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Iowa Supreme Court accepting IOLTA grant applications

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DES MOINES, Iowa (12/19/07)--The Iowa Supreme Court Lawyer Trust Account Commission is accepting grants under the Interest on Lawyer Trust Account (IOLTA) program for the grant period beginning July 1, 2008. IOLTA programs allow lawyers who are holding clients' funds that are too small or short-term for an individual interest-bearing account to deposit the funds into a special bank or credit union account that contains similar funds from other lawyers. The interest generated from the pooled account helps fund legal programs for the needy (News Now Oct. 16). In Iowa, IOLTA grants are awarded to public purpose projects that provide legal services to the poor in civil cases, law-related education and other programs that improve the administration of justice in the state, according to a press release from the Iowa Judicial Branch. Last year, the Iowa Supreme Court awarded $1.327 million to the program. Total IOLTA program receives for the current fiscal year, which ended Nov. 30, exceeded $1.5 million. Deadline for grant applications is 4:30 p.m. CST, March 7, 2008. Grant recipients will be announced in late May or early June. Since Iowa's first grant in June 1986, the state has awarded nearly $20 million in grants. Credit unions in several other states can accept IOLTA deposits, including Maine, Washington, and Ohio. Effective Jan. 1, credit unions in Maine will accept IOLTA deposits for all deposits at low-income-designated credit unions. The Maine Supreme Court ruled in favor of the Maine Credit Union League's position to allow credit unions to offer interest on the IOLTA accounts, after the Maine Bar Foundation sought to limit credit union IOLTA participation to only low-income-designated credit unions (News Now Oct. 16). In August 2006, the Washington State Supreme Court backed the use of credit unions by attorneys to hold IOLTA accounts, after the Washington State Bar Association proposed rules to prohibit credit unions from accepting the interest on the accounts (News Now Aug. 1, 2006). A credit union modernization law in Ohio, the Credit Union Member Service Powers Act, which was signed into law in 2006, also allows credit unions to participate in IOLTAs (News Now Jan. 13, 2006).

CUs targeted in 33 of November phish attacks

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BEDFORD, Mass. (12/19/07)--Credit union brands were targeted in 33% of phishing attempts during November, according to RSA Monthly Online Fraud Report. That's down from 40% in October but still up from September's 29%. Credit union brands were targeted more than regional U.S. bank brands but less than nationwide U.S. bank brands, according to the survey. Nationwide U.S. banks accounted for the largest portion of November's phish net at 44%--slightly more than in October's 43% and September's 38% readings. Regional U.S. banks were hit in 22% of November's phish attempts. That compares with 17% in October and 32% in September. During November, 159 brands were attacked, slightly higher than 154 in October. Also, there were few attacks against institutions that had not been attacked before. The report is based on monitoring by the RSA Anti-Fraud Command Center (AFCC), which has shut down more than 60,000 phishing attacks to date. For the full report, use the RSA resource link.

Colorado Wyoming associations outline advocacy efforts

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ARVADA, Colo. (12/19/07)--The Credit Union Associations of Colorado and Wyoming (CUAC and CUAW) reported their progress for 2007, including an increase in advocacy initiatives and doubling the number of Credit Union Regulatory Improvements Act (CURIA) sponsors in the Colorado delegation from three to six.
The Credit Union Associations of Colorado and Wyoming plan to move into a new headquarters building in Denver and are preparing for the Democratic National Convention in August. From left are: Melissa Vetterling, administrative assistant; Courtney Staatz, manager of political programs; John Dill, president/CEO; Chris Kemm, manager of grassroots advocacy; Tim Dore, senior vice president of governmental affairs; and Mark Robey, general counsel. (Photo provided by the Credit Union Associations of Colorado and Wyoming)
Colorado’s CURIA sponsorship increased 100% this year, with support from Rep. Marilyn Musgrave (R) and Rep. Ed Perlmutter (D). CUAC also persuaded the dean of the Colorado delegation, Rep. Diana DeGette (D) to add her name as a co-sponsor of CURIA. Other accomplishments include education efforts aimed at newly appointed Wyoming Sen. John Barrasso, passage of a state bill that would provide major regulatory relief for credit unions seeking to dispose of repossessed cars in Colorado, and hiring Tim Dore as senior vice president for governmental affairs. Dore replaces Pete Kirchhof, who will be an outside lobbyist with credit unions as one of his clients. John Dill, CUAC president/CEO, credits Chris Kemm, manager of grassroots advocacy, for advances in the associations’ grassroots programs. Kemm joined CUAC and CUAW in 2006. During his tenure, the number of advocates signing up under the CapWiz tracking program increased--1,840 in the first 10 months of 2007. “The strength of credit unions has always been in our grassroots,” Dill said. “What Chris brings to the table is not only a deep understanding of the mechanism and tools of grassroots organizing, but also a newly acquired passion for our credit union movement.” CUAC and CUAW also have used grassroots to help pass a bill that would remove credit unions from regulations of the state automobile dealer’s board, which had started imposing rules on credit unions seeking to sell repossessed autos. Courtney Staatz also was hired as manager of political programs and will work on political fundraising, the associations reported. CUAC and CUAW are looking to 2008, whenthey will field one of their largest delegations to the Credit Union National Association’s Governmental Affairs Conference. They also will move into a new headquarters building by late spring, and will prepare for the Democratic National Convention, scheduled to take place in Denver in August.

