit Union of the Year Award to four credit unions for their exemplary displays of credit union principles and positive influence in the field of service. The awards luncheon was held at this year's CUNA Community Credit Union & Growth Conference, Oct. 23-26 in Denver.

This award honors credit unions that consistently excel in the advancement of credit union ideals, are proactive in their community, and meet the needs of their own diverse member-bases. The yearly judging process considers three aspects of each credit union applicant: Member Impact, Community Impact and Financial Impact.

This year's award was presented to credit unions in two asset categories--less than and greater than $250 million in assets, with a first place and honorable mention winner in each.

2012 Community Credit Union of the Year Award winners:

  • First Place, Credit unions with more than $250 million in total assets: First Community Credit Union, N.D. Accepted by: Janna Bergstedt, marketing manager.
  • Honorable Mention, Credit unions with more than $250 million in assets: 1st MidAmerica Credit Union, Ill. Accepted by: Amber Scott, marketing vice president.
  • First Place, Credit Unions with less than 250 million in total assets: Gulf Coast Community Federal Credit Union, Miss. Accepted by: Lisa Graham, president/CEO, and Debbie Pidek, executive vice president/chief communications officer.
  • Honorable Mention, Credit Unions with less than 250 million in total assets: Dakotaland Federal Credit Union, S.D. Accepted By: Dan Cumbee, president/CEO, and Dawn Mutchelknaus, marketing vice president, and Emily Remund, marketing assistant.
For more information about CUNA's Community Credit Union of the Year Award, use the link.

SECU hosts and educates Chinese banking delegation

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RALEIGH, N.C. (11/9/12)--State Employees' CU (SECU) in Raleigh, N.C., recently hosted members of a Chinese banking delegation who were interested in learning more about the philosophy, practices, strategy and innovation of the not-for-profit cooperative.

The visiting group of 17 emerging financial leaders consists of members of the Youth Federation of China, an association of the Chinese government for rising leaders of the nation. The delegation is the second group from China to visit the credit union in recent years. This year's visit also included a tour of a local branch and SECU's Information Services area.

Click to view larger image A group of 17 emerging financial leaders who are members of the Youth Federation of China, an association of the Chinese government for rising leaders of the nation, recently visited State Employees' CU in Raleigh, N.C., to learn more about the philosophy, practices, strategy and innovation of the not-for-profit cooperative. (Photo provided by State Employees' CU)
SECU President Jim Blaine and Senior Executive Vice President Bobby Hall were among the credit union officers who met with the group. 

The visiting delegates were in North Carolina for a five-day training program through

North Carolina State University's Global Training Initiative, designed to enhance international relationships among businesses in North Carolina through short-term international programs. 

The group represented three of China's "Big Four" state-owned commercial banks, including Industrial and Commercial Bank of China (ICBC), Agricultural Development Bank of China (ADBC) and China Construction Bank (CCB), as well as Export-Import Bank of China, a leader in export financing.

With China's active and competitive financial system, the emerging leaders were interested in learning more about automation, internet account access and mobile access programs in the U.S.

ICBC, with over $2 trillion in assets, recently purchased a bank in the U.S. with plans to expand its franchise. Both SECU and Chinese banking representatives noted many similarities in underwriting of vehicle, mortgage and credit card loans, while acknowledging higher savings rates available in China.

"We sincerely appreciate the reception of SECU leadership and the opportunity for questions and discussion," said delegation leader Zhou Bo of China Construction Bank. "Compared with the banks in China, SECU is a very unique institution in terms of its purpose, ownership and management. The principle at SECU of 'high quality service with low cost' should be the driving force for every financial institution, even in China."

"This visit really offered these emerging leaders the opportunity to see how SECU's unique not-for-profit model functions in today's financial marketplace through its practices, strategies and innovative services," said Jim Blaine, SECU president.

CUANY offers economic forum

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ALBANY, N.Y. (11/9/12)--Credit union leaders heard from investment experts, economists and industry leaders during the Credit Union Association of New York's 2012 Economic Forum last week.

William J. Mellin, president/CEO of the Credit Union Association of New York, welcomes attendees to the 2012 Economic Forum. (Photo provided by the Credit Union Association of New York)
Despite the ongoing impact of Hurricane Sandy, more than 100 attendees from New York, Massachusetts, New Jersey and Rhode Island traveled to Albany for the event.

The Economic Forum kicked off Thursday morning with opening remarks from Association President/CEO William J. Mellin and a presentation titled "Investing in an Uncertain World," led by Kristina Muller and Gregory Perry of Balance Sheet Solutions.

Perry emphasized how the economy is, in and will continue to be in, a low-rate environment. He also noted that, in light of the current financial climate, it is important for credit unions to pay extra attention to their balance sheets and investments, and not sit on a substantial amount of cash.

Thursday afternoon, attendees had their choice of three concurrent breakout sessions. With topics including liquidity, a 2013 economic outlook and risk management, the sessions spurred both thought and discussion.

On Friday, Alloya Corporate FCU's resident economist Dr. Nick Perna and keynote speaker Mark Sievewright, president of Credit Union Solutions at Fiserv, addressed the conference.

Perna focused on how Federal Reserve policies will impact credit unions in the future. Sievewright challenged attendees to adapt to changing consumer preferences and industry innovations.

Results roll in Leagues report election successes

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MADISON, Wis. (11/9/12)--Credit union leagues continue to report strong outcomes for credit union-backed candidates in Tuesday's general election.

All four candidates endorsed by the Missouri Credit Union Association (MCUA) as 2012 Credit Union Champions won their respective races. Winners include:

  • Rep. Lacy Clay (D-District 1);
  • Rep.-elect Ann Wagner (R-District 2);
  • State Rep.-elect Jon Carpenter (D-District 15); and
  • State Rep.-elect Michael Frame (D-District 111).
In Maine, four of the six credit union board volunteers running for the Maine Legislature were victorious, the Maine Credit Union League reported. Representatives re-elected included:

  • Rep. Michael Lajoie (D-Lewiston), chair at Lewiston (Me.) Municipal FCU;
  • Rep. Ken Fredette (R-Newport), board member at Sebasticook Valley FCU, Pittsfield;
  • Rep. Jeffrey Gifford (R-Lincoln), board member at Lincoln (Me.) Maine FCU; and
  • Rep. Ray Wallace (R-Dexter), a member of supervisory committee at Maine Highlands FCU.
In the Maine Senate, of the 28 races the league endorsed, 19 endorsed candidates won their races, for a 68% success rate.

In the Maine House, the league achieved a 79% success rate with 56 of 71 endorsed candidates winning their races.

The Texas Credit Union League's (TCUL) Political Action Committee scored at 95% success rate in races in the state, and at the national level Credit Union Legislative Action Committee scored 96% success rate. In Congress, all 32 Texas congressional representatives (23 Republicans and 9 Democrats) were up for re-election.

Leagues report more election success for CU-backed candidates

For more news on the election of success of credit union-backed candidates, see "CUNA, CU-backed candidates have a strong outcome" in the Thursday edition of News Now. Use the resource link below.

Aid weather problems continue for New Jersey credit unions

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MADISON, Wis. (11/9/12)--Support from the credit union community for East Coast credit unions affected by Hurricane Sandy continues to roll in.

Heavy snow fell on trees and power lines on Wednesday in New Jersey, causing major power outages across the state. (Photo provided by New Jersey Credit Union League)
Donations to CUAid to assists credit unions affected by Hurricane Sandy have surpassed $136,000, the National Credit Union Foundation reported Thursday.

CUAid is the only program of its kind that enables credit union employees, volunteers, and members, as well as credit unions and credit union organizations across the United States, to contribute directly to support other credit union people. The National Credit Union Foundation coordinates with credit union leagues in the disaster area to distribute contributions to affected credit union employees and members.

Also, CU*SWAG, a graphic T-shirt provider for the credit union industry, has designated Friday as a day of donation. CU*SWAG pledges to donate 100% of profits from orders placed Friday to NCUF.

The California and Nevada Credit Union Leagues donated $10,000 to CUAid.

"Our thoughts go out to all those impacted by Hurricane Sandy, and we want to do our part to assist our colleagues and their members in their efforts to recover from this devastating storm," said Leagues President/CEO Diana Dykstra.

In New Jersey, a Nor'easter named Athena wreaked havoc Wednesday on the roads and power lines that were just beginning to recover from last week's storm, according to the New Jersey Credit Union League

Inches of heavy, wet snow fell on already weakened trees and newly repaired power lines and transformers last night, causing downed trees and lines, and major power outages across the state.

Many of those who just had their power turned back on are now in the dark again. Commuting has become difficult with drivers having to dodge tress and lines as well as being detoured off normal routes.

New Jersey residents are hopeful that effects of this storm will not slow down or deter power restoration efforts already underway across the state.

"Just when we were starting to see many more New Jerseyans have their power turned back on, we unfortunately were hit with a snowfall that is delaying power restoration and has taken many areas backwards because of downed trees and lines from the snow," said NJCUL President/CEO Paul Gentile. "I want to thank credit unions, leagues and system players from around the country who have stepped up and donated to the National Credit Union Foundation's CU Aid. The funds are needed and appreciated. We will never forget the outpouring of support."

Businessman pleads guilty in St. Paul Croatian FCU scam

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CLEVELAND (11/8/12)--Businsessman A. Eddy Zai pleaded guilty to nine counts and agreed to forfeit $16.7 million for his participation in a fraud against St. Paul Croatian FCU, Eastlake, Ohio, law enforcement officials said Monday.

Zai, 44, of Pepper Pike, Ohio, pleaded guilty to one count of conspiracy to commit bank fraud and bank bribery, two counts of bank fraud, three counts of money laundering, one count of bribery and two counts of making false statements to financial institutions.

Zai conspired with others, including Anthony Raguz, the defunct credit union's former CEO, to submit false loan documents to St. Paul Croation FCU, defraud the credit union of about $16.7 million, and pay bribes and kickbacks to Raguz for using his position at the credit union to approve numerous loans to Zai and the entities and companies he controlled, according to the indictment.

"Mr. Zai thought he could take a shortcut to success," said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio. "But by bribing a bank executive and defrauding investors, his shortcut trampled over the rights of others He will now have to begin the long path to repay society."

Raguz previously pleaded guilty to issuing more than 1,000 fraudulent loans, for more than $70 million, to about 300 accountholders.  He also pleaded guilty to accepting more than $500,000 in bribes, kickbacks and gifts from the borrowers. His sentencing is set for Nov. 20 (News Now Aug. 9).

Nineteen people have been charged in the scheme. The alleged ringleader in the fraud, Koljo Nikolovski of Eastlake and Skopje, Macedonia, was sentenced in May to 18 years in prison for his role in the fraud (News Now May 14).

St. Paul Croatian FCU was one of the largest credit union failures in history, costing the National Credit Union Share Insurance Fund about $170 million.

The credit union was placed into conservatorship by the National Credit Union Administration (NCUA) on April 23, 2010. One week later, the NCUA liquidated St. Paul Croation and discontinued its operations after determining the credit union was insolvent. At that time, the credit union served about 5,400 members and was believed to have assets of roughly $239 million.

Appeals Court denies CU request in real estate case v. NCUA

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MIAMI (11/8/12)--A federal appeals court Tuesday upheld the National Credit Union Administration's (NCUA) position after a Florida credit union filed a breach of contract lawsuit against NCUA, concerning mortgage loans. The ruling was made in the U.S. Court of Appeals for the 11th Circuit in Miami.

The National Credit Union Administration (NCUA) in March filed a notice to remove a $15 million breach of contract lawsuit filed by Power Financial CU to the U.S. District Court for the Southern District of Florida in Miami. The suit concerns an agreement to buy mortgage loans from a credit union now in conservatorship (News Now March 2).

Power Financial CU, Pembroke Pines, Fla., filed its complaint Feb. 14 in the 11th Circuit Court against Keys FCU, Key West, Fla. NCUA filed its notice of removal with the U.S. District Court on March 1, saying that the agency, as conservator of Keys FCU, is the real party to the case. Keys was placed into conservatorship on Sept. 24, 2009, according to court documents.

The case relates to a loan sale agreement that Power Financial and Keys Federal entered into on July 12, 2010, according to the original complaint filed in the 11th Circuit Court. The complaint said Power Financial agreed to purchase certain mortgage loans of Keys Federal and that the borrowers whose mortgage loans were to be purchased would automatically become members of Power Financial.

The central issue in the appeal is whether an agreement for Power Financial to purchase mortgages of non-members was unenforceable under Florida law, said the U.S. Court of Appeals for the 11th Circuit in Miami in its decision.

In making the ruling Tuesday, the federal appeals court stated: "After Power Financial sued to enforce the agreement, the district court granted summary judgment in favor of the Administration [NCUA] on the grounds that the agreement was unenforceable under Florida law. We affirm the summary judgment because the agreement was unenforceable and affirm the denial of a motion for enlargement of time for discovery because the denial of that motion was not an abuse of discretion."

On Aug. 27, 2010, Power Financial received a letter from Keys Federal that "expressly repudiated" the contract, explaining that the transaction was "no longer in the best interest" of Keys Federal.

It is "extremely difficult," said Power Financial's complaint, for it to purchase replacement mortgage loans because it "is limited by state regulation to specific preapproved geographic areas" related to its field of membership. "Mortgage loans available for purchase in the communities in which Power Financial has members are often not suitable for purchase because of the current real estate conditions in those communities," the document said.

The complaint noted that on Oct. 12, 2010 Power Financial received consent for the sale from the Florida Office of Financial Regulation, and on Oct. 19, 2010, Power notified Keys' attorneys of the approval, but never heard back on the matter.

ATM industry files brief against interchange settlement

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SIOUX FALLS, S.D. and NEW YORK (11/8/12)--The ATM Industry Association (ATMIA) announced Friday that it has filed an amicus ("friend of the court") brief in the U.S. District Court of Eastern New York, in conjunction with other opponents of the proposed class-action settlement between merchants and MasterCard/VISA. Although credit unions were not part of the litigation, they would be affected by temporary reduction in credit card interchange, surcharging and buying groups.

ATMIA contends that the language of the agreement is so broad and vague that it might be construed to include ATM deployers, even though the original claims were made by merchants engaged in the sale of goods or services.

The proposed settlement would presumably end many years of disputes between merchants and the two card brands over interchange fees and surcharging. Merchants would finally gain the right to impose surcharges on credit card purchases, as well as share in about $7.3 billion in payments and temporary interchange reductions as damages. MasterCard and VISA, in turn, receive a broad release of all related claims-both current and future.

ATMIA asserts that the proposed agreement is flawed as written. Most "ATM cards" have been replaced by debit cards, which can be used either for ATM transactions or purchases at the point of sale. MasterCard and VISA debit cards represent the vast majority of that market. As a result, the settlement class definition captures a majority of the cards used for ATM transactions and, thus, the deployers of those ATMs.

However, even if the ATM deployers were drawn into the settlement class, they would not be eligible to receive an award of damages, because an ATM deposit/withdrawal transaction is not a purchase, ATMIA said. Therefore, an ATM deployer could involuntarily become a party to this class action settlement, and at the same time, be barred from receiving any benefit.

ATMIA is requesting that the proposed settlement not receive preliminary approval from the court. Or, that the agreement language be revised to make clear that ATM deployers and operators are not included within the scope of this settlement.

ATMIA is a global non-profit trade association with over 3,700 members in 60 countries.  

The judge overseeing the $7.25 billion settlement in retailers' class antitrust lawsuit against Visa and MasterCard over credit card interchange fees said that opponents to the proposed settlement can plead their case in a hearing set for Friday [Nov. 9] (News Now Oct. 26).

"I have reviewed the settlement agreement and at first blush it appears to satisfy the threshold requirements for preliminary approval," said U.S. District Judge John Gleeson of the U.S. District Court for the Eastern District of New York in the order Oct. 31. He added he would hear their arguments against a preliminary approval Friday. "As in every case, those objections deserve, and will get, careful consideration by the court."

Credit unions were not a party to the litigation, but will be impacted by the injunctive relief settlement terms--temporary reduction in credit card interchange, surcharging and buying groups. The settlement's proposed reduced credit card interchange rate fees could cost credit unions with credit card programs up to $50 million total, said the Credit Union National Association (CUNA).

The settlement would require a reduced interchange rate fee (IRF) of 10 basis points for an eight-month period, likely beginning in mid-2013, and would apply to all card issuers, including credit unions.

If the total credit IRF reduction is $1.2 billion, credit unions with credit card programs would lose about $50 million in total revenues, or about 0.5 basis points on their total assets, CUNA said. The loss would be concentrated among a relatively small number of credit unions with very active credit card programs.

The proposed settlement also calls for Visa, MasterCard and the banks to create a $6.05 billion fund to repay retailers for past fees charged and says retailers would be permitted to assess "check out" fees or surcharges on credit card purchases, which has previously been prohibited by Visa and Mastercard rules.

CMG New survey explains CUs use of social media

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MIAMI (11/8/12)--New research findings from a credit union social media survey show that practice makes for improvement when it comes to employing social media in marketing strategies.

