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Delinquencies affect CMG Mortgage Insurance Co. rating

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NEW YORK and MADISON, Wis. (12/31/09)--Like other institutions in today's economy, CMG Mortgage Insurance Co. (CMG MI) has seen an increase in prime delinquencies. That has affected its ratings, but the company continues to lead with a strong performance in its niche marketplace, says a ratings firm. Fitch Ratings announced it has adjusted the insurance company's rating to BBB from A+ primarily because of increasing prime delinquencies and their potential impact on capitalization. However, CMG's primary default rate "remains well below that of all of its peers," said Fitch's report, attributing the "stronger performance, in part, to CMG's role as a niche player, catering to the unique origination channels within the credit union space." "Despite challenging times for the mortgage industry, CMG MI exhibits the best-performing portfolio for the private mortgage insurance industry in the U.S.," said Joe Dillon, senior vice president and general manager of CMG MI. "Fitch acknowledges that we continue to out-perform our peers, thanks to the high quality of credit union originations. "We appreciate our customers' support and we will continue to be a reliable counterparty, as well as one of the highest rated private mortgage insurers in the U.S.," he added. Fitch said that it reduced the rating because it believes that additional capital is unlikely from either of CMG MI's parent companies, PMI Mortgage Insurance Co. and CUNA Mutual Insurance Society, and that "constrains the ability of CMG to write new, high quality business." Primary new insurance written in third quarter 2009 was $489 million, compared with more than $1 billion for second quarter and nearly $1.5 billion in third quarter 2008. The company's risk-to-capital ratio was 16.8:1 at the end of third quarter. CMG's ownership agreement provides for a capital call to the two parent companies should the ratio reach 19:1.

Oregon foundation elects new officers

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BEAVERTON, Ore. (12/31/09)--The Oregon Credit Union Foundation has elected new officers for 2010. The foundation works to promote and improve financial independence through the Oregon credit union movement. New officers include:
* Chair Carlyn Roy, executive vice president and chief operating officer, OSU FCU, Corvallis; * Vice chair Brooke Van Vleet, executive vice president and chief administrative officer, First Tech CU, Beaverton; * Secretary Kathy Garner, executive vice president, Southwest Corporate FCU, Plano, Texas; and * Treasurer Robert Barzler, president/CEO, Point West CU, Portland.
The officers join Shirley Cate, president/CEO of Providence Health Systems FCU, Portland; Barbara Mathey, president/CEO of IBEW & United Workers FCU, Portland; and Kyle Frick, vice president of marketing and sales of Mid Oregon FCU, Bend, on the board of directors.

Va. gov to WSJ CU payday loan pilot a success

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WASHINGTON (12/31/09)--In an op-ed piece published in The Wall Street Journal Tuesday, Virginia Gov. Timothy Kaine explained how a state credit union has found a way to give consumers small-dollar loans without a big price tag. In July, Virginia launched the Virginia State Employee Loan Program--which is run by the Virginia State Employee Assistance Fund and Richmond-based Virginia CU. The program was created after legislative restrictions in 2008 reformed Virginia’s payday loan standards by doubling the time consumers have to repay the loans and creating a database to ensure borrowers have no more than one payday loan. Virginia’s program offers loans ranging from $100 to $500 for state employees. Loans are offered at a 24.99% annual percentage rate and are repaid through direct withdrawals from an employee’s paycheck over six months. Consumers are not penalized for repaying the loans early, Kaine told the newspaper. The loans also require borrowers to become members of Virginia CU and to complete an online financial fitness course on managing money. Since its inception, the program has facilitated 2,794 loans to state employees totaling $1,373,400, Kaine wrote. The program’s overwhelming response has triggered the state to explore more resources to fund the services. Other organizations, such as Riverside Health System in Newport News, have similar loan programs to help employees pay off high-cost, short-term loans, he added. The Obama administration is considering several major reforms to the U.S. financial system--including the payday lending industry. State governments have been challenged with finding a balance between capping interest rates on such loans without driving the option out of the market altogether, Kaine said. The Credit Union National Association (CUNA) and its member credit unions are committed to providing safe and affordable alternatives to predatory payday lenders. Credit unions nationwide have implemented various programs to provide alternatives to high-priced payday lenders, CUNA has said. Allowing credit unions to provide check-cashing services to non members within their fields of membership has given credit unions the opportunity to bring the unbanked and underserved communities into a mainstream financial institution, providing access to other services like savings and lending, CUNA added.

Louisiana electronic lientitles in effect Friday

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HARAHAN, La. (12/31/09)--A state electronic lien and title program for vehicles goes into effect Friday in Louisiana. Credit unions will need to be compliant with the program as soon as possible, said the Louisiana Credit Union League. The state Office of Motor Vehicles (OMV) is implementing a computer system that will electronically record information concerning the perfection and release of vehicle security interest without submitting or receiving paper title documents. The attorney general’s office says the system is mandatory for all lenders, the league said. The paperless method allows the OMV, public tag agents and lien holders to exchange vehicle and title information. To use the program, a lien holder must contract with a participating public tag agent. The transaction to record a lien can be processed by any motor vehicle office or public tag agent. Information will be transmitted electronically from the database to the agent through a nightly batch process. The information is then transmitted to the lien holder.

More guilty pleas in huge data breach cases

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BOSTON (12/31/09)--As expected, more guilty pleas were entered in a federal court in Boston by a Florida computer hacker charged in the data breaches at Heartland Payment Systems, Hannaford Brothers grocery chain, 7-Eleven stores and two unidentified companies. Albert Gonzalez, 28, of Miami, who led the waves of attacks that affected thousands of credit union members and hundreds of credit unions--as well as other consumers--over a three year period, made his third and final plea, the result of a plea bargain (Wired.com Dec. 29). He pleaded guilty to two counts of conspiracy to gain unauthorized access to computers and to commit wire fraud. Prosecutors agreed to seek a sentence of no more than 25 years, and Gonzalez has agreed to ask the court for no less than 17 years in prison. Sentencing in the case, what prosecutors call the largest identity theft scheme in U.S. history, was set for March 19. He already faces 15 to 25 years from two earlier federal cases related to intrusions of TJX Cos. and Dave & Buster's restaurants. The TJX case also affected a number of credit unions and members. Sentencing for the earlier cases is scheduled for March 18. Prosecutors are asking that the sentences in the three cases run concurrently.

Grinch skims Christmas for hundreds in N.C.

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RALEIGH, N.C. (12/31/09)--A grinch--or a group of grinches--siphoned off cash from the credit/debit card accounts of hundreds of credit union members and customers of other financial institutions in North Carolina last week by using skimming devices at gasoline stations. And a credit union used media interest in the fraud as an opportunity to educate consumers. The alert was made by State Employees' CU, based in Raleigh, which said the fraud began showing up on members' accounts early last week. About 300 members were affected but more fraud reports were still being reported to authorities at press time Wednesday (News Observer Dec. 30). Police said the fraud had spread to member/customers of other financial institutions--likely anyone using a card at a gas pump--throughout North Carolina's Triangle area of Raleigh, Durham and Winston-Salem. Some cards in other states were affected, said the News-Observer. The credit union released surveillance photos of six suspects using disguised skimmers at various stations. All were male and wore billed hats to make identification more difficult. It also viewed it as an opportunity to provide good consumer education information to the community at large via local media, said SECU in a press release. It invited all four major Raleigh, N.C., televisions station to create consumer segments on how card skimming fraud occurs. The credit union informed consumers about skimming and stressed that card fraud victims are not held liable for a fraud on their account. It also provided safety tips to help prevent fraudulent activity. Leanne Phelps, senior vice president of SECU's card and record services department, noted that SECU "has always been very proactive in dealing with potential fraudulent activity on credit union-issued cards. SECU continues to reissue cards whenever even a remote possibility exists that a card has been compromised." Informing members and enlisting their help often has led to the arrest of those perpetrating the fraud. "Members really don't like it when folks 'mess with' their credit union and their money," Phelps said. SECU Security Officer Cory Mathes said that fraud "does impose an expensive, unnecessary cost on the membership as a whole." With fraud and compromised cards growing, "it's more important than ever that consumers are educated on the practice of 'skimming' at gas pumps and other point-of-sale terminals," Mathes said. Skimming devices record data from magnetic strips on the back of the debit or credit card. The devices, often disguised, are placed on card machines to collect data and enable thieves to create counterfeit cards. They often are coupled with a miniature camera to record victims as they key in their personal identification number (PIN) (WNCT.com Dec. 30). SECU advised members to pay careful attention to their account activity and credit card statements, and report any irregularities to the police (WRAL.com Dec. 28). Phelps told the station that consumers using card reading devices should look for anything unusual. Skimming devices on ATMs are easier to find, although they may be color coordinated with the machine. Devices on gas pumps are often hidden on the inside, making detection by the consumer impossible.

N.Y. association ends year with record member growth

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LATHAM, N.Y. (12/31/09)--The Credit Union Association of New York announced that it will end 2009 with record growth in member credit unions statewide during a stressed economy. The growth reflects changes the association has made to enhance its focus on serving credit unions with relevant products, exemplary customer service and an aggressive marketing strategy, the association said. “[The growth] is all the more impressive when you consider the challenges many of us are facing,” said association President/CEO William J. Mellin. The association welcomed back 14 member credit unions:
* Advantage FCU, Rochester; * Bridgeway FCU, Poughkeepsie; * Cobblestone Country FCU, Albion; * CORE FCU, East Syracuse; * Education Affiliates FCU, New York City; * Hudson River Teachers FCU, Mohegan Lake; * Meridia Community FCU, Hamburg; * Mohawk Valley FCU, Utica; * MONEY FCU, Syracuse; * MPO FCU, Middletown; * Northern FCU, Watertown; * Progressive Neighborhood FCU, Rochester; * St. Joseph’s Parish Buffalo FCU, Buffalo; and * TEG FCU, Poughkeepsie.

Software employees charged with fraud vs. CUs

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FORT WAYNE, Ind. (12/31/09)--Two former employees of a company specializing in credit union finance software have been charged with fraud against two Indiana credit unions. William O'Hern, 39, of Winterfield Run and David Lister, 33, of Huntington face two counts each of fraud against a financial institution, according to Allen Superior Court records in Fort Wayne (Fort Wayne Journal Gazette Dec. 30). Both were employees of Bradford-Scott Data Corp.--which has offices in Indianapolis and Fort Wayne, and provides credit unions with Sharetec Systems software--when they allegedly used electronic means to take more than $20,000 combined from Eastern Indiana FCU and Industrial Centre FCU. The incidents occurred in October 2006, police said. Eastern Indiana is a $21.4 million asset credit union based in New Castle, and Industrial Centre is a $42 million asset credit union in Muncie.

CU System briefs (12/30/2009)

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* RALEIGH, N.C. (12/31/09)--State Employees' CU's (SECU) foundation
Click to view larger image Click for larger view
presented a check for $500,000 to Hospice of Wake County, N.C., Dec. 17 at a Hospice Volunteer Appreciation event. SECU Foundation's grant will be used to construct SECU Healing Gardens, a reflective area for patients and their families. It is a matching gift in the hospice's Building Partners in Caring capital campaign. The new Hospice and Palliative Care Center is scheduled to be dedicated on Jan. 9. It will serve five counties in North Carolina. From left are Shirley Bell, chairman of the foundation's board of directors; Hospice of Wake County Board members John Bason and Chip Anderson, and McKinley Wooten, foundation board vice chairman. (Photo provided by the SECU Foundation) ... * WETHERSFIELD, Conn. (12/31/09)--Connecticut Labor Department FCU is offering furlough loans to members who are state employees. The state mandated that state employees take furlough days without pay, and the credit union said the loans will help members through strained economic times. Loans will be offered through Jan. 31 at a 6.99% rate. "This helps our membership manage their budget for the decreased income as a result of the furlough, particularly through the year-end holiday season," said Marie Kinard, CEO of the $13 million asset credit union based in Wethersfield ... * SAN JOSE, Calif. (12/31/09)--Technology CU has named Barbara B. Kamm as president/CEO, effective Jan. 6. She replaces Ken Burns, who left in May (Marketwire Dec. 29). Most recently, Kamm operated a Bay Area-based consulting firm that provided strategic, organizational and financial assistance to young tech companies and financial institutions. She previously served 10 years with Silicon Valley Bank as regional manager for Southern California and then as the bank's chief administration officer in Northern California. Kamm also headed commercial lending at Marine National Bank in Irvine, Calif., and opened and managed the Orange County office of National Bank of Long Beach. Her career in banking started at First Interstate Bank in Los Angeles, where she ran credit training for the bank's branch system. "With her extensive banking and management experience, she is an excellent choice to lead Tech CU during these challenging economic times," said Mical Atz Brenzel, board chairman of the more than $1 billion asset credit union. Technology CU is based in San Jose, with 10 full-service branches around the Bay Area ...

CU to IPost CrescentI No hidden card fees here

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APPLETON, Wis. (12/30/09)--Prospera CU, based in Appleton, Wis., has told a local newspaper that new credit card rules won’t impact its members that much. And the credit union won’t be charging hidden fees or penalty pricing. The Appleton, Wis.-based, $148 million asset credit union was among financial experts i expressing optimism that consumers will become better money managers as a result of the new Credit Card Accessibility, Responsibility and Disclosure (CARD) Act, said the Post Crescent (Dec. 29). Mary Lornson, vice president of operations at Prospera CU, said members won’t see much impact in their cards at the credit union because Prospera already had been underwriting its cards in the best interest for members. With no fees or penalty pricing, the biggest change for members will be an increase in disclosures and changes to the statements they receive from the credit union. The credit union will have to retool its system to add more detailed billing, said Lornson. Billing statements arriving in late February or March will be longer and contain more detail, including how long it would take to pay off the balance with only minimum payments. The new rules aim to keep consumers from overextending themselves, Lornson told the newspaper, adding that consumers have more financial education tools available now. She later noted that Prospera has always advocated sound personal financial management. However, she predicted it would take time for the industry to absorb all the rule changes. The Credit CARD Act makes it more difficult to raise interest rates without cause or impose excessive fees on cardholders. Because many of the provisions won’t be effective until February, a number of banks, including Citigroup, Chase and Bank of America, have been raising rates and increasing fees to cover costs from delinquencies, the article said.

ICUL hosts BarCampBank unconference

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NAPERVILLE, Ill. (12/30/09)--More than 20 individuals from credit unions, leagues and the Credit Union National Association (CUNA), plus vendors and a community banker, met earlier this month for BarCampBank, an ad hoc gathering in Chicago to talk about innovations in financial services. The Illinois Credit Union League hosted the event, which was born from a larger BarCamp concept--sharing and learning in an open environment through discussions, presentations and interaction by all participants. All attendees must present a session or lead a discussion or participate in other ways. Participants start with a blank slate and make up the agenda and schedule their presentation at the beginning of the meeting. BarCampBank aims to foster innovations and create new business models in the world of banking and finance. Topics included Introduction to Social Media, Attracting Gen Y, The Next Financial Technologies and Challenges for 2010. Carla Day, one of the event’s organizers said the group is planning another BarCampBank event in the Midwest next spring. Participants are keeping in touch via an e-mail group and social media vehicles such as Twitter (#BCBChi) and the CU Chat Up website community (http://cuchatup.ning.com/). The first BarCamp was held in Palo Alto, Calif., in August 2005. Since then, BarCamps have been held in more than 350 cities worldwide and focused on many topics and industries. The first BarCampBank event was in Seattle in 2007. Other BarCampBank events have been held in San Francisco and Canada.

CUNA open on Thursday closed Friday

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WASHINGTON and MADISON, Wis. (12/30/09)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association will be open Thursday, New Year’s Eve, and closed Friday, New Year’s Day, for the holiday. News Now will publish a Thursday edition, but not on Friday. It will resume its regular production on Monday, Jan. 4.

CUs mortgage promo cuts sales commissions

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DAYTON, Ohio (12/30/09)--An Ohio credit union program that cuts sales commissions for home buyers and sellers has become more popular this year, according to an Ohio newspaper. The Dayton Daily News reported that the program--by Wright-Patt CU in Fairborn--requires agents to return 20% of their commission to the client. Homebuyers can use the money for down payments, furniture or closing costs, and has brought savings to members who otherwise may have not been able to buy a home, the article said (Dec 26). Real estate commissions range from 6% to 7%. For a $100,000 home, the savings could mean an extra $600 or $700, the newspaper said. Agents have returned $100,000 in commissions, and the cutbacks are expected to reach $112,000 by year-end. Last year, they gave back $87,000. In 2007, they returned $70,000. Ohio credit unions have seen demand for home loans increase. First-mortgage originations during the first half of 2009 reached $960.5 million, compared with $639.5 million the year before, the newspaper added.

ICNNI tells why CUs are better

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WASHINGTON (12/30/09)--CNN Tuesday explained some of the reasons why consumers feel as though they’re “getting a better shake” by choosing credit unions over banks. “Had it with your bank this year? It’s time to start fresh,” said CNN, in a recent story, “Credit Unions Duke it Out With Banks.” CNN carried both a print and video version of the story. Gerri Willis, CNN personal finance editor and host of “Your Bottom Line,” a show dedicated to saving money, noted that fees are lower at credit unions and rates are more attractive. Savings rates at credit unions are 0.41%, compared with 0.29% at banks. A one-year share certificate at credit unions yields 1.45% in interest, while a certificate of deposit at a bank yields about 1.15%. Credit union credit cards are also a bargain, she said. “You might as well go with people who are willing to pay you,” Willis added. She noted a Pew Charitable Trusts study that indicated that interest rates on credit cards from credit unions are 20% lower than those at banks. Credit unions’ penalty annual percentage rate is 18% on average compared with 29% at banks. “People feel like they’re getting a better shake at credit unions, because credit unions serve their members,” Willis said. She suggested viewers visit the Credit Union National Association’s CU Locator to find a credit union. To view the video and print versions of the story, use the links.

A first ASI to assess a premium

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DUBLIN, Ohio (12/30/09)--For the first time, private share insurer American Share Insurance Corp. will charge its client credit unions a special premium assessment of 15 basis points, citing some losses at a few member credit unions. “ASI has never before had to charge a premium or special assessment of this nature, but this past year has been difficult for all financial services providers, including ASI and its member credit unions,” said ASI CEO Dennis Adams. The premium affects all credit unions that have primary share insurance with ASI. ASI primary insurance covers each member’s account up to $250,000. The premium is deemed necessary because of losses developing, or incurred, in a small number of primary insured member credit unions, ASI said in a statement. “We regret assessing such a charge at this time, but additions to our reserve for losses late in the year have forced us to assess the premium to restore the ASI guarantee fund’s equity ratio to above our minimum level of 1.30%,” Adams said. “Record low interest rates and significant guaranty loss provision expense this year have adversely affected ASI’s current earnings, causing our year-end 2009 equity ratio to fall below 1.30% for the first time in over 20 years,” he added. ASI serves roughly 157 credit unions in Ohio, Indiana, Illinois, Idaho, Nevada, California, Texas, Alabama and Maryland. ASI is headquartered in Dublin, Ohio. The National Credit Union Administration this year approved a premium assessment of 0.15% for insured shares on federally insured credit unions to boost the National Credit Union Share Insurance Fund. The Federal Deposit Insurance Corp. also is requiring its institutions to prepay their premium assessments to boost the Deposit Insurance Fund.