CU EEOC settle discrimination suit

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PHOENIX (12/19/07)--A Phoenix-based credit union will pay $250,000 plus remedial relief to settle a discrimination lawsuit, announced the U.S. Equal Employment Opportunity Commission (EEOC). The lawsuit was filed by EEOC against Sun West FCU on behalf of two female managers who were subjected to sexual and gender harassment by a former manager, said EEOC (Arizona Daily Star, Phoenix Business Journal and East Valley Tribune Dec. 17). The settlement by consent decree also requires the $256 million asset credit union to provide training and other relief to educate employees about sexual harassment, retaliation and their rights under Title VII of the Civil Rights Act of 1964. EEOC regional attorney Mary Jo O'Neill, who oversaw the case, told Phoenix Business Journal that employers have a responsibility to take appropriate corrective and preventive action the first time they learn of discriminatory conduct in their workplace.

Washington DFI prohibits home of the 1 mortgage ads

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OLYMPIA, Wash. (12/19/07)--The Washington Department of Financial Institutions (DFI) has alleged that Linden Loans LLC, of Kirkland, used bait and switch tactics in its advertising for mortgage loans. A DFI investigation indicated that although Linden’s advertising promised consumers residential mortgage loans at 1% interest without points or fees, no borrower actually received those terms in 2006. DFI is looking to see if borrowers in 2007 received the promised terms. The statement of charges gave notice that the DFI may issue an order requiring Linden to cease deceptive advertising, suspend its mortgage broker license and suspend the loan originator licenses held by two respondents. The DFI also may fine Linden $150,000, with an additional $2,500 for investigation fees. Linden and its owners, Christopher Opdyke and Mark Sullivan, can request a hearing on the charges. DFI says Linden’s practices violated the Mortgage Broker Practices Act by misrepresenting loan terms, omitting required disclosures, and engaging in an unfair and deceptive practice. “The 1% rate touted by Linden lasts only a matter of months, and requires borrowers to accept predatory loan terms that would greatly increase costs to borrowers,” said Deb Bortner, director of the department’s division of consumer services. “In this case, we allege that Linden’s offer was illusory. “Consumers who responded to the bait were switched to a higher rate and higher cost mortgages. The borrowers who did get the 1% rate--only 44 of 333 borrowers--paid fees that, in some cases, grossly exceeded traditional broker feeds,” she added. Linden’s advertised mortgage loan was a payment-option adjustable-rate mortgage (ARM) that allows borrowers to choose among several payment options. Depending on the payment option, the loan may be a negatively amortizing loan, said DFI. Monthly payments could increase each year by up to 7.5% for five years, after which the interest rate is reset to amortize any unpaid interest. The cap on monthly payment increases does not apply to the reset. Linden also imposes a three-year prepayment penalty on borrowers who get the payment-option ARM. “We intend to closely monitor mortgage advertising in 2008, and expect similar enforcement actions will be forthcoming,” Bortner said. Many credit unions are offering low-cost alternatives to predatory lending practices, including several in Washington.

Albuquerque police destroy suspect package at CU

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ALBUQUERQUE, N.M. (12/19/07)--Bomb squad members on the Albuquerque police force detonated a suspicious-looking package found at Sandia Laboratory FCU Monday. Credit union employees phoned police Monday morning after discovering a box wrapped with duct tape in the credit union’s night drop-box ( Dec. 17). After arriving on the scene and conducting an evacuation of about 75 children from a nearby day care center to another community center, police destroyed the suspicious package. Earlier this year, another Albuquerque-based credit union received two bomb threats. U.S. New Mexico FCU received one on Aug. 18, and one on Aug. 30--demanding money. In the Aug. 18 incident, a suspicious package was left in the credit union. It turned out to be harmless (News Now Sept. 5).