Patrick McElhenie, sales planner at  CUNA Mutual Group, provides CUNA Lending Council attendees a glimpse of social media research in the credit union space. (Photo provided by CUNA Mutual Group)

The survey was conducted with 160 members of the CUNA Lending Council and CUNA Marketing Council in August and were presented to attendees at the 2012 CUNA Lending Council Conference on Tuesday in Miami by Patrick McElhenie, sales planner at CUNA Mutual Group. The research was co-sponsored by CUNA & Affiliates and CUNA Mutual Group.

"Survey findings show credit unions using social media for more than three years are more adept at integrating it into their overall marketing strategy and are achieving better levels of member engagement," McElhenie told attendees of the 2012 CUNA Lending Council Conference.

Nearly all credit unions in the survey, 94%, are using Facebook as a form of social media marketing. Those who have been using social media for more than three years are significantly more likely to use Twitter and YouTube than those who have been using social media for less than three years.

"Advanced social media users are using Twitter, YouTube and podcasts at a much higher rate than beginners. These three social media platforms lend themselves to member engagement more than some of the others," said McElhenie.

Most credit unions surveyed by CUNA Mutual Group are primarily using social media to educate, build awareness and promote events. "Social media can supplement traditional marketing and help credit unions educate and promote, but its real strength is in the ability to engage members," said McElhenie.

The top barriers to using social media identified by credit unions in the survey were measuring return on investment (ROI) and a lack of time and resources to implement social media plans, which are similar across all industries and not unique to credit unions.

Currently, credit unions are using simple ROI metrics with 75% tracking the number of Facebook fans, 59% measuring the number of mentions or comments and 55% tracking the number of posts on Facebook. "The challenge is that while these are quantifiable metrics, they do not measure member engagement, changes in awareness, or increases in sales," McElhenie said.

Most credit unions responding to the survey have plans to develop or enhance their social media strategies for 2013. In addition to the 87% who will continue to use Facebook, credit union lending and marketing professionals also indicated their planned use of other social media platforms:

  • Mobile applications: 74%
  • Twitter: 66%
  • YouTube: 61%
  • Social media analytics: 48%;
  • LinkedIn: 39%;
  • Tumblr: 29%;
  • Google+: 24%; and
  • Pinterest: 1%.
As credit unions gain more experience with social media, their objectives expand beyond using it simply as a one-way marketing and communications tool. Beginners focus on education, awareness and promotion while more advanced users also focus on attracting new members, providing customer service, supporting sales and providing consumer reviews, McElhenie said.

Paraguay looks to Minn. CUs on regulatory oversight

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ST. PAUL, Minn.  (11/8/12)--As Paraguay begins the process of overhauling its legal framework for the country's cooperatives, its credit unions are looking to Minnesota as a compass for regulatory oversight, according to the Minnesota Credit Union Network (MnCUN).

Credit union representatives from Paraguay visited with regulators from the National Credit Union Administration and the Minnesota Department of Commerce on Oct. 31 at the Minnesota Credit Union Network office in St. Paul to learn more about regulatory oversight. (Photo provided by the Minnesota Credit Union Network)
To assist with regulatory reform, MnCUN welcomed five credit union representatives from Paraguay to Minnesota Oct. 27-Nov. 3 as part of an ongoing international exchange with that country's credit union association, Central de Cooperativas del Area Nacional Ltda. (CENCOPAN).

The goal of the visit was to provide insight into Minnesota credit union operations and the state and federal regulatory system, as credit union representatives in Paraguay begin efforts to reform the country's cooperative law. During their stay, the visitors immersed themselves in U.S. credit union culture and learned from regulatory leaders.

In a meeting at the MnCUN office in St. Paul, the group talked with Minnesota Department of Commerce Credit Union Chief Examiner Carl Schwartz and National Credit Union Administration Regional Examiner Justin Burleson. In their questions for the regulators, the Paraguayans focused on the exam process, how regulators identify and resolve problems, the CAMEL credit union rating system and how the U.S. regulatory system is structured and supported.

"In Paraguay the regulatory structure is different," said Enrique Ojeda, a CENCOPAN Board Member and Board Chair of COFAN, a $20-million credit union that primarily serves the police department. "Level A [the largest] credit unions receive most of the regulatory oversight; most of the funding from the government] goes to regulate them. The small credit unions receive less oversight."

Other challenges the group mentioned included a lack of a deposit insurance fund for credit unions in Paraguay, the faster pace of growth for credit unions in the country compared with its regulatory system, and the lack of full monetary support from the federal government to regulators. Schwartz and Burleson said they were impressed by the Paraguayans inquisitiveness and in-depth questions.

"At the Department of Commerce, we try to encourage credit unions to be proactive and work with them to resolve problems," Schwartz said. "Smaller credit unions, in particular, look to their regulator for advice on various issues."

As part of their visit, the international credit union representatives also visited several credit unions in the state, including Hiway FCU and St. Paul FCU in St. Paul, SouthPoint FCU in New Ulm, and US Federal in Burnsville. In those more personal interactions, the host credit unions presented information about their technology developments and the movement to mobile products, operational efficiencies, collections practices and regulation management.

"This week has been very productive," said Dejesus Agustín Brítez, a CENCOPAN board member and board chair of COOPERSAM, a $15 million asset credit union that serves military members and the VA hospital. "We have learned a lot of best practices that we will be going back with, and we will be looking at new ways CENCOPAN can help its credit unions."

This international visit was part of an ongoing exchange between CENCOPAN and MnCUN that was established in 2004 through the World Council of Credit Unions (WOCCU). Sparked by this partnership with MnCUN, the credit union association in Paraguay has led the charge to update the country's 18-year-old cooperative law. The law is now being reviewed and redesigned by WOCCU and Paraguay's regulator for cooperatives, Instituto Nacional de Cooperativismo (INCOOP).

"We want to ensure that this partnership continues to be beneficial, to CENCOPAN and Paraguayan credit unions, as well as to MnCUN and the credit unions we represent," said MnCUN president/CEO Mark Cummins. "I look forward to future exchanges in which we are able to coordinate focused visits to dig deeper into topics and help Paraguay's credit unions make headway in specific areas. Our goal is to structure our time together to be as beneficial as possible."

Redstone FCU opens check cashing center

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HUNTSVILLE, Ala. (11/8/12)--Redstone FCU, Huntsville, Ala., has opened a new subsidiary that it is marketing as a better priced alternative to traditional check cashing establishments.

Right Choice Money Services offers basic financial products, including check cashing, money orders, Western Union money transfers, bill pay, and reloadable prepaid cards in a safe, friendly and convenient environment. 

Right Choice Money Services is different from its competitors because it offers its customers a pathway to traditional savings and credit products through its partnership with Redstone, the credit union said.

The credit union said it identified a need in the market to serve those without traditional credit union or bank services.

"For the nearly 4 out of 10 Alabamians who do not use traditional banking organizations, Right Choice Money Services offers a welcome and competitive alternative," said Joseph H. Newberry, Redstone FCU president/CEO. "Right Choice is not only good for the consumer; it's good for the community. And Right Choice is the right thing to do."

A subsidiary of Redstone FCU, Right Choice operates under its own management committee, who share a vision of providing affordable, friendly and convenient financial services to those who may not have traditional bank or credit union checking accounts. 

Almost 193,000 Alabama households did not have a checking or savings account in 2011, according to the September 2012 release of the Federal Deposit Insurance Corporation (FDIC)'s 2011 National Survey of Unbanked and Underbanked Households.  The report also found that nearly 40% of all households in Alabama use alternative financial services, such as check cashers or payday lenders.

N.Y. N.J. CUs offer assistance to Hurricane Sandy victims

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HIGHTSTOWN, N.J. and ALBANY, N.Y. (11/8/12)--Although New Jersey and New York credit unions were dramatically affected by Hurricane Sandy, they are reaching out to their members to provide financial assistance.

For instance, Healthcare Employees FCU, Princeton, N.J., is offering an emergency loan with no payments due for the first 90 days. Members can obtain up to $3,000 at 3% for 30 months. Loans will be made available through Dec. 15, according to the New Jersey Credit Union League.

ABCO FCU, Rancocas, N.J., is offering a low-interest, disaster relief loan to its membership. For homeowners, up to $25,000 is available at 2.99% annual percentage rate (APR) for up to 48 months. For renters, up to $5,000 is available at 2.99% APR for up to 48 months. Members can use this loan for flood damage, tree removal, vehicle damage, fence repair, shrub replacement, generators and insurance deductibles.

Polish & Slavic FCU, Brooklyn, has set up charging stations in its branches for members who are still without power. A special area has been designated at its Clifton branch for neighborhood children who might need electricity to complete their homework assignments. The CU has also started collecting necessary non-perishable items, such as batteries, blankets, pillows, warm clothing, and outerwear, as well as personal hygiene products, such as toothpaste, toothbrushes, deodorant, and other personal hygiene items for the hurricane victims.

Bethpage FCU, Bethpage, N.Y, will waive late fees and insufficient fund fees for members affected by the storm.

Nassau Educators FCU, Westbury, N.Y., is also offering a Hurricane Relief Loan, with a fixed interest rate of 1% APR for the first year, and an optional 90-day deferral of your the payment. The credit union is also offering a 90-day first-payment deferral on auto loans and a 0% rate on credit card home improvement purchases.

Palisades FCU, Pearl River, N.Y., is offering a hurricane relief loan at 50% off  standard personal loans rates with terms up to 24 months for those impacted by the storm. Community members can borrow up to $5,000 to help aid with storm related issues.

Also, New Jersey Credit Union League president/CEO Paul Gentile spoke with CUbroadcast host Mike Lawson this week to provide a first-hand account of how Hurricane Sandy has  affected New Jersey credit unions and what disaster recovery efforts are underway (The Daily Exchange Nov. 7).

The video includes photos submitted damages caused by the hurricane. Gentile speaks about the devastation of the shore towns and surrounding areas and his personal experience with damages.

CUNA Lending Council announces news Exec. Comm. members

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MADISON, Wis. (11/7/12)--The coming year's executive committee and officers for the CUNA Lending Council were announced during the Council's 18th annual conference, Nov. 4-7 in Miami. This is a result of the most recent annual election by the council membership in the months preceding the conference.

Bill Vogeney, senior vice president /chief lending officer, Ent FCU, Colorado Springs, Colo., will become the council chair. Jason Osterhage, senior vice president /chief lending officer, Delta Employees CU, Atlanta, Ga. was named the council vice chair.

Three new members elected to the executive committee are:

  • Keith Troup, vice president-lending/chief lending officer, Washington State ECU, Olympia, Wash.;
  • Wendy Rohrer, vice president-consumer lending, Summit CU, Madison, Wis.; and
  • Bob Stowell, senior vice president/chief operating officer, US FCU, Burnsville, Minn.
The new members replace outgoing executive committee members who have served their terms: Aaron Bresko, senior vice president/chief lending officer, GTE Financial, Tampa, Fla.; Bonnie Doolin, senior vice president, business development, Massachusetts Credit Union League, Inc., Marlborough, Mass.; Michael Long, executive vice president/chief credit officer, UW CU, Madison, Wis.; and Keith Reynolds, vice president, lending/business services, Citizens Equity First CU, San Jose, Ca.

The CUNA Lending Council executive committee also currently includes:

  • Jennifer Cowles, vice president, real estate lending, American Eagle CU, East Hartford, Conn.;
  • Stacy Fifield, vice president, consumer lending, operations support, Travis CU, Vacaville, Calif.;
  • Dale Frankhouse, director of business services and mortgage lending, Sun FCU, Maumee, Ohio;
  • Gayle Rust Gustafson, vice president, finance services, Rivermark Community CU, Beaverton, Ore.; and
  • Chris Oldag, chief lending officer/vice president, Pacific Service CU, Concord, Calif.

CUNA Mutual honors 6 CUs for lending excellence

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MIAMI (11/7/12)--Six credit unions were recognized for their exemplary lending Monday by receiving CUNA Mutual Group's Excellence in Lending Awards at the CUNA Lending Council's 18th annual conference in Miami.

Click to view larger image Winners of the 2012 Excellence in Lending Awards were announced by CUNA Mutual Group at CUNA's Lending Council Annual Conference in Miami on Monday, and were, front, from left: Kathy Campbell, president/CEO, Northeast Community CU, Mortgage, less than $250 million in assets; Marsha Majors, executive vice president, U.S. New Mexico FCU, Low to Modest Means; Shyaam Shabaka, board vice chair, Cooperative Center FCU, Consumer, less than $250 million in assets; Benjamin Rutledge, vice president-commercial services, Gesa CU, Business; Alissa Sykes, mortgage manager, Sunmark FCU, Mortgage, more than $250 million in assets; and Sarah Klinger, associate  vice president-lending, United Nations FCU, Consumer, more than $250 million in assets. Back row, from left: Dan Murray, CUNA Mutual Group, vice president; and Bill Vogeney, CUNA Lending Council chair, senior vice president, Ent FCU. (Photo provided by CUNA Mutual Group)
Dan Murray, vice president, lending, CUNA Mutual Group, presented the 13th annual awards to:

  • United Nations FCU, Long Island City, N.Y.: Consumer Lending, Assets More Than $250 million;
  • Cooperative Center FCU, Berkeley, Calif.: Consumer Lending, Assets Less Than $250 million;
  • Sunmark FCU, Albany, N.Y.: Mortgage Lending, Assets More Than $250 million;
  • Northeast Community CU, Elizabethton, Tenn., Mortgage Lending, Assets Less than $250 million;
  • Gesa CU, Richland, Wash.: Business Lending; and
  • U.S. New Mexico FCU, Albuquerque, N.M.: Low-to-Modest Means.
"We had a record number of applications this year," said Murray. "But it wasn't just quantity, there were many quality, deserving applicants. In a challenging economy, it speaks to the resolve and creativity of our nominees."

Eighty-four credit unions were considered for this year's Excellence in Lending Awards, the most in the award program's 13-year history.

The  reasons for  the six credit unions being honored for their efforts in the specific lending areas mentioned is detailed below. They include:

CONSUMER--Assets More than $250 Million:

United Nations FCU--($3.7 billion assets; 97,000 members)-- A 2003 Excellence in Lending winner in the Mortgage category, United Nations FCU (UNFCU) is no stranger to providing a suite of financial products and services. The Long Island City, N.Y., credit union offers a line of products and services to satisfy the diverse needs of its members, who are located in more than 200 territories and countries around the world. UNFCU mitigates loan risk through its Country Scoring process, a sophisticated risk monitoring system, that takes in to account loan-to-share, gross domestic product growth and currency. The credit union also has an array of savings, loan, investment and insurance products that address the special needs of its widely dispersed membership. In short, UNFCU lives and breathes its mission of "Serving People who Serve the World."

CONSUMER--Assets Less Than $250 Million:

Cooperative Center FCU (CCFCU)--($102 million in assets; 13,000 members)--The Berkeley, Calif., credit union built its lending program from the ground up by establishing relationships with vehicle dealers through an indirect program. Among some ending initiatives was its "Stimulus Bailout," an unsecured debt consolidation loan to help members shed their high interest credit card or payday loans. Given its membership base is largely UC-Berkeley staff and students, private student loans became a component of CCFCU's lending portfolio. Further diversifying its lending portfolio is the small business program, which is Small Business Administration certified and tied to a state program that guarantees up to 80% of the loan amount.

MORTGAGE--Assets More Than $250 Million:

Sunmark FCU ($364 million in assets; 46,000+ members)--Sunmark FCU of Latham, N.Y., took a holistic approach to mortgage lending through strategic hires, department restructuring, offering competitive rates and by expanding its products. The credit union exhibited flexibility when it shifted from a refinance focus in 2009 and 2010 to purchase volume in 2011 and 2012. A decision to develop strong realtor relationships helped Sunmark grow its purchase business from 10% of its portfolio to 30% today. The credit union also has a diverse marketing strategy, including direct mail. Product offerings have also increased, including no closing costs and no-PMI mortgage options being introduced in August 2011. One campaign this year brought in 78 mortgage loans totaling $13.8 million.

MORTGAGE--Assets Less Than $250 Million:

Northeast Community CU  ($80 million in assets; 9,000+ members)--Northeast Community CU (NECCU) of Elizabethton, Tenn., may not be big, but it thinks big. They developed a mortgage strategy and executed on it by offering residential real estate loans with greatly reduced closing costs, then blanketed their area with news of it. NECCU established a $500 flat-fee closing cost on first mortgages and made it workable by negotiated lower costs with local appraisers and an attorney. The net result was a mortgage product that included closing costs other local lenders couldn't come close to matching, CUNA Mutual said.  Staff then rolled up their sleeves and began identifying members who had recently obtained a loan elsewhere and encouraged them to refinance.

BUSINESS--Gesa CU ($1.2 billion in assets; 109,000 members)--Gesa CU (GCU) has set its sights on becoming southeastern Washington's business lender of choice and is on its way to achieving that goal, CUNA Mutual said.  In a short period of time, GCU has developed a sound, profitable and sustainable member business lending portfolio. The program has exhibited loan growth, interest and fee income generation, examinations and audits of their portfolio. Gesa hired experienced business lenders to provide underwriting and portfolio management. Then, it formed a business loan committee to ensure sound decision-making on loans and collection efforts. Despite a struggling economy, GCU has put up impressive loan growth numbers ranging between $35 million and $47 million from 2009 to 2011, CUNA Mutual said..