Youth marketing is focus of CUNA Council white paper

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MADISON, Wis. (12/30/09)--Youth marketing and communications are the focus of a new CUNA Council white paper. The paper, “Youth Marketing: Strategies and Tactics for Attracting and Retaining Young Members,” is the latest white paper from the CUNA Marketing and Business Development Council. The paper discusses youth marketing, communications planning and strategies, tools and tactics, communications with young people and ways to measure success. It includes 10 case studies of credit unions that are successfully attracting and retaining young members. “We have to attract young members before they reach borrowing age, so when they do reach it, they’ll think of us,” said Lauren Mayhew, marketing director at Daviess County Teachers FCU in Owensboro, Ky., in the paper. Sean McDonald, vice chair of the council and director of business development at Liberty Savings FCU in Jersey City, N.J., added: “It’s important for youth that we get to them at a young age so they can understand the importance of saving and managing their money.”

CU System briefs (12/29/2009)

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* EUGENE, Ore. (12/30/09)--Oregon Community CU, based in Eugene, Ore., has funded $120,000 again this year for 15 student scholarships to the University of Oregon. Each scholarship is worth $4,800 a year. The program has served 100 students for more than 10 years for a total of $1 million. The credit union said it recognizes that more students must both work and take out large loans while attending college full time. Its scholarship program provides financial support for state students with demonstrated financial need who achieve academic excellence and contribute to their community … * NEWARK, Ohio (12/30/09)--As part of a promotion from October to December 2008, Fiberglas FCU, promised members that anyone having a loan at the credit union at the end of the year would be automatically entered into a drawing. The prize: The credit union would make the member’s loan payment for an entire year. Doug Ames, a long-time member and employee of Owens Corning, shown here was the prize winner. The credit union paid his home equity loan payment for him throughout 2009. (Photo provided by Fiberglas FCU) ... * INDIANAPOLIS (12/30/09)--Financial Center FCU has named J. Kevin Ryan as president/CEO, effective Dec. 31. With more than 28 years experience in financial services, Ryan has been involved in the credit union movement for the past 23 years, with experience in finance, budgeting, investments, regulatory compliance, business development and marketing. He has been a board member at the Indianapolis-based credit union and its credit union service organization for the past three years. Ryan has held past executive positions at the Indiana Corporate FCU, Indiana Credit Union League, and CUNA Mutual Group, and earned the Certified Credit Union Executive and Certified League Executive designations from the Credit Union National Association ... * EL PASO, Texas (12/30/09)--Kenneth Walters has been appointed at president/CEO of the El Paso (Texas) Employees FCU, announced the $263.5 million asset credit union’s board of directors. He previously was president/CEO at Chino FCU, Silver City, N.M. Walters joined the El Paso credit union in February 2007 as executive vice president. He said he plans to be actively involved in the credit union movement and is committed to providing outstanding member service while maintaining a strong financial position fofor the credit union. (Photo provided by El Paso Employees FCU) ...

Rhamy returns to Silver State Schools CU

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LAS VEGAS (12/29/09)--Dave Rhamy, who resigned as CEO of Silver State Schools CU in Las Vegas last week, has returned to his job. Media including The Las Vegas Sun and The Las Vegas Review-Journal reported that Rhamy has returned to the credit union (Dec. 24). Silver State Schools CU also posted a message on its website from Rhamy assuring members of its strong financial position. “Our credit union is going through a challenging time, just like most other financial institutions,” Rhamy said. “However, our credit union has nearly $54 million in savings reserve (capital). This means that we could endure two more years of losses similar to those we've experienced in 2009, although we won't likely need to because your (and our) financial condition the past few months is much more positive than the first nine months of the year.” The message does not mention Rhamy’s resignation or return to Silver State Schools CU. Rhamy said last week that he was resigning from the credit union to pursue opportunities in the legal profession, according to the credit union (News Now Dec. 22). He became president/CEO of the credit union in 1999. He tendered his resignation from the board of directors of the Credit Union National Association (CUNA) at that time. A special election for Rhamy’s director seat on the CUNA board, announced before he returned to the credit union, will be conducted Jan. 21 to Feb. 12 by written ballot. Nominations are due Jan. 20. Rhamy is eligible to run for the seat. Silver State Schools CU has $899 million in assets.

Holidays present slew of oddball robberies

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MADISON, Wis. (12/29/09)--Robberies during the holidays were a bit on the usual side, including an armed gunman who wished the tellers he'd just robbed a "Merry Christmas." Among them:
* A man who robbed $75 million asset Financial Plus CU, Des Moines, Iowa, Wednesday afternoon entered the credit union wearing a hooded sweatshirt and a "skeleton" ski mask. He pointed a handgun at a teller, who removed her cash drawer and placed it on the counter. The suspect placed his gun on the counter, removed his gloves, and started shoving money into a plastic bag. The suspect also took another teller's cash, and before he fled, he wished them both a "Merry Christmas." (Des Moines Register Dec. 24). * A thief wore a black jacket, hat, ski mask, dress shoes and dress pants, plus white gloves, when he walked into GTE FCU, Tampa Fla., Dec. 5. He also held up a black umbrella, propping it over his left shoulder while he held a gun in his right hand. The robber took cash from the tellers and vault, stuffed the money in a distinctive grey and black leather briefcase, and ran (TBO.com Dec. 28). Authorities hope the unique briefcase will identify the guy with the umbrella, not to be confused with the "little man with the umbrella," a 20th century marketing icon for credit unions and a predecessor to credit unions' current "Little Guy." * Someone entered the 24-hour lobby at Service First CU's Tea, S.D., branch and stole the ATM just after midnight on Dec. 21. The suspect cut the cables to the ATM and stole the entire machine. Authorities are investigating whether the theft is related to an earlier ATM theft at a convenience store on Dec. 16 (KSFY.com Dec.28). * A fake bomb was used by a man at a drive-through window at a United Community CU Saturday in Crosby, Texas. The man pulled up to the window and handed the teller a package with a note demanding money. She gave him the money, then called police. A bomb squad secured the branch and sent a robot to retrieve the device, which turned out to be a well-constructed homemade bomb hoax. "The teller was smart. She didn't touch it," said the Harris County Sheriff's Office (abc13 KTRK.com Dec. 26). * Another fake bomb was brought into a Riverton, Utah branch of Sandy-based Jordan CU Wednesday just before 5 p.m. by man wearing a ski mask. He also was armed with a gun. He set the package on the counter and said a bomb was inside. He fled toward a residential neighborhood with the money. The Unified Fire bomb squad examined the box and determined it wasn't a bomb. * Holidays are prime time for crimes of opportunity, say police in Epping, N.H. A Service CU ATM inside a Walmart there provided an example. A man thought he deposited $590 into his account via the ATM but didn't read the transaction slip before he walked away. It said, "Unable to make a transaction at this time." The ATM returned the deposit, which the man did not notice. A woman accompanied by a boy stopped at the machine, took the cash and entered Walmart. Police are distributing a surveillance photo of the woman. Service CU, which is based in Portsmouth, N.H., is covering the victim's loss (The Boston Channel.com Dec. 25).

Heartland settles class action lawsuits in Texas

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PRINCETON, N.J., and SAN JOSE, Calif. (12/29/09)--Heartland Payment Systems Inc. has agreed to settle the data breach-related consumer cardholder class action lawsuits that were consolidated in the U.S. District Court for the Southern District of Texas--to the tune of $1 million to $2.4 million. The suits related to a breach by cybercriminals of its payment system, which the company announced Jan. 20. The breaches occurred between Dec. 6, 2007 and Dec. 21, 2008. The credit card processor agreed to pay the amount to class members in the lawsuit who submit valid claims for losses as a result of the intrusion, it said in a press release. It also agreed to pay all costs tied to the administration of the settlement--including up to $1.5 million for the cost of notice to the settling class--and up to $760,000 of the class action members' attorneys' costs. Heartland also agreed to submit the report of an independent expert on the company's actions and plans to enhance the security of its computer system. The settlement is subject to court approval. Heartland said it could terminate the deal if costs of notice exceed $1.5 million, or if it received more than 2,500 requests for exclusion from the settlement class. The settlement includes all intrusion-related proceedings by consumers who used the payment cards during the breach period, including those who may allege to have suffered losses, the company said. In another related court case stemming indirectly from the breach, VeriFone Holdings of San Jose, Calif., said Monday that a U.S. District Judge in New Jersey had denied Heartland's request for a preliminary injunction against VeriFone to prevent it from communicating it would provide support to merchants using processing terminals from Heartland. The two companies have worked together for years, but they filed lawsuits against each other. VeriFone claims a design for processing terminals at Heartland's new end-to-end encryption system infringes on one of its patents. Heartland says VeriFone is using unfair trade practices to keep its business. Data breaches at Heartland and other companies have prompted a drive toward tougher encryption of payments processing systems. As a result Heartland decided to use its own end-to-end encryption platform (News Now Nov. 10). In Monday's VeriFone opinion, U.S. District Judge Mary L. Cooper said Heartland made contradictory claims over its ability to service clients using VeriFone systems. VeriFone had announced in November it would provide support to prevent disruption to merchants.

MidFlorida CEO named to Fed branch bank board

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LAKELAND, Fla. (12/29/09)--MidFlorida CU President/CEO D. Kevin Jones has been named to the board of directors of the Jacksonville branch of the Federal Reserve Bank of Atlanta. His term begins Jan. 1. It will expire on Dec. 31, 2012. Branch directors of the Federal Reserve Bank of Atlanta provide economic information about their industry and the branch territory to the district bank's president and head office directors, who use the information to form monetary policy and make discount rate recommendations. Jones, who joined MidFlorida in 1992, is a past director of the Florida Credit Union League Service Group. Previously he served as vice president of finance at Cummins Employees FCU, and held several positions at American Fletcher National Bank. Hugh Dailey, president/CEO of Community Bank and Trust of Florida in Ocala, also was named to the Jacksonville branch board. MidFlorida CU is headquartered in Lakeland. It has $1.4 billion in assets.

DFI director in first visit to ICUL offices

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NAPERVILLE, Ill. (12/29/09)--The Illinois Credit Union League (ICUL) will submit a proposed rule draft for consideration by the director of the Illinois' Division of Financial Institutions (DFI) of the Illinois Department of Financial and Professional Regulation so the DFI's rule on allowance for loan losses is consistent with a new state statute.
Click to view larger image Illinois Department of Financial Institutions Director Robert Meza of the Illinois Department of Financial and Professional Regulation met with staff at the Illinois Credit Union League recently. From left are: Dan Plauda, league president/CEO; Steve Olson, league executive vice president, general counsel and chief operating officer; Meza, and George Fiegle, executive vice president of ICUL Service Corp. (Photo provided by the Illinois Credit Union League)
DFI Director Robert Meza made his first visit to the league's headquarters since his appointment last year. He met with Dan Plauda, ICUL president/CEO; Steve Olson, executive vice president, general counsel and chief operating officer; and George Fiegle, executive vice president/chief operation officer of the ICUL Service Corp. They discussed Gov. Pat Quinn's approval in August of H.B. 348, now Public Act 96-0141. ICUL initiated the bill to codify several technical amendments to the Illinois Credit Union Act. Under the new law, credit unions are authorized to use Generally Accepted Accounting Principles (GAAP), in consultation with their auditors, to establish the historical loss rate in determining their allowance for loan losses. The law also authorizes credit unions to provide check cashing and similar money transfer services to non-members in their field of membership. Since DFI previously had promulgated a loan loss accounting rule, ICUL staff and Meza discussed the rulemaking necessary to make DFI's rule conform to the new act. ICUL staff agreed to submit a draft amendment for Meza's consideration that would authorize credit unions to establish, in consultation with their retained auditors and in accordance with GAAP, their historical loss rate through the use of a period of less than five years. During his visit to the Illinois Credit Union Center in Naperville, Meza was provided with an orientation of the system's programs. That included transactional credit, debit, pre-paid debit, and ATM products offered by the Service Corp. to credit unions in Illinois and 45 other states. ICUL staff also briefed Meza on the league's resources and services targeting smaller credit unions, including grants available through the Illinois Credit Union Foundation.

Virginia league returns 300000 in dues to CUs

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LYNCHBURG, Va. (12/29/09)--The Virginia Credit Union League will return $300,000 in dues payments to its member credit unions. Each affiliated credit union will receive a rebate of 20% of its 2009 dues payment. The league is able to finance the rebate because it recently sold stock it held in a shared branching operation. The league board thought it was prudent to sell the stock given the premium the league were paying, according to league President Rick Pillow. “We know many of our credit unions have had a challenging year financially given the economy and corporate stabilization costs,” said league Chairman Stan Leicester. We hope the dues rebate will help our credit unions cope with their budgetary challenges.” This is the first time the league has been able to rebate part of credit unions’ dues payments. Rebate checks were mailed Dec. 18.

CUs play Santa to make holidays happy for kids

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MADISON, Wis. (12/29/09)--Credit unions and credit union leagues hosted events and collected and distributed toys to make this year’s holiday season happier for children.
Click to view larger image CU Community CU in Springfield, Mo., adopted a second grade class at Boyd Elementary for the holidays, supplying each child with gifts such as socks, toys and personal hygiene items.
The Illinois Credit Union League provided toys for patients at Children’s Memorial Hospital in Chicago between Thanksgiving and Christmas. The hospital gives patients prizes after they undergo a rough day of tests or treatments, and its in-house TV network hosts game shows where patients receive prizes. The need for small prizes is ongoing, with the greatest need for gas cards and grocery store gift certificates to help families who are visiting their children in the hospital, the league said. CU Community CU, Springfield, Mo., adopted a second grade class at Boyd Elementary School and provided more than $3,500 in cash and donated items for the event. Each child received a gift bag with a
Click to view larger image Children at Boyd Elementary received gifts such as board games from CU Community CU in Springfield, Mo. (Photos provided by CU Community CU)
board game, toys, bubbles, hygiene products, gloves, socks, stocking cap, t-shirt, sweatshirt and other items. “I was surprised that it wasn’t necessarily the toys or games that caused the most excitement with the kids,” said Sarah Buchschacher, CU Community CU marketing assistant. “They liked those gifts, but many of them counted the chap stick, bubble bath, notepads and sock as their favorite things they received.” The credit union offered each child the opportunity to sit on Santa’s lap. CU Community CU’s Kids Club mascot, the CUCCU bird, also attended the holiday party. Andrews FCU, Suitland, Md., provided Christmas gifts for needy children in Washington, D.C., and Burlington County, N.J. It also participated in the Salvation Army’s Angel Tree program. Andrews adopted 40 Angel Tree children in D.C., and bought bikes, clothes, toys and baby items. Employees also collected and donated 52 gifts to the Salvation Army. BELCO Community CU, Harrisburg, Pa., teamed up with local hockey team the Hershey Bears for the annual Teddy Bear Toss Dec. 5. More than 10 BELCO employees and their families collected bears and other stuffed animals that fans threw on the ice after the Bears’ first goal. Fans donated 6,420 bears, which were donated to hospitals and charities. BELCO visited the pediatric ward of Harrisburg Hospital Dec. 22 to deliver bears. Rogue FCU, Medford, Ore., raised $4,300 to help 11 local families in need. A local TV station had run on-air promotions inviting the community to nominate a family in need on its website. The winning family received $1,000. The rest of the money Rogue raised was divided among 10 other families. More than 180 families were nominated and the website generated more than one million hits. “We hear stories from folks who had 30 years of perfect credit history prior to the recession,” said Gene Pelham, president/CEO of Rogue CU. “Now they are about to lose their home. We also hear the stories of unforeseen hardship due to medical issues or a host of other reasons. In difficult times, the communities that survive and then thrive are those communities that join together to help everyone get through.” TruMark Financial CU, Trevose, Pa., donated 105 holiday stockings with toys for the Stockings for Kids program by a local radio station B101 with the Salvation Army of Greater Philadelphia. The stockings were given to needy children in the Delaware Valley. Credit unions also gave to Toys for Tots. CU of Georgia, Woodstock, Ga., contributed to Toys for Tots by setting up donation centers at each of its six branches. Members and employees contributed hundreds of toys, the credit union said. Global CU, Spokane, Wash., gathered 140 toys and $450 in donations to benefit Toys for Tots.

CUs in media on interchange small biz lending economy

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WASHINGTON (12/28/09)--Credit unions and the Credit Union National Association (CUNA) were in the media limelight last week on several issues, including interchanges, business lending, the economy and the backlash against bankers. They were featured in the Boston Globe (Dec. 23), PBS "Nightly Business Report" (Dec. 22), Reuters (Dec. 23), CNBC.com (Dec. 22); Marketplace (Dec. 22), and Denver Daily News (Dec. 23). In a letter to the editor of the Boston Globe, CUNA Board member Robert Cashman, CEO of $764 million asset Metro CU in Chelsea, Mass., discussed the interchange issue and noted the "myriad benefits that merchants receive by accepting credit cards." He urged members of Congress to oppose legislation that would lower interchange fees. "Artificially lowering interchange fees could force credit unions like mine to either raise fees for our members, or possibly stop offering credit cards," Cashman wrote. "All we ask is for merchants to pay their fair share in a system that brings them clear benefits." Bill Bynum, CEO of Hope Community CU, Jackson, Miss., discussed with PBS "Nightly Business Report" his attendance at a White House meeting with President Barack Obama and his economic team and community financial institutions. Bynum explained the concerns smaller financial institutions have about regulators in the financial crisis, noting that regulators "really tightened their examinations quite a bit." "It's quite a balancing act to make sure that we are operating within the bounds that the regulators look for, but also serving our members in the communities that we serve," he added. He said the president wants to hear from community financial institutions such as community credit unions about the challenges they are facing so he can communicate those to the regulators. In Reuters, an analysis by Mike Schenk, CUNA's senior economist, was the lead interview discussing the drop in demand for U.S. home loans. See related article in News Now's Market section, "Rising home sales hopeful sign, Schenk tells Reuters. Schenk also was quoted last week on CNBC.com, discussing consumers' dissatisfaction with banks and how to join a credit union. In the article, Schenk explained that credit unions weren't as tangled up in the subprime mess, "so while the big banks are hunkering down and licking their wounds, we're in much better shape to make consumer loans, and are continuing to do so as we watch our market share grow in every market we serve." In "Bank's failure gets personal," in Public Radio's "Marketplace," senior editor Paddy Hirsch discusses his experience after his small bank, First Federal Bank of California, failed two weeks ago. His conclusion: "I'm going to have to do some pretty careful shopping around in the new year. And frankly, I'm seriously considering a credit union." And, the national press coverage of a bill introduced last week in the Senate that would extend the member business lending cap continued, with an article in the Denver Daily News. To access the articles, use the links.

