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Small businesses to increase tech spending in 08

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MADISON, Wis. (12/26/07)--Sixty percent of small businesses surveyed plan to increase their technology spending in 2008, and credit unions serving small business members may want to monitor this trend. According to an online customer survey conducted by communications provider RingCentral Inc., based in Redwood City, Calif., only 6% plan to decrease their tech spending, while 31% hope to maintain their current spending level (Business Wire Dec. 18). That means small businesses may look for financing for personal computers (PCs) and upgrades, to address data security issues, to enhance their communications capabilities, and to manage their systems. Credit unions can stand at the ready to offer the loans for such projects. Small businesses' spending will focus on PCs (57%) and communications service. Small businesses surveyed considered these communications technologies the most important for their business:
* E-mail, 81%; * Mobile phone, 77%; * Business phone, 69%; and * Website, 61%.
More than one-third of small businesses surveyed plan to invest in phone systems, smart-phones and Voice-over-Internet Protocol (VoIP) technologies.

CU donates funds after Scrooge steals gifts

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WOODBURY, Minn. (12/26/07)--Needy children from more than 100 families in the North St. Paul area were to have received toys for Christmas after Postal CU (PCU) donated $1,250 Dec. 19 to replace 20 bags of toys stolen the day before.
David Grupa, left, was collecting holiday toy donations for an elementary school from North St. Paul businesses when his vehicle was stolen. Postal CU employees Patty Kamas and Doug Zakrewski presented 50 $25 gift checks to Grupa and Webster Elementary School social worker Judy Aubrecht, right, to replace the toys. (Photo provided by Postal CU)
David Grupa was collecting holiday donations from North St. Paul businesses Dec. 18 on behalf of Webster Elementary School when his vehicle was stolen. Though his SUV was later recovered, the toys were gone. PCU donated 50 $25 gift checks to Webster Elementary School to replace the toys. The school collected toys donated from local businesses as a part of the North St. Paul Area Holiday Drive. “Part of PCU’s mission is to help people in the communities we serve,” said PCU President Russ Plunkett. “We were glad to assist in replacing gifts for those less fortunate.”

Former Harrisburg CU CEO pleads guilty to fraud

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HARRISBURG, Pa. (12/26/07)--The former CEO of a defunct community development credit union in Harrisburg, Pa., pleaded guilty Thursday to making false statements to federal officials and conspiring to defraud the U.S. Department of Housing and Urban Development (HUD). Carl Payne, 66, who was CEO of the defunct Greater Harrisburg Community CU as well as the Harrisburg Housing Authority (HHA), pleaded guilty in U.S Middle District Court to two misdemeanor counts (PennLive.com Dec. 20). The other person involved in the conspiracy to defraud was not named in court records but is a person known to the U.S. Attorney's Office. Payne, who recently resigned as executive director of HHA, had faced as much as five years in prison on each count. His guilty plea changes that to a maximum two years' in prison and a $200,000 fine. As part of the plea bargain, Payne agreed not to have any involvement with procurement activities involving HUD or conduct any business with HHA for five years. He was charged with creating and backdating documents to obstruct the federal grand jury's investigation into how $500,000 of federal money was moved from the housing authority to the credit union. The diversion was discovered during an investigation by HUD and the Federal Bureau of Investigation. He also was charged with lying about receiving about $134,000 from the housing authority for his work with the credit union. The $1.7 million asset credit union lost more than $264,000 during the first three quarters of 2005 and in 2004 had a net profit of $3,737. It was declared insolvent on Feb. 3, 2006 (News Now Oct. 4, Feb. 14 and Nov. 26). Judge John E. Jones III set a March deadline for a presentence report. Payne was released after the hearing on his promise to appear for future proceedings.

IT budgets beef up security spending

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MADISON, Wis. (12/26/07)--While an information technology (IT) survey conducted by Boston-based Aite Group earlier this year indicated that community banks are spending more money on technology to protect consumer data, credit unions also are beefing up their security spending. Nationwide, overall spending for IT hardware and software should grow by 5%, according to Forrester Research Inc. estimates. Those estimates were lowered from Forrester’s October projections that said spending would grow by 8% (Computerworld Dec. 13). IT spending nationwide for computers, software and communications equipment is projected to top off at $377 billion this year, and is estimated to increase to $304 billion in 2008, according to the Cambridge, Mass.-based firm. Total IT spending--which includes expenditures for hardware, software, IT salaries and outsourcing--is estimated to be $775 billion this year, and will go up to a projected $815 billion next year, according to Computerworld. “The security dilemma is a balancing act between security and user friendliness,” stated the 2007-2008 Credit Union Environmental Scan (E-Scan). “The more secure your systems, the less inviting they are to members. It’s possible to build a system so secure that no one would use it.” E-Scan made these security recommendations for credit unions:
* Stay informed about new security threats by reading industry publications and websites, attending conferences, and working with peers. Keep an eye on data security proposals in Congress. * Don’t assume the credit union is immune to attack. One security company saw 67% more attacks attempted against its credit union clients than against its banking clients between February 2005 and March 2006. * Focus on the big picture and weigh the need for security from electronic threats with other needs and the value of what you’re securing. * Use a layered approach to security to more effectively secure sensitive data. Make the credit union’s security as user-friendly as possible. * Offer security training for employees. This is critical--they need to know their specific responsibilities and duties regarding information security. * Don’t overlook physical security in the rush to block electronic attacks. The best firewall is useless against a thief masquerading as a vendor who walks out with a hard drive containing member data. Lock computers that aren’t in use, and keep systems behind locked doors.
Currently, the Credit Union National Association (CUNA) is conducting field research for CUNA’s 2008 Technology and Spending Survey Report, according to Steve Rodgers, editor-in-chief of CUNA’s E-Scan. The full report will be available in February, Rogers said.

