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CU System briefs (12/28/2011)

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  • BRANFORD, Conn. (12/29/11)--Branford, Conn., police are investigating a burglary that occurred over the holiday weekend at Branford-based United Shoreline FCU (New Haven Register and McClatchy-Tribune Business News Dec. 27). Employees discovered the break-in when they arrived at work after 7 a.m. Tuesday. No cash was reported missing. Police said the burglars entered through a rooftop vent and broke into a rear employee lobby shortly after 2:20 a.m. Saturday. A surveillance tape showed two persons in dark hoodies entering the credit union. Police officers had checked the building after an electronic alarm went off  at about that time. However, they  said the building was secured and couldn't see anyone inside, said the report …
  • LOUISVILLE, Ky. (12/29/11)--Autotruck FCU, an $84.4 million asset credit union based in Louisville, Ky., has converted to a state charter and is now called Autotruck Financial CU, according to local media reports (Business First and Bowling Green Daily News via bgdailynews.com Dec. 28). The credit union is now the 25th credit union to be regulated by Kentucky's Department of Financial Institutions. The credit union is federally insured. It serves 13,314 members at two locations--Louisville and Bowling Green. Its field of membership includes employees, retirees and family members of several companies--including Ford Motor Co. and General Motors Corp.--in the two cities …

Appstore QR codes among 2012 tech trends

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MADISON, Wis. (12/29/11)--Credit unions are at the forefront of two technology trends that bear close watching in 2012: application development and QR codes.

Financial institutions can leverage mobile technology's QR codes to interactively engage member/customers,Javelin Strategy & Research said in its 2012 Predictions for Banking, Payments, Mobile and Security.

This is the second in a two-part News Now series on technology trends for 2012.

QR codes are bar codes on steroids, according to a Huffington Post Tech blog. They encode information in the in magazine pages, advertisements, even on TV and websites. While barcodes typically identify products and objects, QR codes can trigger actions such as launching a website or downloading a file.

QR codes are most often used to link to content from smartphones. Simple uses include magazine advertisements that link to websites.

Minnesota Power Employees CU, Duluth, Minn., uses a QR code to link smart phone users to its website.

The credit union developed a QR reader application for free through the website Kaywa.com, according to Nancy Hutchinson, Minnesota Power Employees CU senior vice president of marketing/business development.

Members can download a free QR reader and access the $79 million asset credit union's website through their smartphones.

"It was free, so it saved us a lot of money," Hutchinson said. "We couldn't have afforded to develop an application on our own. But most importantly, members love it. Any technology with mobile phones or iPads is hot right now."

And because these are hot, credit unions will be looking for more "apps."

With the opening of its DNAappstore in May, Open Solutions placed a $100 million bet that community financial institutions would collaborate to create an online marketplace for core system solutions.

The service enables participants to build and sell their own apps using DNAcreator and to buy those developed by others in the DNAappstore.

The concept is designed to save community financial instituions institutions time and money. With an active marketplace, credit unions won't have to wait months or years for core providers to provide upgrades. The cost of the typical app is a few thousand dollars, according to Lizette Nigro, Open Solutions product manager.

"Our market is credit unions and community banks," Nigro said. "Individually, the biggest financial institutions may be too big to fail, but collectively community financial institutions are too important to fail. They are the backbone of meeting consumer needs. We saw an opportunity to provide a means of collaboration so could better compete with the larger financial instituions in the world."

Credit unions are among the most active developers within the DNAappstore. As of the end of November more than 100 apps have been developed. Nigro estimates about 70% of the apps were developed by credit unions.

"Credit unions have a culture of being more progressive and nimble," Nigro said. "And collaboration is just more a part of their culture."

Elan acquires BofAs credit card portfolio

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MINNEAPOLIS (12/29/11)--The credit card portfolio being acquired by U.S. Bank's Elan Financial Services unit from Bank of America includes small business and consumer cards from 28 credit unions and other financial institutions, U.S. Bank said Tuesday.

