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California CUs mortgage loans buck the trend

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RANCHO CUCAMONGA, Calif. (12/31/08)--California credit unions are bucking the trend with mortgage loan portfolios growing to nearly $54 billion during third quarter, according to a report from the California and Nevada Credit Union Leagues. Daniel Penrod, industry analyst for the leagues, noted that California credit unions’ mortgage lending ballooned to $53.9 billion in mortgage assets as of Sept. 30--an increase of $1 billion over mortgage assets a year earlier( Dec. 30). The assets were up even though mortgage originations declined during third quarter to 13,753 loans from 21,562 loans the year before. Year-to-date, originations totaled 71,266, compared with 78,066 for the first three quarters of 2007, he said. Adjustable-rate mortgages (ARMs) and home equity lines of credit (HELOCs) saw the most significant changes for California’s credit unions. ARMs declined by 50.6% from a year earlier to 267 for third quarter 2008. HELOCs were down 45.6% to 8,225, while fixed-rate loans were down 10.9% to 5,261. Penrod reported that for the current quarter, credit unions have less mortgage business because consumers are pulling back and avoiding large purchases in the uncertain economy. But in 2009, interest rates could drop to 2% to 3% and spark more buying and refinancing. The newspaper also featured comments from Steve Volle, president of Members Loan Services Inc., which assists seven San Diego-based credit unions. He noted credit unions deliver better terms and lower rates that commercial banks do. But some people with non-credit union mortgages may not be able to refinance loans they should not have had in the first place. He estimated credit unions have gone from 1%-2% of the mortgage business to 3% or 4% in the area. For the full article, use the link.

More CUs step in to fill car loan gap

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DENVER and NEW YORK (12/31/08)--Two newspapers--one in Denver, the other in New York City--are reporting credit unions stepping in to fill the financing gap left by other lenders in the auto loan market during the recession. New-auto sales fell an unprecedented 37% in 12 months through November. But “credit unions are holding up the Colorado auto market,” according to a Tom Wilber, a Denver area Ford dealer’s finance director (Denver Post Dec. 29). In the past credit unions typically financed about 20% of the vehicles sold. In recent months, they’ve financed half or more, said Wilber. Credit unions’ share of auto loans registered in Colorado was 42.9% at the end of the third quarter, up from 32.1% at the end of first quarter, according to Centennial-based CU Direct Connect, which links borrowers with credit unions. The article notes that credit unions’ conservative nature in lending kept them from winning a larger part of the market share in the past but left them able to lend in today’s tight market. An auto broker in Centennial noted that people who haven’t used credit unions for auto loans in the past are beginning to use them. New York Daily News (Dec. 29) noted that the economy has brought an abundance of deals on new and used cars. Although it’s a tough time for business, it’s a great time for consumers who have a steady job and solid credit scores, said a spokesman for the Greater New York Automobile Dealers Association. “If your credit isn’t perfect, you could consider alternative possible sources of financing like credit unions—or ask your local new-car dealer for help,” the article says. To read both articles in full, use the resource links.

CUNA closed Thursday re-opens Friday

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WASHINGTON and MADISON, Wis. (12/31/08)--The Credit Union National Association’s Washington, D.C., and Madison, Wis., offices will be closed Thursday in observance of New Year’s Day. They will re-open on Friday. News Now will not publish a Thursday issue. It will resume publication Friday.

CUs gift cards strong despite retail sales dip

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SPRINGFIELD, Ill. (12/31/08)--The Illinois Credit Union League (ICUL) Service Corp. sold nearly the same amount in gift cards as it did last year, despite a nationwide dip in holiday retail sales. ICUL Service Corp. sold about 600,000 cards, Karen Duffy, senior vice president, told News Now. The strong card sales are likely due to more credit unions offering gift cards to members. Members are asking for the cards, and credit unions “want to offer that financial service,” Duffy said. “Our gift cards did great.” The minimum amount required on the cards sold by ICUL is $10, while the maximum is $500. The average amount for the cards this year was $80, Duffy said. ICUL Service Corp. worked to educate credit unions about the difference between open- and closed-loop gift cards because of concerns some consumers had, she said. Closed-loop cards only can be used in the store where they were purchased. Open-loop gift cards, such as those sold by Visa, MasterCard and Discover, can be used anywhere in the world, Duffy said. Some consumers were concerned that stores they purchased closed-loop gift cards in would become bankrupt after the holidays, she said. Regulations in some states have prohibited financial institutions from selling open-loop cards because the cards often have fees tacked onto them or carry an expiration date. ICUL Service Corp. is monitoring regulations for changes in 2009 and how any changes could affect sales, Duffy added. ICUL Service Corp. is a business corporation that provides credit, debit card products, checking, clearing house and loan services to credit unions in Illinois and 45 other states.

