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Another scam wave hits CUs in several states

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MADISON, Wis. (12/3/09)--Another wave of texting and phishing scams has swamped credit unions and other financial institutions in several states--this time in the Western half of the nation--prompting them to alert members and the public. Two scams circulating in Northern Colorado involve texting to cell phones of members and nonmembers. The messages invoke the name of a defunct credit union, Norlarco CU, which was acquired by Public Service CU in Denver (Coloradoan.com Dec. 1). The text messages say recipients' accounts have been restricted and they must call a toll free number. To unlock the account, they are instructed to enter their debit or credit card number, personal identification number (PIN) and expiration date. Several members of Public Service CU received the message, according to its website. The credit union told members to not respond in any way to the message and to "Delete it immediately. It is a scam." In Cheyenne, Wyoming, Warren FCU, members received a similar scam, prompting the Better Business Bureau serving Northern Colorado and Wyoming to tell the Coloradoan, "It seems like credit unions are specifically targeted." In California, credit unions in Redwood City and Merced were targeted with the same kinds of messages. San Mateo CU, Redwood City, said on its website it had not sent a text message received by consumers. In Merced, another credit union as well as customers of AT&T cell phone accounts were targeted, reported the sheriff's office (Merced Sun-Star Nov. 26). Bridgeton, Mo.-based Vantage CU, which was been targeted before in previous waves of scams, said fraudsters started sending text-message phishing scams again to members and non-members last weekend in the credit union's name. Eric Acree, vice president, told the St. Louis Post-Dispatch that the credit union is trying to educate members about its security procedures so they don't fall for the fake messages. The credit union never contacts accountholders with an unsolicited text message, he told the newspaper. In Nampa, Idaho, police said scammers sent text messages with an emergency notification about their accounts to consumers. Mountain Gem CU was targeted by the scammers, and Northwest Christian CU and IDADIV CU used their websites to warn consumers about the scam (The Idaho Statesman Nov. 25).

Union president admits taking loan kickbacks

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PHILADELPHIA, Pa. (12/3/09)--The president of one of Delaware County, Pa.'s, largest labor unions pleaded guilty to accepting kickbacks for illegal loans while working at a credit union. Anthony Forte, president of United Aerospace Workers Local 1069, was charged with fraud, bribery and conspiracy. He told U.S. District Judge Berle Schiller that he was involved in the scheme while serving as executive vice president of Boeing Helicopters CU, a $107 million asset credit union in Ridley Park, Pa. (The Philadelphia Daily News Nov. 18). Indictments said Forte, his brother and six others made $105,000 in fees on $2.54 million in loans to unqualified loan applicants. The credit union's field of membership included employees working at Boeing and their families. But Forte, who was in charge of signing up select employee groups, allowed nonemployees with credit problems to receive loans. Loan applications listed phony relatives and included inflated income. Cheryl Altieri, president/CEO of the credit union, told News Now that Forte no longer works at the credit union and no other employees were involved in the scam. He will be sentenced early in 2010.

Southwest Corporate outlines losses for October

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DALLAS (12/3/09)--Southwest Corporate FCU Monday outlined its losses related to U.S. Central FCU holdings for the month of October and for year-to-date 2009 in its monthly financial report. October losses for Southwest will total more than $40.2 million. Year-to-date will be recorded at nearly $130 million, the corporate said in its report. And the corporate has a retained deficit of $37.1 million at the end of October. U.S. Central depleted an additional 25% of its corporate membership capital shares in October as a result of its third-quarter portfolio assessment. "The impact of this action depleted $43,190,000 of Southwest Corporate's membership capital shares in U.S. Central, leaving $19,079,000 remaining in membership capital shares as of Oct. 31," said Melissa Wardell, senior vice president/chief financial officer, in a summary of the report. As a result, Southwest Corporate recognized a net loss of $40,249,000 in October." The year-to-date net loss is made up of net losses on investments of more than $158 million, partially offset by operating earnings prior to investment losses of more than $29 million, the corporate said. As initially reported to member credit unions in September, the corporate depleted 33% or nearly $159 million of members' capital accounts in October to cover the retained deficit as of Aug. 31, as directed by the National Credit Union Administration (NCUA) in its NCUA Letter to Credit Unions 09-CU-10. As a result of the additional depletion of U.S. Central membership capital shares in October, Southwest Corporate has a retained deficit of $37.1 million as of Oct. 31, the corporate said. For the complete report, use the resource link.

