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School Board's Tax Resolution Heads Toward Public Hearing

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BISMARCK, N.D. (12/18/13)--Banks in South Dakota remain persistent in attempting to get local-level government entities to weigh in on credit unions' tax status.  However, credit unions should not be deterred by the Brookings (S.D.) School Board's action Monday to move banks' resolution to a public hearing, said the Credit Union Association of the Dakotas.
 
Credit union advocates could not get on the school board's meeting agenda and therefore did not get the opportunity to rebut bankers' arguments, said CUAD (The Memo Dec. 17). A public hearing presents that opportunity. In other meetings in Brookings and several areas of the state, when credit unions were able to present their case, they have prevailed.
 
According to CUAD advocates who attended the meeting, board member Van Fishback opened the discussion and Marysz Rames, the board president, directed the board to move the bank-driven resolution forward for a public hearing.  Fishback is a third-generation banker and vice chairman of Fishback Financial Corp., the holding company for First Bank and Trust of Brookings.
 
The resolution was brought by Kevin Tetzlaff, president/CEO of First Bank and Trust in Brookings, and chairman of the South Dakota Bankers Association.

In other developments, due to a scheduling conflict, the "Taxation Equality" resolution did not go before the Yankton (S.D.) County Commission Tuesday afternoon and is likely to be rescheduled to be considered at the next meeting in January, said CUAD, whose advocates will be on hand to debate the bankers' appeal.

CU System Briefs (12/18/2013)

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  • CHESTERFIELD, Va. (12/ 18/13)--A man, told by a cell phone scammer his wife was being threatened, approached two credit unions in Richmond, Va., Monday to withdraw funds from accounts. Initially police stopped him because his burgundy car fit the description of someone who robbed a branch of Virginia CU.  However, the man told police he was a victim. He approached tellers at Call FCU, withdrew $1,800 from his savings account and handed tellers a note that said, "Under duress, call the police!" The man was cleared of robbery charges after telling police he had received a call on his cell phone from an insistent man who was holding his wife until he sent money to pay for a fender-bender. The phone call was traced to Puerto Rico. The man's wife returned from a shopping trip unharmed and unaware of what had happened. She had left her cell phone at home. Scammers are getting more creative, Tom Gallagher of the Better Business Bureau told WTVR.com (Dec. 16) ...
  • AUSTIN, Texas (12/18/13)--An Austin, Texas-based credit union revealed it will have a new president/CEO in the new year. Government Employees FCU announced Monday that Dee Crisp will be appointed to the role on Jan. 6. Crisp has worked for United San Antonio FCU for the past eight years, where he served as vice president of finance. "It is an honor to accept the role of president/CEO of GEFCU," he said. "The organization has such a rich history and opportunity for success, I am eager to begin my service to the credit union and its community." United San Antonio FCU is based in San Antonio, Texas, and has roughly $227 million in assets. GEFCU has about $123 million in assets ...
  • RICHLAND, Wash. (12/18/13)--The interim president/CEO of Gesa CU has been appointed to the job on a permanent basis. Don Miller, Gesa's temporary head since June, was named this week as its the next leader (Tri-City Herald Dec. 16). Miller has held several executive positions with Gesa since joining in 1987. He has most recently served as its chief sales officer. "Don's broad knowledge of the financial industry and the markets Gesa serves make him the ideal candidate to lead Gesa into the future," said Board Chairman Gregg Andrews. Gesa CU is based in Richland, Wash., and has $1.27 billion in assets ...

N.Y. CUs' Growth Exceeds National Numbers

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ALBANY, N.Y. (12/18/13)--The Credit Union Association of New York noted that the state's credit unions continue to surpass national numbers in growth of membership and shares.
 
Annual membership growth clocked in at 3.3%, compared with 2.1% on the national stage, according to the analysis of third-quarter numbers.
 
Where share balances increased an average of 4.1% nationally, New York credit unions experienced 5.3% growth. As of Sept. 30, their total shares outstanding totaled $55.8 billion, the association said.
 
The average New York credit union branch originated more loans ($13.2 million) than the national credit union average of $12.9 million, and member business lending continued to strengthen. Just over 14% of the state's loans are classified as business loans--more than double the national average of 6.2%. A September-to-September comparison showed a 13% increase in member business loans.
 
"Credit unions across New York and the nation are continuing to build on the momentum they've gained since the recession," said CUANY President/CEO William J. Mellin.
 
New York's second-quarter numbers also were higher than the national averages, according to the association.
 
Other states with notable third-quarter growth include Iowa, Missouri, Minnesota, Idaho, and Cornerstone Credit Union League's members--Arkansas, Oklahoma and Texas (News Now Dec. 17).

CUs Collaborate to Protect Members Against Fraud

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MADISON, Wis. (12/18/13)--When security breaches lead to card fraud, credit unions' No. 1 method of defense is education--of their members, other credit unions and the community at large.
 
Most recently, a payment-processing system breach in the Inland Northwest led to credit unions and other financial institutions to put restrictions and holds on card purchases. This--in addition to notifying card holders of the fraud and issuing new cards--helps reduce or even prevent fraudulent transactions from going through.
 
Credit unions in the Spokane, Wash., area began receiving increased reports of card fraud from their members in September. The common point of purchase: grocery stores that use URM Stores Inc. for their payment processing (The Spokesman-Review Dec. 15). Rosauers, Harvest Foods, Huckleberry's Natural Market, Yoke's Fresh Market and Super 1 Foods are among the grocers that use the network.
 
