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CU assists 10 families victims of housing fraud

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AUSTIN, Texas (12/31/07)--University FCU (UFCU) in Austin is helping 10 Hispanic families who were victimized by a homeownership scam. UFCU said it will provide mortgage loans to help the homeowners keep their properties. The credit union will charge the mortgage portfolio interest rate it offered at the time the loan applications were first prepared in fall 2006. The homeowners will pay only the remaining balance on their homes. “This will secure the homes in the occupants’ names at a substantially lower price,” said Yvonne Noack, UFCU mortgage lending officer. “They won’t lose their property.” The homeowners had bought the properties several years earlier in what turned out to be a scam, operated by Robert L. Flores Jr. of Cedar Park, said the credit union. Flores and his company, Galindo Trust, were successfully sued by Texas Attorney General Greg Abbott, and permanent injunctions with civil penalties totaling $1.4 million were ordered against the defendants in May. The scam targeted Hispanic buyers who do not speak English. Some of the buyers did not have Social Security identification or other documents normally required of homebuyers, Abbott said, according to the credit union’s press release. In the scam, Flores’ company sold homes that he bought as a group from Shriners Hospital, which financed his purchase. Flores then re-sold the homes but did not tell buyers of the pre-existing liens he owed. He also collected for taxes and insurance but failed to pass on the families’ payments. The credit union has $840 million in assets.

Another CU difference shows up--in elderly abuse case

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ANTIOCH, Calif. (12/31/07)--When an 82-year-old member was being bilked by an acquaintance of his life savings in his accounts at a credit union and three banks, the banks stood by and watched. The credit union, however, proved once again the credit union difference: It intervened. Antioch Schools FCU, Antioch, Calif., was cited in an editorial in insideBayArea.com (Dec. 27) about California's new law requiring mandatory reporting of possible financial abuse against elderly consumers. Before the law was a gleam in legislators' eyes, the credit union was investigating a series of withdrawals from member Jack Whittaker's account at the credit union. A $23,065.58 wire transfer from Whittaker's savings account was the starting point. A day after the money left his account, he visited the credit union to make a withdrawal and found out the money had gone to purchase an annuity he knew nothing about. Whittaker hadn't touched the account in five years, but in April 2005, he began withdrawing hundreds of dollars at a time. A younger man accompanied him, and credit union CEO Robert Greaff didn't believe the man's claim that he was Whittaker's caretaker. On Dec. 14, 2005, Whittaker visited the branch for another withdrawal, and the teller, who saw red flags on the account, asked what he wanted the funds for. He didn't know. Greaff contacted authorities about his suspicions. Greaff also contacted Allianz Insurance Co. of North America, got the wire transfer reversed, and set up an eight-month surveillance on Whittaker's account. That led to 10-year prison sentence for the companion, Joe Gonzales, for elder theft. Gonzalez had befriended Whittaker, who lived alone and had no family in the area. Over a year, Gonzales drained four bank accounts and ran through more than $100,000 of Whittaker's savings. He stood to inherit the man's home and annuities he persuaded Whittaker to buy from an associate. "Legally, the Antioch Schools FCU didn't have to do anything. The mandatory reporting law hadn't gone into effect yet. Employees could have looked the other way," said the article. It continued: "Bank of America didn't alert anyone while Gonzales was raiding Whittaker's account there. Neither did Citibank. Nor Wells Fargo." The editorial also noted, "It's a shame that we even need a law to compel people to do what is so clearly the moral thing to do."

West Texas CU issues loan interest rebate and dividend

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EL PASO, Texas (12/31/07)--West Texas CU issued an interest rebate and a dividend totaling more than $745,000 to members. The interest rebate will go to members who paid interest on their loans during 2007. The rebate amount was a percentage of the interest that members paid on their loans. The $74.6 million asset, El Paso-based credit union also issued a bonus dividend to members who were paid dividends on their accounts in 2007. The bonus dividend was a percentage of dividends that members earned in their accounts.