Corporate One releases financial report for November

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COLUMBUS, Ohio (12/28/09)--Corporate One FCU reported positive reserves and undivided earnings (RUDE) of $25.6 million in its semi-annual review of its November securities portfolio, released last week. All member Paid-in-Capital (PIC) and Member Capital Shares (MCS) remain intact, the Columbus, Ohio-based corporate said. The corporate's losses totaled nearly $40.4 million for the 11 months ending Nov. 30. That compares to a net income of $19.7 million a year earlier. Losses for November totaled $32.3 million. The losses, "while disappointing" were fully anticipated, said President/CEO Lee C. Butke in the report's executive summary. Based on what is known today, "we do not anticipate having to impair our members' capital in the future," Butke said. November's losses stemmed from several factors, primarily $17.7 million in other-than-temporary impairment (OTTI) write-downs related to available-for-sale investments; $4.6 million in its capital investment in U.S. Central, and $10 million impairment on securities insured by Financial Guarantee Insurance Corp. As of Nov. 30, the corporate no longer has any capital exposure to U.S. Central, having written off 100% of its investment in U.S. Central's capital investments. That means that any future losses at U.S. Central will no longer impact Corporate One's RUDE statistics. Core earnings totaled $13.4 million for the 11 months ending Nov. 30. The corporate noted it has nearly $5 billion in assets under management, a 7% increase over a year earlier, and it has budgeted more than $9 million in core earnings for 2010 (35 basis points). Liquidity remained strong, with the corporate ending November with cash and cash equivalents totaling $874 million. Average shares for the month totaled $3.64 billion, compared with $3.32 billion for November 2008--a 10% increase. Corporate One said it continues to maintain access to multiple lines of liquidity and had, at November's end, more than $1.58 billion in tested, liquidity sources. For the full report, use the link.

Calif. chamber asks AltaOne to reconsider branch closure

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KERNVILLE, Calif. (12/28/09)--The Kernville (Calif.) Chamber of Commerce wrote an open letter to AltaOne FCU in the Kern Valley Sun last week, seeking reconsideration of the credit union's decision to close its Kernville branch. AltaOne FCU, headquartered in Ridgecrest, Calif., announced Dec. 15 that it would close three branches--including the Kernville branch--because of the economy's effect on its operating expenses. It will keep an external ATM operating with full service. Members had begun to go delinquent on loans, and the mounting chargeoffs affected the credit union's capital ratio, which dropped to below the well-capitalized standard of the National Credit Union Administration (NCUA), according to AltaOne President/CEO Bob Boland. The hit on its provisions for loan losses totaled $12 million this year, Boland told News Now. Other contributing factors were the assessment for the National Credit Union Share Insurance Fund and the $2.9 million in capital held at Western Corporate FCU (WesCorp). NCUA encouraged the credit union to review its operating expenses and take measures to increase its capital, he said. Boland told News Now the credit union had received a letter from Kernville chamber asking management to reconsider, based on the need of its members there. "We're sensitive to our members-owners in the community," he said. "Kernville is located in a remote, rural area and is a very small community that is isolated. Bank of America and Comerica banks both had abandoned the area, and the credit union was the community's preference, he said, noting the area has some small businesses that cater to tourists. "The president has been encouraging credit unions and others to serve small businesses," Boland told News Now, "but in California, unemployment is at 15%, we're seeing bankruptcies triple, car dealers are closing down and it's a very severe state of affairs. We have to reduce our operating expenses to get back to a position of profit, and we've had to make some very tough, tough choices." To cut expenses, the credit union already had closed its Mammoth Lakes location in October. Its 14 locations have been reduced to 10. Other towns' residents have been vocal about missing their credit union's convenient services. "Most members don't understand we went through a wave of layoffs to help our operating expenses," he said, adding, "There were no other options." He noted that the credit union owns the Kernville facility and will keep the building and a tenant, so it isn't abandoned. However the credit union can't staff it. "Should our financial situation improve, we'll reconsider, but we can't make promises, and we won't hold out false hope." The credit union is also closing its RiverWalk branch in Bakersfield; closing an in-store mini branch in the Albertsons grocery in northern Ridgecrest; and eliminating free-standing ATMs at the NAWS Recreation Center, China Lake and at the southern Ridgecrest Albertsons in-store branch. Like Kernville, the Bakersfield and northern Ridgecrest locations will keep full-service external ATMs. Member accounts from Kernville and the RiverWalk locations are being transferred to Lake Isabella and the Ming center in Bakersfield, said the credit union. In it's letter, the Kernville Chamber of Commerce said it "is very much opposed" to the closure because "it is the only financial institution located in the northern part of Kern Valley." The area includes Kernville, which has a population of 2,000; nearby Wofford Heights with 4,000 in population; Riverkern, Fairview and Johnsondale (Kern Valley Sun Dec. 22).

Invest or stay liquid Corporate offers 2010 strategy

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PLANO, Texas (12/28/09)--Share growth of 10.4% and loan growth of 2.7% in 2009 have left credit unions flush with cash during a period of extremely low investment yields. In the absence of loan demand, what options do credit unions have for excess funds? Three divergent strategies have emerged, said Andy Swoger, senior investment officer with Southwest Corporate CU Investment Services in Plano, Texas:
* Leave cash liquid and wait for increasing rates; * Increase holdings of agency callable and mortgage-backed securities (MBS) bonds; and * Increase short-term laddering into bank certificates of deposit (CD) portfolios and corporate certificates.
Credit union cash and equivalents rose 32.8% over the same period in 2008, according to third-quarter National Credit Union Administration (NCUA) data. “The increase suggests many credit union portfolio managers are reluctant to allocate excess funds in the current low rate environment,” Swoger said. “Unfortunately, unallocated funds coupled with low interest rates are driving down investment yields.” NCUA data also indicate total investments for the third quarter increased 25.5% over third quarter 2008. Credit union investment portfolios experienced significant growth in every category, with agency MBS ($12.6 billion), agency bullets/callables ($12.2 billion), bank CDs ($9.8 billion), collateralized mortgage obligations ($6 billion), and corporate certificates ($3.3 billion) leading the way. As of early December, bank CD rates “were relatively high compared with agency bullets and corporate certificates,” Swoger said. “As CD portfolios have grown, many credit unions dissatisfied with CD yield are looking to agency step-ups and shorter average life MBS alternatives. "In my experience, bank CDs traditionally provide more value in a declining rate environment due to less efficient pricing methods (lag), but those inefficiencies are also present when rates turn around,” he continued. “In a rising rate environment, agency securities and MBS provide strong relative value due to constant re-pricing.” Heading into 2010, Swoger anticipates that credit unions will continue to grow and diversify into agency markets, based on the large shift experienced into these investment vehicles in 2009. “Credit unions are becoming increasingly comfortable investing in agency securities. Generating earnings is more difficult than in the past, and in a cash-rich environment, evaluating other investment options may be a good idea,” he said. “The agency market provides credit unions the ability to put larger amounts of cash to work with relative ease.” As the yield curve steepened during 2009, portfolio managers began extending out investment maturities, Swoger said. Investments with maturities less than one year grew during the first half of 2009, but the trend reversed in the third quarter. Investments with terms of fewer than one year decreased, and investments with one-to-three-year terms experienced growth. “The Federal Reserve has stated that the depressed economy and slow recovery may require the Federal Open Market Committee to keep rates low for an extended period,” Swoger said. “I think credit unions now realize that in order to pick up yield, they have to move a little further out on the curve.” Portfolio managers should always carefully weigh the high cost of keeping funds liquid versus the impact of interest rate risk on the investment portfolio, and more important, on the total balance sheet, Swoger said. A valuable exercise when analyzing this dilemma is to calculate how much rates would have to rise for a credit union to break even on holding short-term funds yielding less than 50 basis points, he said. Retaining excess cash flow in overnight cash accounts yielding 15 to 25 basis points while waiting for rates to rise may not be the best alternative, especially for credit unions suffering from slow loan growth, he added. With economic pundits forecasting low rates for the next six months and slow-rising rates the remainder of 2010, extending duration may be warranted, Swoger said.

CU System brief (12/27/2009)

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* EL CAJON, Calif. (12/28/09)--Grossmont Schools FCU hosted more than 60 school district superintendents, cabinet members, school board trustees and educational stakeholders at its "Advocacy for
Click to view larger image Click for larger view
Education--A Dialogue With Sen. Mark Wyland" on Dec. 12). Wyland (R-38) is a member of the California Senate Education Committee. Wyland detailed the Senate version of "Race to the Top" legislation, S.B. X51, which he coauthored with Sens. Gloria Romero (D-24), Bob Huff (R-29) and Elaine Alquist (D-13), and updated attendees on its progress. He also spoke about the state's 2010/2011 education budget. Other topics included allowing school districts greater flexibility on deciding how to best use their funds; the impact of the H1N1 flu virus on school districts, and states' deferred payments to school districts, which are contributing to negative cash flows. From left are Assemblyman Joel Anderson (R-77), Wyland, and Grossmont Schools FCU CEO Steve Devan. (Photo provided by the California Credit Union League) …

Tinker goes beyond ADA mandates to serve blind members

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OKLAHOMA CITY (12/28/09)--Tinker FCU is going beyond the legal requirements of the Americans with Disabilities Act to help members with visual impairments. In February, Tinker FCU merged with a small credit union that serves individuals with visual impairments--The Associated Blind of Oklahoma/Texas FCU (ABOT FCU). Since the merger, Tinker employees have explored hardware and software technology to help members read disclosures, conduct their financial business independently and receive information about the accounts and services the credit unions offer. “We realized very quickly in the merger process that we were going to have to make some changes in the way we do things, in order to truly meet the needs of these members we had pledged to serve,” said Billie Houston, executive vice president and chief financial officer. “While we can offer them much more in the way of account and service options than their previous credit union was able to, we realized we must also be able to cater to their special needs, in order for them to be able to take advantage of what we offer. “It would be unfair to them to always have to depend on others to help them conduct their personal business,” Houston added. Tinker will install JAWS, a software program that can electronically read printed type and translate it to audio, at its branches next year. Marketing has also made its accounts and services brochures available in large print--both on the credit union’s Web site and internal Intranet system. About 10% of members read Braille, so the credit union is researching Braille options. Tinker employees also have received sensitivity training, conducted by the director of the Oklahoma League for the Blind. “We realized the steps we’re taking also will help many of our older members who may be experiencing sight problems simply due to their age,” Houston said. “We’re very happy to serve these members as they deserve, and our research and discussions have also led us into thinking about service to other members with special needs other than vision.” Tinker has $2 billion in assets.

CUs offering advice for fiscally fit 2010

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MADISON, Wis. (12/28/09)--Credit unions are offering their members advice on how they can stay “fiscally fit” in the new year. The Ohio Credit Union League said that Ohio credit unions are encouraging consumers to review their finances and incorporate five steps into their New Year resolutions:
* Pay down credit card debt. Set a goal to pay off debt by making monthly payments beyond the minimum amount due. * Review monthly budgets. * Save for 2010 and beyond. The league recommended having six months’ worth of salary saved. * Check credit reports. * Educate children about money.
Affinity FCU, Basking Ridge, N.J., also offered five financial tips for consumers to consider:
* Evaluate the terms and conditions of credit cards. Card companies have raised rates as high as 29.9% and lowered spending limits, the credit union said. * Take advantage of free online money management tools. Affinity will offer FinanceWorks to its members as a part of its online banking service. * Set up a meeting with a financial adviser. * Contribute to an individual retirement account. Consumers have until April 15 to make contributions for 2009. * Review credit reports.

Pa. CUs in district meetings with state legislators

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HARRISBURG, Pa. (12/28/09)--Pennsylvania credit unions have participated in several district meetings with state legislators, discussing overdraft protection, member business lending, interchange and the positive actions credit unions are taking for their communities.
On Dec. 22, Rep. Glenn Thompson (R-5) and Charles Dent (R-15) were briefed on key credit union issues by Connie Wheeler, CEO, and Jim Beierlein, board member, both of Penn State FCU, Bellefonte (Life is a Highway Dec. 23). Thompson, who is a member of two credit unions, said credit unions did not contribute to the nation’s financial crisis. If there were more credit unions, there would not have been a financial meltdown, he added. Dent met with Fran Muto, CEO, People First FCU, Allentown; Rosie Krantz, CEO, Lehigh Valley Educators CU, Allentown; and Alan Musselman, chief financial officer, First Commonwealth FCU, Lehigh Valley. Rick Wargo, Pennsylvania Credit Union Association (PCUA) executive vice president and general counsel, and M.E. Siegfried, PCUA communications specialist, also attended.
Rep. Glenn Thompson (R-5) met with Connie Wheeler and Jim Beierlein, Penn State FCU, Dec. 22. Thompson is a member of two credit unions.
Rep. Charles Dent (R-15) met with credit union representatives Dec. 22. From left are Rick Wargo, Pennsylvania Credit Union Association executive vice president and general counsel; Fran Muto, CEO, People First FCU; Dent; Rosie Krantz, CEO, Lehigh Valley Educators CU; and Alan Musselman, chief financial officer, First Commonwealth FCU. (Photos provided by the Pennsylvania Credit Union Association)
During the meeting, Dent agreed with the credit union representatives on the value of overdraft protection and how it helps consumers. He also addressed concerns about the proposed Consumer Financial Protection Agency, saying that it is “going after a lot of folks who are already regulated but aren’t the cause of the problem we’re in today.” On Dec. 18, Mark Brennan, PCUA governmental affairs committee member; Ron Celaschi, Clearview FCU, Moon Township; and Lisa Florian, Riverset CU, Pittsburgh, met with Rep. Tim Murphy (R-18). The group discussed financial literacy; overdrafts; interchange; member business lending; cramdowns; and the Credit Card Accountability, Responsibility, and Disclosures Act. PCUA Director Cookie Yoder and Ron Lasich, PCUA governmental affairs committee member, met with Rep. Mike Doyle (D-14). They discussed what credit unions are doing for their members in the stressed economy, overdraft protection, interchange and member business lending.

FBI probing breach targeting Citibank

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WASHINGTON (12/23/09)--The Federal Bureau of Investigation (FBI) is investigating a computer security breach targeting Citigroup Inc.'s subsidiary, Citibank, says The Wall Street Journal (Dec. 22). The theft resulted in tens of millions of dollars stolen by hackers working with Russian cybercriminals, the newspaper said, adding the attack was detected over the summer but could have occurred as long as a year earlier. Citigroup denied the report, saying its system had no breaches and no losses--either for customers or the bank. The newspaper cited a source "familiar with the case" who said the FBI, the National Security Agency, the Department of Homeland Security and Citigroup had "swapped information to counter the attack." The federal agencies declined to comment, said the newspaper. A Citibank customer, Robert Blanchard, co-owner of a lighting company in Mount Vernon, N.Y., told the newspaper he tried to log into his company's Citibank account on July 6 but couldn't do so with his regular password and token code. Citibank changed his password and sent him a new one by overnight mail, but he still couldn't get in. Before he could call his local bank branch, online thieves had sent more than $1 million from his account to banks in Latvia and Ukraine. Investigators discovered a computer at his lighting company had been infected by a computer at another company he co-owns. That computer dragooned his lighting company computer into a group of computers used to attack others. The software loaded onto his computers included a spyware program that logged keystrokes. Citibank sleuths began working to help him recover $810,855 from the Latvian bank, and Citibank gave him the remainder, said the article. Citigroup said the Blanchard case was an isolated fraud incident." Citigroup has stayed mum about such incidents since 1994, when Citibank revealed that a Russian hacker had stolen more than $10 million from customer accounts, said security analysts. Most of the money was recovered. However, the bank's competitors used the incident to try to steal its largest depositors. The recent incident indicates that today's hackers have more sophisticated elements that are harder to block from intrusion, said security companies in the article.

WOCCU applauds supported U.N. resolution

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MADISON, Wis. (12/23/09)--World Council of Credit Unions (WOCCU), together with the global credit union movement, applauded the United Nations (U.N.) General Assembly's vote Friday proclaiming 2012 the International Year of Cooperatives. The proclamation recognizes the important role cooperatives of all types, including credit unions, play in strengthening and supporting global economic social development. Recognition by the U.N. also strengthens the global cooperative movement itself, according to Pete Crear, WOCCU president/CEO. "WOCCU has always been proud to be at the forefront of global credit union development, but the International Year of Cooperatives raises the stakes on the important role cooperatives play," said Crear. He was a member of the U.N. committee that drafted the recommendation. "By recognizing the value cooperatives have in social development, the U.N. is honoring the work we've already done. However, the declaration also poses a challenge to make cooperatives even more influential and effective in the work we will do in the future," Crear said. WOCCU staff participated in the development of the original recommendation that led to the declaration. Staff also contributed to the U.N. Secretary General's report, "Cooperatives in Social Development," which served as the foundation for the recommendation. In advance of Friday's vote, WOCCU worked with its members to lobby U.N. representatives to ensure passage of the resolution. The recommendation leading to the General Assembly vote cites cooperatives' abilities to "promote the fullest possible participation in the economic and social development of all people." It also recommends the promotion and growth of financial cooperatives to meet the goal of inclusive finance by providing access to financial services. The U.N. declaration encourages all member countries and stakeholder organizations to support cooperatives by raising public awareness of cooperatives' roles in "sustainable development, eradication of poverty and (support of) livelihoods of various economic sectors in urban and rural areas." The declaration further encourages governments to create legal and social environments conducive to promoting cooperative development "by providing a level playing field for cooperatives vis-à-vis other business and social enterprises, including appropriate tax incentives and access to financial services and markets." "Credit unions and other cooperatives will play an even greater role in social and economic development both at home and around the world in the years to come," Crear added. "Our role is to not only spread the good word, but help strengthen cooperatives' capabilities to reach and serve people who need that service most." In the next few months, WOCCU will coordinate with the U.N. and the International Cooperative Alliance on planning and facilitating the International Year of Cooperatives.

Dispute over CU National fraud losses moves to federal court

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MADISON, Wis. (12/23/09)--A dispute between CUNA Mutual Insurance Society (CUMIS) and credit unions looking to recover losses related to fraud at CU National Mortgage Corp. has moved to U.S. District Court in Madison, Wis., from state court. “The case was moved to federal court by one of the credit unions,” said Rick Uhlmann, CUNA Mutual Group senior manager of media relations. “This is a procedural action that does not change the substance of the dispute over insurance coverage.” Twenty-six credit unions lost $140 million after being defrauded by CU National Mortgage, which closed after filing for bankruptcy in February. The credit unions argue that the losses they incurred should be covered under surety bonds they purchased from CUMIS, a subsidiary of CUNA Mutual Group. CUMIS filed two declaratory judgment actions in June and August in Wisconsin state court asking the court to declare that the surety bonds did not cover the losses from the CU National Mortgage fraud (News Now Dec. 8). CUNA Mutual filed the judgment action to resolve questions about coverage. The court served the actions, and the case was moved to federal court last week. CU National Mortgage President, Michael McGrath, pleaded guilty in June to defrauding the credit unions and Fannie Mae. He admitted to conspiring with others to fraudulently sell credit unions loans and use the proceeds to finance U.S. Mortgage’s operations and investments for himself and the company (News Now June 12).