Debit-card scams tied to gas pumps

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MADISON, Wis. (12/19/07)--A rash of recent debit-card scams, originating at gas pumps, have been occurring in several areas of the U.S. Many of the victims are members of credit unions. In El Monte, Calif., 70 people were victimized as of Saturday, according to police. All of the victims used debit cards at an ARCO gas station to purchase gas (San Gabriel Valley Tribune Dec. 15). Several victims are members of El Monte-based Vons Employees FCU and El Monte City Employees CU. Although no illegal devices were found at the gas station, investigators believe that an advanced computer device was used to capture information from debit-card electronic stripes and personal identification numbers (PINs). The gas station owner is not a suspect, police said. The identity thieves used the information to make cash withdrawals, varying from $400 to $1,500, from locations in Palms Springs, Calif., and New York, and from 7-Eleven stores in Las Vegas, police said. In Houston, Harris County Sheriff’s office investigators are tracking three men who stole debit-card PINs at the gas pump, then used the numbers to manufacture counterfeit cards and steal more than $100,000 from area ATMs. Roughly 500 accounts were breached, including those of several members at San Antonio CU. The thieves withdrew between $2,000 and $3,000 at each ATM, the sheriff’s office said. In Menomonie, Wis., city police started receiving several reports Nov. 19 of fraudulent charges on residents’ debit cards. The fraudulent charges are occurring in Florida--mainly at gas stations, according to police reports. The victims’ debit cards are being swiped even though they have the cards in their possession. This likely means that a copy of the cards has been made and used, police said (Dunn County News Dec. 18). So far, more than 20 local victims, 60 locations and 120 purchases have been affected. Each purchase made totaled about $70, according to Inspector Dave Pellett of the Menomonie Police Department.

CU System briefs (12/18/2007)

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* BRIDGETON, Mo. (12/19/07)--An ankle injury has resulted in a lawsuit against Vantage CU of East St. Louis. Betty Cowan filed suit Dec. 7 in St. Clair County Circuit Court after fracturing her right ankle while stepping off an uneven surface on pavement. The incident occurred May 11, 2006. She is seeking $50,000 in damages (The Madison St. Clair Record Dec. 13) … *
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WARRENVILLE, Ill. (12/19/07)--Members United Corporate and the World Council of Credit Unions hosted a delegation of 18 industry leaders from Mexico on Dec. 4. The delegation, pictured at the corporate, represents 14 credit unions. Members United shared information about the U.S. Credit Union System and corporates' role in the system. Mexico's credit union movement doesn't have a corporate credit union network and credit unions must rely on banks and other entities for investment and correspondent needs. (Photo provided by Members United Corporate) … * KNOXVILLE, Tenn. (12/19/07)--Knoxville police have identified a suspect in Friday's armed robbery of Covenant Health FCU as Shabaaka Awolowo, 26. The robbery received attention because the robber used a fake stick of dynamite as a weapon. He left the fake device behind when he fled with the cash. The suspect has multiple outstanding warrants for failure to appear in court and was still at large on Tuesday (The Knoxville News Sentinel Dec. 18) … * COLORADO SPRINGS, Colo. (12/19/07)--Four people have been arrested for an aggressive, takeover style armed robbery Monday at Air Academy FCU, Colorado Springs. Arrested were Percy Rogers, 24; Damien Owens, 20; Desmond Owens, 22; and Eunice Scott, 27. The first three are held on aggravated robbery charges while Scott is held as an accessory to aggravated robbery. Police said the robbers were aggressively armed during the incident. No one was injured. Rogers had been accused in shootings in 2005 and 2001, according to court records. During the getaway chase, local schools were in lockdown. (The Gazette Dec. 18) … * SAN ANTONIO (12/19/07)--Nicolas "Nick" Holguin assumed the duties of president/CEO at Baptist CU on Dec. 10, the $21.4 million asset credit union announced. Holguin has 18 years of combined banking and credit union experience, with 12 years as a credit union CEO. Baptist CU was chartered in 1955 by employees of the Baptist Memorial Hospital System of San Antonio and has maintained a close relationship with the hospital system for more than 50 years. It serves other select employee groups of the Baptist community in San Antonio, Dallas and statewide …