IUSA TodayI CU holiday clubs help avoid spending hangovers

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MADISON, Wis. (12/31/07)--Credit unions looking to help their members avoid holiday spending hangovers should encourage them to set money aside in Christmas Club accounts for next year’s holiday season. USA Today has cited Credit Union National Association (CUNA) statistics about credit unions offering the accounts. With Christmas Club or similar holiday club accounts, credit unions deduct select amounts from members’ paychecks and set the money aside in a separate fund that can be used for holiday spending. Alberto and Marta Zamora, members of Landmark CU in New Berlin, Wis., set aside $70 per month for their Christmas Club account earlier this year. The money was automatically deducted from their paychecks. In October, the money was transferred to their checking account so the couple could start shopping. The clubs are “convenient,” and the couple “doesn’t have to worry” about buying presents for family because they’ve already saved for the Christmas season, Alberto Zamora told the Milwaukee Journal Sentinel (Dec. 11). An article published Friday in USA Today also emphasized the benefits of credit unions' Christmas Club accounts. The article cited the CUNA as saying three-quarters of the nation’s credit unions offer the accounts. The average consumer planned to spend $923.26 this year, according to BIGresearch and the National Retail Federation. If consumers set money aside for the holidays through Christmas Club accounts, they can “have a debt-free Christmas next year,” Gail Cunningham, spokesman for the National Foundation of Credit Counseling, told the newspaper.

CUNA closed on New Years Day no News Now

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WASHINGTON and MADISON, Wis. (12/31/07)--The Madison, Wis., and Washington, D.C., offices of the Credit Union National Association will be closed Tuesday in observance of New Year's Day. News Now will not publish Tuesday but will resume regular publication on Wednesday.

Thirsty robbery suspect arrested at convenience store

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HARRISBURG, Pa. (12/31/07)--A thirsty robbery suspect’s decision to stop for a drink at a convenience store shortly after an attempted credit union robbery resulted in his arrest. After allegedly attempting to rob the Blue Chip FCU in Harrisburg, Paul Risser, 35, stopped about a half-mile away at the Turkey Hill Mini Mart where he and a friend bought a beverage. Risser was promptly arrested by police (Life is a Highway Dec. 28). Risser was charged with Wednesday’s robbery attempt, as well as three other robberies: Dec. 2 and Dec. 11 at Blue Chip FCU, and Dec. 20 at Mid Penn Bank in Steelton, according to police. He was in Dauphin County Prison in lieu of $100,000 bail, officials said. Mary Lynn Tylenda, Blue Chip CEO, told the Pennsylvania Credit Union Association a robber stole cash during the Dec. 4 and Dec. 11 robberies. After the second robbery, the credit union kept the doors locked during business hours and added several forms of security, including guards stationed in the lobby. Other precautions included allowing only individuals who could be identified inside the credit union, and requiring individuals to remove sunglasses and hoods before entering. When Risser arrived at the credit union on Wednesday, he noticed a security sign on the door and departed. The security guard and staff recognized him and called police. The guard chased Risser and identified his vehicle, which police found at the convenience store. Tylenda said she appreciates the efforts of her staff and thanks members for their patience in dealing with the beefed-up security. Only one member complained about heightened security, but once the situation was explained, he apologized for complaining, she said. Some members have volunteered to be stationed in the credit union lobby to help with security, Tylenda added.

Missouri Corporate announces 100000 bonus dividend

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ST. LOUIS (12/31/07)--Missouri Corporate CU will pay out a bonus dividend of $100,000 to its member credit unions today. “We really had a great year this year,” Kitty Gray, Missouri Corporate chief financial officer, told . “We wanted to pass on as much to our members as we could. We’re really excited about the $100,000 dividend to be paid today.” Missouri Corporate also declared a 6% dividend to all Paid-in-Capital holders for the fourth quarter. “We wanted to maintain that high rate of return we paid in the third quarter to our members for the Paid-in Capital holders,” Gray said. The St. Louis-based Missouri Corporate CU has served member credit unions through investment strategies and support services since 1977.