Streifel elected to CUNA board special elections announced

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MADISON, Wis. and WASHINGTON (12/23/09)--Susan Streifel, an incumbent from Woodstone CU, Federal Way, Wash., has been elected to the Credit Union National Association (CUNA) Board in District 6, Class A. Streifel ran against Jon Hernandez of CalCom FCU, Torrance Calif. The position represents credit unions with fewer than 20,000 natural person members. District 6 is composed of Alaska, California, Hawaii, Idaho, Nevada, Oregon, Washington, American Samoa, Guam, Johnston Atoll, Midway Atoll, Northern Mariana Islands, Palmyra Atoll and Wake Atoll. Also, a special election will be conducted for the director seat in District 6, Class C, following the resignation Friday of Dave Rhamey, former president/CEO of Silver State Schools CU. Nominations are due to CUNA on Jan. 20. The special election will be conducted by written ballot from Jan. 21 to Feb. 12. The term of office will expire at the adjournment of the 2012 Annual General Meeting. CUNA is expediting the election process to ensure a successful candidate is in place to attend CUNA's Governmental Affairs Conference/February board meeting. Nomination and voting times have been cut to roughly three weeks each. Another special election for a District 4, Class D position--previously held by Wisconsin Credit Union League President Brett Thompson--is in progress. So far, one nomination has been received: Patrick Jury, president of the Iowa Credit Union League. Nominations for that election are due Jan. 8. Nomination forms will be accepted by fax (608-231-4874), email thanson@cuna.coop, or hard copy sent to 5710 Mineral Point Road, Madison, WI 53705.

SECU donated 270000 to 900 charities in 09

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RALEIGH, N.C. (12/23/09)--State Employees’ Credit Union (SECU) of North Carolina employees and members made contributions benefiting more than 900 nonprofits in the 2009 State Employees Combined Campaign (SECC). SECU employees donated more than $66,000 to this year’s campaign, and SECU members, via their foundation, provided $200,000 in funding for the SECC Resource Guide Listing, helping to offset administrative costs of the campaign to assure more funds reach the North Carolinians who need them most. In a year when overall giving to the campaign was down by 20%, SECU employees increased their giving by 15%, surpassing their 2008 figure by nearly $9,000. This outreach complements the credit union’s ongoing charitable efforts at its 226 branches and multiple operations centers, SECU said. “In this time of great need in North Carolina, SECU’s employees are demonstrating their commitment to helping others through efforts such as the SECC,” said Leigh Brady, senior vice president of SECU’s Education Services department. She noted the efforts exceeded expectations for the campaign. “Equally impressive is the commitment of SECU members, providing critical funding for the SECC Campaign in the absence of state resources,” Brady said. SECU, based in Raleigh, N.C., has more than $16.7 billion in assets.

Kinecta FCU CEO resigns effective year end

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MANHATTAN BEACH, Calif. (12/23/09)--Kinecta FCU announced Monday that its board of directors has initiated a search for a new president/CEO. Current President/CEO Simone Lagomarsino has resigned from her position. She will remain with the organization through Dec 31. “I speak on behalf of the entire board in expressing our appreciation to Simone for the leadership she has provided to Kinecta over the past three-and-a-half years,” said Mary Yasui-Yamabe, Kinecta board chair. “Her leadership, through an extraordinarily difficult time, has been invaluable in ensuring Kinecta came through the global financial crisis and challenging economic environment safe, sound and strong. “Our 2009 losses were due principally to WesCorp investment write-downs, building our allowance for loan losses, and National Credit Union Shared Insurance Fund expenses,” Yasuyi-Yamabe continued. “Our fourth-quarter numbers reflect the strength and stability of our operations and our credit union, and clearly show the worst is behind us. Kinecta’s rate of delinquency formation has been declining for several months, our capital ratio is now 6.63%, up 22 basis points in the past two months, and we plan to restore operations to profitability and bring the capital ratio above 7% in 2010. “During Simone’s tenure at Kinecta, we have significantly improved operational effectiveness, increased efficiencies and enhanced technology infrastructure,” she added. “We wish her the very best moving forward, and have no doubt she will be successful in this next chapter of her career.” Lagomarsino led the credit union for 3.5 years. “I leave Kinecta knowing the credit union is healthy and has a strong capital position with exceptional performance and member satisfaction,” she said. “I have no doubt Kinecta will achieve great success ahead.” Kinecta FCU, based in Manhattan Beach, Calif., has $3.93 billion in assets.

CUNA closed Thursday-Friday no INews NowI

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WASHINGTON and MADISON, Wis. (12/23/09)--In observance of the holidays, the Washington, D.C., and Madison, Wis., offices of the Credit Union National Association (CUNA) will be closed Thursday and Friday. News Now will not post editions those days and will resume regular publication on Monday. Next week, CUNA will be closed Jan. 1 for the New Year's Day holiday. News Now will not publish a Jan. 1 edition.

CU System briefs (12/22/2009)

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* MADISON, Wis. (12/23/09)--A robbery Monday in Madison, Wis., in which citizens teamed up to help police nab a suspect, occurred at Badger Campus CU, on Spring Street, near the University of Wisconsin-Madison campus. It did not occur at UW CU, as local news accounts and News Now reported in Tuesday's edition … * OGDEN, Utah (12/23/09)--Goldenwest FCU, a $714.6 million asset, Ogden, Utah-based credit union, announced that for the sixth consecutive year, its members will earn a bonus dividend this year. Goldenwest will pay a 7% annual yield on shares for the month of December. Collectively, members will earn more than $640,000 with the bonus dividend. The bonus program has provided more than $13 million to members during the past six years, Goldenwest said. The bonus dividend is paid on primary, secondary, individual retirement and Christmas Club share accounts (Deseret Morning News Dec. 22) … * PLYMOUTH, Mich. (12/23/09)--Glenn Ray is the Michigan Credit Union League’s new director of public affairs. He succeeds former director Mike Bridges and will work at the league’s Lansing headquarters (Michigan Monitor Dec. 21). Ray will develop a proactive media relations program, oversee the league’s CUBE TV and manage the credit union fundraising drive to support a cooperative advertising campaign. Ray has more than 15 years of experience working for Ford Motor Company in financial communications and public affairs. He also was the director of public, government and industry affairs at ArborGen in South Carolina and served as director of public and media relations with Quicken Loans in Livonia, Mich. ... * RANCHO CUCAMONGA, Calif. (12/23/09)--Jim Blouin has been named regional sales manager-Northeast for CO-OP Financial Services. With more than 20 years of credit, debit and ATM processing sales and relationship management experience, Blouin spent 12 years at Fidelity National Information Services Inc. (formerly Certegy Card Services). He began his career with The Howard Bank, NA/Banknorth Group, Inc. Blouin will be based in Montpelier, Vt., and will be responsible for business development and sales in the region. CO-OP Financial services provides a nationwide ATM network, debit processing services, ATM processing and other account-driven access channels such as shared branching, checking imaging and mobile payments …

New CDCU in Long Island City thanks federation

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LONG ISLAND CITY, N.Y. (12/23/09)--The East River Development Alliance (ERDA) is thanking the National Federation of Community Development Credit Unions for helping the group obtain a federal charter for a community development credit union (CDCU) that will open next year in Long Island City, N.Y. The federation has worked with ERDA for five years to get the CDCU chartered. The CDCU will be the first chartered in the region since 2000. The federation also committed $100,000 to the CDCU. “The launch of our credit union will embed a culture of ownership and savings in public housing neighborhoods in Western Queens,” said ERDA President/CEO Bishop Mitchell E. Taylor. “We believe that this is a replicable model for change in other public housing neighborhoods nationwide.” ERDA--a non profit that supports credit union organizers--targets communities with average incomes below $24,000. The New York City average income is $39,000, and the U.S. average income is $43,600. ERDA organizers plan to hold a press conference about the CDCU soon. First Bergen FCU, Hackensack, N.J., also was chartered this year with help from the federation. “Chartering of new credit unions has unfortunately become a rare event--only two new federal charters this year, both of them CDCUs,” said federation President/CEO Cliff Rosenthal. “This is one of our major areas of concern, and one which we are vigorously advocating with the National Credit Union Administration.”

Plant closure affects CU but were here for the long haul

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FRANKLIN, Va. (12/22/09)--The closure next year of a paper mill will impact a Franklin, Va.-based credit union, but the impact is "manageable," according to its CEO. When International Paper announced it would close its Franklin paper mill, the $208 million asset Bronco FCU went into action, reassuring members it was prepared to assist them with financial problems they might experience from the closures (The Virginian-Pilot Dec. 21). Nearly 14% of Bronco's 18,990 members work at the facility. The closure's impact of "isn't insignificant, but we think it's manageable," CEO Bob Petty told the newspaper. He posted a letter on Bronco's Web site assuring members that the credit union is "here for the long haul." Three years ago the credit union became a community chartered credit union to diversify its membership instead of relying on a single employer-sponsor. To respond to members' concerns, the credit union created a team that addresses financial education needs such as inquiries from International Paper employees with questions about severance payments and rolling over their 401(k) retirement plans, Pam Vaughan, marketing and human resources manager at the credit union, told the paper. A second team works with members who encounter financial difficulties, she said. In addition to losing 828 jobs at International Paper, the area's communities may lose twice that number in jobs from the effects of the mill's shutdown on other businesses, according to the Virginia Economic Development Partnership. Those losses could trigger financial difficulties for borrowers and depress demand for home loans, car loans and other credit, the article said.

California CUs 3Q Assets shares up but loans down

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SACRAMENTO, Calif. (12/22/09)--Assets and shares at California credit unions were up in the third quarter, according to the California Department of Financial Institutions’ Quarterly Report. The report commented on California’s state-chartered credit unions. Assets were up 1.8% at $74 billion, while shares increased 2.5% to $62.1 billion compared with September 2008. Loans decreased 7.2% from September 30 one year ago to $48.5 billion, the report said. “In a state which has been hit with a real estate crisis, high unemployment and a large fiscal deficit, members have turned to bolstering their savings and tightening their belts when it comes to expenses,” said Daniel Penrod, California and Nevada Credit Union League senior industry analyst. “This has led to a significant increase in assets, particularly savings, and a decrease in the demand for loans. Despite California credit unions’ ability and--unlike other financial institutions in the state--willingness to lend, members are hesitant to borrow,” he added. Other statistics the report noted:
* Net worth decreased 13.3% to $6.6 billion from $7.6 billion, causing the net worth to asset ratio to decrease to 8.90% from 10.45% one year ago; * The loan loss allowance was up 108.5%, to $1.3 billion from $602.8 million; * Net margin to average assets increased to 4.35% from 4.20% one year ago; * Provision for loan losses was up 75.9% to $1.1 billion; * Net income moved to a net loss of $365.4 million from revenues of $32.7 million during third quarter 2008; * Delinquent loans increased 68.3% to $1.1 billion; and * The number of credit unions decreased 7.4% to 175.
California has 476 credit unions.

Loans members assets delinquencies in Kansas CUs

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WICHITA, Kan. (12/22/09)--Kansas credit unions have experienced an uptick in assets, loans, members and delinquencies in the third quarter, according to a report from the Kansas Department of Credit Unions released last week. Credit union assets were up 14% to $3.75 billion compared with the third quarter of 2008, the report said (The Wichita Eagle Dec. 18). Other highlights of the report were:
* Credit union membership rose nearly 6% to 539,000; * Loans increased nearly $76 million to roughly $2.5 billion in the third quarter; * Delinquencies jumped 42% to $35.6 million, compared with the same period last year: and * Return on average assets was 0.80% before accounting for fees credit unions had to pay to replenish the National Credit Union Share Insurance Fund. Once the fees were factored in, ROAA was 0.69%.
“We’re pleased with the overall performance of the credit unions,” Jerel Wright, assistant vice president of consulting and compliance with the Kansas Credit Union Association, told News Now. “Credit unions still are looking at writing down further losses from the National Credit Union Administration (NCUA) assessment. So that will be the biggest drag. “The credit unions all are saying it would be a really good year, except for the NCUA assessments,” he concluded.

CU System brief (12/21/2009)

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* MADISON, Wis. (12/22/09)--Madison, Wis., police were lauding the teamwork of a group of citizens who helped catch a suspect in a robbery Monday of Badger Campus CU in Madison. A jogger in yellow shorts, a credit union member, a bicyclist and a woman driving her car past the scene all helped track down the alleged robber, who was arrested within minutes of the 12:08 p.m. robbery of the credit union's Spring Street branch. Police recovered the stolen money and the robbery note, and the suspect, Michael Gober, 45, Madison, was tentatively charged with robbery. The group of citizens came together to provide police with "great detail on his direction of travel" and "all assisted police in setting up a very quick and successful dragnet," said Madison police spokesman Joel DeSpain. As he ran, the suspect tried to get into cars without success and was chased down by officers in a parking lot (The Capital Times Dec. 21) …

CU small biz efforts in N.J. papers spotlight

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MONTVALE, N.J. (12/22/09)--The efforts of New Jersey credit unions to provide needed services to small businesses were featured in a Monday story in The Bergen Record. The article highlighted Cabin Crafters, a small South Hackensack, N.J., company that refurbishes corporate jet cabins, said the New Jersey Credit Union League (The Daily Exchange Dec. 21). The difficulties that Cabin Crafters’ founder and President Mario Diaz, 43, had in obtaining funds to expand and relocate with several banks were detailed in the article. Diaz finally used his personal funds to finance the project, and when the company looked for a $250,000 line of credit--as a safety net should a cash flow problem arise--he turned to a credit union. “In the current real estate market, banks are very reluctant to give out loans,” Gabriella Arrigo, Cabin Crafters’ bookkeeper, told the newspaper. Businesses like Cabin Crafters have helped New Jersey’s largest credit union, Affinity FCU, more than double the size of its business-loan portfolio this year to $100 million from $47 million, the paper said. Affinity FCU, based in Basking Ridge, N.J., has $1.98 billion in assets. “Credit unions are stepping up to make the small-business loans a lot of banks are not making now,” Paul Gentile, president/CEO of the league, told the newspaper. The article also listed issues facing credit unions--including the member business lending cap--when lending to small businesses. With legislation pending on increasing the cap to 25% of assets, the article mentioned that credit union lending to small business would provide 108,000 jobs nationwide. To read the article, use the link.

Rhamy tenders resignation from Silver State Schools CU

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LAS VEGAS, Nev. (12/21/09)--David Rhamy, president/CEO of Las Vegas-based Silver State Schools CU, last week resigned the position as well as his seat on the Credit Union National Association board, effective immediately. Rhamy resigned "to pursue opportunities in the legal profession," said a statement from Carol Gibson, interim CEO and executive vice president/chief operating officer, on the credit union's website. Rhamy had been president/CEO of the $899.2 million asset credit union since 1999. "Not only has he worked diligently to provide leadership to our credit union for the past 10 years, he has also been a tireless advocate for the credit union movement during his more than 30 years in the industry. We will miss him and wish him the best," said Gibson. Rhamey was a member of CUNA's Corporate Credit Union Task Force, established in January. He is past chairman of Western Federal Corporate CU (Wescorp) and served on its board since 1995. He also has been active in the California and Nevada Credit Union League and the Richard Myles Johnson Foundation. Silver State Schools CU is the largest in the Las Vegas area. It, like other financial institutions in the state hard-hit by the recession as members defaulted on loans, reported losses at nearly $36 million during the first nine months of 2009 (Las Vegas Sun Dec. 20). The credit union's private insurer, American Share Insurance of Ohio, told the Las Vegas Sun Nov. 27 that despite a high number of problem loans, the credit union has a good depositor base and strong management.

CU System briefs (12/18/2009)

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* GREENSBORO, N.C. (12/21/09)--After being contacted by credit unions in his district and throughout North Carolina, U.S Rep. Walter Jones (R-3rd) co-sponsored House Resolution 3380--the Promoting Lending to America’s Small Business Act of 2009. Jones became the first North Carolina sponsor of the bill, which would raise the credit union member business lending cap to 25% of assets. “Congressman Jones has seen firsthand how credit unions are providing solutions for business owners and government entities across the state,” said Dan Schline, senior vice president of association services for the North Carolina Credit Union League. North Carolina credit unions’ grass roots efforts paid off, said the league (weekly update Dec. 17) … * RALEIGH, N.C. (12/21/09)--A credit union's surveillance video helped identify for arrest a suspect charged with kidnapping, rape and attempted murder. Michael Lynn Rogers of Raleigh has been charged with repeatedly raping and using a knife or razor to cut a woman multiple times. The woman told police they were at an ATM at State Employees CU before he drove her to a park and assaulted her. Investigators obtained a copy of the ATM's surveillance tape and used it to help identify the suspect. They also gleaned information from an ATM card and state motor vehicle department records (The News and Observer Dec. 17) … * GREAT FALLS, Mont. (12/21/09)--A Great Falls, Mont., man received more than eight years in prison for robbing Great Falls-based Family First CU in 2006 (Great Fall Tribune Dec. 18). Jason Albritton, 35, also will repay the $135,742 he took from the credit union. On June 19, 2006, Albritton, armed and wearing a ski mask, entered the credit union and ordered everyone to the floor. He then pointed his gun at an employee and followed her to the credit union’s vault. He emptied money from the vault and teller drawers before leaving. Albritton also has been convicted of robbing a Florida bank in 2006 ... * BOULDER, Colo., and DENVER (12/21/09)--Two Colorado credit unions have received the go-ahead from regulators and members to complete a merger, which will be effective Jan. 1. Premier Members FCU, a $312.2 million asset credit union in Boulder, and Colorado United CU, a $72 million asset credit union in Denver, said Colorado United's membership voted overwhelmingly in favor of the merger. Its three branches will be rebranded as Premier Members. Rhett B. Rowe, president/CEO of Premier Members, will keep his position as CEO, while Colorado United President/CEO Branda Abbott will become Premier Members' president and chief operating officer. All other Colorado United employees will remain with the credit union (Mergers & Acquisitions Week Dec. 23) …