LOW-TO-MODEST MEANS--U.S. New Mexico FCU ($725 million+ in assets; 67,000+ members) --This Albuquerque, N.M., credit union couldn't be more proud or much better at serving MOMMs--Members of Modest Means. Throughout its 77-year history, U.S. New Mexico has prided itself on being responsive to serving this membership with products and services aimed at helping MOMMs attain financial security. The credit union keeps its finger on the pulse of their membership through a 30-employee volunteer committee that identifies MOMMs' social and financial needs. The credit union responds with delivering a product suite designed to address the needs of that demographic, including programs such as Balance Financial Fitness, Eagle Advance, Credit Builder Credit Card, and CourtesyPay. U.S. New Mexico FCU is financially stable and its delinquency and charge-offs tell a very positive story, CUNA Mutual said.

Indiana Cooperative Development Center announces awards

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INDIANAPOLIS (11/7/12)--The Indiana Cooperative Development Center will honor annual award winners at its Co-op Summit on Friday.

Bruce Ingraham, who recently retired as president of Beacon CU, Wabash, Ind.,  has been selected as Indiana's Cooperative Hero of the Year. He will be inducted into the group's Cooperative Hall of Fame.

The Cooperative Hall of Fame recognizes cooperators who have made an impact through their leadership or in their community service.

Ingraham worked for the credit union since 1980, when it was called Wabash County Farm Bureau CU, and had $38 million in assets. Today, Beacon CU's assets total $961 million and it serves more than 46,000 members.

Indiana's rural electric cooperatives' international project - Hoosiers Power the World – has been selected as the recipient of the 2012 Cooperator Community Service Award.

Hoosiers Power the World is an initiative supported by Indiana's rural electric cooperatives, in partnership with the National Rural Electric Cooperative Association International Foundation, to bring power to remote areas of Guatemala.

In August and September, 32 volunteers traveled to the northeastern area of the country bordering Mexico to bring electricity to three isolated villages for the very first time. The projects benefitted nearly 1,000 men, women and children who had never had access to electricity, even though they could see the lights in neighboring villages.

2012 was designated by the United Nations as International Year of the Cooperative, with the theme "Cooperatives build a better world."

CU System Brief (11/06/2012)

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DOWNEY, Calif. (11/7/12)--Financial Partner CU Vice President of Marketing Anne Legg was asked to share her MBA thesis, "Creating a New Credit Union Sustainability Business Model," to the 2012 International Cooperative Summit held in Quebec, Canada Oct. 8-11. Legg's thesis was selected from over a hundred entries globally, and she was the only credit union professional selected.  The thesis identifies credit unions as a viable financial services alternative for consumers, and in it Legg seeks a solution for credit union sustainability by examining international credit union systems in addition to the cooperative grocery and farming industries. Legg's recommendations for achieving sustainability within the credit union movement include developing a shared-value business model, micro lending, and re-positioning strategies-- as well as incorporating programs founded on the cooperative principles. More than 2,800 participants from at least 91 countries attended the four-day international summit where speakers included  former Secretary of State Madeline Albright …

CUs continue to recover from Sandy

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WASHINGTON (11/7/12)--As of early afternoon Tuesday, the National Credit Union Administration (NCUA) listed 44 credit unions, most of them in New Jersey, as closed or not operational as a result of Hurricane Sandy.

NCUA initially listed 118 credit unions closed or in pending status as a result of Sandy, according to a list posted by agency's website.

Other credit unions within Sandy's path are operating partially with branch closures, in temporary facilities, or with only ATM services, NCUA said.

"Our examiners along the East Coast are checking with their credit unions to provide support and assistance; our consumer experts are answering the many financial questions that members may have; and we're expediting consideration of credit union emergency grant applications. NCUA will continue to do what's needed to help," said NCUA Chairman Debbie Matz in a release.

New Jersey had by far the most credit unions closed, with about 90 credit unions closed, not operating or status pending on Friday, according to NCUA. About 90% of the state's 202 credit unions were operational as of Tuesday afternoon, according to Paul Gentile, president of the New Jersey Credit Union League.

"It's a matter of to what degree they are operating," Gentile said. Some may not have telecom, some may not have ATMs. Many still face challenges. This has been a great lesson in the cooperative power of credit unions and shared branching."

Residents of New Jersey still face gas shortages and power outages in many parts of the state, Gentile said.

"Things are not back to normal," Gentile said, "But we are definitely making progress."

New Jersey also has 66 shared branching outlets. As of Tuesday afternoon, 59 were operational, according to the league.

Several credit unions are offering extra office space for other credit unions:

  • Aspire FCU, Clark, N.J.;
  • Credit Union of New Jersey, Ewing, N.J.;
  • West Orange (N.J.) Municipal FCU; and
  • Visions FCU, Endwell, N.Y.
Residents and business owners in eight New Jersey counties that were severely affected by Superstorm Sandy can start applying for federal assistance on Thursday. The money was made available as part of a disaster declaration signed Tuesday by President Barack Obama.

The Credit Union Association of New York also reported that the majority of credit unions on Long Island, in the metropolitan New York area and Westchester/Rockland are now operational to a point where members can access much-needed funds. Many of those credit unions are still facing a number of issues including unopened and/or not fully operational branches, many of which are functioning with reduced staff. In addition to persistent power outages in some areas, technology issues, such as no telephone, Internet or mobile services continue to impact operations at numerous credit unions. Other credit unions have been able to be open for their members thanks to generator power, the league said.

To review the list, use the link.

Tennessee names chief lobbyist Robinson as new CEO

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CHATTANOOGA, Tenn. (11/7/12)--The Tennessee Credit Union League has named its chief lobbyist, Fred Robinson, to succeed Tom Gaines as president/CEO.

Robinson has been with the Tennessee league for 29 years. For the past six years, as vice president of governmental affairs, Robinson has overseen the state's political arena for the league and conducted strategic planning.  He has coordinated grassroots activities with credit union members, and led the league's Tennessee Political Action Committee.

Robinson is an advisory committee member for U.S. Congressman Stephen Fincher, a committee member of Tennessee Emergency Management Agency, a member of the Tennessee Lobbyist Association, a member of the Tennessee State Political Action Committee and a member of the Tennessee department of Financial Institution's Credit Union Task Force.

Gaines, who has been with the league for 24 years, will remain on staff through the end of the year.

2013 CUNA Mortgage Lending School dates announced

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MADISON, Wis. (11/7/12)--Registration is now open for CUNA Consumer & Residential Mortgage Lending School, April 8-11 in San Diego, the Credit Union National Association announced. 

CUNA Consumer & Residential Mortgage Lending School provides credit union lending professionals with the resources they need to become well-rounded lending experts. The school's focuses are to strengthen core lending skills, answer attendees' questions and to offer opportunities to develop proficiency in lending fields outside one's expertise. The school also features insights and practices from credit unions that have successfully increased their loan originations.

Keynote speakers, Mark Arnold, president of On The Mark Strategies, and Lee Silber, best-selling author and award-winning speaker, will discuss the importance of member retention, tactics for increasing member loyalty, and overall business success. Also, breakout speakers will cover a range of applicable lending topics, including:

  • Avoiding common mistakes in consumer compliance;
  • Incorporating generational lending at credit unions;
  • Risk rating loan portfolios; and
  • Preparing for a regulatory review.
For those lenders who have attended in the past, the school offers opportunities to share ideas and best practices, focuses on increasing your loan volume while exploring innovations in lending. You'll leave prepared to handle a wider range of today's lending demands.

CUAid More than 100K raised as CUs help with Sandy relief

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MADISON, Wis. (11/7/12)--State credit union leagues, individual credit unions and the National Credit Union Foundation (NCUF) have raised more than $100,000 to provide relief for credit unions and their members since activating the online disaster relief system, CUAid.coop, after Hurricane Sandy swept along parts of the East Coast causing devastating damages.

Also, the New Jersey and New York credit union leagues have made information available for their member credit unions to obtain relief grants, Christopher Morris, NCUF director of communications, told News Now.

"The devastation in New Jersey has impacted millions of people's lives. We continue to deal with a gasoline shortage, lack of basic necessities for those who have lost their homes and many are still without power. With the temperature dropping and a Northeaster approaching later this week, we need resources to ensure basic needs are met for those most impacted," said Paul Gentile, president/CEO of the New Jersey Credit Union League. "I have been touched by the outreach we have received from credit unions and credit union system organizations throughout the country. It is so valuable to have a fund like CU Aid available to concentrate fundraising efforts."

"The damage from Hurricane Sandy continues to impact many New York credit unions, their employees and members. Countless remain without power, heat and other basic necessities, while some have completely lost their homes," said William J. Mellin, president/CEO of the Credit Union Association of New York. "The need for financial assistance is great, which is why I am asking everyone to open your hearts and give whatever you can. To those that have already donated to help our credit union family, thank you!" 

"In just seven days, we've raised over $100,000 with donations ranging from $10 to $10,000," said Morris. "It's inspiring to see so many credit unions stepping up yet again to help those in need."

Credit union supporters in every state can now make donations at www.cuaid.coop.

As donations are posted through CUAid.coop, NCUF is coordinating with the New Jersey Credit Union League and the Credit Union Association of New York to distribute money efficiently to affected credit union employees and members. One-hundred percent  of the donations through CUAid goes to credit union disaster relief. In the event that all donations are not used for Hurricane Sandy relief, NCUF will transfer any and all unused funds to its "General Disaster Relief fund" for future disaster relief efforts.

Mellin sent out a video message asking for the New York credit union community to provide financial support to New York's 150-plus credit unions and two million credit union members impacted by Sandy. To view the video, click on the embedded link.



Among the contributors, the Pennsylvania Credit Union Association (PCUA), Pacul Services Inc., and the Pennsylvania Credit Union Foundation made a combined $6,000 donation to CUAid (Life is a Highway Nov. 6). "Our hearts go out to the people and credit unions that were impacted by this historic storm," said Jim McCormack, PCUA president/CEO. "It is in the spirit of cooperation and people helping people that we send these donations to help the victims recovering from this latest disaster."

Other than massive power outages, Pennsylvania was spared major damage, PCUA said.

The Texas Credit Union Foundation (TCUF) Board of Trustees has approved a grant of $5,000 for hurricane relief efforts (Professional Service Close-up Nov. 6).

"When Hurricanes Ike and Rita struck southeast Texas, the credit union movement came to our aid," said TCUF Executive Director Courtney Moran. "The support we received from credit unions across the country allowed us to respond to the immediate needs of credit union employees affected by the devastating hurricanes. That is one of the many wonderful things about the credit union movement, we are a family that helps and supports one another in good times and in bad."

Individual credit unions nationwide are helping out as well.

For instance, Peninsula Community FCU, with $134 million in assets and based in Shelton, Wash., has chosen to donate to CUAid because it realizes credit unions and their members have all been stricken by the loss and ongoing struggle of the victims of Hurricane Sandy on the east coast, the credit union said in a release Monday. As people work together to dig out from the devastation, it is imperative that they are able to access financial services, Peninsula Community said.

"Credit Unions support their communities and, when devastation hits, reach out to those communities too," said Jim Morrell, Peninsula Community president/CEO. "One of our staff saw this opportunity to donate through CUAid as one way we could live out the 'people-helping-people' philosophy that we are all about."

And from as far away as California, to help with the aftermath of Hurricane Sandy, which affected states from Florida to New England, Los Angeles FCU (LAFCU) donated $1,000 to CUAid. LAFCU is collecting Hurricane Sandy donations from members and employees in their branches during November.

LAFCU's donation is given on behalf of the Los Angeles Charitable Association, Inc. (LACA), the credit union's nonprofit that financially supports the philanthropic activities of charitable organizations in the Greater Los Angeles area.

CUNA Mutual Group joins group partnership with Akcelerant

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MIAMI (11/6/12)--To improve collections activities for credit unions, CUNA Mutual Group and its Collateral Protection Insurance (CPI) alliance partner, State National Companies, announced they are joining forces with Akcelerant, a provider of connected software technology to the financial services industry.

The partnership was announced Monday at the 2012 CUNA Lending Council Conference in Miami.

The three-way partnership will provide credit unions insured by the CPI alliance of CUNA Mutual Group and State National with a connector for the Akcelerant Framework, providing credit unions with a single platform to execute daily collection activities such as accessing CPI details, filing claims, tracking claims and other functions. The connector is in development and will be available for credit union implementation in early 2013.

The Akcelerant Framework connects customers to key services with service providers, creating the optimal work environment for financial institutions looking to get the most out of their collections operations, CUNA Mutual said.

Credit unions that choose the alliance of CUNA Mutual and State National Companies for their collateral protection needs and use Akcelerant for their collections activities will reduce the time their staff spends managing collections and CPI-related activities, freeing them to focus on revenue-generating tasks, said Bob Trunzo, president, CUNA Mutual Group Insurance & Financial Services.

"This partnership is a perfect example of CUNA Mutual Group's commitment to deliver best of breed solutions to credit unions," Trunzo said. "We found the best in State National for CPI, and it shows in how fast our alliance is growing. Connecting with Akcelerant raises the bar even higher in the value our customers will realize from our CPI alliance."

CUNA Mutual and State National Companies formed an alliance in 2009 to provide tracked CPI to credit unions. That alliance protects more than 340 credit unions' collateral and has grown 55% in three years due to strong market demand. State National Companies tracks loans for 600-plus lenders.

Members will have a more consistent experience when working with credit unions' lending and collections staff, according to Trace Ledbetter, senior vice president, State National Companies. "And Akcelerant collections users will be able to tap into the power of State National Companies' CPI program inside the Akcelerant Framework, making the use of CPI data seamless inside their normal collections workflow," Ledbetter said.

The partnership is about giving customers what they want, said Eric Snyder, Akcelerant executive vice president of business development. "Over the years, there has been consistent demand from our customer base for diverse choices and a robust library of connected services," Snyder added. "We recognize the success of CUNA Mutual Group and State National's CPI alliance and are excited about delivering this new functionality to credit unions."

Conference teaches CU philosophy principles

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RALEIGH, N.C. (11/6/12)--More than 40 credit union employees gathered in Winston-Salem, N.C., Oct. 23-25 for the third annual Principles & Philosophy Conference, hosted by the National Credit Union Foundation and the North Carolina Credit Union League.

More than 40 credit union employees gathered in Winston-Salem, N.C. Oct. 23-25 for the third annual Principles & Philosophy Conference. From left, conference facilitators Larry Blanchard, CUNA Mutual Group; and  Lois Kitsch, National Credit Union Foundation; and conference planning committee members Amy Gravitte, Coastal FCU, Raleigh, N.C., and Ashley Ruffin, Local Government FCU, Raleigh, N.C.  (Photo provided by North Carolina Credit Union League)
The conference provides credit union employees a comprehensive look at the history of the credit union movement and the principles that make them different from banks.

"Credit unions have a proud history of serving members and , like all cooperatives, a unique business model that stresses people over profits," said Ashley Ruffin of Local Government FCU, Raleigh, N.C., who chaired the volunteer committee of credit union staff that planned and hosted the conference.

While most credit union "lifers" know and live by the cooperative principles, "there has been a huge influx of new credit union talent that can benefit by understanding how and why cooperatives are different," Ruffin said.

Lois Kitsch of the National Credit Union Foundation and Larry Blanchard of CUNA Mutual Group facilitated the event. Blanchard and Kitsch described the growth and evolution of the cooperative and credit union movements, and shared the nine operating principles that underpin the cooperative business model.

The nine principles are organized in three key areas--democratic structure, service to members and social goals--and serve to differentiate cooperatives from other business models. The nine principles fall into three categories. They include:

Democratic Structure:

  • Open and voluntary membership;
  • Democratic control; and
  • Non-discrimination.
Service to Members:

  • Distribution to members;
  • Building financial stability; and
  • Service to members.
Social Goals:

  • Ongoing education;
  • Cooperation among cooperatives; and
  • Social responsibility.
Attendees were organized into groups and through a series of discussions and assignments were asked to integrate the cooperative principles more fully in their work. Participants also received tips on how they could share the cooperative principles at their credit union, and ensure that fellow staff members were aware of their value.

Prior to the cooperative principles session, Brandon McAdams and Patrick Livingston of Coastal FCU, Raleigh, N.C., provided an in-depth look at the history of the cooperative and credit union movements in the U.S. and world. Jeff Hardin of the North Carolina Credit Union League (NCCUL) shared a timeline of the development and spread of credit unions in North Carolina, and Vicki Parker of the Support Center provided the history of the African American credit union movement in the state.

"The league is committed to ensuring that the principles that make credit unions unique will continue to light the road ahead," said NCCUL President/CEO John Radebaugh. The conference was planned and hosted by a volunteer committee of Credit Union Development Educators (CUDEs). "We are deeply grateful to the CUDEs for their hard work in making this conference such a remarkable success. Each of these volunteers is a terrific reflection of the people helping people philosophy of credit unions," Radebaugh said.

One more CUNA board nomination received

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MADISON, Wis. (11/6/12)--One more nomination has been submitted for the Credit Union National Association (CUNA) board positions.