In media CU advises FIs fighting fraud

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MARLBOROUGH, Mass. (12/3/09)--A credit union official shared insights in a Wednesday interview with Bank Info Security on how financial institutions, including credit unions, can fight fraud in light of new regulatory compliance and security initiatives that spell changes for financial institutions. Kris VanBeek, senior vice president of information systems at the $4.1 billion asset, Marlborough, Mass.-based Digital FCU, told the publication that changes in compliance and pending regulation that are looming this year and well into 2010 portend the possibility that financial institutions could lose efficiency. The transitions to meet new compliance requirements also could help fraudsters, he added. “Some of the real risk is the changes themselves …” VanBeek said. “Whenever you introduce changes to a system, if you didn't properly test them, whether it be an actual bug or maybe the logic wasn't there or it wasn't implemented in the most optimal method, so there is another risk there. “And then probably the most profound risk is the actual compliance regulations themselves,” he continued. “I think a good example of one of the major changes is some of the Reg CC changes with the Federal Reserve consolidating its processing centers into a single kind of super center in Ohio. What that does is changes Reg CC in terms of availability, and what better way for a fraudster to look at a potential opportunity than to change funds availability. “So again, whether you are going into an ATM, whether you are going into a branch, whether you are using remote capture to deposit an image from home or from some other source, the requirements of the funds to be available in a shorter timeframe presents an opportunity for fraudsters who are technically savvy and understand the process really well--sometimes as well as financial institutions themselves,” Van Beek said. To read the full interview, use the link.

CU System briefs (12/02/2009)

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* TALLAHASSEE, Fla. (12/3/09)--Steven L. Stubbs, chief financial officer of Tallahassee (Fla.) Memorial Hospital FCU, died late Monday night of a self-inflicted gunshot wound, according to Wakulla County Sheriff's Office (wjhg.com. Stubbs, 29, shot himself at his home with a rifle after an eight-hour standoff, said the sheriff's office. He had been charged with the murder of his girlfriend, Leslie Dyan Drew, a 28-year-old teachers aide. Drew was found shot to death in the Apalachicola National Forest Sunday afternoon (The Tallahassee Democrat Nov. 30) … * INDIANAPOLIS (12/3/09)--Clarian FCU, a $19.5 million asset credit union based in Indianapolis, has agreed to absorb Indianapolis-based Community Choice FCU, the credit unions announced Wednesday (Indianapolis Business Journal.com Dec. 2). Officials said they expect the merger to be completed by year's end. The proposal was approved by the National Credit Union Administration on Nov. 10. The combined credit union will have more than 8,700 members and more than $20 million in assets. Community Choice's members will benefit with access to 40 different retail locations through a shared-branch network, and to online banking and bill payment services … * SYDNEY, Australia (12/3/09)--Two Australian credit unions--Companion CU and Community CPS Australia--will merge Jan. 1, forming one of Australia's largest credit unions and serving more than 180,500 members. More than 95% of members of Companion CU at a meeting Nov. 25 voted for the merger. The credit union will be known as Companion CU, a division of Community CPS Australia Ltd. in the Hunter and Gunnedah regions. Members will benefit from an expanded branch network, enhanced products and services, and reduced risk due to greater market diversification. Companion employees also will have a national job network and comprehensive training programs, the credit unions said (Cessnock Advertiser Dec. 2) … * SALT LAKE CITY (12/3/09)--H. Floyd Tanner, longtime board chairman at Mountain America CU, Salt Lake City, has died, said the credit union. Tanner had been chairman for 16 years and a board member for 39 years. He served in numerous capacities, including 10 years on the Supervisory Committee, with the credit union. In 2008, he was named Credit Union Executives Society's Director of the Year. Tanner was retired from the Utah State Tax Commission, where he worked for 27 years. He also worked with J&F Ranch, and Tanner and Tanner Enterprise. "Floyd Tanner has been an important part of the success of Mountain America CU," said President/CEO Sterling Nielsen. "His dedication, wisdom and management have provided consistent direction to the credit union for over 39 years." Tanner's wife, Joyce, preceded him in death earlier this month … * HARRISBURG, Pa. (12/3/09)--Russell Bergstedt, president, Mon Valley Community FCU, Allenport, Pa., died Nov. 24, according to the Pennsylvania Credit Union Association (Life is a Highway Nov. 30). Bergstedt had been president for more than 25 years and was one of the founders of the annual Mon Valley Chapter ARC golf tournament. "Russ was a strong leader for credit unions in the state and Mon Valley, and also for the United Steel Workers Union," said PCUA CEO Jim McCormack … * COLUMBUS, Ohio (12/3/09)--Wendell I. Lilly Jr. died Sunday at the age of 67. A retired tool and dye tradesman for General Motors, Lilly served as a member of the board, treasurer, and as chairman of Western CU, Columbus, Ohio. He is survived by his wife, two sons, and eight grandchildren (The Columbus Dispatch Dec. 1) …