CUs holiday food drives make sure theres plenty

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MADISON, Wis. (12/21/09)--With the tough economy adding pressure to food banks across the nation, credit unions took steps to help ensure no one goes hungry during the holidays. Beginning with Thanksgiving collections, many have continued collecting food items throughout this month so many can have a holiday meal on Friday. Here's a sampling of what credit unions have done:
* Credit Unions Care Foundation of Virginia made a $10,000 donation to food banks and
Click to view larger image Security Service FCU volunteers help sort more than one million pounds of food collected in the seventh annual Food4SA campaign in San Antonio. From left are Victoria Keller, Joe Rodriguez, Lisa Gambill, Megan Gwinn, Mary Valdez and Melissa De Hoyos. The credit union and media partners News 4 WOAI, Magic 105.3 FM and the San Antonio Express-News collected the amount in four weeks for the San Antonio Food Bank. The collection will make 834,000 meals for needy families. The food bank, which already provides food for 25,000 people facing emergency or financial calamity each week, reported a 35% hike in first-time families asking for help. (Photo provided by Security Service FCU)
the Salvation Army to distribute to all areas of the state. "The economy has strained our communities and limited resources. Our foundation has made it possible to help in this time of need by donating a total of $5,000 to food banks across the Commonwealth and $5,000 to support the Salvation Army's work in Virginia," said Gerrianne Burkes, president/CEO of Herndon, Va.-based Northwest FCU and chairman of the foundation. * First CU (Chandler, Ariz.) members and employees donated nearly 800 pounds of non-perishable food for local food banks in Tucson, Flagstaff, Chandler and Mesa. The food is equivalent to 614 meals. "This year more than ever folks are struggling," said Desiree Hoogerhuis, community outreach coordinator. * More than 65 of Troy, Mich.-based Genisys CU employees, family members and friends helped pack 300 food boxes at the Baldwin Center for Thanksgiving Day dinner. Today they will repeat the act, helping pack an estimated 300 more boxes for Friday's holiday meal (Michigan Monitor Dec. 7).
Click to view larger image Louisiana Credit Union League staff compiled gift bags with food items for more than 200 homeless people in the New Orleans area. The project, which will benefit the homeless ministry at St. Mark's United Methodist Church, honors the late Carolyn C. Ricks, former LCUL compliance director, who initiated the league's annual outreach projects many years ago. From left are: Jennifer Green, assistant vice-president); Courtney Miceli, EFT/compliance specialist; Jill Kitchens, director of education; Shannon Morneault, accountant; Jennifer Plaisance, senior accountant; Angela Gervais; and Christopher Johnson, network specialist. (Photo provided by the Louisiana Credit Union League)
* Altura CU, based in Riverside, Calif., launched a canned food drive the first week of December to help local food banks, schools and non-profit organizations. The staff at each branch selected a local organization to help. The donations were collected through Saturday at all 14 branches. "News reports have confirmed that food banks and other charities that provide food items have seen a huge increase in requests, sometimes with record numbers turning out," said Cindy Thomas, regional director at Altura. * Cabrillo CU, San Diego,
Click to view larger image Numerica CU, Spokane, Wash. contributed more than $14,000 to the KREM 2 (CBS) Tom's Turkey Drive to raise food and donations for 2nd Harvest Food Bank of the Inland Northwest. The two day event surpassed its goal to collect 10,000 turkeys/meals for its 10th anniversary. Numerica's contribution involved a $12,000 sponsorship, a $1,500 contribution at the Volunteer Kickoff and $2,000 during the live drive. This year for the first time, Numerica conducted a T-shirt Design Contest for youth in kindergarten through 12th grade. Here, from left, Dennis Cutter, Numerica president/CEO, and Tom Sherry, KREM2 chief meteorologist, present Abigail Swanson with a $100 savings account for her winning design. (Photo provided by Numerica CU)
also heard that food donations were down this year and rallied to help. More than $300 of food items were donated by 60 employees to St. Vincent De Paul food bank. "This year we realized a food drive before the holidays season begins would help the local food bank immensely, so we asked staff to bring a non-perishable food item to our staff meeting," said Anne Legg, vice president of marketing. * In November, staff and members were so generous that North Districts Community CU, Gibsonian, Pa., had to make three trips from the credit union to The Lighthouse Pantry in nearby Butler with goods collected during its food drive (Life is a Highway Dec. 4). It's now in the middle of a "Keep Them Warm" clothing drive to benefit the Light of Life Mission in Pittsburgh. * In Missouri, credit unions across the state went above and beyond. Among the credit unions participating in holiday drives, including food drives, were Show Me CU, Mexico; Gateway Metro FCU, St. Louis; Anheuser-Busch Employees' CU, St. Louis, Vantage CU, Bridgeton; and American Eagle CU, St. Louis (The Missouri difference Dec. 16).
Food wasn't the only thing on the holiday agenda for many of the credit unions. For example, on Thursday, all Wausau, Wis.-based Connexus CU employees spread good cheer in the community with a number of volunteer activities. They included packaging and delivering more than 3,500 non-perishable food items to local pantries, caroling for residents of a hospice house; preparing, serving and cleaning up after lunch at the Salvation Army; wrapping gifts for United Way's Bundle of Joy program; transporting and organizing gifts for the Neighbors Place; ringing bells for the Salvation Army; and playing bingo with residents of Harmony House.

Shoppers creativity to avoid debt is seminal CUNA tells IAPI

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NEW YORK (12/21/09)--With the holiday shopping season running at full bore, consumers are being creative in how they spend and pay for items and services so they don’t run up card debt, the Credit Union National Association told The Associated Press Friday. The article was picked up by ABC News Friday. Consumers are paying with cash, with direct debits from bank accounts, by using layaway payment methods, by taking advantage of free financing and even by cashing in frequent flier miles, the AP said. Bill Hampel, chief economist at the Credit Union National Association, describes the consumer switch as “seminal.” “People are trying a lot of new behavior in how they're spending and how they are paying for it in response to a very scary economy,” he added. To read the article, use the link.

Heartland pays Amex 3.6 million in settlement

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PRINCETON, N.J. (12/21/09)--Heartland Payment Systems has agreed to pay American Express $3.6 million related to a 2008 hacking of Heartland’s payments network that cost card companies, credit unions and other financial institutions hundreds of thousands of dollars. “This settlement marks the first agreement with a card brand related to the intrusion,” said Bob Carr, Heartland chairman and CEO. Heartland also has disputes with other card brands including Visa and MasterCard (IDG News Service Dec. 17). More than 130 million credit and debit card numbers from card processor Heartland and Hannaford Bros., a Maine-based grocery store chain, were stolen by hackers in separate breaches. Thousands of credit unions and other financial institutions were forced to re-issue credit and debit cards to cardholders whose numbers and personal information were compromised as a result. Heartland has been sued by credit unions, financial institutions and other individuals for the costs they incurred to re-issue cards. Credit unions likely lost between $2.50 and $3.50 per card in re-issuing costs, and additional dollars for staff time (News Now Aug. 18). Albert Gonzalez, 28, a former Secret Service informant, and two others were charged conspiracy and conspiracy to engage in wire-fraud. Gonzalez also pleaded guilty to charges involving other breaches, including TJX, Office Max, Barnes and Noble and Boston Market (News Now Sept. 15). Gonzalez could face up to 20 years for wire-fraud conspiracy and another five for conspiracy if convicted on the Heartland and Hannaford breaches. He also faces a $250,000 fine per charge.

Guys I gotta go...were being robbed

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STOCKTON, Calif. (12/21/09)--On Dec. 15, Allied CU CEO Frank Michael participated in a conference call with the Credit Union National Association’s Small Credit Union Committee. During the call, Michael suddenly needed to sign off. “Guys, I gotta go ... we’re being robbed,” he told the group. A gunman was waving his revolver at Michael behind the glass window of his office. Two individuals, each wearing hooded sweatshirts and masks, had entered the Stockton, Calif.-based credit union in a takeover-style robbery. One jumped the counter and emptied the drawers on the teller line, while another held a member and put a gun to her head. One of the robbers made his way to Michael’s office, which is located by the teller line. When Michael saw the gunman, he immediately exited the conference call. Members of the Small CU Committee later commented on how calm Michael sounded when he signed off. After hanging up, Michael called the police. The gunman watched him make the call, but didn’t do anything to stop him, he said. “They were on their way out,” Michael told News Now. “They can’t stay too long.” After the men left, Allied CU called for victim assistance to help the traumatized member who had a gun to her head. Nobody was injured. Police caught the robbers a few miles outside of the credit union after tracking them with a global positioning system (GPS) device that was in a stack of $20 dollar bills. “My staff did a great job,” Michael said. “They responded the way they were supposed to. They gave them the money and then got them out the door.” Takeover robberies are not new to Allied CU. The credit union had two takeover robberies in November. They have since deployed GPS devices and installed glass over the teller counters. “That made a difference,” Michael said. “We’re always prepared.” The glass helps police lift fingerprints, and the GPS device allows police to track the robbers after they leave the credit union. The device is activated after the cash is lifted off the till. When Michael called the police, they were already tracking the men, he said. Credit unions should think about what they can do to assist police with apprehension, Michael said. For instance, formica countertops don’t retain fingerprints, but glass does. Credit unions also can look into different tracking devices and work with police to see what solution works best for them. Dye packs can help recover stolen money, while GPS devices can help catch thieves, he said. It’s also important to prepare staff for robberies by talking through what could happen and teaching them how to respond. After Tuesday’s robbery, the staff is doing great. “The fact that the robbers were caught restored their confidence,” Michael said.

College aid community informed about CU financing options

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WASHINGTON (12/21/09)--Recent presentations from executives at Credit Union Student Choice are making consumers aware of the financing solutions offered by a new entrant in the market--credit unions. Officials from Credit Union Student Choice, a credit union service organization (CUSO) that provides turnkey private student lending services to nearly 100 credit unions nationwide, were featured on the agenda at several events, including the California Association of Student Financial Aid Administrators (CASFAA) conference. Held after a decision by the California government that could result in a 30% increase in costs for students attending state colleges and universities, the conference addressed the increasing importance of private student loan options. “During a period of incredible economic difficulty for lenders, families and colleges, the entrance of credit unions into the private student loan marketplace is one of the few bright spots in college financing,” said Scott Patterson, executive vice president at Student Choice. “During my panel discussion at the CASFAA conference, the audience was extremely impressed with the program being offered through our partner credit unions and eager to learn more,” he added. “Administrators play a key role in the lending process, and it’s critical that we educate them about the options we provide.” Student Choice President Jon Jeffreys represented the CUSO at a panel discussion at the Consumer Bankers Association Student Lending Conference in Washington, D.C., alongside executives from some of the largest student lenders in the country, including First Marblehead, Citibank’s Student Loan Corp. and U.S. Bank. “The opportunity to speak at this conference serves as testimony to the expanding role and increasing influence of credit unions within private student lending,” Jeffreys said. “While the national lenders focused squarely on the challenges in the market, the story of Student Choice, our credit unions and the 10,000 members we’ve helped thus far is extremely positive.” Executives from Student Choice also were at conferences for the Career College Association and the Ohio Association of Student Financial Aid Administrators to heighten awareness of credit union financing options. “Feedback from the financial aid officers who’ve worked with Student Choice has been overwhelmingly positive,” Patterson said. “By offering zero origination fees, a unique line-of-credit structure, and market-leading interest rates, credit unions are providing superior value to borrowers.”

Vermont CUs EconomyofMe fin lit debuts at CUs

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BURLINGTON, Vt. (12/21/09)--Four Vermont credit unions hosted musical artists Nyke Van Wyk and Joe Gattuso last week to kick off the Association of Vermont Credit Unions’ (AVCU) new financial literacy project, EconomyofMe. Van Wyk and Gattuso traveled to North Country FCU, South Burlington; Members Advantage Community CU, White River Junction; Bryant FCU, Springfield; and Granite Hills CU, Barre. They played for an hour in each credit union’s lobby (Newslines Express Dec. 18).
Musical artists (left) Joe Gattuso and Nyke Van Wyk performed at four Vermont credit unions last week. During their performances, the Association of Vemont Credit Unions met with key staffers to discuss financial literacy project for teens, EconomyofMe. (Photo provided by the Association of Vermont Credit Unions)
While they entertained, AVCU staff met with CEOs and key employees at the credit unions to discuss EconomyofMe. EconomyofMe will interact with Vermont’s 14 to 18-year-old population through Facebook, Twitter, YouTube, mobile devices and music. The students will have the opportunity to learn from articles, videos, blogs and games to enhance their personal financial literacy knowledge. They also can ask questions and participate in contests. The goal is to build a statewide community to share ideas and knowledge to empower high school students financially, AVCU said. “Now, more than ever, we’re aware of the effect the economy has on each of us,” said Colin Ryan, AVCU project manager. “We make and spend money, draw on resources, build savings and invest in ourselves every day. In many ways, each of us is already running our own personal economy...the economy of me.” The purpose of the presentations was to identify credit union personnel with connections at high schools statewide who can bring EconomyofMe to the schools, said AVCU President Joe Bergeron. AVCU will continue meeting with more credit unions.

Leagues touting accomplishments via videos

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MADISON, Wis. (12/18/09)--Some leagues are trying out the video route to inform their credit unions about their accomplishments in 2009 or present holiday wishes to their affiliates. Virginia Credit Union League President Rick Pillow offered a video overview of the league's 2009 accomplishments on youtube.com to close the league's 75th anniversary and to thank the state's credit unions for their support "during this eventful, but productive year." In it, Pillow reviews a number of the league's political action initiatives, noting that the league "had one of the best election seasons on record, with fully 87% of the candidates we supported retaining or winning their legislative seats." Credit unions and the league also:
* Defeated two bills in the General Assembly, one that would have fined credit union employees in certain fraud cases and one that would hamper small credit unions' ability to offer mortgages; * Crafted revised bylaws for state chartered credit unions and provided critical resources on a "a long list of new and revised regulations"; * Launched the Credit Unions Care Foundation of Virginia to champion community service work; and * Donated its first million dollars to Children's Miracle Network and its hospitals in the state.
"Who can say what the new decade will hold for credit unions?" Pillow asks. "What we can say, with absolute certainty, is that we'll be better able to face what comes by continuing to do what we've always done: work together for the good of our members and the credit union movement." For the full video, use the link. In another state, Texas Credit Union League President Dick Ensweiler and his wife Judy presented holiday wishes to credit unions via a video on the league's website. "As the year winds down, we reflect back, and what a year it was," says Ensweiler, "from the mess on Wall Street, to the housing bust, to all the complications that brought to the credit union movement, we had a lot to deal with." But, he noted, "credit unions are strong." On the state level, Ensweiler said the state's Credit Union Department has been extended another 12 years as a semi-independent, self-directed agency. "Credit unions are adjusting to a new era, a new way of doing business," he noted, adding he is confident in the future of credit unions. To access that video, use the link.

Two Mich. CUs report hikes in loans new members

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ANN ARBOR, Mich. (12/18/09)--Two Michigan credit unions have grown in membership and in loan volumes this year while their “capital-challenged” banking counterparts have scaled back lending, according to local Michigan media. The growth stems from credit unions giving consumers “eye-to-eye” attention, said Bill Beardsley, president and chief lending officer for Michigan Business Connection, an organization that works with credit unions. They also have money to lend--unlike banks--and the few banks that have capital aren’t lending, he added (AnnArbor.com Dec. 17). “I hear stories all the time from very well-qualified buyers who were simply told by their bank they don’t make those loans anymore,” he told the news site. “We’re talking about the most basic lending products, such as car loans and small business loans.” As a result, Michigan credit unions have upped their small business lending by nearly 20% during the past year. University of Michigan CU (U-M CU), Ann Arbor, lent $91.3 million this year. The last time the credit union came close to this figure was in 2005 with $65.5 million. The difference is $25.8 million. Jeff Schillag, U-M CU vice president of marketing and business development, said the credit union will likely conclude the year with more than 4,800 new members. That would be the highest number of new members in the past five years, he told AnnArbor.com. Ypsilanti-based Community Driven CU also has grown. The credit union wrote $10.5 million in auto loans this year, compared with $3 million in a typical year. Driving the extra loans was the federal government’s “Cash for Clunkers” program, which brought in a number of deals, said CEO Kevin Finneran. He added that the financial crisis came at a “great time” for the credit union. With banks pulling out of financing, the credit union had an opportunity to increase its lending. Next year, Community Driven will gear programs toward dealerships and marketing other services. Consumers hear about the credit union’s car loans and then find out that its fees are nonexistent, Finneran added. Michigan’s 335 credit unions have grown in loans, deposits and memberships. The Michigan Credit Union League said credit unions added a record 59,000 members this year, News Now reported Dec. 10.

Ohios chapter system refocuses on three purposes

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DUBLIN, Ohio (12/18/09)--The Ohio Credit Union League's chapter system is being refocused with a newly defined purpose targeting three impact areas. The league's Chapter Structure Task Force worked the past 18 months on a new structure, which is moving into the implementation and execution stage, says the league's newsletter, eLumination (Dec. 16). The three areas targeted by the new defined purpose are:
* Community involvement; * Credit union support; and * Movement responsibility.
The task force shared its final report and recommendations, which were approved Dec. 1 by the league's board.

ICBS Early ShowI other media give boost to CUs

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NEW YORK (12/18/09)--Is it time for consumers to dump their banks? That’s a question the CBS Early Show posed to consumers in a highly positive Thursday story about credit unions. The story, “Credit Unions Better than Banks For You?” compared credit unions with banks, touting credit unions’ benefits--including low rates, member service and the fact that credit unions are still lending, even though many banks have pulled back. “[Consumers are] tired of all the big fees being imposed by the big banks, they’re tired of the really bad customer service...so they’re making the switch from the banks to the credit unions. Membership was up 11% in the third quarter,” said “Early Show” financial contributor Vera Gibbons. “If you look at the bank loan portfolios, they’re actually shrinking, whereas the credit union loan portfolios are growing,” she added. “What that means--is if you’re a creditworthy customer you stand a better chance of getting a loan at a credit union than at a big commercial bank.” She also noted that credit unions offer higher rates on deposits and lower rates on loans, especially auto loans. “The overall satisfaction rate is very high at credit unions,” Gibbons said. Another story by CBS Moneywatch Thursday said to “consider a credit union” as one of the “nine best strategies for borrowing in 2010.” The story cited a 2009 Pew Charitable Trusts Study, which said credit union credit card interest rates are about 20% lower than banks. The Pew study has received significant attention from other media including The New York Times and The Wall Street Journal. On Thursday, CNBC noted that consumers should check out credit unions when seeking auto loans. The story quoted Jim Hanson, Credit Union National Association vice president of personal finance. Hanson told CNBC that credit unions' rates tend to be 1% to 1.5% lower than banks'. To see a video of the CBS Early Show story, “CUs Better than Banks for You?” or to read the full MoneyWatch article, use the links.

Mass. CUs weather cold to build home for injured vet

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MARLBOROUGH, Mass. (12/18/09)--Despite freezing temperatures, hundreds of volunteers, including many from Massachusetts area credit unions, joined the Homes for Our Troops "Build Brigade" Dec. 11-13 in Middleboro, Mass., to build a home for an injured vet. They built a specially adapted home for Army SSG Michael Downing and his family. Downing lost his legs during combat in Afghanistan during his second tour of duty there in 2008, according to the Massachusetts Credit Union League (E-Weekly Dec. 16). The announcement that Downing's home would be the organization's next project was made in June at the Homes for Our Troops Gala in Boston. Title sponsors of that event were the Massachusetts and New Hampshire Credit Union Leagues and the Credit Union Association of Rhode Island. Before raising the first wall, the group held an opening ceremony with speakers including Daniel F. Egan, president of the three leagues; John Gonsalves, founder and president of Homes for Our Troops; and Col. Jack Hammond, chief of staff, and Lt. Col. Art Elfman, both of the Massachusetts National Guard. Volunteers will work on the home throughout the winter, with Downing and his family planning to move in next spring. Homes for Our Troops has built 40 homes for severely injured veterans and has nearly 30 more projects in progress. Credit unions have been involved in building homes in several states, including Missouri and projects during the presidential campaign national conventions last year in Colorado and Minnesota.