U.S. Bank bought BofA's $700 million portfolio of credit cards through Elan after  BofA announced earlier this month it was exiting the business of handling cards for other financial institutions.

That meant credit unions are no longer able to sell card portfolios to FIA Card Services, the BofA unit that issues bank cards for other banks and credit unions under their names (News Now Dec. 7).

Although terms of the deal and the purchase price were not released, it is one of the largest credit card acquisitions Elan has made in its four decades of existence, according to the Minneapolis Star Tribune (Dec. 28).

Elan said it will continue branding and marketing the cards under the names of the 28 other financial institutions.

Scams to watch for in 2012

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NEW YORK, Wis. (12/29/11)--Credit unions can help their members avoid becoming victims scams and rip-off attempts with some simple but smart tips.

The American Association of Retired Persons (AARP) has compiled a list of the five most malicious scams consumers are likely to encounter in 2012.

The Nigerian letter. In this advance-fee scam, someone unknown to the consumer offers promises of great riches. Lonely people in financial distress are usually targeted by scammers trying to take advantage of kindness generosity or greed. While this scam is old, new variations make it more effective in trapping the vulnerable and unwary. The questionable plea promising millions of dollars has been replaced by more clever approaches: a foreign business person trying to set up a domestic bank account, a parent trying to raise money to help free a hostage child, or a U.S. soldier trying to ship home war booty to help his dying mother. Data mining now allows the scammers to appear more legitimate by personalizing the messages.

Credit unions should advise their members not to respond these types of inquiries. Instead, members should delete any e-mails of this type and throw away any paper mail.

Exploitation through education. With this type of scam, fraudsters offer a "secret" system, manipulating the consumer's emotions while promising riches or easy success. Middle-agers and seniors looking to change careers are usually targeted. Scammers entice the education-seeking unemployed with promises to get rich quick with the secret plan, win a high-paying job with the streamlined schooling, or pass a test for a chance at a nice government job. Victims often learn little they couldn't find in their local library, but become burdened with thousands of dollars in bogus tuition and fees.

Credit unions should caution members to avoid making same-day decisions. Any career or education decision merits research and referrals.

Trumped up diagnoses of problems.  Here, fraudsters exploit consumers' lack of expertise, their trust in authority and any critical need.  Most consumers are cautious when an auto mechanic discovers a previously undetected, but expensive, car repair. The mechanic has personal interest in pointing out the pricey problem. That same conflict of interest now appears in other industries. AARP cited hearing specialists who hawk hearing aids and financial planners pitching a brand of mutual funds as examples of scams exploiting consumers' trust.

Credit unions should advise their members to separate the diagnosis from the product or service deliverer.

Facebook scams. An organization or person who doesn't know the consumer may attempt to "friend" consumers via Facebook, exploiting the trust of the "safe" social-network environment. While Facebook keeps people connected, the walled-off environment of filtered contacts that consumers have learned to trust has also led them to a false sense of security that scammers take advantage of. Once "friended," they link out of the safe environment to an external site where they can attack consumers viruses or pitched scam offers.

Credit unions should advise their members not to respond to or "friend" any person or organization that they do not know.

Phishing. In "phishing," a false entity asks for information it should already have--if it were the legitimate entity--and targets anyone with a bank or credit card account. Armed with consumers' names, addresses and phone numbers, phishers call or e-mail consumers with requests to "verify" other personal information such as Social Security number, credit card information and banking data.

AARP advises that the best defense to these scams is to avoid making quick decisions and divulging any personal information. Discuss any financial decision over $500 with a friend or relative, and take at least 24 hours to mull it over.

iNPRi reports CUs boom from anti-bank outrage

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NEW YORK (12/29/11)--National Public Radio's (NPR) year-end review highlighting people, movements and ideas that had a good year featured a seven-minute look at credit unions Tuesday, in a segment entitled "Credit Unions Booming From Anti-Bank Outrage."