The nomination was made in District 6, Class D, for Troy Stang, president/CEO, Northwest Credit Union Association, Federal Way, Wash.

Other previous nominations include:

  • District 4, Class C: Dennis Pierce, CEO, CommunityAmerica CU, Lenexa, Kan.;
  • District 6, Class A: Susan Streifel, president/CEO, Woodstone CU, Federal Way, Wash.;
  • District 5, Class D: J. Scott Sullivan, president/CEO, Nebraska Credit Union League, Omaha, Neb.;
  • District 5, Class B: Incumbent Roger Heacock president/CEO, Black Hills FCU, Rapid City, S.D.'
  • District 2, Class A: Incumbent John Graham, president/CEO,  Kentucky Employees CU, Frankfort, Ky.
Positions up for election are:

  • District 1, Class C;
  • District 2, Class A;
  • District 3, Class B;
  • District 4, Class C;
  • District 5, Class B;
  • District 5, Class D;
  • District 6, Class A; and
  • District 6, Class D.
A nominee must be an employee or voting board member of the nominating credit union to be an eligible candidate elected by credit unions. The nomination must be seconded in writing by at least two other credit unions from the same district and class.

League candidates must be a league president and nominated in writing by their league, and seconded in writing by at least one other league from the district.

Nominations are due through Nov. 16. For contested elections, ballots will be sent Nov. 21, with voting continuing through Jan. 4. Results of contested elections will be announced Jan. 8.

Directors will take office upon the adjournment of CUNA's Annual General Meeting on Feb. 25 in Washington, D.C.

Nomination packets are available by calling 800-356-9655, ext. 4013; using the resource link; or e-mailing thanson@cuna.coop.

Savings Sleuth--Solve the Mystery is 2013 Theme for Youth Week

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MADISON, Wis. (11/6/12)--Credit unions nationwide selected "Savings Sleuth--Solve the Mystery" to be the theme for the 2013 National Credit Union Youth Week, which will take place April 21-27.

 
Click to view larger image Click for larger view

 

The concept was chosen from ideas submitted by credit union staff this fall.

"Savings Sleuth--Solve the Mystery" will present youth with the mystery of how to save their money to purchase the things they want. By visiting credit unions, they'll be able to find clues toward solving that mystery and learn a good deal about early finance and credit unions in the process.

The theme was based on a submission from Cynthia Tong with Audobon FCU in Owensboro, Ky., who suggested a focus on savings detectives. "We have to remember that in order to attract the next generation of credit union members, we need to engage them at a young age," advises Tong. "Consider examples like McDonald's--if the youth love your services, their parents will enjoy coming in too! We love having kids visit our credit union, and they get plenty of attention when they do."

Joanne Sepich, CUNA's Youth Week coordinator, expressed full support for this year's theme selection. "If becoming a detective gets a child interested in setting a goal and saving for it, I say go for it," Sepich said. "I'm all for making a little financial fun."

Official National Credit Union Youth Week art, articles, and celebration materials will be available online in January. For the latest information on Youth Week, credit union staff may sign up for the free Youth Week e-Newsletter. Use the link.

Financial Trust Index shows CUs outpace banks

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NAPERVILLE, Ill. (11/6/12)--As the economy continues to be a top issue for voters in the final days of the presidential campaign, said the Illinois Credit Union League, trust in credit unions has remained high at 61% among Americans, according to the latest Chicago Booth/Kellogg School Financial Trust Index.

The index also found that 23% of Americans say they trust the U.S. financial system. That is an increase of two percentage points since the last issue of the index in June and reflects a rebound of trust in the banking sector.

The index measures public opinion during three-month periods to track changes in U.S citizens' trust in the private institutions in which they can invest their money, including the stock market, banks, mutual funds and large corporations. The index has consistently reported notably more trust in credit unions than local and national banks, quarter over quarter, since it began in December 2008, said the league.

Monday's report is the 16th quarterly update and is based on a survey conducted in September.

The gain in the banking sector was largely driven by an increase of trust in national banks in particular, which rose by five percentage points to 28% since the last report, said Luigi Zingales, co-author of the Financial Trust Index and the Robert R. McCormack Professor of Entrepreneurship and Finance at the University of Chicago Booth School of Business. Also, trust in community banks remained at 56%.

The Financial Trust Index also was developed and spearheaded by Paola Sapienza, Merrill Lynch Capital Markets Research Professor of Finance at the Kellogg School of Management at Northwestern University. Professors Sapienza and Zingales define trust as "an expectation that a person (or institution) will perform actions that are beneficial or at least not detrimental to others. While trust is fundamental to all trade and investment, it is particularly important in financial markets, where people part with their money in exchange for promises."

Data is analyzed quarterly from more than 1,000 U.S. households, randomly chosen and surveyed via phone by Social Science Research Solutions. In different quarters, this information is supplemented with data on additional topics.

"This is a story we all already knew. Credit unions are trusted," said Dan Plauda, president/CEO of the Illinois league. "To have this kind of academic pedigree backing what we knew to be fact, is great."

Credit unions also have scored high in other national and local surveys on trust, loyalty and member satisfaction studies this year. They include:

  • Credit unions were rated No. 1 in a survey of 5,000 consumers asked to rate the reputation of 34 business sectors in a study conducted by Denver-based Prime Performance (News Now May 14). Credit unions topped all business sectors in reputation with an average reputation score of 5.78 on a seven-point scale with seven as "very good."  They were followed by grocery stores (5.50), and community banks (5.40). Regional banks came in seventh at 5.04 and national banks 18th at 4.15.
  • Credit unions topped the list of U.S. financial institutions in member/customer satisfaction, according to the 2011 Customer Experience with Call Center Representatives Survey by Prime Performance (News Now March 9). Members/customers claim they were more satisfied last year in their interactions with credit union and bank call center representatives than in 2010. Based on a recent interaction with a call center representative, credit union members rated their overall satisfaction with a net score of 83%. The comparable score for small banks is 79%. The industry average is 70%.  Falling below that are: large banks, 66%; Chase, 62%; Wells Fargo, 61%; and Bank of America, 56%.
  • Credit unions were among the top customer satisfaction rankings in Temkin Group's release of its 2012 Temkin Customer Service Ratings, which examines how U.S. consumers rate the customer service of 174 large companies across 18 industries (News Now June 28).
  • A National Cooperative Business Association (NCBA)/Consumer Federation of America (CFA) survey found more Americans think credit unions and other cooperative businesses have the best interests of their members and customers in mind more than do for-profit businesses (News Now May 3). The survey also revealed a favorable view of cooperatives in regards to their business trustworthiness and quality of service. Co-ops received higher marks across the board than for-profit businesses.
  • Credit unions outshone banks in consumers' perceptions of safety and soundness, with 40% of respondents saying they believe credit unions are the safest financial institutions, compared with 34% naming banks (News Now Feb. 23). Nineteen percent of respondents said they trusted both types of institutions equally. The numbers are the results of the 2012 Credit Union National Association (CUNA) National Voter Survey.
  • A CUNA survey in February found that 43% of respondents said credit unions were the best place for consumers to keep their day to day savings and checking accounts (News Now Feb. 22).

CU System Briefs (11/05/2012)

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  • MADISON, Wis. (11/6/12)--Mike Bunge has joined CUNA Brokerage Services Inc. (CBSI) to lead new-business development for the broker-dealer. Bunge most recently served as the senior vice president of business and community development at Summit CU in Madison, Wis. In that role, he promoted financial literacy by launching a credit union branch in a local high school as well as coaching families participating in the credit union's "Project Money" program, which helped members work to reduce debt, increase savings, and learn how to make every dollar count. Bunge also was responsible for 24 Summit Credit Union branches with $1.6 billion in assets and 118,000 credit union members …
  • ROCHESTER, Minn. (11/6/12)--Kelly McDonough, president/CEO of First Alliance CU Rochester, Minn., was named one of Finance & Commerce's Top Women in Finance. Each year the independent daily newspaper recognizes women who have made significant contributions to the financial services industry by positively influencing their businesses and communities. McDonough has served as president/CEO of $125 million First Alliance CU for nine years. The credit union serves nearly 12,000 members …

CMG Six must-have skills for compliance officers

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MIAMI (11/6/12)--Preparing for changes in today's regulatory environment demands a new toolbox of skills for regulatory compliance staff, attendees of the CUNA Lending Council annual conference were told Monday by Bill Klewin and Lauren Calhoun of CUNA Mutual Group. 

At the CUNA Lending Council Conference in Miami on Monday, Bill Klewin, CUNA Mutual Group director of regulatory compliance, outlined six skills every compliance officer should possess. (Photo provided by CUNA Mutual Group)
"The role of the compliance officer is changing and finding staff with the right skills is a higher priority than ever before," said Klewin, CUNA Mutual Group director of regulatory compliance.   "A critical component to managing all of the complex regulatory changes will be finding competent compliance staff and giving them the tools and resources to upgrade their skills and influence."

Klewin outlined six skills every compliance officer should have. They included:

  1. Ability to interpret. There are very few black-and-white rules so the ability to interpret the spirit of the rule, as well as the actual language, is important. Compliance staff need to be able to work within the gray areas.
  1. Attention to detail. This seems obvious because so many regulations require detailed analysis, but it's important to attend to the details while maintaining a view of the big picture.
  1. Attention to the big picture. Compliance officers must understand the bigger picture and what the regulators are trying to accomplish with the regulation. They must also have the attention to detail to help them figure out how to implement it.
  1. Ability to apply rules to real-life facts. Knowing the regulations inside and out is great, yet staff must have the ability to apply their fact situations to the rules and regulations.
  1. Risk assessment capabilities. The ability to assess the alternatives and make a decision based on the risk is critical.  Compliance officers must understand the risk tolerance of the credit union as well as litigation environment in their area
  1. Communication skills. Written and verbal communication skills are essential. The compliance officer must have the ability to communicate at all levels in the organization from front-line staff to the CEO and board of directors.  Having compliance expertise adds little value if it can't be communicated effectively.
A key question facing credit union managers is how and where to find staff with these comprehensive skills, Klewin said. He believes that there are three options for credit unions to upgrade the skills of their compliance staff: They can buy, build or partner with others.

"Buying," or hiring, someone who already has these skills is very expensive because they are in great demand.  Building the skills in current staff takes time and is a risk because of turnover.  Outsourcing the entire compliance operation does not position credit unions well for the long-term. Therefore, most credit unions will likely need to do a combination of all three tactics to meet their needs.

Calhoun, CUNA Mutual regulatory compliance manager, also provided an update on lending compliance issues on the horizon in 2013.

"Depending on the timing of the Consumer Financial Protection Bureau (CFPB), 2013 could be the year of mortgage compliance changes for credit unions," said Calhoun.  The CFPB has issued seven proposed mortgage rules, each with comment period closing dates in October or November.  The majority of these rules will be issued in final form by the end of 2012 or in January, while one or two others will come later in the yea

Other potential regulatory changes on the consumer lending radar include:

  • Know Before You Owe: Student Loans and Credit Cards;
  • Overdraft Protection;
  • Servicemembers Civil Relief Act;
  • Payday Lending and Payday Alternative Loans;
  • Pre-paid Reloadable Cards; and
  • Business Lending Data Collection.

CUNA announces 2012 Desjardins award winners

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MADISON, Wis. (11/5/12)--The Credit Union National Association (CUNA) has announced the winners of the 2012 Desjardins Awards for Youth and Adult Financial Education.

Entries from 29 states yielded 10 first place winners, along with several second place and honorable mention winners, in both the adult and youth education categories.

The Desjardins Awards are named for Alphonse Desjardins, the founder of the North American credit union movement. Besides founding the first credit unions in Canada and the U.S., Desjardins pioneered youth savings clubs and in-school "banks," known as caisses scolaires. The award honors credit unions, chapters and leagues for their commitment to both youth and adult financial literacy.

"A core value of credit unions is to assist their members with a better understanding of their finances so that they can make the best decisions possible with their hard-earned money," says Bill Cheney, CUNA president/CEO. "The individuals and institutions honored with the Desjardins Awards personify this timeless value of our movement. I am honored to represent an industry that counts these award winners among its supporters."

"Congratulations to this year's winners and honorees for their admirable work to develop financial education skills in members of their communities," says Vikki Kinsler, CUNA's program coordinator for the Desjardins Awards. "Credit unions, chapters and leagues from nearly 30 states applied for the award, which shows the strength of the movement's commitment to caring about its members."

Recipients were chosen from among the state-winning entries by CUNA's national awards committee.

Winners for the Desjardins Youth Financial Education Award include (asterisks indicate repeat winners):

  • Clarence Community & Schools FCU, Clarence, N.Y.;
  • CommunityAmerica CU (Kansas City, Mo.);*
  • CORE FCU, East Syracuse, N.Y.;*
  • Generations FCU, San Antonio; and
  • Northwest Chapter of the Ohio Credit Union League.*
Second place winners for the Desjardins Youth Financial Education Award include:

  • Acadia FCU,Fort Kent, Maine;
  • Horizon CU, Spokane Valley, Wash.:* and
  • Northwest  Federal Credit Union Foundation, Herndon, Va.
Honorable mention winners for the Desjardins Youth Financial Education Award include:

  • Arapahoe CU, Englewood, Colo.;*
  • CASE CU, Lansing, Mich.;
  • Commonwealth CU, Frankfort, Ky.; and
  • Tarrant County CU, Fort Worth, Texas.
Winners for the Desjardins Adult Financial Education Award include:

  • Beach Municipal FCU, Virginia Beach, Va.;*
  • Credit Union 1, Anchorage, Alaska;*
  • Town & Country CU, Minot, N.D.; and
  • United Labor CU, Kansas City, Mo.
Second place winners for the Desjardins Adult Financial Education Award include:

  • Capital CU, Kimberly, Wis.;
  • Community CU, Lewiston, Maine;* and
  • Palmetto Citizens FCU, Columbia, S.C.*
Honorable mention winner for the Desjardins Adult Financial Education Award was:

  • CommunityAmerica CU, Kansas City, Mo.*
The Maine Credit Union League was also awarded a first place award for its efforts to improve financial literacy for both youth and adults.

In December, PDFs of the winning entries will be available for viewing on CUNA's website. Winning entries will be on display at CUNA's 2013 Governmental Affairs Conference (GAC), Feb. 24-28, in Washington, DC. The award winners will be honored during a reception at the GAC on Feb. 27.

Police officer CU robbery suspect shot during chase

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MARSHALLTOWN, Iowa (11/5/12)--An Iowa police officer and a suspect in a credit union robbery were released from the hospital after being wounded in a shootout Friday morning during a chase after the credit union was robbed.

Two suspects robbed the Lennox Employees CU, Marshalltown, Iowa, at about 9:30 a.m. Friday, then fled the bank with Marshalltown police in pursuit. One suspect fired his gun and hit an Officer Vern Jefferson in the leg. Jefferson returned fire, wounding Ben Crisantos, 22, Marshalltown, in the lower extremities, said police (SFGate.com Nov. 2).

A short time later, the second robbery suspect, Abel Ramirez, 22, also of Marshalltown, was arrested.

No one at the credit union was injured.

Police charged Crisantos with attempted murder and Ramirez with first-degree robbery, both Class B felonies. If convicted, they face up to 25 years in prison.

INerdwalletI in IUSNews and World ReportI CUs better than banks

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NEW YORK (11/5/12)--Today's anniversary of Bank Transfer Day has prompted comparisons of credit unions with big banks. A NerdWallet analyst writes in the U.S. News & World Report  that compared with Chase, Wells Fargo, Citibank and Bank of America, credit unions turn out to be the better banking option.

In a blog entitled, "Are Credit Unions a Better Option?" NerdWallet analyst John Gower notes that while "by no means a new concept (the oldest dates back to 1908), credit unions further penetrated the national consciousness in late 2011" when Bank of America proposed its $5 monthly fee on debit card accounts and the grassroots event Bank Transfer Day urged consumers to leave big banks for smaller, community-focused credit unions."

"Over the last year, NerdWallet.com has conducted extensive analysis in various facets of banking--pitting credit unions vs. banks. The results show that, when it comes to many basic services, credit unions outperform the biggest banks."

The blog had these things to say about credit unions:

Since the Dodd-Frank Wall Street Reform Act, most big banks have eliminated free checking accounts, requiring consumers to meet a minimum balance and other requirements.  Most credit unions, however, continue to "maintain a truly free checking account." Among the top 10 banks and credit unions in the U.S., 70% of credit unions offered free checking, while just one of the banks did--an average savings of more than $100 per year for consumers.  Many credit unions also pay dividends on checking balances--"something that's usually only found with high-fee premium checking at the big banks."

Credit unions offer higher deposit rates than banks, Gower writes. Big banks offer no interest on a basic savings account and under 0.75% annual percentage yield for a five-year certificate of deposit; credit unions average more than 0.15% for savings accounts and 1.42% for the CD--nearly double what's offered the big banks.

Credit unions' shared branches address any concerns about limited access to branches and ATMs. Members have access to nearly 5,000 branches of the CU Service Center network nationwide, just under Wells Fargo's 6,300 branches and Chase and BofA's 5,700 branches.