Brrrr No its another dues freeze says CUANM

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ALBUQUERQUE, N.M. (12/18/09)--The Credit Union Association of New Mexico is giving member credit unions a gift for the holidays: a dues freeze and a rebate. For the fifth consecutive year, CUANM's Board of Directors has approved a dues freeze for the association's 50 affiliated credit unions. In addition, CUANM will send a rebate to the credit unions, based on adjusted 2009 net income--the first time the association has offered a rebate. "After a challenging year for our credit unions when every penny counted, we are very pleased to be able to share in our financial success," said Sylvia Lyon, CUANM CEO/president.

WOCCU expands Islamic CUs in Afghanistan

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MADISON, Wis. (12/18/09)--The U.S. Agency for International Development (USAID) has awarded World Council of Credit Unions (WOCCU) $60.5 million to expand financial services in southern and eastern Afghanistan. The WOCCU program will establish the country's first national association for Islamic investment and finance cooperatives (IIFCs), or credit unions, and help IIFCs reach more small and medium-scale business owners, farmers and low-income households in underserved rural areas.
Click to view larger image Farmers in Helmand province in southern Afghanistan purchase fertilizer with financing from their Islamic investment and finance cooperative (IIFC), or credit union.
Afghanistan's banking and microfinance sectors have grown in the past several years with support from international donors; however, financial services have yet to reach rural areas on a large scale, said WOCCU. "The most difficult challenge with broadening access to credit and savings in Afghanistan is operating in the sparsely populated, culturally conservative and highly insecure southern and eastern provinces where farming is the primary economic activity, input supply is very limited and markets are undeveloped," said Brian Branch, WOCCU executive vice president and chief operating officer. "WOCCU's program will directly address these challenges while increasing the flow of financial services," he added. WOCCU has worked since 2004 with local leaders across Afghanistan to establish the country's first fully Shari'a-compliant financial institutions, which operate under Islamic principles of finance.
Click to view larger image Islamic investment and finance cooperatives (IIFCs), or credit unions, supported H1N1 influenza awareness training for children in eastern Afghanistan as part of their community development programs. (Photos provided by the World Council of Credit Unions)
As a result, 16-member-owned IIFCs with 11 full-service branches currently bring financial services to about 47,000 members across the country. Three are already self-sufficient, despite a harsh operating environment, said WOCCU, and overall membership is growing by about 1,000 new members per month. WOCCU plans to expand the IIFC network by adding 15 IIFCs and seven branches in the south and east, and support creation of a national association provide supervision, technical assistance and local capital to the IIFCs. "This new program will make a significant contribution to the stabilization efforts while building institutions that can rapidly become self-sustaining and permanent Afghan-owned and governed vehicles for economic development," said Geoffrey Minott, USAID/Afghanistan private enterprise officer. For more about WOCCU's program in Afghanistan, use the link.

Fed ELEP policy affects CUs 2 ways--CUNA economist

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WASHINGTON (12/17/09)--Federal Reserve policymakers' decision Wednesday to continue the policy of "Exceptionally Low interest rates for an Extended Period" (ELEP) will affect credit unions in two ways, said a Credit Union National Association (CUNA) economist. Those with strong loan demand will see an increase in net interest margins. Those with weak loan demand will see investments putting "significant downward pressure" on assets, said CUNA Senior Economist Steve Rick. Noting that economic activity has continued picking up and labor market deterioration is abating, the Federal Open Market Committee (FOMC) Wednesday kept the target range for federal funds at 0%-0.25%. That "is considered to be an emergency interest rate due to the financial crisis," said Rick. "The stance of monetary policy remains extraordinarily accommodative," Rick said about the decision to continue the ELEP policy. "This will maintain a steep yield curve for a while longer. Longer-term interest rates could rise further if financial market participants see short-term political pressure impairing the Federal Reserve's independence. This could push up inflation expectations and therefore longer term interest rates," he told News Now. "For those credit unions with strong loan demand, the steep yield curve should increase net interest margins as low-rate short-term deposits are used to fund longer-term higher-rate loans," he said. "Credit union average net interest margins rose to 3.23% in third quarter, up from 3.13% in the second quarter. The higher net interest margins should help credit unions cover loan chargeoffs and NCUA (National Credit Union Administration) assessments, and therefore earn their way out of the current financial crisis," Rick said. "Unfortunately, credit union loan growth has declined significantly since the beginning of the financial crisis in the fall of 2008. Credit union loan balances are up only 2.4% in the 12 months ending in October, the slowest pace since 1992 and below the last five-year average of 8.5%.," he added. The FOM noted in its statement that household spending remains constrained and faces many headwinds (weak labor market, modest income growth, lower housing wealth, and tight credit), Rick said, adding, "Until those headwinds become tailwinds, credit union loan portfolios will post small gains, with forecasts of only 3%-5% in 2010. "In the third quarter, credit unions responded to the ELEP policy by lowering their deposit interest rates enough to lower their cost of funds 14 basis points (1.63% in the third quarter versus 1.76% in the second quarter)," Rick said. "Low interest rates on savings, however, have not discouraged credit union members from increasing their deposit balances. During the first 10 months of 2009, credit union savings balances rose 10.3%, faster than the 6.2% reported for the similar period last year. "This has increased credit union liquidity and credit union investment portfolios," Rick noted. "Investment portfolios rose 30% over the last year, pushing up credit union investment-to-asset ratios from 26.3% in October 2008 to 31.3% in October 2009. This change in the distribution of assets from loans to investments is putting significant downward pressure on asset yields for those credit unions with weak loan demand." In addition to keeping the target range steady, the FOMC Wednesday said the Fed would ease the pace of purchasing securities and set dates for scaling back or terminating a number of temporary liquidity swap arrangements. To support mortgage lending and housing markets and to improve private credit market conditions, the Fed will purchase $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt, as well as gradually slow the pace of these purchases. It anticipates the transactions will be executed by the end of first quarter 2010. The Fed expects that most of its special liquidity facilities will expire on Feb. 1, "consistent with the Federal Reserve's announcement of June 25," the FOMC said in a statement after Wednesday's meeting. The facilities include the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, the Commercial Paper Funding Facility, the Primary Dealer Credit Facility, and the Term Securities Lending Facility. The Fed will also work with its central banks to close its temporary liquidity swap arrangements by Feb. 1. "The Federal Reserve expects that amounts provided under the Term Auction Facility will continue to be scaled back in early 2010. The anticipated expiration dates for the Term Asset-Backed Securities Loan Facility remain set at June 30, 2010, for loans backed by new-issue commercial mortgage-backed securities and March 31, 2010, for loans backed by all other types of collateral," the committee said. "The Federal Reserve is prepared to modify these plans if necessary to support financial stability and economic growth," it added.

Ohio U. CU launches SEG ambassador Web portal

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ATHENS, Ohio (12/17/09)--Ohio University CU (OUCU) in Athens is launching a new Select Employee Group Ambassador Web Portal to better manage the credit union’s roughly 65 select employee groups (SEG) Ambassador Program and enhance its SEG relationships. The SEG portal, was developed by the credit union marketing firm Profound Communications. “We are hoping that this will really enhance the value we bring to our SEGs,” said Laura Pratt, OUCU vice president of marketing. “[A SEG] is a partnership and we want to build on that partnership.” The portal includes the latest credit union news, the tasks ambassadors can perform and the rewards they can earn. Ambassadors each have a secure user login for the portal. The site tracks the points on their individual points statement. The portal also includes a task-reporting form and rewards-redemption form that allows ambassadors to manage their activities online. “We wanted to make it easy for our SEG ambassadors to keep track of their activities and make it easier for them to redeem rewards. We had a paper program and it's just been cumbersome,” Pratt said. “The self-reporting features will greatly improve our management of the program.” Ohio University CU is in the process of hiring a new SEG development coordinator to help it implement the SEG portal in early 2010. The credit union has $241 million in assets.

CU waives coin fee for kids donation

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NORTH TONAWANDA, N.Y. (12/17/09)--Niagara Regional FCU waived its usual coin sorting fee to help a group of children who donated their change to buy a new chair for the local fire department. About 60 second-graders arrived at the North Tonawanda, N.Y. credit union to exchange $151 in coins for dollar bills. The money was used to purchase a new armchair for the fire department. A local store manager had agreed to sell the chair to the children at cost (Tonawanda News Dec. 16). Donna Wick, Niagara Regional FCU CEO, was touched by the children’s donation. She decided to waive the standard fee of 4% for using the machine so the children could keep all the money they raised. She told the newspaper that it was “cool” to see the children come into the credit union. She lined the children up two by two so they all could use the machine. The children’s teacher, Patricia Froebel, got the idea to buy a new armchair after she saw the living area for the firefighters a few years ago. The furniture was in poor condition, she said. Niagara Regional FCU has $19 million in assets.

Frugal Vermonters have low delinquencies says CU

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BURLINGTON, Vt. (12/17/09)--Residents of Vermont have a reputation for being frugal, and recent data that track delinquent payments of auto loans, home loans and credit card bills support that perception, said a Vermont credit union. “When we look at our members who [are] lower income, they tend to have a lower delinquency rate than your average American,” said Jodi Harrington, marketing and member-services manager for Burlington, Vt.-based Opportunities CU (The Burlington Free Press Dec. 16). In general, Vermonters demonstrate “common sense and frugality” when managing their finances--character traits that help them maintain low debt burdens, Harrington told the newspaper. Only 0.65% of car loans in Vermont were more than two months delinquent in the third quarter, the paper said, adding that this favorably compares with a national delinquency rate of 0.81%, according to a report released last week by TransUnion LLC, in Chicago, which tracks auto, credit card and mortgage-debt performance. Opportunities CU has $28.5 million in assets.

CU System briefs (12/16/2009)

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* MANHATTAN BEACH, Calif. (12/17/09)--Kinecta FCU applauded U.S Rep. Jane Harman's (D-Calif.) vote this week opposing the Mortgage Bankruptcy Cramdown Amendment to H.R. 4173, which would have impacted credit unions and community banks. "The cramdown amendment would have impeded our ability to continue lending to our 225,000 members," said Kinecta President/CEO Simone Lagomarsino in a media statement Tuesday. "Credit unions did not make subprime loans, and during this economic crisis, we have diligently worked with our members offering loan modification programs to help them stay in their homes," Lagomarsino said. "Rep. Harman has been proactive in the community by supporting educational seminars to help people retain their homes and has recognized the negative impact this amendment would have had on the broader community." California and Nevada Credit Union Leagues President/CEO Bill Cheney noted Harman understands "the challenges facing our industry during this difficult time. We know it was a tough decision for the congresswoman, but her vote makes it clear she truly listens and responds to the needs of her constituency." The amendment was originally introduced to reduce foreclosures from the subprime crisis, but would have affected all financial institutions … * ST. LOUIS (12/17/09)--U.S. Rep. Roy Blunt (R-Mo.), a long-time credit union supporter, stopped by the Missouri Credit Union Association (MCUA) Dec. 14 to meet with representatives from 11 area credit unions (The Missouri difference Dec. 16). He is a candidate for the U.S. Senate seat currently held by Sen. Kit Bond (R), who is not running for re-election in 2010. Blunt thanked credit unions for their continued communication about financial legislation and agreed that more legislators need to learn the difference between banks and credit unions. "I have always valued my relationship with Missouri credit unions, and I hope you feel the same," he said, noting "this is a very crucial time in politics." (Photo provided by the Missouri Credit Union Association) * SIOUX CITY, Iowa (12/17/09)--Council Bluffs, Iowa, police have arrested a man with a hatchet who allegedly tried to rob Telco Triad Community CU twice Tuesday. Alert employees at the $65 million asset credit union noted the man wore wore a ski-mask and had something up his sleeve, and locked him out of the credit union both times. The second time, a nearby policeman followed him and arrested him. Police arrested Larry Eugene Burns, 21, of Denver, and charged with suspicion of conspiracy to commit robber, first-degree robbery and ongoing criminal conduct. He and a second man, James Lunsford, were also charged in connection of a robbery at a local bank at 2 p.m. Monday (Omaha World-Herald Dec. 16 and WOWT.com Dec. 15) … * OLYMPIA, Wash. (12/17/09)--Washington State Employees CU, based in Olympia, has opened its new headquarters downtown after six years of planning. The five-story, 130,000-square-foot building, which is near its old headquarters, was opened in stages, a spokeswoman told The Olympian (Dec. 16). The grand opening was Wednesday. The $1.4 billion asset credit union invested $65 million to buy the land. The old building will house the credit union's data center, with space available for leasing, and some retail space will be available in the new building, CEO Kevin Foster-Keddie told the newspaper. The new facilities include a 469-stall employee parking garage. It is a LEED certified silver, a rating set by the U.S. Green Building Council … * ALBANY, N.Y. (12/17/09)--GPO FCU employee Kristi Cieslak is the grand prize winner of FIS' "Did You Know" warehouse dash, reported Covera Card Solutions. FIS is Covera's card processing partner. The warehouse is filled with "awards" available to cardholders and includes items such as a MACbook air laptop, Movado watches, pearl and diamond earrings, an all-clad cookware set, a Sony Blu-Ray Disc home theatre system and more. FIS received thousands of entries in the campaign, which was created to drive credit union employee knowledge and promotion of FIS' credit/debit card rewards program, Scorecard. Cieslak is shown with GPO FCU CEO John Prumo, who surprised her with flowers as he shared the news she had won. (Photo provided by Covera Card Solutions) …

CUs holiday giving focuses on childrens needs

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MADISON, Wis. (12/17/09)--Many holiday giving activities at credit unions nationwide are focusing on helping children--from collecting warm winter clothing and toys to gathering cash donations. Some examples are:
* Associated School Employees CU, Youngstown, Ohio, donated 350 hats, scarves and gloves to the Head Start Program at Trumbull Community Action Program. Santa Claus presented the winter gear and cookies to each preschooler in the program. Head Start provides services to children with special needs.
Click to view larger image Associated School Employees CU, Youngstown, Ohio, donated winter gear to preschoolers at a local head start program. Santa Claus distributed the winter gear and cookies to the children. (Photo provided by Associated School Employees CU)
Click to view larger image Connecticut credit unions presented a check to the U.S. Marines for its Toys for Tots program. The credit unions raised $1,380 for Toys for Tots. From left: Corporal Ryan Roberts, U.S. Marines; Doreen Roy, president, Moran/Nixon Chapter, vice president human resources and public relations, Northwest Hills CU, Torrington, CT; Jim Howard, president, New Haven Chapter, branch manager, New Haven County CU, North Haven, CT; Betty Maurer, president, Hartford Chapter, president & CEO, Workers FCU, Stafford Springs, CT; Lance Corporal Alex Stock, U.S. Marines. (Photo provided by the Credit Union League of Connecticut)
* Connecticut credit unions raised $1,380 for the U.S. Marines’ Toys for Tots program. More than 135 credit union representatives and their guests also provided 300 unwrapped gifts and toys for the program. * The Kansas City Chapter of Credit Unions also donated to Toys for Tots (The Missouri Difference Dec. 4). * The Delaware County Chapter of Credit Unions in Pennsylvania donated $1,200 to the St. Vincent DePaul Society, and collected for Toys for Tots (Life is a Highway Dec. 3). Meadville (Pa.) Area FCU also is collecting toys for the Salvation Army. * Capital CU, Kimberly, Wis., is sponsoring giving trees in which members take a tag from the tree and buy the item listed for a needy child or family. The credit union also is donating the proceeds from its holiday money gift envelopes and is accepting cash donations. * Erie (Pa.) General Electric FCU sponsored a tree for a local festival. The tree’s theme, a spin-off of “How the Grinch Stole Christmas,” was “How EGEFCU Gives Back at Christmas.” The credit union also filled a sleigh with presents and decorated a tree with toys. The toys will be given to children at the St. Martin Center in Erie (Life is a Highway Dec. 8). * Security Service FCU, San Antonio, Texas, employees filled more than 100 stockings with toys and other items for ChildSafe, which provides services for child and adolescent victims of sexual abuse. * US FCU, Burnsville, Minn., donated 100 mittens and hats to the local Community Action Council’s Armful of Love program. The program has identified 1,300 needy families and will provide them with gifts and a meal. * Staff of the Pennsylvania Credit Union Association (PCUA) volunteered at a Coats for Kids telethon on Dec. 11. PCUA provided credit card machines, processed all payments and paid the interchange fee so 100% of contributions went to the Salvation Army (Life is a Highway Dec. 14). The telethon raised $232,119. * Rome, N.Y.-based AmeriCu’s five branches are offering several holiday activities, including Toys for Tots drives, a Salvation Army kettle drive and mitten challenge. The Herkimer branch also offered a “stuff the bus” promotion to gather toy donations Dec. 11.

Consumers write CUNA Nearing point of bank revolt

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MADISON, Wis. (12/16/09)--Consumers are writing the Credit Union National Association (CUNA) to vent against banks' actions and policies, and some are mentioning the word "revolt." In a meeting Monday, several large banks were taken to task by President Barack Obama about their reluctance to make loans and help the economy and their opposition to regulatory reforms. That prompted several letters Tuesday to News Now. "I wonder if you have made any discoveries of people revolting against any of these banks that pay these huge salaries and/or bonus packages?" asked Mel Eaglin of San Diego, in an e-mail to CUNA. "If for no other reason, I would automatically move my money from any of these banks. I've encouraged others to do the same," Eaglin told News Now. "If enough depositors move their accounts (savings and checking) elsewhere, then banks could quickly be undercapitalized. Just an idea," Eaglin concluded. In another e-mail, a member of Arizona FCU, Phoenix asks "What is the credit union movement's response to Obama's call to the banking industry?" The member said he has "used credit unions exclusively for my personal financial needs since 2002. I believe the credit union movement, and its member-ownership business model, is the only alternative to the profit-driven and very non-consumer center commercial banking industry. He noted the president in the meeting "issued a call to the banking industry to remember the aid given to that industry by the American people by way of the TARP (Troubled Asset Relief Program) program, and give assistance to the 'Main Street' consumer by increasing lending activity; by doing so, the banking industry would be of great help in the economic recovery," the Arizona FCU member wrote. "No mention was made of the role that credit unions play in America's consumer financial network [at the president's meeting]. No mention was made in news reports I saw about the credit union movement being represented in this meeting by either executives or member-owners. I find that disappointing and troubling," the member said. "What is the response of CUNA to the president's call for greater response and accountability from the commercial banking sector? How have America's credit unions been impacted by the economic difficulties of the past couple of years, and how are America's credit unions helping in the economic recovery? Why are credit unions still a better value for the consumer than commercial banks, and how is the credit union movement spreading that message?" he asked. CUNA has pointed out to Obama that credit unions are in fact lending to business and could be doing much more. CUNA President Dan Mica noted that credit unions could pump more than $10 billion into the economy and create more than 108,000 jobs if Congress would agree to expand their capacity to make business loans. However, he said Monday, "The very people who met with the president today are the same people who oppose allowing credit unions to help." He noted the "absolute unconscionable" actions of bankers who "would block credit unions from helping the nation, while simultaneously being rebuked by the president for not doing enough to help. "Were we in the room, the president could have easily pointed to us and said, 'These guys want to help--why can you be more like them?" Mica said (News Now Dec. 15). The words brought another writer's comments: "Hooray for speaking out re: (the) omission from Obama bank meeting. How blind can they be?" said Mary A. Sommerville, a contractor and Army G-4 publications manager. Sommerville told News Now in a separate e-mail. "I am a long-timer user and believer in credit unions, which have probably done more for the economy and private citizens than banks. I hope the omission by the president was not intentional but lack of good advice."