The program aired on "Tell Me More," anchored by Michel Martin and noted the Credit Union National Association's statistics, since revised, on the movement's membership growth  as well as credit unions' seven-point jump to a record high 87 in the most recent customer satisfaction index.

In the segment,  personal finance consultant Alvin Hall told how credit unions are different from banks:  the fact they are nonprofit cooperatives that can't issue shares and use their money for the benefit of members.

The interview turned to consumers' anger over bank fees. Hall noted that consumers were told by banks to stop writing checks and use a debit card, and reacted when banks suddenly added fees.  "They saw this as the banks using the small guy, the guy who may not be able to maintain that minimum balance, as the source of revenues. And people said, 'I've had enough.'"  The result was Bank Transfer Day, which urged big bank customers to switch to small banks and creditunions.

Hall also said credit unions may not be as accessible in some places and they don't have as many branches but they can be part of a broad network.  He also noted that people like credit unions because they are "much more personal. They're not there to exploit you."  He advised that before switching, do the research to make sure fees are lower and the services are convenient.

Tablet early adopters Asian-Americans Hispanics

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MADISON, Wis. (12/29/11)--The credit union wants to cash in on the popularity of mobile devices such as smartphones and e-tablets. Its marketing staff targets promotion of the credit union's  new, hip mobile service to the younger generation--and misses two key audiences: Asian-Americans and Hispanics.

Early adopters of the emerging mobile devices such as iPads and e-readers such as Nook and Kindle aren't necessarily the young folks, according to a study by eMarketer reported in eMarketer.com (Dec. 9). Asian-Americans are avid users of the new devices and among the first to buy tablets and e-readers. They join U.S. Hispanics as among the early adopters on new technology, the publication said.

Roughly 14.4% of Asians used tablets monthly this year, compared with 12.6% of Hispanics and slightly over 10% of blacks and whites.  eMarketer predicts that in the U.S.,  whites won't reach the same tablet penetration as Asian-Americans until about 2014.

A study from the Center for Hispanic Marketing Communication at Florida State University also backs up the findings. In that study, 20% of English-speaking Hispanics use the mobile devices, followed by 15% of Spanish-speaking Hispanics and 14% of Asian-Americans.

Seventeen percent of both Asian-Americans and Hispanics reported owning the devices. They "are proportionately more likely to adopt these devices than non-Hispanic whites," said Felipe Korzenny, who led the Florida State study.

According to MSNBC.com (Dec. 23), digital goods were the fastest-growing category for sales online during the holiday, with e-readers and tablets among the leaders. Sales of digital goods, which also include music and videos, were up 30% from the same period last year in the days before Christmas and were expected to increase after Christmas. Amazon.com estimated that earlier this month, customers bought more than one million Kindles a week.

In other words, mobile banking will be increasing  beyond cell phones, and credit unions will need to be on board early with their mobile banking as buyers look for applications for their new toys.

Scottish Labor leader praises CUs on loans

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GLASGOW, Scotland (12/29/11)--A Scottish Labor Party leader said an increase in credit unions would help consumers manage their debt and avoid payday loans.

Credit unions do "amazing work," said Johann Lamont, noting that they offer a lifeline to people who are ignored by the traditional banking sector, provide stability at a time of uncertainty and offer people "a fair deal" (The Press Association Dec. 26).

In addition to an increase in credit unions, Lamont said Scotland needs a change of attitude in how the poorest in society can borrow money. Some families are running into debt on payday loans with large interest payments of up to 2,000%.  Scotland's government estimated that 85,000 people in the country annually borrow from more than 150 illegal money lenders, the article said.

Lamont noted that many families see payday lenders as the only option to get through the holidays. She said she favored laws to cap interest rates on loans by payday lenders, and noted that credit unions in her constituency help people to borrow fairly.