"Credit unions actually outperform the big banks when it comes to self-service access to your money" because of their surcharge-free ATM network. The largestincludes more than 30,000 ATMs, Gower writes. At Chase or any other bank, customers are limited to fewer than 20,000.

"As the anniversary of Bank Transfer Day approaches, don't ignore your local credit union as a viable option for your banking business. Lower fees and higher deposit yields are likely worth a switch," Gower concluded.

Use the link to access the full article.

82000 raised by CUAid for hurricane victims

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MADISON, Wis. (11/5/12)--As of 2 p.m. Friday, the National Credit Union Foundation (NCUF) had raised more than $82,000 through CUAid.coop, the credit union movement's Disaster Relief Fund, to aid credit union staff, volunteers and members directly impacted by Superstorm Sandy's assault last week on the East Coast and Mid-Atlantic states.

"The outpouring of support and assistance from credit union organizations in just a few days has been inspiring and amazing to behold," said Christopher Morris, NCUF's director of communications.

"I even heard from a mid-size credit union across the country in California today that is planning on holding a 'jeans day' for staff starting next week to raise funds specifically for CUAid," he told News Now Friday afternoon. "The 'people helping people' philosophy is thriving this week."

Credit union supporters in every state can donate at www.cuaid.coop (use the link). CUAid is the only program of its kind that enables credit union employees, volunteers, and members, as well as credit unions and credit union organizations across the U.S., to contribute directly to support other credit union people.

NCUF will coordinate with the credit union leagues in the disaster area to distribute money efficiently to affected credit union employees and members. One hundred percent of the donations through CUAid goes to credit union disaster relief. If all donations are not used for Hurricane Sandy relief, NCUF will transfer unused funds to its "General Disaster Relief fund" for future disaster relief efforts.

The National Credit Union Administration (NCUA), since activating its disaster relief policy on Tuesda,  is monitoring 2,000 credit unions in the region and has  list of known credit unions impacted by the storm on a special Hurricane Sandy Information page on its website. Use the link. Last week its consumer assistance hotline (800-755-1030, 8 a.m.-5 p.m. ET, Monday through Friday) experienced a higher-than-usual call volume. (See related News Now story: "Hurricane: NCUA reminds CUs, members help is available.")

The agency has established grants of up to $7,500 for low-income credit unions to help restore operations and make repairs and approved its first grant application last week for New York University FCU.  For more information, use the grants link. New York University FCU was the first credit union to apply to NCUA for its emergency grants to restore service. It applied on Wednesday and approval was made Thursday, said NCUA.

The New Jersey Credit Union League has posted the grant application and procedures for assistance for those affected. Use the link for more information.

Other efforts to provide aid for Sandy's victims related to credit unions include a statewide Disaster Relief Fund reactivated by the Credit Union Association of New York through the New York Credit Union Foundation to assist credit union employees, staff and members in that state.See the link. Association President/CEO William J. Mellin said credit unions will get a toolkit soon to help them with the relief effort.

A number of organizations, including state credit union foundations are working with NCUF for CUAid.coop.  CO-OP Financial Services gave $10,000 as soon as the fund was activated. CU Direct Corp., a lending solutions provider for credit unions, said Friday it has donated $10,000 as well.

Individual credit unions, in addition to providing funds for credit union folks, also are collecting for immediate disaster relief agencies such as the American Red Cross. Redwood CU in Santa Rosa, Calif., said its branches are collecting contributions for the Red Cross. The Credit Union National Association urged staff at its Madison, Wis., offices to give blood at the American Red Cross.

The NCUA is also launching a clothing drive for credit union members and employees affected by the hurricane, which will be delivered to the New Jersey league office in Hightstown next week, said the league's updates.

The assistance is needed. The New Jersey league said that hurricane deductibles for Sandy-related claims will not be applicable. The New Jersey Department of Banking & Insurance said the hurricane deductible trigger will not apply in the state because the National Weather Service had downgraded Sandy from a Category One hurricane to a Post-Tropical Cyclone just before it reached landfall. The department has issued guidelines. Use the DOBI guidelines link.

Leagues report damage updates from Sandy

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ALBANY, N.Y., and HIGHTSTOWN, N.J. (11/5/12)--CUNA Mutual Group reported Friday afternoon that it had received no new damage claims from credit unions impacted by Hurricane Sandy. The leagues in New York and New Jersey sent out updates Friday with the latest assessments of their states' credit unions impacted by last week's Superstorm Sandy.

Click to view larger image Credit Union Association of New York Senior Vice President Ron McLean, left, and SUMA FCU (Yonkers) Treasurer/Chief Operating Officer Ihor Makarenko unload the first of two generators provided by CUANY to provide electricity to the credit union after power went out when Hurricane Sandy hit the state last week.
Earlier last week CUNA Mutual Group had reported 25 credit unions were impacted, mostly through power outages but that it was still early in the assessment process. (See related News Now story: "Sandy so far: 25 CUs damaged, CUAid raises $65K.")

Credit Union Association of New York President/CEO William J. Mellin provided an assessment for those in New York. "As you all know, the damage from Hurricane Sandy continues to impact many of our New York credit unions," said his message to member credit unions.

"I have spoken personally with several credit unions in the affected areas, and our member relations team is also working diligently to get in touch with more than 150 potentially impacted credit unions. As we reach them, we're collecting information about their operational status and needs. We have already coordinated resources like generators and laptops and will continue to do as much as possible," Mellin said.

Until power is restored in critical areas, it is difficult to fully assess the situation, he said, but added that so far, "the losses are significant.""

"We have faced other disasters, but what sets this apart is the vast number of credit union employees and members who have been impacted. In the most affected areas, there are more than two million credit union members. Countless are still without power and access to gas, heat and other basic necessities. Some have completely lost their homes. And they're all going to be looking to their credit unions for help as they begin to recover."

CUANY has reactivated the statewide Disaster Relief Fund through the New York Credit Union Foundation (NYCUF).  Use the New York foundation link for more information. Mellin also said credit unions will get a toolkit to help them with the relief effort.

(For an update on the credit union movement's fundraising efforts to help the affected credit unions, see related News Now story, "$82,000 raised by CUAid for hurricane victims.")

The National Credit Union Administration has been monitoring the status for more than 2,000 credit unions in the storm's path. "The vast majority of federally insured credit unions are fully operational; however, some are closed, and others are operating partially with branch closures, in temporary facilities, or with only ATM services. Affected credit unions are working to quickly restore normal operations," NCUA said.

Its examiners along the East Coast are checking with their credit unions to provide support and assistance, answering members' questions, and NCUA is expediting consideration of credit union emergency grant applications.

Click to view larger image Yonkers, N.Y.-based SUMA FCU Treasurer/Chief Operating Officer Ihor Makarenko is all smiles as the generators provided by the Credit Union Association of New York create electricity--and light--at the credit union in the wake of Hurricane Sandy. (Photos provided by the Credit Union Association of New York)
NCUA is experiencing a higher-than-usual call volume at its consumer assistance hotline (800-755-1030, 8 a.m.-5 p.m. ET, Monday through Friday). The agency has established a Hurricane Sandy information page on its website with a list of known credit unions temporarily closed by the storm or that are operational. Use the link.

New York University FCU was the first credit union to apply to NCUA for its emergency grants to restore service. It applied on Wednesday and approval was made Thursday, said NCUA. (See related News Now story: "Hurricane: NCUA reminds CUs, members help is available")

The New Jersey Credit Union League reported that of its total 66 Shared Branching outlets in the state, 41 were up and running, while 25 were still down as of 5 p.m. Friday.

The league has provided twice daily status reports. New reports and some changed-status reports are below. (For credit unions reported earlier and whose status hasn't changed, see related News Now story, "New reports on status of CUs in hurricane aftermath.") New status reports as of 5 p.m. ET Friday include:

  • 1st Bergen FCU--It is temporarily relocated to 291 Second St., Hackensack, N.J. Its hours will be 10 a.m. to 4 p.m. Monday-Friday, and 10 a.m. to 6 p.m. Thursday and Friday. The temporary phone number is 201-342-2936.
  • ABCO FCU--All branches are open and operating with normal business hours, except for the Rider University branch, which will reopen today.
  • ADP FCU--Branch office in Florham Park, N.J., was closed Friday. Branches in Roseland, N.J., and Alpharetta, Ga., are open during normal business hours.
  • Affinity FCU-- Most branches will be open during normal business hours, with the exception of these branches that are still without power: Bedminster (both the AT&T and Lamington Road locations), Morristown (Country Mile Village), New Providence, and Middletown. Online Banking, Mobile Banking and AUDREY (automated phone banking service) are fully operational. Standard 800 number is fully operational: 800-325-0808. Some Affinity ATMs are operational, specifically those in branches in Basking Ridge, Flemington and Paramus.
  • Atlantic FCU--Kenilworth, Newark and Elizabeth branches are now open with regular operating hours but running on generator power with limited staff.
  • City of Trenton Employees CU--Open and fully operational.
  • Credit Union of New Jersey--All branches are open except its ETS branch.
  • Deepwater FCU--Opened on Wednesday, was not damaged in any way, and running at full service.
  • Elizabeth NJ Fireman's FCU-- Has power but no connectivity. Optimum has crews in the area but no estimated time of repair. ACH, drafts, debit card, payroll deductions have been processed online. May get cash if not connected by today. Members have made withdrawals by debit card.
  • Financial Resources FCU--These New Jersey branches and the Member Service Center (Call Center) are open until 4 p.m.: Bridgewater, Somerset and Flemington. The Green Brook and Hillsborough branch remain closed due to power and telecommunications issues. All branches outside of New Jersey are open for normal business hours. ATMs are operational at these public locations: 1 New Amwell Road, Hillsborough, N.J.; 780 Easton Ave., Somerset, N.J.; 110 Rehill Ave., Somerville, N.J.; State Theatre of NJ, 11 Livingston Ave., New Brunswick, N.J.; Residence Inn, 4225 US Highway 1, Monmouth Junction, N.J.; Jewish Renaissance Center, 275 Hobart St.; and Perth Amboy, N.J.  The 800 number is now operational at 800-933-3280 or via e-mail using the "Contact Us" link on home page. Online Banking, mobile, mobile apps and text message banking continue to be available.
  • First Financial FCU-- Neptune and Toms River Branches opened Friday at 9 a.m. with limited service. The credit union has declared an emergency situation, and will move its processing out of state. It expected to be fully operational in the next 48 to 72 hours. The Wall Township Reality Fair sponsored by First Financial FCU originally scheduled for today has been postponed.
  • Franklin St. John's CU--Its office is closed due to power outage; however, transactions are being processed remotely.  Members can contact Diane Murray at dlmurray02@aol.com.
  • Garden Savings FCU--All branches are open and operational. All electronic banking services have been available since Wednesday.
  • Israel Memorial A.M.E. FCU--Closed due to power outage.
  • Lakewood Community FCU--Closed due to power outage.
  • Liberty Savings FCU--Union City branch was open for business 2 p.m. to 7 p.m. Friday.
  • Local 32 Asbestos Workers FCU--Open and fully operational.
  • Messiah Baptist Church FCU--Open and fully operational.
  • MidState FCU--Opened Friday, but without power. Members can cash pay checks, make withdrawals, make payments, etc. Power estimated to come back up in two weeks.
  • Morristown FCU--Has been open at both branches since Tuesday working regular scheduled hours.
  • Picatinny FCU--Main branch in Rockaway, Denville, and Arsenal branches are fully operational. Mt. Olive branch is closed due to power outage.
  • Piscataway Township Employees FCU--Open and fully operational.
  • Port Ivory FCU--Closed due to power outage.
  • Prime FCU--Open and fully operational.
  • Princeton FCU-- Fully up and running as of Wednesday.
  • Public Service FCU--Still without power and Internet; operating from a remote location for back office processing. Staff is at the office to answer phone calls during the day. Debit, ACH, and share drafts are  OK, does not have VRU and Home Banking at the present time.
  • United Teletech FCU--Tinton Falls branch is open. Due to local curfews, the credit union has modified hours (lobby open 9 a.m. to 4 p.m., drive-up from 8:30 a.m. to 4:30 p.m., with extended hours on Saturday to 3 p.m.). Neptune Branch  opened Friday and has a working ATM. North Brunswick Branch opened Friday but does not have a working ATM. All other locations are closed pending the restoration of power.
  • Unity FCU-- Open and fully operational.
  • West Orange Municipal FCU--Power restored to second floor of building, is off generator but Internet and phone lines do not run up to second floor.
  • XCEL FCU--Bloomfield, N.J. office OK, but most branch staff depend on PATH and New York subways for transportation. Fed Plaza branch in Manhattan has power and will open today. Journal Square branch in Jersey City will remain closed until further notice. Branch at 3680 Kennedy Blvd. in Jersey City is open. All ACH and share drafts were posted remotely each day.
The league also reported that Edwards & Edwards, which provides legal service to numerous New Jersey credit unions and the league, reopened Friday after electrical power was restored.

Gov. Chris Christie signed an executive order pertaining to damages, which urges financial institutions, insurance industry and real estate industry to take into consideration the difficulties related to Sandy and exercise "appropriate forbearances on collection, cancellation, documentation and other regulatory requirements including, but not limited to notifications of hospital admissions, due dates for claim filings, premium and loan payments and late fees, prior authorization requirements and limitations on prescription refills.

Also, in Pennsylvania, Bucks First FCU, Bristol, was experiencing intermittent loss of power and phone service as workers tried to restore power to the area, said the Pennsylvania Credit Union Association (Life is a Highway Nov. 2). Bucks County experienced the largest number of power outages in the state.

In Maine, the Maine Credit Union League reported that power outages were the biggest impact of the hurricane in that state (Weekly Update Nov. 2). Among those losing power were Ocean Communities FCU at its York and Westbrook branches, and PeoplesChoice CU's Wells branch. By Tuesday afternoon, both reported power was back up and they were operating normally, said the league.

Bank Transfer Day at one year Love affair continues

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WASHINGTON (11/5/12)--The Credit Union National Association  has distributed a radio news release to stations around the U.S. in anticipation of today's one-year anniversary of Bank Transfer Day, which marked a lovefest for credit unions as consumers fled high-fee banks for sensible financial services.

In the radio segment, CUNA President/CEO Bill Cheney, as he did last week in a Huffington Post column, takes note of the strong growth credit unions have seen in new members and new checking accounts over the past year.

"More than 2.2 million Americans became members of credit unions during the 12 months ending in June of this year," Cheney said. "Not only is that the fastest increase in new membership that we've seen in over a decade, it's also four times greater than the 550,000 who joined during the year ending in June of 2011.

"Why are people switching to credit unions? For starters, about 80% of credit unions today still offer free checking accounts. And, fees in general tend to be lower at not-for-profit credit unions than at banks," he said. To hear the audio clip, click on the clip at the end of the story.

Cheney also is scheduled to be a guest this evening on the Fox Business Network's Willis Report discussing what credit unions have seen in the year since Bank Transfer Day.  The Willis Report airs at 6 p.m. ET.

During the 12 months between June 2011 and June 2012, share draft/checking accounts at credit unions rose 2.87 million, to 47.6 million accounts, a 6.4% increase, according to CUNA's economics and statistics department. That compares with a 2.9% increase in the previous year. The number of accounts is a record back to since CUNA began counting checking accounts in 1989.

The increased consumer awareness about credit unions leading up to Bank Transfer Day also resulted in more consumers finding credit unions--via aSmarterChoice.org, which launched in March 2011. For much of 2011, the site had averaged 2,000 visits a week from people seeking to find a credit union. On the Friday before Bank Transfer Day, it recorded 40,000 visits. On Bank Transfer Day itself, which was a Saturday, the site registered 40,000 visits. Since then, the site has averaged 5,000 to 7,000 visits a week through 2012.  In the first nine months of 2012, more than 300,000 successful credit union searches were conducted by consumers.

The beauty of the growth that stems from Bank Transfer Day is that it was a consumer-inspired social media drive that urged people to move their money from big banks to credit unions because bank customers were fed up with increasing fees. The word spread with thousands of mouse clicks in social media movement, with current members telling others how great their credit unions were and giving testimony to the philosophy of credit unions and their low fees or no fees and better rates.

Throughout the year, national media have focused on the rapid growth of credit union membership. One of the latest reports, in Crain's Cleveland Business (Oct. 29) discusses the growth of Ohio's credit unions' membership. Mike Schenk, vice president of economics and statistics at CUNA, told the publication about the growth: "We think a lot of it has to do with Bank Transfer Day and follow-on activities. That single event really has snowballed. It's created a tremendous amount of interest in and awareness of credit unions."

The Wisconsin Credit Union League noted that in the 12 months ended June 30, checking account growth was 6.6%, the largest in over a decade. "Consumers are acting as if every day is Bank Transfer Day," said league President Brett Thompson. "While the strength and safety of credit unions attracted many consumers during the economic downturn, consumers have grown more loyal and are spreading the news because of the savings they're seeing." Consumers in the state saved $201 million in 2011, just be being members of credit unions rather than using banks--$76 per member or $144 per family.

Three more CUNA Board nominations arrive

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MADISON, Wis. (11/5/12)--Three more nominations have been submitted for Credit Union National Association (CUNA) Board positions.