California Coast EPA team up on green autos

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SAN DIEGO (12/3/09)--California Coast CU is offering reduced auto loan rates for members who purchase or refinance “SmartWay” vehicles, which the U.S. Environmental Protection Agency (EPA) considers to be more environmentally friendly. The SmartWay designation signifies the vehicle has greater fuel efficiency and lower greenhouse gas emissions and other air pollutants. California Coast is the only credit union in California and among only six financial institutions nationwide that have partnered with the EPA to provide loan rate discounts for the SmartWay program, the $1.8 billion-asset, San Diego-based credit union said. The program has been popular with members of the credit union. Many are surprised to find their vehicle qualifies under the EPA’s SmartWay guidelines, said California Coast. “When you think of environmentally friendly vehicles, you usually think of hybrids,” said Rene’ McKee, California Coast’s vice president of marketing. “But our members are pleasantly surprised the loan discounts are not just for hybrids and that actually hundreds of foreign and domestic models qualify.” California Coast’s SmartRate Auto Loan program rewards its members with loan rates starting at around 4% annual percentage rate, and encourages them to help protect the environment. The program is for new, used or refinanced vehicles. Prospective buyers can check the credit union’s website to see if their vehicle qualifies.

CUNA board election ballots due Dec. 18

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MADISON, Wis. (12/3/09)--Some of the Credit Union National Association’s (CUNA) board of directors election ballots are due later this month. Credit unions in District 6, Class A--those with less than 20,000 natural person members--are reminded to cast their ballot for their CUNA board representative. Ballots were sent Oct. 23 and must be received by the independent auditing firm, Johnson Lambert & Co. LLP, no later than Dec. 18. Candidates are Jon Hernandez, CalCom FCU, Torrance, Calif., and incumbent Susan Streifel, Woodstone CU, Federal Way, Wash. To receive a duplicate ballot, contact CUNA’s Corporate Secretary at thanson@cuna.com or call 800/356-9655, ext. 4013.

CUs holiday efforts focus on troops

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MADISON, Wis. (12/3/09)--Credit unions are focusing some of their holiday outreach efforts to help members of the armed forces. The efforts range from providing ways for families to keep in touch with their loved ones overseas to helping those affected by the recent shootings at Fort Hood in Texas. Aberdeen Proving Ground FCU, Aberdeen, Md., collected more than 500 wireless phones, chargers and accessories for Cell Phones for Soldiers. The items will be recycled into 22,000 minutes of prepaid calling cards and given to U.S. soldiers overseas. The donated phones are sent to ReCellular, which pays Cell Phones for Soldiers for each phone. Andrews FCU, Suitland, Md., donated $1,000 to the Association of U.S. Army Central Texas-Fort Hood Chapter’s Community Response Fund to help soldiers and families affected by the recent shootings at Fort Hood (Focus Newsletter Nov. 30). The credit union also is sponsoring several military holiday greeting spots airing on various networks in the Washington, D.C., area. Greetings from deployed service members will air during commercial segments of “Regis,” “The View,” “Good Morning America,” and during ABC 7 and News Channel 8 local news segments. Viewers can watch the holiday greetings Dec. 7-Dec. 20. “The holidays are a difficult time for families to be apart,” said Chris McDonald, Andrews Federal president/CEO. “As we gather with our families this holiday season, Andrews Federal wants everyone to keep service members in mind as they serve our country and protect our freedoms.” Ent FCU, Colorado Springs, Colo., will host taping sessions for military families on Dec. 15 through the nationwide Operation Best Wishes program, sponsored by Western Corporate FCU in San Dimas, Calif. (States News Service Dec. 1). Family members and loved ones of military members stationed overseas can send a live, free video-based Web cast to soldiers overseas. Each participant has 10 minutes to record a greeting. Military members can log in at their location and view the live message or watch it later. Louviers FCU, Newark, Del., is collecting greeting cards and other items for stocking stuffers that will be shipped to members serving in Iraq and Afghanistan (Together Nov. 30). The credit union hopes to ship at least 6,000 stockings.