Mass. Supreme Court dismisses CUs breach case

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BOSTON and MADISON, Wis. (12/16/09)--The Massachusetts Supreme Court has dismissed a multi-million dollar lawsuit by CUMIS Insurance Society, filed on behalf of credit unions whose members' credit cards were compromised in a data breach of BJ's Wholesale Club in 2004-2005. The suit, filed in April of 2005, had sought recovery of millions of dollars lost by CUNA Mutual and 163 CUMIS Bond policy holders. In 2005, CUNA Mutual had estimated the costs suffered by credit unions would likely exceed $5 million and that at least 300 credit unions suffered losses due to the breach (News Now Jan. 27, 2005, and April 6, 2005). "It's disappointing the Massachusetts Supreme Court concluded that the card associations' compliance process provided an adequate remedy for credit unions that suffered huge losses in the BJ's Wholesale Club breach," said Chuck Cashman, Plastic Card product executive with CUNA Mutual. "This is an unfortunate ruling and one which we, and likely our credit union partners in this litigation, do not agree with," he said in an e-mail to News Now. "Data breaches will continue to be a front-burner issue for all parties involved-- merchants, card issuers and consumers. But because of our action, we've created awareness to empower others to stand up and say, 'Enough is enough' on data breach losses," Cashman said. BJ's Wholesale's breach was the one of the first huge breaches that hit a widespread area and involved millions of cardholders. It brought to light that a large number of merchants use point-of-sale software systems that capture and store full magnetic stripe information off plastic cards--a violation of the card association operating rules and regulations. CUMIS' complaint alleged a breach of a third-party contract, based on BJ's agreement with Fifth Third Bank not to store customers' magnetic stripe data (Courthouse News Service Dec. 15). The credit unions sought compensation for having to reissue millions of new credit cards to replace ones compromised in the breach. The Massachusetts State Court in Boston, the trial court sided with BJ's and the state high court affirmed, saying the contract was exclusively between BJ's and Fifth Third. The court also dismissed fraud and negligence claims against BJ's and the bank, saying they never misled the credit unions and CUMIS about their compliance with Visa and Mastercard regulations. "By pursuing this litigation, CUNA Mutual helped expose the limitations of existing law in providing recourse which, in turn, helped spur the passage of legislation in some states," Cashman said. "We're hopeful our efforts provided some motivation to the card associations to increase their efforts to require compliance with their rules, thereby helping reduce the chances for these types of occurrences in the future," he added.

U.S. CU Profile for third quarter 2009 now online

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MADISON, Wis. (12/16/09)--With a hopeful sign in the economy's third-quarter rebound, credit unions' savings growth increased to 10.2%, according to a third quarter 2009 summary of credit union results compiled by the Credit Union National Association. The U.S. Credit Union Profile for the quarter is now available online.
Click to view larger image Click for larger view and complete statistics
Loan growth for the quarter eased to 2.7% from 6.7% in 2008--which is typical for an economic downturn, said the profile, which is prepared by CUNA Economics and Statistics. Delinquencies and net chargeoffs increased but both remained substantially lower than bank norms, said the profile. Earnings pressures remain obvious, with the return on average assets (ROA) at 26%, compared with -0.2% in 2008 and 64% in 2007. The aggregate loan-to-savings ratio at credit unions decreased to 78.1% from 83.2% in 2008. That means there is more liquidity, but ROA pressure remains as credit unions' low-yielding investments grow. Interest-rate-risk exposure declined to 34.6% from 2008's 35.2% . Increased mortgage loan sales are a major factor in the decline, said CUNA. Third quarter net worth ratios declined to 10.1 % from 10.6% in 2008 due to the combination of fast asset growth and low earnings, CUNA said. The liquid asset ratio increased to 16.3% as of June, from 14.7% last year. Stable low-cost deposits held steady at 36.2% but are substantially lower than in 2005. Nearly all credit unions remain well-capitalized, with 95.8% maintaining a net worth greater than 7%, the report said. Asset yields decreased 62 basis points (bp) from 2008, but interest costs declined by 64 bp. Credit union margins were nearly equal to expense ratios, largely to fast asset growth and stabilization accounting. Membership growth inched up, with the 12-month member growth now double the rate of population growth. Net interest margins increased marginally to 316 bp. Noninterest income rose to 178 bp from 128 in 2008. Credit union borrower-bankruptcy rates rose to 3.7 per 1,000 credit union members from 2.6 last year. The profile includes overviews of mortgage lending, consumer lending, share/deposits, and more. In September, 7,773 credit unions averaged $114 million in assets with the median assets at $16.1 million. The movement had total assets of nearly $885.9 billion. Total loans were $585.1 billion and total savings were more than $748.8 billion. Members totaled 91.3 million. Total surplus funds in the movement was nearly $268.2 billion. Use the resource link to access the full report.

CEFCU issues 7 million dividend to members

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SAN JOSE, Calif. (12/16/09)--Citizens Equity First CU (CEFCU) will be issuing a $7 million dividend to members, including members of Valley CU, which CEFCU acquired after Valley was placed into conservatorship last year. Valley CU is now a division of CEFCU. Peoria, Ill.-based CEFCU told The San Jose Business Journal Tuesday that savings and loan activity in 2009 was strong enough to give the dividend to its 268,000 members. Loan volume at Valley’s three branches in November increased about 3,000% to $3.4 million, up from $109,000 in November 2008. CEFCU has $4.17 billion in assets. When Valley CU, San Jose, Calif., was acquired by CEFCU, it had $257 million in assets and 30,000 members.

Member Business Solutions reaches 1 billion in loans

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DULUTH, Ga. (12/16/09)--Member Business Solutions LLC (MBS), a credit union service organization (CUSO) jointly owned by Georgia Central CU, Duluth, Ga., and Southeast Corporate CU, Tallahassee, Fla., recently passed the $1 billion mark in underwritten loans. This comes less than a year after surpassing the $500 million milestone. “One of the keys to our steady growth has been referrals from existing clients and industry insiders,” said Jim Gallagher, MBS president. “We focus on giving our lenders a thorough underwriting package in one to three business days, which allows them to effectively compete in the small business market.” Credit unions entering the market today will find plenty of opportunity, Gallagher said. While banks still deal with large volumes of bad loans, loans underwritten by MBS have an aggregate reportable delinquency rate of 0.64% versus 3.35% reported by the National Credit Union Administration for credit unions nationally. During the same period, the commercial bank delinquency rate exceeded 5%, which has provided more opportunities for MBS partners because high delinquencies have tightened credit in the general marketplace. “Our credit union business lenders are not encountering a lot of competition because the bankers are contracting and trying to manage problem loan portfolios,” Gallagher said. MBS is unique in its focus on encouraging its partners to fill their portfolios with amortizing secured-term loans with a concentration on owner-occupied real estate, Gallagher said. Also, MBS’ emphasis in underwriting loans has been on global cash flow. As a result of the CUSO’s attention to the two criteria, the portfolios of MBS partner credit unions have performed above average, he added. Another byproduct of the current economic landscape is the lack of traditional income sources at financial institutions. “Credit unions are being squeezed with a lack of consumer loan demand and falling investment rates, leading them to explore business loans,” Gallagher said. MBS has 60 partner credit unions, 11 of which joined in the last year.

Wescom CU to close 12 branches

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PASADENA, Calif. (12/16/09)--Wescom CU, Pasadena, Calif., announced it will close 12 branches on Jan. 29 to improve its long-term financial strategy. The branches closing include all six locations in San Diego County and Santa Barbara County, and in Temecula, Fontana, Monrovia, Anaheim Hills, Santa Monica and San Pedro. After the closings, Wescom will have 29 branch locations in five counties. Wescom has thousands of members in San Diego County and in Santa Barbara County. The credit union said it planned to fully develop its presence in those areas, but the economy hampered its ability to allocate resources. “We concluded it would continue to be a challenge to provide adequate resources to our growing markets,” said Wescom CEO Darren Williams. “We also considered our branch network as a whole and concluded we could make adjustments in our primary markets as well.” However, “we believe we can continue to serve our members well with our 29 remaining branches and through our remote and automated channels,” he added. Wescom will make positions available to every employee in the impacted branches. Many positions will be comparable and in commutable location; however, some management level staff will be offered noncomparable positions and the geography of the branch network will make it less feasible for some staff to commute to a new location. The credit union also said it is working to improve its online banking and ATM capabilities to serve members. Wescom has $3 billion in assets.

Calif. league CEO urges lifting MBL cap in article

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ONTARIO, Calif. (12/16/09)--Bill Cheney, president/CEO of the California Credit Union League, recently told a California newspaper credit unions’ member business lending caps should be lifted so they can help small businesses. Credit unions cannot lend more than 12.25% of their assets. The California league participated in a congressional lobbying effort urging lawmakers to approve proposed legislation that would raise the caps (The Inland Valley Daily Bulletin Dec. 10). The effort was part of the Credit Union National Association’s national Hike the Hill visits by credit unions to their congressional delegates. By lifting the cap, “we conservatively estimate that this can create 108,000 jobs nationally (the first year) without any cost to the taxpayer,” Cheney told the newspaper. He added: “We’re getting a lot of positive response from lawmakers.” Many banks are not lending to small businesses, which Cheney said he isn’t criticizing. However, he pointed out that there should be other alternatives to help businesses. Arrowhead CU, San Bernardino, Calif., has run up against its business loan cap. Raising the caps could increase the credit union’s business lending from $100 million to $200 million, said Jon Parks, Arrowhead CU vice president of business development.

IOpEd NewsI Stick it to the banks. Join a CU

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PHILADELPHIA (12/16/09)--Consumers who are fed up with high bank fees, poor service and stingy lending should “stick” it to banks where it hurts--by joining a credit union, said the author of an opinion piece in Tuesday’s opednews.com. Dave Lindorff, a Philadelphia-area journalist, wrote that he joined a credit union after going through several tribulations at his local bank--including having his credit line frozen, being turned down when asking that a check from a regular employer be immediately cleared to help him pay bills, and waiting a month for a refund of funds improperly taken from his account. He chose the $394 million asset, Warminster, Pa.-based Freedom CU, where he said he had no trouble obtaining a credit line. “President Obama recently had to call bankers to the White House to plead with them to start lending (unsuccessfully, it appears), but here's my credit union begging me to finish filling out my loan application, and this for a loan that will be at a rate more than 1% lower than what my bank was offering,” Lindorff wrote. “No wonder 90 million Americans are already using credit unions,” he added. “At a time when the interest rate on a 30-year mortgage at a typical bank is 5.58%, it's 5.44% at credit unions.” He also noted that bank interest on savings accounts is averaging 0.44%, while it’s 0.68% at credit unions. Bank [certificates of deposit] are paying an average of 0.62%, and credit unions are paying 1.22%, or almost double, he said. Used-car loans at a bank cost 7.5%, while credit unions charged 5.72%, he said. These days, there should be a lot more credit union members, Lindorff wrote, “but I guess it’s hard for credit unions to compete with the advertising budgets of the banks.” His advice: “Stop grumbling about your bank, and about all those obscene fees, charges and the bad service you get, and just do a little research and switch to a local credit union. "It’s not just that you'll save money, be happier … but in a small way, you'll be doing your part to stick it to the banks,” he concluded. To read the opinion piece, use the link.

CU System briefs (12/15/2009)

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* HARRISBURG, Pa. (12/16/09)--The Pennsylvania Credit Union Association Tuesday said it was experiencing disruptions in its phone service, with sporadic calls interrupted by disconnections. Verizon was working on the matter and hoped to have the problem corrected by Tuesday afternoon. Callers were advised that if their call was disconnected to call back or e-mail PCUA (Life is a Highway Dec. 15) … * LOS ANGELES (12/16/09)--The downtown Los Angeles branch of Los Alamitos, Calif.-based Southland CU was robbed Monday by a man who rode a bicycle for his getaway vehicle. The holdup occurred at about 10:30 a.m. when the man handed the teller a note and escaped with an undetermined amount of cash, said the Los Angeles Police Department (LAPD). No injuries were reported. The branch is located about a block from LAPD's new headquarters building (www.nbclosangeles.com Dec. 14) … * LATHAM, N.Y. (12/16/09)--The Credit Union Association of New York and Sunmark FCU
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presented $2,000 to the Children's Hospital at Albany Medical Center. The donation represents proceeds from the association's statewide "Credit Unions Care for Kids" 2009 campaign. Pictured are from left: association President/CEO William J. Mellin; Rich Meddaugh, public relations specialist from Sunmark FCU; and Brenna Griswold, certified child life specialist for the hospital. Griswold also was presented with a large wagon stuffed with stuffed animals for patients. (Photo provided by the Credit Union Association of New York) … * RALEIGH, N.C. (12/16/09)--State Employees' CU, based in Raleigh, N.C.,
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celebrated its gift of 54 laptop computers for North Carolina's Tarheel Challenge Academy with a ribbon cutting ceremony officially opening of the school's computer lab. The credit union provided the computers through a partnership with Visa Inc. The academy, located in Salemburg, N.C., is a quasi-military program for at-risk youth sponsored by the state's National Guard. It has graduated more than 2,7000 youth graduate since 1994. The laptops will be used to enhance instruction, and will feature links to financial literacy programs--including SECU's teen website, the National Endowment for Financial Education's website and Visa's Practical Money Skills for Life. Cutting the ribbon are, from left, Shirley Bell, immediate past chair of SECU's board; two Tarheel ChalleNGe Academy cadets; and North Carolina Adjutant General William E. Ingram Jr. (Photo provided by State Employees' CU) …

CDFI Fund First American CU among new native CDFIs

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WASHINGTON (12/16/09)--A credit union in Arizona is among six new community development financial institutions (CDFI) geared toward serving Native Americans, the Treasury Department’s CDFI Fund announced Tuesday. First American CU (FACU), Casa Grande, Ariz., is chartered by Arizona and is one of the nation’s first Native American credit unions. It was organized to serve tribal members and employees of the Navajo nation. FACU has three branches. Its 18,000 members include members of eight Native American tribes and residents of primarily rural communities near their reservations. FACU has $65 million in assets. FACU offers credit union products and services, and is one of the few lenders who will make loans to Native Americans living on their reservation, the CDFI Fund said. Other newly certified institutions include:
* Karuk Community Loan Fund Inc., Happy Camp, Calif.; * Keweenaw Bay Ojibwa Housing and Community Development Corp., Baraga, Mich.; * Lower Brule Community Development Enterprise LLC, Lower Brule, S.D.; * Native Community Finance, Laguna, N.M.; and * Northern Shores Loan Fund Inc., Harbor Springs, Mich.
The six CDFIs were certified between August through November.

Pacific Service CU cuts rates for 80 of credit cardholders

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WALNUT CREEK Calif. (12/15/09)--While many banks are raising rates, lowering available credit limits and increasing fees, Pacific Service CU has lowered its credit card rates for 80% of its cardholders. As a result of a new program design, rates at the credit union are between 8.9% and 13.9% annual percentage rate (APR), based on credit qualifications. "While most financial institutions are raising costs to consumers through higher interest rates and fees, Pacific Service is lowering costs to consumers by restructuring products and services to create market-leading value," said Steve Punch, president of the Walnut Creek, Calif.-based credit union. "Earlier this year we launched four new checking programs that lowered costs for thousands of consumers. Those programs were very well-received, and we expect a similar response for our redesigned Visa credit card program," Punch said. The program is unique in the current marketplace, said the credit union. It assesses no fees for cash advances, balance transfers, carrying a zero balance or paying the balance in full each month. It has low variable rates, a 25-day grace period on purchases, and the same interest rate for purchases and cash advances. It also has no annual fee for basic Visa Platinum cardholders. Visa Rewards Platinum cardholders can avoid a $25 annual fee with a qualifying credit union checking account. Also, Rewards points earned do not expire. "Most credit card programs are fee-driven as a way for the financial institution to earn additional revenue and post a better bottom line," said Kristin Dove, vice president of marketing at Pacific Service. "But, excessive fees and astronomically high interest rates are unfair to consumers who manage their finances responsibly." For its fair and ethical practices, Pacific Service CU's credit card program recently received the Credit Card Connection's highest five stars rating. Pacific Service CU has more than $1 billion in assets.

WOCCU foundation exec dir. profiled in newspaper

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MADISON, Wis. (12/15/09)--The executive director of Worldwide Foundation for the World Council of Credit Unions was featured Sunday in the front page of the business section of the Wisconsin State Journal. In the article, "Bringing financing to those in need," Valerie Breunig describes her job raising money from U.S. credit unions for WOCCU's work in microfinance aide and other programs to alleviate poverty in developing countries, such as Kenya, Rwanda, Afghanistan, Sri Lanka, Bolivia and Colombia. She travels to program sites two or three times a year to monitor progress of the foundation's programs and noted that "Everybody loves to tell you about their credit union, when it formed, how it started, who the original founder was." Most of her job involves fundraising. Last year, she and an assistant raised $1.4 million, mostly from U.S. credit unions, to support WOCCU programs. Larger program grants are raised by staff in Washington, D.C., through donations from corporations, foundations and government agencies, the article said. Breunig noted that program sites are chosen in areas where WOCCU can get funding. Asked about the economic downturn's effect on giving by credit unions, Breunig said gifts are down this year because some credit unions have been hit hard by the downturn. In response, the organization cut some regional training in Latin America. However, she said, "I'm feeling like we're through the worst (period)."

