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CUNA org offline for upgrade this weekend (12/06/2012)

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MADISON, Wis. (12/7/12)--The CUNA.org website will be unavailable for product purchases, meeting registrations and member-only log-ins this weekend, said the Credit Union National Association (CUNA).

The site will be unavailable between 8 p.m. ET Friday and 8 a.m. ET Monday. However, credit unions can still access the site for other information, such as News Now, not requiring the special log-ins.

CUNA is installing an upgrade to its e-business system.

ATM Survey Skimming biggest threat

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SIOUX FALLS, S.D. and LONDON (12/7/12)--Skimming remains the biggest global threat to ATM security, according to a survey released Thursday by the ATM Industry Association (ATMIA) this week.

The (ATMIA), the only global non-profit association for the ATM industry, announced the release of its second ATM fraud survey conducted among its members.

The second most cited threat was cash and card trapping, which is primarily a European problem which has not migrated to North America as yet, ATMIA said. Gas and explosive attacks were seen by the respondents as the third biggest threat, followed by ATM burglary and cyber attacks.

Respondents were asked if criminal attacks in general on ATMs in their country/region were

increasing or decreasing. About 14% said criminal attacks were increasing sharply. Another 33% said they were increasing moderately.

Also, 60% said costs to ATM businesses arising from ATM fraud were increasing sharply or moderately

About 93.7% stated that security best practices are either "essential" or "very important."

"The security of ATMs is undoubtedly world-class--but we need to stay vigilant to ward off new and emerging threats," said Mike Lee ATMIA CEO.

The association will study mobile apps fraud in the first quarter of 2013, Lee said.

To download the survey results, use the link.

INewsdayI op-ed Govt should bless increased MBLs

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NEW YORK (12/7/12)--Congress should pass the Small Business Lending Enhancement bill and allow credit unions to lend more money to small businesses, Newsday wrote in an op-ed published Thursday. "It's a marriage the deficit-burdened federal government should bless," Newsday concluded.

The bill, introduced in the U.S. Senate by Sen. Kirsten Gillibrand (D-N.Y.), would create a good match between credit unions that have capital and small businesses that are have a difficult time procuring the capital they need to operate and expand, Newsday said.

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' member business lending (MBL) cap to 27.5% of assets from 12.25% so that more loans could be made to small businesses. CUNA and credit unions say that increasing credit unions' MBL cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

"The change could boost lending to small businesses nationally by $10 billion in the first year, and in New York by $1 billion," Newsday said. "On Long Island, where there are 36 credit unions, the estimated increase in lending potential would be $320 million.

"The higher cap would be phased in for individual credit unions that demonstrate sound underwriting and business-loan servicing practices to the National Credit Union Administration, the agency that insures their deposits and oversees their lending," the publication added.

To read the op-ed, use the link.

CUNA amicus brief backs lower court ATM ruling

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MADISON, Wis. (12/7/12)--The Credit Union National Association (CUNA) is urging a federal appeals court to uphold a lower court decision spelling out how credit unions and ATM vendors qualify for immunity from liability for missing "fee decals," which have been the target of a number of lawsuits brought against the credit unions and vendors.

The lawsuits are proceeding even though the decals are obsolete, since interactive notices also now appear on ATM screens.

In a "friend of the court" brief filed late Wednesday in the U.S. Court of Appeals for the ninth circuit, CUNA argues that the court should hold that "ATM operators are not required to establish the identity of the vandal or third party that removes an affixed fee decal in order to establish immunity from civil liability under the safe harbor defense" under federal law. Adoption of this standard would mean, in effect, that missing stickers are presumed to be the work of vandals for which credit unions will not be held liable.

Doing so, CUNA states, recognizes that ATMs are remote, unmanned, and often beyond any practicable means of surveillance.

Further, CUNA argues that--as found by the lower court--the appeals court should affirm that good faith compliance "should be measured by a standard of reasonableness under the circumstances applicable to the particular ATM and its operator."

Doing so, CUNA states, recognizes that "a 'one-size-fits-all' solution does not address the realities of a diverse, decentralized ATM industry whose financial institutions and other members endeavor in good faith to comply with the Electronic Funds Transfer Act (EFTA) and Regulation E. Under this approach, smaller institutions, with their limited staff, would not be held to an unreasonably high standard concerning the monitoring of their machines.

"This is consistent with the intent of the EFTA and Regulation E and balances consumer protection with the realities of the ATM industry," CUNA wrote.

"Our filing in this case is of critical interest to credit unions facing numerous lawsuits over ATM signage. Just as CUNA seeks results for credit unions in Congress and with regulators, we look for effective opportunities to seek protections in the courts," said CUNA General Counsel and Executive Vice President Eric Richard.

To download CUNA's brief, use the link.

The lower court ruling in the U.S. District Court for the Southern District of California in San Diego outlined two scenarios that show a good-faith compliance effort.

EFTA requires ATM operators to provide notice to the consumer that a fee has been imposed by the operator for providing the service, and the amount of the fee, the court said.

However, the court ruled there are two defenses for a lack of notice.

"The  bona fide error defense provides that 'a person may not be held liable … if that person shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid such error,'" the court said. Therefore, "a defendant is not liable for a missing ATM fee notice if: 1)  the defendant maintained 'procedures reasonably adopted to avoid' a missing notice: and 2) the lack of a notice was 'not intentional,' but was a "bona fide error.'"