Message is a phish attempt says CUNA

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MADISON, Wis. (12/31/08)--An e-mail circulating Tuesday purports to be from the Credit Union National Association (CUNA), but CUNA says the e-mail is a phishing scam seeking personal information. The e-mail claims to be from CUNA’s customer service and has as its subject line “Your card has been deactivated.” It claims to have disabled the recipient’s card and personal identification number (PIN) and asks the recipient to call 800-587-9804. CUNA and any financial institution would not send e-mails or phone messages soliciting account and identification information. Recipients should delete the message. The message is similar to a number of phishing–type scams involving e-mails, text messaging to cell phones, automated calls and in-person calls to home phone lines, and more. In November, the RSA Anti-Fraud Command Center noted a 20% increase from October in the number of banking brands attacked by fraudsters. Attacks against new entities also increased with 23 new organizations targeted in November. However, the rate of growth of these attacks slowed down. RSA said an increase of 3,481 attacks occurred from August through October—an average of about 1,160 attacks per month. In November, the rate of increased phishing attacks slowed to 46 attacks. Regional banks were attacked most often, followed by nationwide banks and credit unions. Earlier this month, Jefferson Parish FCU, a $65 million asset credit union in Harahan, La., was among several institutions—including the Jefferson Parish Sheriff’s Office and security firms--targeted by phishing attempts claiming to be from those institutions (Times-Picayune Dec. 23). More than 450 residents received telephone calls from credit card scammers with automated messages. Sheriff Newell Normand issued a warning about the scam Dec. 21. The newspaper said at least 14 people responded with personal information. One woman spoke to an actual person, who warned her about fraud, then got her to reveal her card information, birthdate, Social Security number and her card’s expiration date. Last week, Mississippi Attorney General Jim Hood issued a warning about text messages targeting credit union members in that state (WTOK-TV Dec. 25). Hood had been contacted by the Mississippi Credit Union Association after several Jackson area credit union members received a text message. One person’s account had to be closed, said Hood. He noted that the best protection in such situations is education. “Consumers need to understand the scam is circulating, learn what to look out for and most important, do not respond,” he told the newspaper. Credit unions have a number of resources addressing the issue on CUNA’s website.

CU System briefs (12/30/2008)

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* WARNER ROBINS, Ga. (12/31/08)--The board of directors of Robins FCU has selected John R. Rhea as its new president/CEO. Rhea was executive vice president since 2006 at the Warner Robins-based credit union. Rhea was vice president of branch operations from 1996 to 2003. He has more than 30 years experience in the financial industry. Robins FCU is a $1 billion asset credit union serving 130,000 members in 16 counties. It is the fourth largest credit union in Georgia … * BURBANK, Calif. (12/31/08)--Darin Guggenheimer has been named president/CEO of Burbank City FCU, effective tomorrow. He succeeds Thomas J. Moioffer, who will retire after 24 years at the helm of the $250 million asset credit union. According to Janne Turner, board of directors chair, the selection was unanimous, due to Guggenheimer’s financial expertise and knowledge of the credit union industry. Guggenheimer, a 13-year associate of the credit union, served as chief financial officer since 1995 …

McCormack new chair of state execs association

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HARRISBURG, Pa. (12/31/08)--Jim McCormack, president/CEO of the Pennsylvania Credit Union Association (PCUA), has been elected chair of the Pennsylvania Association of Society Executives (PASAE) board of directors for 2009. McCormack was elected to the PASAE board in 2006 and served as vice chair this year. “In these challenging times, Pennsylvania’s trade and professional associations can thrive by learning from each other,” McCormack said. “It is my hope that PCUA’s involvement in PASAE will directly benefit Pennsylvania’s credit unions and their members.” He succeeds Robert Imperata, who will serve as PASAE immediate past chair. PASAE is a trade association that represents Pennsylvania non profit corporate management teams and companies interested in working with it.