Regulator seeks comments on CUbank merger

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HAVERHILL, Mass. (12/19/07)--State regulators are seeking public comment regarding the recent announcement of plans to merge Northeast Community CU and Haverhill Bank under the name Haverhill Bank. The Massachusetts Division of Banks has confirmed it will accept public comment on the matter through Jan. 10, regarding the merger of the $100 million asset credit union and $130 million asset bank. The merger, designed to expand and improve on financial services for area residents, according to a Northeast Community press release, must be approved by members, depositors and regulators. Members of Northeast Community CU approved a proposed merger of the credit union with Haverhill Bank by an overwhelming 77 to 1 at a special meeting Sept. 13, according to Peter DiBenedetto, CEO (News Now Sept. 17). Under state law, the resulting institution will be chartered as a bank and will have the second-largest market share in Haverhill. Haverhill Bank President Thomas R. Faulkner will serve as chairman and chief executive officer, and Di Benedetto will serve as president and chief operating officer. The new bank will have combined assets of about $260 million, deposits of $20 million and capital of $30 million, thereby affording it the ability to offer larger loans than either of the institutions can now provide, Northeast said in a press release. “We’ve continued to grow steadily since 1934 while maintaining a strong capital base,” Di Benedetto said. “When we look at what we wanted to offer our members in the future, it made sense to combine our efforts with an institution that has similar values and also is coming from a position of strength. “We believe the combined institutions will be better able to serve the future financial needs of our customers and the entire Haverhill community,” he concluded.

Federation assisting with new IDA grants

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NEW YORK (12/19/07)--The National Federation of Community Development Credit Unions is working with Assets for Independence (AFI) to match $19 million in grants for organizations that want to start or expand individual development account (IDA) programs. The federation is working with AFI to provide technical assistance to all prospective grantees. The federation’s goal is to help expand the diversity of organizations that participate in the AFI IDA programs. AFI has identified credit unions as a target group because of their commitment to serving low-income communities and people of modest means. “Credit unions have always been dedicated to building assets and many already run efficient and effective IDA programs,” said Cliff Rosenthal, federation president/CEO. IDA programs help eligible low-income individuals build savings that can be used for homeownership, business capitalization or post-secondary educating and training. Application deadlines are Jan. 15 and March 25, 2008. AFI is a program run by the U.S. Department of Health and Human Services Office of Community Services. For more information, use the links.

Teller pegs member of partner CU as robber

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OGDEN, Utah (12/19/07)--A credit union teller helped authorities nab a robbery suspect after she recognized the robber as a person who’d made an inquiry a week earlier at a partner credit union. On Dec. 11, Elrachio Naguan Craig allegedly entered the Goldenwest FCU in Ogden and handed the teller a note demanding money. Craig was wearing a yellow-hooded sweatshirt with “Wyoming” written across the front and nothing covering his face (The Salt Lake Tribune Dec. 17). After the teller handed over $1,176 in cash, the robber fled the credit union, according to the FBI. After the robbery, the teller told authorities that she recognized the robber as someone who had asked about an account at Cyprus CU in West Jordan, Utah, where she had worked as a teller a week before. Through an alliance agreement, account holders at Cypress can manage their accounts at Goldenwest. Credit union officials found the Cyprus transaction made the week before and learned the account belonged to Craig, the FBI said. Police compared a booking photo to the credit union’s surveillance footage, and found a match. Police also received seven phone calls from people identifying Craig as the robber. Craig admitted to the robbery, the FBI said. He is charged with one count of credit union robbery, according to court records. If convicted, he faces up to 20 years in prison.

KeyPoint CU launches account access via Facebook

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SANTA CLARA, Calif. (12/19/07)--KeyPoint CU has launched a Facebook Banking Application that provides its members full access to their accounts through the social networking website, Facebook. The $795.3 million asset credit union and MShift Inc., a mobile banking solutions provider, jointly developed the application, called the KeyPoint Credit Union Facebook (eBanking & Payment News Nov. 22). Members who are in the Facebook site have one-click access to their online banking account as well as information from the Santa Clara, Calif.-based credit union. All account information is encrypted with a minimum of 128 bits, and no user data is stored on the Facebook services. It also provides a forum for members to socialize. "Our current membership is significantly younger and more globally mobile than the typical credit union member," said Juli Anne Callis, executive vice president/chief operating officer of KeyPoint. "That means we need to be out there scouting for ways to bring value in the forum of the latest convenience to our existing members or risk losing them to more forward-looking organizations."