They are:

  • District 4, Class C: Dennis Pierce, CEO, CommunityAmerica CU, Lenexa, Kan.;
  • District 6, Class A: Susan Streifel, president/CEO, Woodstone CU, Federal Way, Wash.; and
  • District 5, Class D: J. Scott Sullivan, president/CEO,  Nebraska Credit Union League, Omaha, Neb.
These are in addition to nominations received earlier. Incumbent Roger Heacock was nominated for the District 5, Class B board position. He is president/CEO of Black Hills FCU in Rapid City, S.D. Also, incumbent John Graham,  president/CEO of Kentucky Employees CU in Frankfort, Ky., was nominated for the District 2, Class A position.

Positions up for election are:

  • District 1, Class C;
  • District 2, Class A;
  • District 3, Class B;
  • District 4, Class C;
  • District 5, Class B;
  • District 5, Class D;
  • District 6, Class A; and
  • District 6, Class D.
A nominee must be an employee or voting board member of the nominating credit union to be an eligible candidate elected by credit unions. The nomination must be seconded in writing by at least two other credit unions from the same district and class.

League candidates must be a league president and nominated in writing by their league, and seconded in writing by at least one other league from the district.

Nominations are due through Nov. 16. For contested elections, ballots will be sent Nov. 21, with voting continuing through Jan. 4. Results of contested elections will be announced Jan. 8.

Directors will take office upon the adjournment of CUNA,s Annual General Meeting on Feb. 25 in Washington, D.C.

Nomination packets are available by calling 800-356-9655, ext. 4013; using the resource link; or e-mailing thanson@cuna.coop.

CUs ramp up for tomorrows elections

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The Illinois Credit Union League (ICUL) met with U.S. congressional candidate Cheri Bustos.  Those attending  include (from left to right): Donald Edwards, ICUL senior vice president, federal governmental affairs; Joe Green, board vice chair, Cornerstone CU; Bustos; Wayne Radzi, board chair, Cornerstone CU; Gail Clore, CEO, Cornerstone CU; and Barrie Hendricksen, Northwest Illinois Chapter Legislative forum representative and chief financial officer, Cornerstone CU. (Photo provided by the Illinois Credit Union League)
MADISON, Wis. (11/5/12)--Credit unions nationwide have prepared for tomorrow's general election by educating candidates about credit unions and their issues and by backing candidates who are credit union supporters.

At the state level, all 186 legislative seats will be decided, and the league has endorsed 101 House and Senate candidates running for the Maine Legislature. Meanwhile, the race to determine who will replace retiring U.S. Sen. Olympia Snowe (R-Maine) will be decided. Last spring, the league was one of the first organi­zations to announce its support for former Maine Governor Angus King, Jr.'s candidacy in the U.S. Senate race.

In Maine's Second Congressional District, U.S.  Rep. Mike Michaud (D-2), a former credit union board member who is now an hon­orary credit union board member, again has the strong support of the league as he seeks a sixth term in the House of Representatives. In the First Congressio­nal District, two-term U.S. Rep. Chellie Pingree (D-1) has the support of the league as she runs for a third term.

Citadel FCU in Exton, Pa., hosted a breakfast fundraiser for U.S Rep. Jim Gerlach (R-6) on Oct. 23. In addition to Citadel CEO/President Jeff March and Citadel's management team, the breakfast was attended by several credit union leaders. Jim McCormack of Pennsylvania Credit Union Association and Rick Stipa of TruMark Financial were among the attendees. Gerlach is a member of the House Ways and Means Committee and supports the work of credit unions. Pictured is the Host Committee, from left: Jim McCormack, PCUA; Jim McCrudden, Citadel; Rosemary Helm, Citadel; John Rothwell, Rothwell Business Solutions; Jeff March, Citadel; Rick Stipa, TruMark Financial; Gerlach; Ed Maier, Citadel; Brian Berry, Citadel; Curtis Baker, Citadel; Chris Pippett, Fox Rothschild; and Mike Schnably, Citadel. (Photo provided by Citadel FCU)
In New York, The Credit Union Association of New York's (CUANY) board of directors recently voted to endorse first-term U.S. Rep. Richard Hanna (R-Utica-Rome) in New York's 24th Congressional District. Hanna has developed strong relationships with the association and numerous credit unions.

"I look forward to continuing to support policies in Congress that allow upstate credit unions to assist our neighbors everyday with their financial needs," Hanna said. During his first term, Hanna co-sponsored priority legislation for credit union member business lending, supplemental capital, financial institution examination fairness and ATM fee disclosure reform.

"The association is as committed as ever to endorsing and electing pro-credit union candidates and Rep. Hanna is one such candidate," said William J. Mellin, CUANY president/CEO.

In Illinois, Cheri Bustos, Democratic candidate for the U.S. 17th Congressional District, was provided a forum by credit unions in northwestern Illinois in late October to discuss issues critical to credit unions in that area of the state, as well as other local matters, said the Illinois Credit Union League (ICUL).

The meet-and-greet event was held at Cornerstone CU's branch location in Sterling, Ill. The Northwestern Illinois Chapter of Credit Unions, which hosted the event, is home to more than 225,000 members.

Bustos is a former alderman for the city of East Moline, Ill. Her career also includes serving as a journalist as well as in public relations and communications for the not-for-profit healthcare industry for more than 20 years.

Through her work experience and as a member of a local credit union, she has gained a considerable appreciation for the not-for-profit industry, including credit unions, said the league. Bustos believes in the movement's "people helping people" philosophy and strongly supports maintaining the credit union member-owned, not-for-profit, cooperative structure, the league added.

Bustos also is endorsed by the CUNA's CULAC. Credit unions from the Northwest Illinois chapter are distributing a statement of support to their members prior to tomorrow's election.

In Virginia, on Wednesday, U.S Rep. Gerald "Gerry" Connolly (D-Va.) visited the Belvoir FCU branch in Woodbridge, Va. Being an advocate of credit unions and the credit union movement, Connolly wanted to gain a better understanding of what one credit union was doing to make a difference within the financial industry.

On Wednesday, U.S Rep. Gerald "Gerry" Connolly (D-Va.) visited the Belvoir FCU branch in Woodbridge, Va. From left,  (first row): Tisha Wallace, chief operating officer; Amy McConnell, eMarketing and Public Relations Specialist; Connolly; Dottye Bunch, facilities/project manager; From left, second row: Ken Worthey, marketing and communications specialist; Jason Lindstrom, chief marketing officer; Gaye DeCesare, COA; Jennifer Dorcsis, executive assistant; Mike Ligon, chief financial officer (Photo provided by Belvoir CU)
During Connolly's visit, Belvoir's executive and marketing teams discussed with him the credit union's active role within the credit union movement and the Fort Belvoir community, and the advantage credit unions provide their members, especially to those in the military.

Belvoir Federal's Chief Marketing Officer Jason Lindstrom and Chief Operating Officer Tisha Wallace discussed the impact the credit union makes with its members through specific loan products, such as the ARK Loan and the Credit Builder Loan, which were designed to help individuals in desperate need of financial assistance.

The executive team described how Belvoir has assisted members when they could not find funding elsewhere and educated members so they could eventually receive a mortgage or auto loan.

Connolly ended his visit to Belvoir FCU on a positive note by saying: "I have been a member of a credit union for over 34 years, so I know how they work. Now that I am in Congress, I support many credit unions … Your mission (at the credit union) is critical, and I think there are ways to educate those in Congress to show your position."

All of the candidates mentioned for national office--Hanna, King, Michaud, Bustos and Connolly--received maximun financial support from CULAC, Hawkins told News Now.

International co-ops address future at Manchester summit

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MANCHESTER, England (11/5/12)--Cooperatives United: A World Festival and Expo, a global festival of events and exhibitions, was held last week in Manchester, England, to mark the close of the International Year of the Cooperative (IYC).

2012 was designated by the United Nations (UN) as IYC, with the theme "Cooperatives build a better world."

The conference's closing ceremony featured a panel discussion that included IYC U.S. Steering Committee member Paul Hazen, along with Dame Pauline Green, Bank Transfer Day founder Kristen Christian and several other international leaders.

Bill Cheney, president/CEO of the Credit Union National Association (CUNA), attended the International Co-operative Alliance board meeting during Cooperative United. CUNA has been a participant on National Cooperative Business Association's International Year of Cooperatives Steering Committee. CUNA and U.S. credit unions and leagues were active in a number of IYC events in the U.S., including the cross-country Co-Cycle tour and Cabot Creamery Cooperative's Community bike/walking along the East Coast.

A new video Celebrating 2012 IYC was released in conjunction with Cooperatives United. It runs three minutes, 20 seconds and includes content from the National Rural Electric Cooperative Association, National Cooperative Grocers Association, Co-Cycle, and the Cooperative Teach-in team as well as UN Secretary General Ban Ki-moon, ICA President Dame Pauline Green, and cooperative leaders and projects from around the world. To view the video use the link.

N.J. CU steps up with child care office space

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CLARK, N.J. (11/5/12)--When employees of Aspire FCU, Clark, N.J., returned to work following Hurricane Sandy, they faced challenges in their personal lives.

Because local New Jersey schools were closed after Hurricane Sandy last week, Aspire FCU President/CEO Tom O'Shea invited staff to bring their kids to work.
Recognizing that Hurricane Sandy had created child-care issues for many staffers since area child care facilities were closed for the week, President/CEO Tom O'Shea invited staff to bring their kids to work.

About a dozen kids, ranging in age from 15 months to 15 years, gathered in the credit unions learning center to watch movies and color, among other activities, O'Shea told the New Jersey Credit Union League (The Daily Exchange Nov. 2). O'Shea's daughter provided assistance caring for the children.

Because of limited gasoline availability in the area, Aspire CU also offered staff the opportunity to work from home when possible. Because few traffic signals in the area were working, so the $186.5 million asset credit union dismissed staffers before sunset.

Aspire also offered other credit unions, business partners and vendors offering emergency office space and internet access.

Aspire FCU in Clark, N.J. offered other credit unions, business partners and vendors emergency office space and Internet access in the aftermath of Hurricane Sandy. (Photos provided by New Jersey Credit Union League)

The credit union is monitoring U.S. Postal Service deliveries and is waiving members' late and overdraft fees, if appropriate. Members who are out of work as a result of Hurricane Sandy will be offered an opportunity skip-a-pay on their loans for free.

"It's times like these, when our members and employees are most in need that we're reminded of the reason credit unions exist--to help people," O'Shea told the New Jersey league. "In the cooperative spirit of credit unions, it's our duty to assist others where we can.

"We're fortunate enough to have all the amenities needed to operate as a fully-functioning credit union, and it would be unwise and selfish to only think about ourselves in a time like this when our employees' families and other partners in the industry have a need that we can help fill," O'Shea said.

Retail heavyweights file opposition to interchange settlement

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NEW YORK (11/5/12)--A group of large retailers Friday requested a Federal judge to reject a proposed settlement in the retailers' class action antitrust lawsuit against Visa and MasterCard over credit card interchange fees.

The retailers said the settlement would not bring credit card swipe fees charged by Visa and MasterCard under control and does not give merchants who oppose it an adequate mechanism to opt out.

Among the retailers joining the court filing were Target, Macy's J.C. Penney, The Gap, Neiman Marcus, Abercromie & Fitch, Papa John's and the National Retail Federation. The 19 companies represent more than 17,000 separate retail outlets and more than $150 billion in annual sales, said court documents.

In a brief filed Friday in the U.S. District Court, Eastern District of New York, Brooklyn, the retailers argue the settlement cannot legally be certified as a class action because it attempts to force a one-size-fits-all solution onto a diverse group of merchants. Retailers also argued that a provision barring all retailers--including those who opt out of the settlement--from filing future lawsuits over swipe fees is impermissibly broad under federal law.

Credit unions are not involved in the lawsuit, but they and other financial institutions would be affected by the settlement's terms. The $7.5 billion settlement would require a reduced interchange rate fee (IRF) of 10 basis points for an eight month period, likely beginning in mid-2013, and would apply to all card issuers, including credit unions (News Now Nov. 1).

If the total credit IRF reduction is $1.2 billion, credit unions with credit card programs would lose about $50 million in total revenues, or about 0.5 basis points on their total assets, Credit Union National Association said. The loss would be concentrated among a relatively small number of credit unions with very active credit card programs.

The proposed settlement also calls for Visa, MasterCard and the banks to create a $6.05 billion fund to repay retailers for past fees charged and says retailers would be permitted to assess "check out" fees or surcharges on credit card purchases, which has previously been prohibited by Visa and Mastercard rules.

The surcharging aspect of the settlement--as well as the provision that consumer-owned credit unions would see a reduction in interchange revenue--are signs that the settlement does nothing for consumers, CUNA President/CEO Bill Cheney has said. Interchange revenue enables credit unions to provide "essential and cost-effective credit card services" to members. "We also know that the temporary reduction in interchange revenue that credit unions will experience will not likely find its way into the pockets of consumers, but will more likely into those of merchants," Cheney said.

NEW N.Y. N.J. leagues update CUs status report significant losses

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ALBANY, N.Y., and HIGHTSTOWN, N.J. (FILED 3:12 p.m. ET 11/2/12)--The leagues in New York and New Jersey sent out updates this afternoon on the latest assessments of credit unions in their states impacted by Hurricane/Superstorm Sandy Monday and Tuesday.

"As you all know, the damage from Hurricane Sandy continues to impact many of our New York credit unions," said a message to member credit unions from Credit Union Association of New York President/CEO William J. Mellin.

"I have spoken personally with several credit unions in the affected areas, and our member relations team is also working diligently to get in touch with more than  150 potentially impacted credit unions. As we reach them, we're collecting information about their operational status and needs. We have already coordinated resources like generators and laptops and will continue to do as much as possible," Mellin said.

Until power is restored in critical areas, it is difficult to fully assess the situation, he said, but added that so far, "the losses are significant. We have faced other disasters, but what sets this apart is the vast number of credit union employees and members who have been impacted. In the most affected areas, there are more than two million credit union members. Countless are still without power and access to gas, heat and other basic necessities. Some have completely lost their homes. And they're all going to be looking to their credit unions for help as they begin to recover."

CUANY has reactivated the statewide Disaster Relief Fund through the New York Credit Union Foundation (NYCUF).  Use the New York foundation link for more information. Mellin also said credit unions will get a toolkit to help them with the relief effort.

Meanwhile, the CUAid.coop Disaster Relief Fund activated for credit union people in all the affected states by the National Credit Union Foundation had passed the $65,000 funds raised as of this morning. Use the link for more information.

The National Credit Union Administration has been monitoring the status for more than 2,000 credit unions in the storm's path. "The vast majority of federally insured credit unions are fully operational; however, some are closed, and others are operating partially with branch closures, in temporary facilities, or with only ATM services. Affected credit unions are working to quickly restore normal operations," NCUA said.

Its examiners along the East Coast are checking with their credit unions to provide support and assistance, answering members' questions, and NCUA is expediting consideration of credit union emergency grant applications.

NCUA is experiencing a higher-than-usual call volume at its consumer assistance hotline (800-755-1030, 8 a.m.-5 p.m. ET, Monday through Friday).

New York University FCU was the first credit union to apply to NCUA for its emergency grants to restore service. It applied on Wednesday and approval was made Thursday, said NCUA.

The New Jersey Credit Union League's twice daily status report showed the status of several credit unions reporting their status for the first time as well as some whose status changed. For the status of credit unions not on this list, use the link to the related News Now story, "New reports on status of CUs in hurricane aftermath." New status reports include:

  • Affinity FCU-- Most branches will be open during normal business hours, with the exception of these branches that are still without power: Bedminster (both the AT&T and Lamington Road locations), Morristown (Country Mile Village), New Providence, and Middletown. Online Banking, Mobile Banking and AUDREY (automated phone banking service) are fully operational. Standard 800 number is fully operational: 800-325-0808. Some Affinity ATMs are operational, specifically those in branches in Basking Ridge, Flemington and Paramus.
  • Deepwater FCU--Opened on Wednesday, was not damaged in any way, and running at full service.
  • Elizabeth NJ Fireman's FCU-- Has power but no connectivity. Optimum has crews in the area but no estimated time of repair. ACH, drafts, debit card, payroll deductions have been processed online. May get cash if not connected by today. Members have made withdrawals by debit card.
  • Financial Resources FCU--These New Jersey branches and the Member Service Center (Call Center) are open until 4 p.m.: Bridgewater, Somerset and Flemington. The Green Brook and Hillsborough branch remain closed due to power and telecommunications issues. All branches outside of New Jersey are open for normal business hours. ATMs are operational at these public locations: 1 New Amwell Road, Hillsborough, N.J.; 780 Easton Ave., Somerset, N.J.; 110 Rehill Ave., Somerville, N.J.; State Theatre of NJ, 11 Livingston Ave., New Brunswick, N.J.; Residence Inn, 4225 US Highway 1, Monmouth Junction, N.J.; Jewish Renaissance Center, 275 Hobart St.; and Perth Amboy, N.J.  The 800 number is now operational at 800-933-3280 or via e-mail using the "Contact Us" link on home page. Online Banking, mobile, mobile apps and text message banking continue to be available.
  • First Financial FCU-- Neptune and Toms River Branches opened today at 9 a.m. with limited service. The credit union has declared an emergency situation, and will move its processing out of state. It expects to be fully operational in the next 48 to 72 hours. The Wall Township Reality Fair sponsored by First Financial FCU originally scheduled for Monday, Nov. 5th, has been postponed.
  • Frankling St. John's CU--Its office is closed due to power outage; however, transactions are being processed remotely.  Members can contact Diane Murray at dlmurray02@aol.com.
  • Lakewood Community FCU--Closed due to power outage.
  • Liberty Savings FCU--Union City branch will open for business at 2 p.m. and will remain open until 7 p.m. tonight.
  • Local 32 Asbestos Workers FCU--Open and fully operational.
  • Messiah Baptist Church FCU--Open and fully operational.
  • MidState FCU--Open as of today from 8:30 a.m. to 4:30 p.m., but without power. Members can cash pay checks, make withdrawals, make payments, etc. Power estimated to come back up in two weeks.
  • Morristown FCU--Has been open at both branches since Tuesday working regular scheduled hours.
  • Princeton FCU-- Fully up and running as of Wednesday.
  • Public Service FCU--Still without power and Internet; operating from a remote location for back office processing. Staff is at the office to answer phone calls during the day. Debit, ACH, and share drafts are  OK, does not have VRU and Home Banking at the present time.
  • Unity FCU-- Open and fully operational.
The NCUA is also launching a clothing drive for credit union members and employees affected by the hurricane, which will be delivered to the New Jersey league office in Hightstown next week, said the league.