In the second scenario, the safe harbor defenses provides: "If the notice required to be posted  …  by an automated teller machine operator has been posted by such operator  … and the notice  is subsequently removed, damaged, or altered by any person other than the operator of the automated teller machine, then the operator shall have no liability under his section for failure to comply …"

Wisconsins Thompson Let CUs make MBLs

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MADISON, Wis. (12/7/12)--A letter to the editor penned by Brett Thompson, president/CEO of the Wisconsin Credit Union League, published Dec. 3 in The Capital Times, a south central Wisconsin newspaper, touted the benefits of increasing the credit union member business lending (MBL) cap. 

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. CUNA and credit unions say that increasing the cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

"A whopping 80% of Wisconsin voters polled by the Wisconsin Credit Union League say they support the credit union small business jobs bill--legislation that would add $408 million of new credit for Wisconsin businesses through credit unions," Thompson wrote.

Other statistics noted by Thompson include:

  • A 2011 study from Pepperdine University shows that banks are denying the majority (60% ) of loan applications.
  • Credit unions have done all they can. Since the start of the recession in 2007, Wisconsin banks decreased their business lending by 2% while Wisconsin credit unions grew theirs by 55% to compensate.
  • The legislation would add close to 5,000 jobs in Wisconsin the first year alone.
  • Half of credit union business loans help families with income under $50,000.
  • A bipartisan coalition of more than 30 organizations supports the legislation. They represent small businesses, the self-employed and the insurance, textile, realty, construction, automotive and technology industries.
  • The legislation won't hurt banks. Banks hold 95% of U.S. business loans; this legislation won't dent their market share. In fact, almost half of banks support the legislation.
To read the complete letter, use the link.

NorthSouth Carolina leagues to consider merging

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COLUMBIA, S.C. and RALEIGH, N.C. (12/7/12)--The North Carolina Credit Union League (NCCUL) and South Carolina Credit Union League (SCCUL) boards of directors announced Thursday their unanimous votes to move forward with a process to formally consider consolidation of the two leagues.

Their votes authorize creation of a six-member consolidation task force consisting of three board members from each state.

The task force will assess whether consolidation best positions both organizations to continue meeting the needs of credit unions in North and South Carolina. Further movement toward consolidation would be subject to approval by each board and the membership of each organization.

"For the past year, the South Carolina Credit Union League board of directors has been engaged in a process to determine the strategic future of the organization," said SCCUL Chairwoman Faye Crocker, acknowledging the retirement of current President/CEO Steve Fowler at the end of 2013.

The two associations history of collaboration, including joint ownership in multiple entities, and they share a foundation and corporate credit union. Credit union leaders in both states know each other and have developed strong working relationships through the years, the leagues said. 

"We have established great trust and mutual respect with the South Carolina Credit Union League and its credit unions over the years," said NCCUL Chairman Maurice Smith.  "Both boards continue to look to the future to ensure we have the strongest possible league to serve credit unions in the Carolinas for years to come. We look forward to examining that issue through the Consolidation Task Force."

Individuals slated to serve on the consolidation task force include:

  • Crocker,  Greater Abbeville (S.C) FCU;
  • Linda Weatherford of SPC CU, Hartsville, S.C.;
  • Nick Wodogaza of Palmetto Citizens FCU, Columbia, S.C.;
  • Maurice Smith of Local Government FCU, Raleigh, N.C.;
  • Patty Idol of Mountain CU, Waynesville, N.C; and
  • Jeff Jones of Freedom FCU, Rocky Mount, N.C.

Check forging scheme uses homeless men

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MADISON, Wis. (12/7/12)--Eight homeless men were charged with forgery in Wisconsin Tuesday for allegedly cashing forged checks at credit unions during three days in August.

"We think we've traced the leaders of the operation to Georgia," police spokesman Joel DeSpain told News  Now.  "They've pulled this scheme in other cities in Wisconsin and Minnesota that we are aware of.  They find out where the homeless hang out in cities and target them for their operation."

But Madison police said the organizers of the scheme remain at the large and pulled same scam in several Wisconsin cities. The organizers targeted homeless men, provided them with clothes, gave them the fake checks and took most of the proceeds from them, remain at large (Wisconsin State Journal Dec. 4).

In September, two suspects described as "middle level players" in the scam by Det. Scott Sachtjen of the Madison Police Department were arrested in Brown County, Wis., near Green Bay. The suspects were found with checks in a car with Georgia license plates, but would provide no information to lead police to organizers of the scheme.

"It's frustrating," Sachtjen said. "These rings are big in the south. Now they appear to be going nationwide."

Sachjten stressed the importance of educating frontline staff to be aware of suspicious checks.

"It's so easy to counterfeit checks, and tellers are the first line of defense because they see them every day," Sachtjen said. "They are also aware of who comes into the branches."

The 16 counterfeit checks that were cashed in Madison in August were created to look like they came from Hoffman Manufacturing, a store fixture manufacturer in Madison, and were cashed at branches of Summit CU, also of Madison, according to the complaint.

The homeless men contacted by police for allegedly cashing the checks told similar stories.

Daven Pinkard, one of the homeless men, told police that two men he didn't know picked him up at a local resource center for the homeless. They told Pinkard and two other homeless men that they would be put on the payroll of a construction firm to make $200 to $400. The men said they had a check from the construction firm, which was owned by the uncle of one of the men.

The two men drove the homeless men to a retail store and bought them shirts, ties and shoes. The homeless men were then transported to an Arby's restaurant to change clothes. They were later provided a meal at McDonald's.

Pickard and the other homeless men cashed checks at two Summit CU locations. They were then asked by the leaders of the scam if they had other friends to cash checks.

Other men who were brought into the scheme told police they were picked up at a local church and at local parks.

The checks were each written for amounts between $1,500 and $4,300. The homeless men received about $300 each for cashing them.