The exposed credit card data were sold on the black market and ended up on counterfeit cards. Fraudulent purchases have been reported globally.
 
The losses are mounting into the thousands, and it's not merchants or member/customers who cover the loss.
 
"Almost 100% of the time, it's the financial institution," said Debra Keesee, CEO, Spokane (Wash.) Media FCU.
 
Credit unions have fraud insurance, but because the losses must meet certain deductibles, the credit unions often are still on the hook for the losses.
 
A similar fraud scenario occurred in Indiana. A credit union's card company and its core processor identified a common point of purchase relating to compromised card information (Herald-Times  Dec. 3). Indiana University CU, Bloomington, had to re-issue roughly 4,000 debit cards with new numbers. To protect the members, the credit union put the cards into a fraud-monitoring program that blocks signature-based "swipes" at the point of sale. Reissuing the cards is an inconvenience, said Bryan Price, president/CEO of the $761 million-asset credit union, but it is a practical way to control the fraud.
 
Another way for credit unions to protect each other and members is to share information about other types of fraud. Internet Archive FCU, New Brunswick, N.J., said it had been presented with a fraudulent official check that had been drawn off HEB FCU. On its website, the San Antonio-based HEB FCU urged that people call the credit union to verify official checks.
 
Last week, debit-card holders in Vermont received automated telephone calls that attempted to collect account numbers (Newsline Express Dec. 13). The Association of Vermont Credit Unions advised credit unions to be alert and educate members about the calls. Credit unions should emphasize that they would never request an account number by phone, text or email because they already have that information.
 
These educational reminders--as well as collaboration with law enforcement divisions and other financial institutions--support credit unions' work to mitigate the impact of fraud.

'Crash the GAC' Deadline Extended to Friday

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MADISON, Wis. (12/18/13)--The Crash the GAC program is just shy of its goal of 51 attendees for the 2014 Credit Union National Association's Governmental Affairs Conference (GAC). To reach that objective, the application deadline has been moved to Friday.
 
"The response to the 2014 Crash the GAC has been amazing," said Meghann Dawson, instructional design manager, CUNA. "We're down to just a few more states before we reach our goal of having every state represented." She noted that CUNA is partnering with The Cooperative Trust and state credit union leagues to support the system-wide initiative.
 
Now in its fifth year, Crash the GAC's goal is to have one "crasher" from each state and the District of Columbia attend CUNA's signature conference Feb. 23-27 in Washington, D.C.
 
Crash the GAC is supported by The Cooperative Trust, CUNA, CUNA Mutual Group, state credit union leagues and other credit union associations.
 
Use the link or email trust@trust.coop for more information about applying or about available sponsorships.
 

Biometrics Topic of White Paper from TMG

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DES MOINES, Iowa. (12/18/13)--Mainstream adoption of biometrics authentication to identify people will be driven not only by the improved security the technology offers, but also by the simplicity of use it provides users, according to a new white paper from The Members Group (TMG).
 
The paper cites perhaps the most widespread example of the consumer market embracing biometrics technology: the iPhone 5s, which came equipped with fingerprint identification.
 
The iPhone's fingerprint scanning technology provides a good test of the mainstream market, said the paper's author, Nicole Reyes, TMG senior fraud prevention analyst.

"Indeed, many iPhone users have welcomed the innovation, largely because it has made life just a little bit easier for them," she wrote. "While those of us in the security profession would like to think it was the increased safekeeping of their personal data and information that intrigued iPhone fans, we know most people are just as excited about speed and simplicity as they are about security."
 
Biometrics within account-related channels, ranging from hotel room keys to amusement park passes to ATM transactions, is not passing fad, Reyes added. As with any technology innovation, however, developers must prove the tool is not only valuable, but simple. "In other words, consumers may like the idea of security, but they love the idea of simple," Reyes wrote.
 
Processors, acquirers, merchants and financial institutions in the U.S. that are working towards the migration to the Euro MasterCard Visa standard are well-advised also to monitor the development of biometric security solutions, the papers said. As biometric security on mobile devices increases, mobile commerce will change significantly. Solutions are finding their way into the mainstream with increased speed, and often without the help or even support of traditional financial industry players, the paper said.

Filene Launches Study Examining Americans' Financial Capacity

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MADISON, Wis. (12/18/13)--Filene Research Institute and George Washington University's Global Financial Literacy Excellency Center (GFLEC) have partnered to explore Americans' financial capability.
 
The basis for the initiative, which will be guided by Filene research fellow and GFLEC Academic Director Annamaria Lusardi, will be the 2012 National Financial Capability Study.
 
Commissioned by the Financial Investor Education Investor Foundation, the study benchmarks key indicators of financial capability and evaluates how these indicators vary by demographics, behavior, attitude and financial literacy. The state-by-state results break down financial decisions and literacy by gender, age bracket and region, and highlight how a lack of financial capability has disadvantaged many Americans.
 
The Filene-GFLEC project will result in four reports that provide detailed data and insights on the financial needs of pre-retirees (ages 51-60), women, young adults and Latinos/Hispanics.
 
"Each of these groups represents an important constituency for credit unions," said George Hofheimer, chief innovation and research officer at Filene. "The young adult and pre-retiree groups face inflection points in which they need to make important financial decisions. Latinos represent almost 20% of the U.S. population and almost all of the U.S.'s net population growth. And women are key household decision makers whose priorities, and preferences need to be better understood."
 
The research project is expected to continue over an 11-month period. The first report will be released in early 2014.