CU System briefs (11/01/2012)

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  • WILMINGTON, Del. (11/2/12)--Delaware First FCU, based in Wilmington, was  damaged by a car last month, according to the Delaware Credit Union League (Together Oct. 30). The credit union reported to the league that the went over an embankment and rammed into the side of the building. The car damaged the outside brickwork, but a closer inspection indicated cracks to the wall and ceiling inside the building as well.  No one was hurt in the incident, which occurred Oct. 17 …
  • BOULDER, Colo. (11/2/12)--Boulder Valley CU, based in Boulder, Colo., has received approval from the Colorado Division of Financial Services to expand to a community-based charter. It can now serve people who live or work in Boulder County, Broomfield County, or in the towns of Estes Park, Drake and Glen Haven. Since 1959, it has served  the faculty and administration of the Boulder Valley School District. Over time it expanded to include students and family members and other diversified employee groups. A community charter will help it develop a stronger presence in the Boulder and Broomfield Counties and the Estes Park Community, the credit union said Wednesday …
  • NEW HAVEN, Conn. (11/2/12)--Connex CU's board of directors has named Frank Mancini as president/CEO, effective yesterday, announced the New Haven, Conn.-based credit union Thursday. Mancini has been part of Connex's executive team since 2003, serving as chief financial officer. In that position, he oversaw Information Services, Operations and Collections and helped the credit union growth to $380 million in assets. Mancini succeeds John Edwards, who is retiring after leading Connex for 34 years …

New reports on status of CUs in hurricane aftermath

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MADISON, Wis. (11/2/12)-
Click to view larger image Flooding of New York City's tunnel--including the Battery Tunnel here--from Superstorm Sandy's storm surge kept many commuters at home part of the week. CUNA Strategic Services provider Agility Recovery, a business continuity firm, worked with impacted credit unions and other businesses in the area.
More and more credit unions that had been closed since Superstorm Sandy swept through the East Coast and Mid-Atlantic states earlier this week are beginning to open for business.

Credit unions in New Jersey and New York, which bore the brunt of the storm surge and flooding damages, were starting to assess the damages and report into their leagues, their insurance agencies and regulators of their condition (See related News Now story: Sandy so far: 25 CUs damaged, CUAid raises $65,000).

In New York, Bethpage FCU reported on its website Thursday that its telephone service is available but it is experiencing high call volumes. These branches have power and are open: Bay Shore, Bay Shore King Kullen, Bethpage, Central Islip, Commack King Kullen, Elkmont, Farmingdale, Freeport, Hempstead, Huntington, Levittown, Lynbrook, North Babylon, Patchoque, Port Jefferson, Riverhead, Seaford  and West Babylon,  and Westbury. All branches will close at normal hours, except Bay Shore King Kullen, Commack King Kullen, Elmont and Levittown, which will close at 5 p.m.

Bethpage said it will waive late fees on loan payments and insufficient fund fees for deposit accounts for members affected by the storm.

Click to view larger imagePower outages are the biggest problem for most credit unions, their employees, volunteers and members in the states affected by the storm Monday and Tuesday. Here is a look at New York City, with large areas unlit as a result of the storm.
Although the New Jersey Credit Union League offices are closed, staff  are working remotely to serve member credit unions. It is issuing credit union status updates twice a day. At 5 p.m. ET Thursday, here was the status that credit unions reported to the league:

  • 1st Bergen FCU--Will be open from noon to 6 p.m. today at its Hackensack location. Equipment and facility OK, but had no power.
  • ADP FCU--Roseland office open and operational.
  • Affinity FCU--Following branches will be open from 9 a.m. to 3 p.m.: Basking Ridge, Piscataway, Cedar Knolls, Flemington, Hillsborough, Edison (all other branches remain closed). Online Banking is unavailable, but the credit union is working to restore it as quickly as possible. Affinity's Casino Night, scheduled to take place last night, was postponed. Information will be communicated once available.
  • Atlantic FCU--Kenilworth office is without power; will open once power is restored.
  • Bay Atlantic FCU--Operational and all systems are functioning properly. Used disaster recovery/business continuity (DR/BC) plans to service members on Monday.
  • Bridgeton Onized FCU--Open but no e-mail. Used DR/BC plans to service members on Monday.
  • Central Jersey FCU--Woodbridge office open and fully operational; South Plainfield office closed until power is restored.
  • Click to view larger image Walking and driving in New York City became impossible with the flooding in some areas in Lower Manhattan, the city's financial district. Pictured is the flooding near the city's Freedom Tower. (Photos by Agility Recovery)
    Community Financial Services FCU--Credit union has no power and will reopen when power is restored. All back office transactions including ACH, share draft and ATM are being processes. Online banking and bill pay are also up and running.
  • Credit Union of New Jersey--Operational at its main office and branch in Ewing as well at its Lafayette Branch and Willingboro Branch.
  • Essex County Teachers FCU--Credit union has power, phone, and DP communications; reported that many shared branching CUs aren't available on the network, communicated these issues to NCUA.
  • Financial Resources FCU--Bridgewater, N.J., branch was open until 3 p.m. Thursday, but all other New Jersey branches remained closed. Experienced power and telecommunications outages,but otherwise suffered little to no damage. All locations outside of the state are operational and processing normally otherwise. The credit union's website, mobile, mobile apps, text messaging and other electronic services are up and running. Its 800 number is not operational.
  • First Financial FCU--Neptune andToms River Branches will be open today at 9 a.m. with limited service.
  • Hamilton Horizons FCU--Closed due to power outage. All back office transactions, including auto clearinghouse (ACH), checking and ATM are still operating. Power is estimated to be up on Monday.
  • Garden Savings FCU--Parsippany branch re-opened; Newark branch without power and is closed.
  • Jersey Central--Cranford office open.
  • Jersey Shore FCU--All offices are fully operational.
  • McGraw-Hill FCU--2 Penn Plaza, 1221 Ave. of the Americas, and East Windsor branches are now open and operating under normal business hours. 55 Water St. branch is still closed due to the forced evacuation of the building. The credit union has reestablished its phone communications and is continuing to monitor Online Banking/Bill Payment and Mobile Banking and Shared Branching locations, which are currently offline.
  • MidState FCU--CU has remained closed due to thefts and no power in Carteret; it is posting remotely all ACH drafts, etc., and will attempt to hire off duty police to sit with the staff so that it can open today.
  • North Jersey FCU--All branches open.
  • Parlin DuPont FCU--Now has power but no phone/Internet; making do with file transfers and PBF.
  • Picatinny FCU--Main branch in Rockaway and Denville branch are fully operational. The arsenal had a delayed opening of noon yesterday and the Mt. Olive branch is closed due to power outage. The credit union has allowed the league Business Consultant Angel Santos to work at the Rockaway office for the time being.
  • Rancocas FCU--Open and operational.
  • Renaissance CDCU--Credit union has been shut down without power, Internet access, phones, and so forth since Monday. It hopes the power will be back on in the area of the credit union by the end of the day so it can begin processing ACH, share drafts and ATMs.
  • Rutgers FCU--Busch is open, College Ave. is running on a limited schedule, Newark is closed. All services are available.
  • United Teletech FCU--Tinton Falls branch is currently open for business. Due to local curfews, the credit union has modified hours (lobby open 9 a.m. to 4 p.m., drive-up from 8:30 a.m. to 4:30 p.m.). All other locations are closed pending the restoration of power to those locations.
  • West Orange Municipal FCU--It has a generator and should be able to continue operations with little interruption going forward.
  • XCEL FCU--Bloomfield, N.J. office is OK, but most branch staff depend on PATH and New York subways for transportation. Fed Plaza branch in Manhattan and Journal Square branch in Jersey City will remain closed until further notice. The branch at 3680 Kennedy Boulevard in Jersey City is open. All ACH and share drafts were posted remotely each day.

Sandy so far 25 CUs damaged CUAid raises 65000

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MADISON, Wis. (11/2/12)--About 25 credit union policy holders in seven states have reported damages from Hurricane Sandy so far, and more damage reports are expected, said CUNA Mutual Group Thursday.  Credit unions and movement supporters have already chipped in $65,000 to CUAid to assist credit unions through the aftermath, with several organizations making appeals, even internationally.

Click to view larger image CUNA Strategic Services provider Agility Recovery took photos in parts of  New York City after Superstorm Sandy swept through  the area Monday and Tuesday. One building lost its walls. (Photo provided by Agility Recovery)
"We have received damage reports from about 25 credit union policyholders so far, located in seven states. Most of the claim reports are for minor building damages in the New York City, Long Island and Jersey Shore areas," said Phil Tschudy, media relations manager at CUNA Mutual Group.

"Many credit unions are still without power, and we expect to receive more claim reports. The damage reports we have received do not include those caused by flooding or storm surges, which are insured through the Federal Emergency Management Agency's (FEMA's) National Flood Insurance Program," he said.

"Power is, and will continue to be a major problem for many days. However, per our findings and discussion with the National Credit Union Administration (NCUA) all credit unions are operational. Some branches are closed, but members can transact business via the Web, or at other branch locations of their credit union," Tschudy told News Now Thursday afternoon.

"CUNA Mutual Group has been proactively reaching out to credit unions in the impacted areas to determine how they are faring, and not waiting for them to contact us for help.  If we have not been able to reach a credit union or if the credit union was unsure if a branch was damaged due to evacuation, we have had our adjusters work with authorities to make onsite inspections, which have sometimes meant arranging for police escorts. These inspections help us determine if damages need to be immediately addressed, if power is on, and if it is necessary to arrange for security to protect the building and its contents," he said.

"Our staff has been working closely with the NCUA and credit union leagues to share information. We are continuing our attempts to contact a small number of credit unions we have not yet reached and are asking they contact CUNA Mutual Group at 800-637-2676 and let us know of any problems they are having, big or small, as well as if they are aware of any other credit unions they know of that need help."

The National Credit Union Foundation late Thursday afternoon told News Now that since it activated its online disaster relief system CUAid.coop Wednesday morning, credit unions and organizations have donated nearly $65,000 to the efforts to help credit unions.  It had raised $25,000 in the first 24 hours and by the end of Thursday the funds had more than doubled, said Christopher Morris, NCUF's director of communications.

The World Council of Credit Unions (WOCCU) Thursday encouraged international credit union organizations to support disaster relief efforts through CUAid.coop.

"Credit unions, their staff and employees in the Northeast have been significantly affected by this disaster. Many of these are credit unions that have given  to help rebuild other countries hit by disaster," said WOCCU President/CEO Brian Branch. "As a global community committed to building up and helping one another, we encourage our global community to help NCUF support credit unions trying to get their members back on their feet," he added.

"Everyone who supports CUAid is helping affected credit union people directly with critical needs, longer-term recovery needs, operational needs and assisting credit union members," said NCUF Executive Director Bucky Sebastian.

The Texas Credit Union Foundation (TCUF) Thursday announced it had approved a $5,000 grant for hurricane relief efforts to be given to CUAid.coop (LoneStar Leaguer Nov. 1).

"When Hurricanes Ike and Rita struck Southeast Texas, the credit union movement came to our aid. The support we received from credit unions across the country allowed us to respond to the immediate needs of credit union employees affected by the devastating hurricanes," said TCUF Executive Director Courtney Moran. "That is one of the many wonderful things about the credit union movement--we are a family that helps and supports one another in good times and in bad."

NCUF has provided special webpage buttons with Hurricane-Sandy specific materials credit unions can use in their fundraising efforts.

Two congressmen named Outstanding Hoosier Legislators

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INDIANAPOLIS (11/2/12)--The Indiana Credit Union League has named two congressmen-- Andre Carson (D-7), who represents Indiana's 7th Congressional District, and Marlin Stutzman (R-3), who represents Indiana's 3rd Congressional District--as Outstanding Hoosier Legislators for 2012.

The award is presented each year during the league's annual convention to honor legislators who have gone the extra mile to support Indiana's credit unions and their 2.2 million members. This year's convention was held Oct. 3-5.

Since joining Congress in early 2008, Carson has proven to be a strong credit union supporter, said the league. As a member of the House Financial Services Committee, he has been interested in credit unions' perspectives on critical issues that have come before the committee. For the third time, Carson signed on as a co-sponsor of legislation that would help create jobs by increasing the limit on loans that credit unions can make to small businesses.

Carson has strong relationships with the credit unions in his district and understands the important role credit unions play in their communities, the league said.

Stutzman also has become a strong credit union supporter since joining Congress in late 2010. Beginning early on, he met on many occasions with credit unions in his district and in Washington, D.C. and has voiced support for credit unions on key issues, including debit card swipe fees and member business lending (MBL).

Stutzman is a co-sponsor of H.R. 1418, which would increase the credit union MBL cap.

"With the many important issues being discussed in Congress, Indiana's credit unions appreciate the support of these two leaders," said league President John McKenzie. "They both support increasing the cap on credit union small business lending and they are willing to take a stand on legislation that will help create jobs in Indiana communities."

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. CUNA and credit unions say that increasing the cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

NCUF Wegner Awards Dinner tickets available (11/01/2012)

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MADISON, Wis. (11/2/12)--Credit union leaders and supporters can purchase tickets for the National Credit Union Foundation (NCUF) Dinner Presenting the Herb Wegner Memorial Awards. The 25th annual dinner will take place Feb. 25 in conjunction with the Credit Union National Association Governmental Affairs Conference in Washington, D.C.

Tickets can be obtained online at ncuf.coop or registrants can use the link to download a printable form, complete it offline and fax or mail their completed form to NCUF. The deadline to purchase tickets is Feb 1.  

Individual tickets for the three-course dinner are $275 each. Tables of 10 are t $2,750. The estimated fair market value of goods and services received is $150, said NCUF.

"2013 is the 25th anniversary of the Herb Wegner Memorial Awards, and this year's winners are an outstanding addition to the list of past recipients," said Bucky Sebastian, NCUF executive director.

The awards ceremony will celebrate the highest national honors in the credit union movement, specifically:

  • Lifetime Achievement: Rick Craig, former president/CEO of America First FCU, Riverdale, Utah;
  • Lifetime Achievement: Hubert H. Hoosman Jr., president/CEO of Vantage CU, Bridgeton, Mo.; and
  • Outstanding Program: Credit Union Miracle Day.
For more information on the award winners, use the link.

CUs see strong financial performance in September

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MADISON, Wis. (11/2/12)--Credit unions reported strong financial performance, mostly driven by declining loan-loss provisions in September, according to a Credit Union National Association (CUNA) economist's analysis of September's monthly sample of credit unions.

"Net income as a percentage of average assets (return on assets) came in at 0.85% in September and 1.06% for the third quarter," Steve Rick CUNA senior economist, told News Now. "This is significantly better than the 0.72% reported in the third quarter of 2011.

Click to view larger image
"Earnings rose year over year despite a slight drop in the loan-to-savings ratio, which fell to 68.4% in September from 69.6% in September 2011. The rise in earnings will allow credit union to compete more effectively in the credit market place as banks begin to loosen the underwriting standards and pursue loans more aggressively," he said.

"The 34-basis point rise in earnings was mainly driven by falling provisions for loan losses," Rick continued. "Loan charge-offs and delinquency rates have fallen significantly over the last year. We expect credit unions to charge off 73 cents for every $100 in loans this year, down from 90 cents last year. We expect this charge-off ratio to fall to 0.65% in 2013. It will take a few more years before this ratio reaches the 0.5% considered normal for credit unions and banks."

Credit union loans outstanding grew 0.3% in September 2012, up from 0.5% growth in

August. Credit union loans totaled $605.4 billion in September, compared with $582 billion in September 2011. Fixed-rate mortgages led loan growth with a 2.1% increase, followed by new- auto loans and used-auto loans, which grew at 1.2% and 0.9% respectively. Credit card loans remained flat during September, while home equity loans fell 0.6%, adjustable-rate mortgages fell 1.2% and unsecured personal loans fell 2.3%.