Barden Matous named California unsung heroes in California

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RANCHO CUCAMONGA, Calif. (12/26/07)--The late Lance Barden and Margaret "Maggie" Matous of Oakland have received "Unsung Hero" awards from the California Credit Union League's Historical Preservation Committee. The awards honor individuals with at least 20 years' service. Barden's 28-year career began when he was elected treasurer of the new Berkely Farm Credit Administration CU. He worked 22 years as a federal examiner for the Credit Union Section of the Farm Credit Administration (now the National Credit Union Administration). He organized more than 400 credit unions, including the first credit union in Nevada--Sierra Nevada Power FCU. In 1949, he organized the first eight credit unions in Alaska. He is the only federal examiner to organize a credit union league or trade association--the Hawaii Credit Union League in 1936. He also worked with the California league in a variety of volunteer and staff positions. Matous' career began in 1961 as an accounting manager for Aerojet FCU. She served nearly 25 years as CEO of what is now Schools FCU, Sacramento. She pioneered several programs, including one of the first share draft programs in the state; volunteered at the state and national level of the movement; served on advisory councils for the Filene Research Institute and Department of Corporations; and served on the Credit Union Executives Society board. In 1993, she became the league's director of special projects, implementing programs through the Shapiro Group and Filene Foundation to assist smaller credit unions and individual credit union employees. She also served as CEO of the Marin County FCU from 1994 until her retirement in 2000.

CU System briefs (12/21/2007)

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NAPERVILLE, Ill. (12/26/07)--More than 20 credit union executives from Mexico braved winter in the Midwest to visit the Illinois Credit Union League. The group also toured and met with staff at Members United Corporate FCU, Credit Union 1, and NorthStar CU. At a league meeting, staff provided an overview of its services. Two staffers from the World Council of Credit Unions accompanied the group, shown here with league President/CEO Dan Plauda, in middle back row in front of the flag. (Photo provided by the Illinois Credit Union League) … * HARRISBURG, Pa. (12/26/07)--Mennonite Financial FCU, based in Lancaster, Pa., granted $23,000 to 15 church and charitable organizations this year. For the past 12 years, the $80.2 million asset credit union has tithed 10% of its interchange income from its Visa card program for the grants, said the Pennsylvania Credit Union Association (Life is a Highway Dec. 20). Since the program began in 1995, the credit union has offered $210,000 in grants … * MACON, Ga.(12/26/07)--Two suspects in a Dec. 6 robbery of Robins FCU, Warner Robins, Ga., were arrested in Matamorors, Mexico, Dec. 19, along with a suspected accomplice in another robbery (Macon Telegraph Dec. 21). Anthony Scott Chairmont, 27, and John Welborn Smith, 56, both of Warner Robins, are suspects in the credit union robbery. Aleesha LaShae Aysh, 17, is a suspect in a bank robbery. The group are also suspects in the robberies of two Louisiana banks, committed on the way to Mexico. They are in jail in Brownsville, Texas … * BUFFALO, N.Y. (12/26/07)--A Buffalo man was sentenced to nearly six years in federal prison for the Oct. 12, 2006, armed robbery of St. John's Buffalo FCU. Adrian Applewhite, 20, pleaded guilty in August to a felony robbery charge. He was also ordered by U.S. District Judge William M. Skretny to make restitution of more than $14,000. During the robbery, three men burst into the credit union's office, one of them waving a handgun. The other two men are still at large (Buffalo News Dec. 20) … * BANGOR, Maine (12/26/07)--Charles E. Noddin, former chairman and vice chairman of Katahdin FCU, Millinocket, Maine, died Dec. 19 at the age of 75, while visiting relatives in Georgia. Noddin worked 36 years for Great Northern Paper Co., Millinocket, until his retirement in 1986. He was a board member of the credit union for 28 years (Bangor Daily News Dec. 21)…

Ohio CUs participate in payday loan hearing

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SOUTH CUMMINSVILLE, Ohio (12/26/07)--A public hearing on payday lending in Ohio was held Dec. 19, with credit unions participating and spotlighting some of their alternatives to payday lending. Hearing testimony was given at the headquarters of Working in Neighborhoods in South Cumminsville, with Ohio Attorney General Marc Dann serving as the hearing’s coordinator (The Cincinnati Enquirer Dec. 20). Dann said in an interview that he believes that the payday lending model is broken from the consumers’ standpoint. Questions at the hearing often returned to alternatives to payday lending, such as the $1.226 billion asset Fairborn, Ohio-based Wright-Patt CU’s short-term loan program. Wright-Patt CU CEO Douglas Fecher explained that “StretchPay” loans, offered by several credit unions, charge a $35 fee for unlimited yearly access to a $250 loan, with an 18% annual percentage rate. Members take out about nine of these loans per year on average, often to pay off payday loans, Fecher added.

CUs Poinsettia Bowl gets good marks

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SAN DIEGO (12/26/07)--The Poinsettia Bowl college football game played Thursday night between Navy and Utah was sponsored by San Diego County CU and received high marks from a sports-fan blogger. On the blog, FANHOUSE, one blogger stated: “If I ever find myself living in San Diego County, and I need a good credit union, it’s damn sure going to be the San Diego County CU, because no other credit union in San Diego County can put on a bowl game like the folks at the San Diego County CU” (The Debriefing at AOL Sports Dec. 21). The blogger wrote about how exciting the back-and forth game went, with Utah finally winning, 35-32. The highly competitive bowl game kicked off the 2007-2008 college football schedule of 32 Division I bowl games.