Credit union savings balances fell 0.6% in September, compared with a 1.2% increase in

August. Credit union savings in September totaled $885.2 billion--or $48.4 billion more than the $836.8 billion in September 2011. Individual retirement accounts led savings growth with a 0.8% increase, followed by regular shares (0.4%) and money market accounts (0.1%). One-year certificates and share drafts fell 0.8% and 4.6% respectively.

Regarding asset quality, credit unions' 60-plus-day delinquency improved slightly from 1.2% in August to 1.1% in September.

Click to view larger image
"The credit union loan delinquency ratio also fell significantly over the last year," Rick said. "Credit unions reported that 1.14% of all loans were delinquent in September, down from 1.59% in September 2011. The decline in the loan delinquency ratio was caused by a 25% drop in the dollar amount of delinquent loans (the numerator of the ratio) and a 4% rise in total loans (the denominator of the ratio). These dynamics resulted in the almost 29% drop in the delinquency rate over the last year. This is the biggest one-year drop since the delinquency rate hit its high-water mark of 1.88% in January of 2010. We are forecasting the credit union loan delinquency rate to fall to 0.90% in 2013, slightly above the 0.80% long-run average," Rick said.

The loan-to-savings ratio remained constant in September at 68%.

The movement's overall capital-to-asset ratio is 10%. Credit unions have a total of $107 billion in capital.

CU doesnt let Sandy shut down trick-or-treat

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CANTON, N.C. (11/2/12)--Champion CU, Canton, N.C., made trick-or-treat happen for the the kindergarten classes of North Canton and Meadowbrook Elementary schools in Canton, N.C. despite the havoc wrought this week by Hurricane Sandy.

Click to view larger image Champion CU brought Halloween treats to kindergarten classes of North Canton and Meadowbrook Elementary schools in Canton, N.C. this week. The students were unable to attend annual Town of Canton Trick-or-Treating because of school delays caused by Hurricane Sandy. (Photo provided by Champion CU)
Each year, downtown businesses open their doors to students and preschool classes from the area for Town of Canton Trick-or-Treating. Merchants hand out candy to the eager children that come through their doors dressed in their Halloween costumes. With the unpredictable weather and school delay that resulted from Hurricane Sandy, kindergarten classes were not able to participate in Wednesday's planned event.

Management at Champion CU, an annual participant in the event, decided that if the children  couldn't come to the credit union, the credit union would go to the schools.

"We love when the children come to the credit union," said Noralynn Grindstaff, Champion CU marketing and communications manager. "We dress up and enjoy ourselves as much as they do. We were just as disappointed that they couldn't make it, so we wanted to find a way to still share this with them." 

Grindstaff, Loan Servicing Officer Marc Trull and the credit union's Explore Account mascot, Kaycie the Kangaroo, loaded up the treat bags and made a visit to both North Canton and Meadowbrook Elementary Schools.

"Champion CU went out of its way to send some special visitors with Halloween goodies for our kids," said Whitney Trull, Meadowbrook kindergarten teacher. "Our kids were so excited to see a kangaroo, a hunter, and a spider at our door. We can't thank them enough."

Bethpage study Free checking main reason for choosing CU

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BETHPAGE, N.Y. (11/2/12)--Consumers stressed the importance of free checking with no hidden fees as a top attribute when choosing a financial institution, according to a recently released study from Bethpage (N.Y.) FCU.

In the study, designed to determine how last year's Bank Transfer Day (BTD) movement and credit union support has impacted the banking market longer term, 60% of Long Islanders said they would most likely leave their current financial institution if they charged hidden fees and did not offer free checking.

The survey, administered in August by CoreBrand, a Manhattan-based brand consultancy, polled 874 Nassau and Suffolk checking account holder residents.

The research follows a recently released Bankrate 2012 Checking Survey that indicated checking account fees are at an all-time high. The Bankrate survey found that the average monthly maintenance fee for a non-interest checking account is now at a record high of $5.48, a 25% jump from last year.

"Last year's BTD movement certainly helped fuel consumers' demands to expect more from their financial institution," said Kirk Kordeleski, Bethpage FCU president/CEO. "As we see bank fees continue to soar to unprecedented highs, those strong demands will continue and consumers will not only express their discontent, but continue to make changes in where they do their banking. BTD helped Bethpage experience record growth as consumers leveraged their voices and chose credit unions for the valuable options they offer."

Bethpage has seen significant growth in checking accounts and new members since BTD, which was Nov. 6, 2011. Bethpage opened more than 27,500 checking accounts, a 49% increase compared with the 11 months prior to BTD. Bethpage has also added 35,800 new members since Bank Transfer Day, an increase of 68% compared to the previous 11 months.

Other key findings in Bethpage's study include:

  • When asked what attributes are important when choosing a bank or credit  union, 68% of respondents said providing free checking with no hidden requirements is important.
  • When asked to identify what traits they look for when choosing where to bank, 73% said they want to bank at a financial institution that is honest, 72% said trustworthy, and 71% said ethical.
  • Among people actively looking to switch to a different financial institution, 37% would leave their current financial institution for better rates and lower fees.
Bethpage said its Bonus Checking offers account holders free checking including free debit card transactions, no maintenance fees, and no minimum balance fees. It also includes free online banking, mobile banking and telephone banking, plus the ability to earn interest.

Top 10 iNews Nowi stories for October (11/01/2012)

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MADISON, Wis. (11/2/12)--An article announcing the CO-OP Financial Services and SHAZAM Network agreement to allow members of participating credit unions access surcharge-free and shared-deposit ATMs was the most read News Now article in October.

The list of Top 10 stories for October includes:

10. Hurricane Sandy aftermath: Damages and closures

MADISON, Wis. (10/31/12)--Credit unions not impacted by Hurricane Sandy's flooding have reported some damages, but those in the storm surge/flood areas have yet to determine how badly their buildings are damaged. Meanwhile, a number of closures and postponements continued Wednesday.

9. NCUA prohibits WesCorp exec from CU work

ALEXANDRIA, Va. (10/19/12)--Robert Siravo, the former CEO of the failed Western Corporate FCU, has been prohibited from participating in the affairs of any federally insured credit union by the National Credit Union Administration.

8. Verizon data-breach report points to challenges for FIs

MADISON, Wis. (10/26/12)—Data-breach incidents worldwide last year were more numerous, were caused by more players, and represent a broader and more diverse geographical scope, Verizon said Wednesday in releasing its "2012 Data Breach Investigations Report."

7. Third new FCU for 2012 will launch

ALEXANDRIA, Va. (10/3/12)--Come November, about 150,000 people who live, work, worship, volunteer, attend school, and transact business in the Kalamazoo, Mich., area will have a new federal credit union to serve their financial services needs.

6. CBS 'CUs 101' story drives viewers to CUNA's aSmarterChoice.org

WASHINGTON (10/10/12)--CBS This Morning in an Oct. 8 segment made a strong case for credit union membership, highlighting the CUNA consumer Website aSmarterChoice.org as one resource for potential members.

5. August CU loans, savings grow, BTD effect continues

MADISON, Wis. (10/2/12)--Although credit unions' savings growth outpaced loan growth by a wide margin in August, the combination of a slowly improving economy, significant pent-up demand, and seasonally strong borrowing should result in relatively strong loan growth in the coming months, according to a CUNA economist's analysis of CUNA's monthly sample of credit unions for August.

4. Happy International Credit Union Day

MADISON, Wis. (10/18/12)--Several states will receive International Credit Union Day proclamations from state governors and lawmakers today as credit unions around the world celebrate the credit union philosophy.

3. CUNA economists adjust quarterly CU, economic outlook

MADISON, Wis. (10/16/12)--CUNA economists met last week to complete their quarterly update of the economic and credit union outlook, affirming the belief the economy will be OK despite looming national fiscal issues and fallout from European debt problems.

2. Vermont DFR, CU reach agreement on use of 'bank'

MONTPELIER, Vt. (10/9/12)--The Vermont State Employees CU and the State Department of Financial Regulation announced Friday they have reached an agreement on when VSECU and other state-chartered credit unions can use the words "bank," "banking" and similar words in marketing their services.

1. CO-OP, SHAZAM sign ATM sharing pact

RANCHO CUCAMONGA, Calif. (10/17/12)--CO-OP Financial Services and the SHAZAM Network have signed an agreement that will allow members of participating credit unions to access surcharge-free and shared-deposit ATMs nationwide.

MDDCCUA fosters new CU federation in Colombia

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COLUMBIA, Md. (11/2/12)--A group of eight Colombian credit union representatives last week traveled to Columbia, Md., to sign a partnership agreement with the Maryland and District of Columbia Credit Union Association (MDDCCUA) through World Council of Credit Unions' International Partnerships Program.

The Maryland and District of Columbia Credit Union Association (MDDCCUA) and the Federación Nacional de Cooperativas de Ahorro y Crédito Financieras (FECOLFIN), the new Colombian credit union federation, last week signed a partnership agreement at PAHO/WHO FCU headquarters in Washington D.C.. Pictured, from left, Juan Carlos Borda, FECOLFIN vice chairman; John Bratsakis, MDDCCUA president/CEO; Jaime Chavez, FECOLFIN chairman; Miguel Boluda, PAHO/WHO FCU president/ CEO; and Victor Miguel Corro, vice president of the Worldwide Foundation for Credit Unions. (Photo provided by the World Council of Credit Unions)
The delegates represented the board of directors of the new credit union federation, Federación Nacional de Cooperativas de Ahorro y Crédito Financieras (FECOLFIN), one of WOCCU newest members.

FECOLFIN's newly appointed board of directors sought a credit union association partner to jumpstart the organization in terms of best practices, policies and procedures. MDDCCUA offered to fill that role and assist the group of credit union CEOs and volunteers by sharing its business strategies and advising how to increase affiliation in a critical phase of development.

The creation of FECOLFIN is an important milestone for the Colombian credit union movement, WOCCU said. Although Colombia has one of the highest rates of cooperative membership, the infrastructure of the credit union sector was missing key elements of a cohesive movement, such as a credit union federation. FECOLFIN will focus on giving a credit union-specific voice to its members before legislators and the government. The new federation also will seek to improve collaboration among credit unions nationwide.

"Currently, regulations in the country are either inconsistent or lacking detail, and credit unions do not have a seat at the table during talks about regulatory changes," said Jaime Chavez, FECOLFIN chairman. "The credit unions in Colombia need to come together with a unified voice to help tell our story and convince the regulators that credit unions need to be treated differently than banks."

The first phase of the partnership will focus on providing advocacy assistance to the Colombian credit union sector through workshops for credit unions and special visits with government officials. The partnership also will help FECOLFIN develop educational services and other services relevant to its membership.

MDDCCUA said it hopes to learn from Colombian credit unions about the needs of South American immigrants living in the Maryland and D.C. area, and strategies particular to that population that can be shared with MDDCCUA member credit unions.

In addition to visiting the offices of MDDCCUA, the group also visited the offices of three member credit unions: Montgomery County Employees FCU and Mid-Atlantic FCU, both of Germantown, Md., and PAHO/WHO FCU, Washington, D.C. During the credit union visits, delegates focused on learning the characteristics of a U.S. credit union's balance sheet and the regulatory challenges U.S. credit unions face.

MDDCCUA plans to form a delegation of association and credit union representatives to provide onsite assistance and learn about FECOLFIN firsthand.

NEW 25 CUs file damage reports so far N.J. CU status update

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MADISON, Wis. (FILED 12:25 p.m. CT 11/1/12)--About 25 credit union policy holders in seven states have reported damages from Hurricane Sandy and more damage reports are expected, said CUNA Mutual Group today.

"We have received damage reports from about 25 credit union policyholders so far, located in seven states. Most of the claim reports are for minor building damages in the New York City, Long Island and Jersey Shore areas," said Phil Tschudy, media relations manager at CUNA Mutual Group.

"Many credit unions are still without power, and we expect to receive more claim reports. The damage reports we have received do not include those caused by flooding or storm surges, which are insured through the Federal Emergency Management Agency's (FEMA's) National Flood Insurance Program," he said.

"Power is, and will continue to be a major problem for many days. However, per our findings and discussion with the National Credit Union Administration (NCUA) all credit unions are operational. Some branches are closed, but members can transact business via the Web, or at other branch locations of their credit union," Tschudy told News Now.

"CUNA Mutual Group has been proactively reaching out to credit unions in the impacted areas to determine how they are faring, and not waiting for them to contact us for help.  If we have not been able to reach a credit union or if the credit union was unsure if a branch was damaged due to evacuation, we have had our adjusters work with authorities to make onsite inspections, which have sometimes meant arranging for police escorts. These inspections help us determine if damages need to be immediately addressed, if power is on, and if it is necessary to arrange for security to protect the building and its contents," he said.

"Our staff has been working closely with the NCUA and credit union leagues to share information. We are continuing our attempts to contact a small number of credit unions we have not yet reached and are asking they contact CUNA Mutual Group at 800-637-2676 and let us know of any problems they are having, big or small, as well as if they are aware of any other credit unions they know of that need help."

Also, the National Credit Union Foundation said that since opening its CUAid Disaster Relief Fund yesterday, it has raised more than $25,000 in donations. Use the link to donate.

The New Jersey Credit Union League issued an updated status report at noon today and will issue another one at 5 p.m.

  • 1st Bergen FCU--Equipment and facility OK, but no power. Opening limited hours today and Friday, if necessary, at one of its other sponsor sites.
  • ADP FCU--Roseland office open and operational.
  • Affinity FCU--Following ranches will be open from 9 a.m. to 3 p.m.: Basking Ridge, Piscataway, Cedar Knolls, Flemington, Hillsborough, Edison (all other branches remain closed. Online Banking is unavailable, but we are working to restore it as quickly. Affinity's Casino Night, scheduled to take place today at 6 p.m. has been postponed. Information will be communicated once available.
  • Atlantic FCU--Kenilworth office is without power; will open once power is restored.
  • Bay Atlantic FCU--Operational and all systems are functioning properly. Used disaster recovery/business continuity (DR/BC) plans to service members on Monday.
  • Bridgeton Onized FCU--Open but no email. Used DR/BC plans to service members on Monday.
  • Central Jersey FCU--Woodbridge office open and fully operational; South Plainfield office closed until power is restored.
  • Credit Union of New Jersey--Operational at its main office and branch in Ewing as well at its Lafayette Branch and Willingboro Branch.
  • Essex County Teachers FCU--Credit union has power, phone, and DP communications; reported that many shared branching CUs aren't available on the network, communicated these issues to NCUA.
  • Financial Resources FCU--Experienced power and telecommunications outages. All branches in New Jersey remain closed as a result of the outages, but otherwise suffered little to no damage. All locations outside of the state are operational and processing normally otherwise. The credit union's website, mobile, mobile apps, text messaging and other electronic services are up and running.
  • First Financial FCU--Toms River Branch opened at 9 a.m. today. All other offices and branches will remain closed until further notice.
  • Hamilton Horizons FCU--Closed due to power outage. All back office transactions, including auto clearinghoiuse (ACH), checking and ATM are still operating.
  • Garden Savings FCU--Parsippany branch re-opened; Newark branch without power and is closed.
  • Jersey Central--Cranford office open.
  • Jersey Shore FCU--All offices are fully operational.
  • McGraw-Hill FCU--2 Penn Plaza, 1221 Ave. of the Americas, and East Windsor branches are now open and operating under normal business hours. Verizon is still down at East Windsor branch so CU can't get member info out. 55 Water St. branch is still closed due to the forced evacuation of the building.
  • MidState FCU--CU has remained closed due to thefts and no power in Carteret; posting remotely all ACH drafts, etc. Will attempt to hire off duty police to sit with the staff so that it can open for Friday.
  • North Jersey FCU--All branches open.
  • Parlin DuPont FCU--Now has power but no phone/Internet; making do with file transfers and PBF.
  • Picatinny FCU--Main branch in Rockaway and Denville branch are fully operational. The arsenal had a delayed opening of noon yesterday and the Mt. Olive branch is closed due to power outage. The credit union has allowed the league Business Consultant Angel Santos to work at the Rockaway office for the time being.
  • Rancocas FCU--Open and operational.
  • Renaissance CDCU--Credit union has been shut down without power, Internet access, phones, etc. since Monday. It hopes the power will be back on in the area of the credit union by the end of the day so it can begin processing ACH, share drafts and ATMs.
  • Rutgers FCU--Busch is open, College Ave. is running on a limited schedule, Newark is closed. All services available.
  • United Teletech FCU--Tinton Falls branch is currently open for business; all other locations are closed pending the restoration of power to those locations.
  • West Orange Municipal FCU--Has a generator and should be able to continue operations with little interruption going forward.
  • XCEL FCU--Bloomfield, N.J. office OK, but most branch staff depends on PATH and NY subways for transportation. Fed Plaza branch in Manhattan, and Journal Square branch in Jersey City will remain closed until further notice. Branch at 3680 Kennedy Boulevard in Jersey City is open. All ACH and share drafts were posted remotely each day.