UBIT case oral arguments end briefs due Feb. 1

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DENVER (12/15/09)--Closing arguments in Bellco CU's challenge of the government's unrelated business income tax (UBIT) ended at 12:15 p.m. (MT) Friday in a U.S. District Court in Denver, with the judge requesting post-trial briefs from both sides by Feb. 1. U.S. District Judge Christine M. Arguello began hearing testimony Dec. 7 from 15 witnesses, including 11 called on behalf of the Greenwood Village, Colo.-based credit union and four called by the government, according to Eric Richard, Credit Union National Association (CUNA) general counsel, who attended the trial. "The judge asked both sides for additional briefs, due Feb. 1. She will need time to read them and make her decision, so we are not expecting an immediate outcome," Richard told News Now, adding that Judge Arguello indicated that some of the issues involved in the case are difficult. At the conclusion of the case presented on behalf of Bellco by Mike Conway of the Foley & Lardner law firm, the government moved for a summary judgment as a matter of law, saying Bellco hadn't met its burden of proof. However, Judge Arguello said Bellco had submitted plausible evidence and denied the government's motion. Bellco argued why income derived from credit life and disability insurance, as well as royalties from accidental death and dismemberment (AD&D) insurance, should not be subject to UBIT. Among Bellco's arguments were that:
* Credit insurance is substantially related to the credit union's purposes of promoting thrift and making credit available at fair and reasonable rates. All sides in the case agree that a substantially related product is tax exempt, said Richard. "The Colorado credit union statute indicates credit unions must promote thrift among their members and help make credit available at fair and reasonable rates. The products protect credit union members from loss and protect the credit union from the effects on its capital from defaults on the loans," Richard told News Now. * Credit unions have been offering and integrating the insurance in the work of credit unions at least since 1934, when CUNA and CUNA Mutual were established. * Bellco offered the best rates in Colorado on credit insurance products, and these products were valued by the Bellco members who elected them.
The government argued that credit union insurance products are a poor value for members and do not promote thrift. The government's case relied heavily on what it characterized as the low loss ratios experienced by the insurance company that worked with Bellco on some of the insurance products offered through Bellco. Also at issue is whether AD&D insurance provides royalty income, which is exempt from UBIT. "To earn royalty income, the credit union must play a passive role in marketing and administering the AD&D program. The outside parties who contract with the credit union, such as marketing and insurance companies, must do most of the work," Richard said. "We believe Bellco met this test. But the court will consider whether Bellco's time and actions spent with the product reflect more than passive involvement." Richard noted that Bellco CU President/CEO Doug Ferraro "has shown incredible dedication" on a key issue important to credit unions. "He and his key employees participated in all the preparations for this trial, including the discovery process. He testified as the first witness last week, and spent every day with counsel at the counsel table in court the entire week." Bellco filed the lawsuit in May with support of the UBIT Steering Committee, which includes CUNA, CUNA Mutual, the American Association of Credit Union Leagues and the National Association of State Credit Union Supervisors (News Now Dec. 7).

Connecticut league visits offer thanks dues notices

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MERIDEN, Conn. (12/15/09)--The Credit Union League of Connecticut’s management and staff are personally visiting all member credit unions to thank them for their membership, loyalty and participation in 2009, offer holiday greetings and hand deliver dues notices for 2010. The league said it made the same type of visits in 2008. "Even in these financially challenging times, credit unions are poised to deliver crucial service to members,” said league President/CEO Tony Emerson. “Providing uncommon, superior member service during a tough economy often means simple, good business, setting an organization apart from its competition. “The league wants to exemplify this model,” he added. “We also want to deliver a high caliber of service to our member credit unions. Like them, we are first and foremost a service organization.” The league said it served member credit unions in 2009 by listening to their needs and fulfilling their requests with low- or no-cost alternatives and events such as a regulatory compliance workshop and a Real Estate Settlement Procedures Act conference. For 2010, the league has established a six-month, 12-session compliance school--at no cost to small credit unions--to keep affiliated credit unions up-to-date on the increasingly complicated regulatory compliance landscape. “No one is describing credit union operations as turnkey these days,” Emerson said. “By forming programs that provide hands-on, essential instruction and the latest updates, and surrounding them with personal connection and individual attention, the league is fulfilling its promise to serve with the same commitment that member credit unions render service to their own members. It’s the way we like to do business in Connecticut.”

NCUA denies lump-sum payment to employee of defunct CU

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WASHINGTON (12/15/09)--The National Credit Union Administration (NCUA) has denied a lump sum payment of more than $265,000 to a person who had a deferred compensation agreement with the failed New London (Conn.) Security FCU. The decision issued Nov. 19 was made available last week on NCUA’s website (theday.com Dec. 12). The unnamed resident, a former credit union employee, also will not receive her expected retirement benefits, NCUA said. The type of deferred compensation agreement, known as a “Rabbi Trust,” placed the employee’s benefits at risk, NCUA said in a decision that appealed a ruling in its Asset Management and Assistance Center, the publication said. “The reason parties entered into Rabbi Trusts organized this way is to inject sufficient uncertainty in the possibility of payment to the beneficiary that the Internal Revenue Service will not treat the benefits under the trust as recognized, and thus taxable, at the time the trust is first funded,” NCUA said on its website. “The beneficiary of a Rabbi Trust obtains a tax benefit in exchange for the risk that the institution might become insolvent before the promised benefits are all paid off,” NCUA added. “Unfortunately ... this insolvency risk materialized in the case of New London [Security FCU].” NCUA dissolved the credit union in July 2008, stating its late investment broker, Edwin F. Rachleff, had likely been embezzling funds for years, the publication said. Rachleff committed suicide in August 2008. “There appears to have been massive fraud at New London,” the NCUA decision said. “As a result, there are almost no assets available to pay claims and, presently, none available for general creditors.”

Six cyber trends outlined by I.D. theft center

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WASHINGTON (12/15/09)--Identity crime, especially Internet-based crime, continues to plague consumers and the economy, according to the Identity Theft Assistance Center (ITAC) Identity Theft Outlook for 2010. The report is based on developments during the past year and notes what’s ahead in 2010, including trends in criminal activity and law enforcement. The report also outlined six trends ITAC anticipates for 2010:
* More criminals will use malware to steal usernames and passwords, and recruit accomplices as “money mules” to open phony accounts and transfer funds. “It is the responsibility of consumers and businesses alike to demand the best security protection and to implement it into their everyday experiences,” said Michael Stanfield, CEO, Intersections Inc., a CUNA Strategic Service. * More collaboration on cyber security. The Obama administration will continue to break down silos within the government and collaborate more with the industry as it develops and implement cyber security policy, ITAC said. * Expanded use of identity management solutions to address identity theft, data breaches and cybercrime. * Changes resulting from “Red Flag” rules. Red flags are any activity or practice that indicates possible identity theft. Consumers will face questions about address changes and other behavior, including missed payments or changes in spending patterns. Consumers may be annoyed until they adjust to the new levels of scrutiny. * Stiffer sentences for those convicted of identity theft. The law requires a mandatory two-year sentence for aggravated identity theft. Prosecutors also are pursuing added jail time for related felonies, including wire fraud and use of unauthorized access devices. * Possible federal regulation of breaches of consumer data. The Senate is slated to consider two measures that would regulate how public and private organizations protect personal information.
ITAC is a nonprofit coalition of financial-services companies, committing to protect consumers from identity theft. Through its partner Intersections, ITAC offers identity management services.

Debt still troubles consumers CUNA tells IThe StreetI

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WASHINGTON (12/15/09)--Consumers have been paying down debt and saving more than they did during the economic boom, but the average level of household debt is still 120%--leaving consumers wary, a Credit Union National Association (CUNA) senior economist told The Street Monday. “Most people and investors are thinking we’re not going to come roaring out of this; it’s going to be a slow, deliberate and painful recovery,” Mike Schenk, CUNA senior economist, told the news outlet. “They want to feel like things are getting better. And once they feel like things are not only getting better but staying better, we can fix some more of these problems.” Consumers will remain skeptical until debt is reduced and wages grow. Retail sales have been strong, “but the real wild card there is if you see big uptick in inflation, that’s going to get big, long-term investors pretty nervous,” he added. For the full article, use the link.

CU hero gives gift of life

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COLCHESTER, Conn. (12/14/09)--In August, Fred Brown, director of marketing and member development at Northeast Family FCU, Manchester, Conn., saw a TV news story about a man who donated a kidney to help a coworker. "I thought, ‘That sounds neat--I’d like to save a life,’" Brown told News Now. In early September, Brown began the process of donating one of his kidneys by altruistic donation--which means that the donor and recipient are usually anonymous, though they could have the option of meeting later. During the next couple months, Brown underwent a laborious process of medical testing and meeting with a social worker, psychologist and transplant coordinator. On Dec. 2, Brown underwent surgery to remove his kidney for the donation. The surgery was successful. “Everything was as I was told,” Brown said. Brown stayed in the hospital for five days, and will be off from work for four to six weeks. While he was in the hospital, Brown met the woman who received his kidney. The donation saved her life. The woman, Pam Cyr, had seen a news story about Brown several days before surgery, and “put two and two together.” “She’s a very nice woman,” Brown said. One day while Brown was in the hospital, Cyr visited him. He was asleep, so she left him a note: “Your kidney visited.” Brown said the two plan to stay in touch. “She actually lives one town over from me, and we know some of the same people,” he said. After undergoing the donation process, Brown advised those who are considering donating a kidney to do so. “Don’t wait,” he said. “Just do it. Don’t be greedy. You have two kidneys--one to give away.” Besides being healthy, Brown advised the donor to ensure support from family because the donation process will affect them also. “Make sure your family is behind you,” he said. He also said to make certain there’s nobody in the family who may need a kidney later. Northeast Family FCU staff was very supportive of Brown’s decision to donate, he said. When asked if working for a credit union has affected his sense of altruism, Brown said that individuals who work for credit unions are already giving people. His donation, a personal decision, was coincidental with being a credit union employee, but at the same time, his gift goes “hand in hand” with the credit union philosophy. “Fred has a great heart for credit unions,” said Kathy Hammond, vice president of business development at Kent CU in Ohio and a friend of Brown’s. “He also is a hero in his personal life.” Northeast Family FCU has $64 million in assets.

SECU provides refuge for hospital patients and families

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RALEIGH, N.C. (12/14/09)--State Employees’ CU (SECU) is sponsoring a Family House to provide a place for out-of-towners to stay when recovering from surgery or medical care or when someone in their family is hospitalized at University of North Carolina Hospitals. The $16.7 billion asset, Raleigh, N.C.-based credit union’s house has provided a refuge this year for more than 1,160 guests from North Carolina, 19 other states and three foreign countries (The Daily Tar Heel via Weekly Update Dec. 7). “It’s a home away from home,” Robert McRae, whose family stayed there, told the paper. The cost of operating a room for one night is $56, but guests pay between $5 and $35 per room each night, depending on their financial circumstances. The average guest contribution is $25 per night, and there is no limit on how long a person can stay at the house--one person has been there since January--the paper said. “That way it’s a service for all families, not just those who can afford it,” Executive Director Greg Kirkpatrick told the paper. The house will have holiday decorations and events such as evergreen trees, wreaths, community volunteer performances, a Christmas dinner and a surprise visit from Santa Claus. Sometimes there is a waiting list for the 34,000-square-foot house, which contains 40 rooms. “It’s a nice place to stay, but it’s also a supportive and encouraging environment for people to get together,” Janet Hudgens, marketing and volunteer coordinator, told the paper.

Suze Orman to Larry King CUs have great rates

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WASHINGTON (12/14/09)--Credit unions offer better rates on credit cards, personal finance guru Suze Orman told Larry King on Larry King Live Thursday. King asked Orman if credit unions are a better option for those interested in transferring their credit card balances to credit unions from a bank. “Yes, yes, yes, yes,” Orman said. “Credit unions--especially ones that are federally chartered--the maximum interest rate they can charge you is 18%. Now, while that may sound like a very high interest rate, the truth of the matter is many of these banks today are charging 29.99% interest.” “So here is what I am suggesting. I think the United States of America--all of you should start looking into credit union credit cards and do a balance transfer,” Orman said. She suggested consumers visit creditcardconnection.org, a new site that offers information about financial institutions offering credit cards. Users can enter in their zip codes to find credit unions, Orman said.

CU System briefs (12/11/2009)

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* PALO ALTO, Calif. (12/14/09)--Thieves at Stanford FCU in Palo Alto, Calif., stole an ATM machine, according to PaloAltoOnline Dec. 10). The ATM was located in an office building where a credit union branch was formerly located. The building required an electronic card for entry, local police said. The theft was reported Dec. 7 at 8:45 a.m. Police have no suspects, but said the thief may have had knowledge of how to install and uninstall an ATM. Stanford FCU has $1 billion in assets ... * HARRISBURG, Pa. (12/14/09)--The Pennsylvania Credit Union Association (PCUA) warned credit unions in Life is a Highway Friday that financial institutions in Pittsburgh have received phone calls from a male who identifies himself as FBI Agent Bob Craig. The individual then provides a description of a white male with a mustache, saying the described male plans to rob the branch and may have a gun or bomb. The “agent” then tells the institution to give the robber money if he comes in, and that the FBI will apprehend him. The caller is not an agent--he is an accomplice of the robbery, PCUA said. One robbery has taken place in North Huntingdon, Pa., and another attempt was made Dec. 4 ...

Obama appoints Wash. league exec. to SBA post

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SEATTLE (12/14/09)--The White House announced Thursday the appointment of Calvin Goings, senior policy adviser to the Washington Credit Union League and former Washington state senator, as regional administrator for the Small Business Administration (SBA), overseeing Region X headquartered in Seattle with offices in Washington, Oregon, Alaska and Idaho. “Calvin Goings’s experience and drive to help small businesses succeed, including credit unions, makes him a clear choice to lead the administration’s Pacific Northwest small business initiatives,” said John Annaloro, league president/CEO. “The Washington state and national credit union communities are extremely proud; we look forward to our continued work with the administration.” Goings has spent nearly his entire professional life in public service. In 1996, Goings became the youngest state senator to ever be elected in Washington. Between 1996 and 2001, he rose to vice-chair of the Senate Transportation Committee where he supported investment in infrastructure projects to bolster the local economy, and also statewide legislation to support small businesses. In 2000, Goings was elected to Pierce County (Wash.) Council, where he focused on economic development, workforce training, small-business investments and industrial land preservation. “I am honored to be joining the Obama Administration and the SBA to implement the White House plan to support small business expansion in these difficult times,” Goings said. “Working with small businesses and emerging entrepreneurs across Washington, Oregon, Idaho and Alaska, we can fully realize President Obama’s plan for reinvigorating our economy.” Goings rejoined the Washington league early this year. From 1998 to 2001, he served as executive director of the credit union trade association’s 501(c) (3) philanthropic arm--the Washington Credit Union Foundation. In the span of his nearly 20 years in public life, Goings has earned many honors and awards, including the Distinguished Service Award from the Washington State Patrol Troopers Association, the Outstanding Citizen Award from the Washington Jaycees, the Citation of Leadership from the Small Business Incubator, and the Excellence in Community Service citation from the Puyallup/South Hill Rotary.

Peruvian CUs pave way for agricultural lending

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WASHINGTON (12/14/09)--As a development methodology, value chain financing has proved effective in helping credit unions in Peru reduce the risks of agricultural lending and expand access to affordable finance for rural populations, said the World Council of Credit Unions (WOCCU). WOCU has released the “WOCCU Value Chain Finance Implementation Manual: Increasing Profitability of Small Producers,” designed to help financial institutions, development finance organizations and donors better understand and implement the award-winning methodology developed in Peru. The manual was created in partnership with The SEEP Network, an international association for microenterprise practitioners. Often referred to as a supply chain, a value chain is a series of activities, including financing, that take a product or service from its conception to market. The WOCCU value chain finance methodology, developed in partnership with Federación Nacional de Cooperativas de Ahorro y Crédito del Perú (FENACREP), WOCCU's membership organization in Peru, is designed to assess and mitigate specific risks associated with financing existing rural value chains. The process also determines at which points along the value chain--from production to commercialization--financing can best support the different participants, particularly small farmers.
Click to view larger image Value chain finance can mitigate credit union risk while serving more members, Federación Nacional de Cooperativas de Ahorro y Crédito del Perú Manuel Rabines tells potential participants in Peru. (Photo provided by World Council of Credit Unions)
“Using this methodology, the credit unions can take into account the financial and market potential of the entire value chain, not just the creditworthiness of a single individual, as we have traditionally done,“ said Manuel Rabines, general manager and CEO of FENACREP and first vice chair on WOCCU’s board of directors. “With this shift in focus, the credit unions can more accurately measure and mitigate risk, opening the door to potential rural participants previously seen as too risky.“ The U.S. Agency for International Development (USAID), which funded the WOCCU/FENACREP Peru program, has lauded the effectiveness of the process. This past February, it awarded its first Innovations in Financing Value Chains award to WOCCU and FENACREP for the program. The award-winning methodology is outlined in the new manual, according to Anicca Jansen, senior technical advisor from USAID's Office for Microenterprise Development. “There is so much practical information in the manual to help a financial institution evaluate whether or not value chain finance is right for them and to actually start implementing it,” Jansen said. “This publication will add value to the development community.” To date, six Peruvian credit unions have used the methodology to finance 36 distinct value chains through 76 rounds of financing. In total, credit unions have disbursed $2.3 million through 1,573 loans to 4,686 rural producers, producer groups and other value chain participants. In addition to Peru, WOCCU is implementing USAID-funded agricultural and value chain finance programs in Haiti, and programs in Kenya and Sri Lanka funded by the U.S. Department of Agriculture. WOCCU also is testing financial applications through new technology solutions--including point-of-service devices and personal digital assistants--designed to enable credit unions to reach even more people in the rural areas and increase the efficiency of providing rural finance options. “Many rural poor face difficulties in increasing income and assets not only because of lack of access to financial markets, but also due to isolation from markets, lack of information about crop demand and product prices and lack of relationships between input suppliers and harvest buyers,“ said Brian Branch, WOCCU executive vice president and chief operating officer. “WOCCU’s value chain programs increase income generation and wealth accumulation for poor households through simultaneous improvements in access to financial services and value chain linkages,” he added.

Gateway Metro opens 3rd elementary school branch

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ST. LOUIS, Mo. (12/14/09)--Gateway Metro FCU has opened its third elementary school branch in Missouri. The branch was opened at Christ, Light of the Nations School in
Click to view larger image Gateway Metro, St. Louis, operates the only three student-assisted credit union branches in Missouri. Pictured are Gateway staff members, St. Ferdinand staff and students during a grand opening of the St. Ferdinand branch in October. (Photo provided by Gateway Metro FCU)
Bissell Hills. The opening comes after St. Ferdinand CU and HNJ Catholic CU combined operations with Gateway Dec. 1. In addition to the Bissell Hills branch, Gateway has started and operates the only two elementary school student-assisted credit union branches in Missouri. The credit union will provide financial education to more than 630 students, Gateway said. Gateway also is offering a 10% annual percentage yield youth share certificate. Children ages 10 to 18 whose parent or grandparent has a checking and direct deposit at Gateway Metro are eligible. Youth must take an online financial class to earn the interest. The certificate allows them to make additional deposits up to $1,000. Gateway Metro FCU has $187 million in assets.

Filene announces new chair

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MADISON, Wis. (12/14/09)--The Filene Research Institute announced that Patricia Smith, president/CEO of Unitus Community CU in Portland, Ore,, has been elected chair of the institute. She replaces outgoing chair Patsy Van Ouwerkerk, CEO of Travis CU in Vacaville, Calif., who completed a three-year term as chair and will remain on the board as a director. Smith, a four-year veteran of the Filene board, will be the institute’s sixth chair. “The need for independent research about changes in consumer finance has never been more important than it is today,” Smith said. “I’m proud of the research and the innovation work we’ve done at Filene to position credit unions for this changing world.”

Bankrate CUs offer better auto loan rates

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NORTH PALM BEACH, Fla. (12/11/09)--Credit unions offer lower rates on auto loans than banks, a personal finance expert from the Credit Union National Association (CUNA) told Bankrate.com. Credit unions’ auto loan rates tend to be about 1% to 1.5% lower than banks’ rates, Jim Hanson, CUNA vice president of personal finance, told Bankrate. The Bankrate story listed 10 tips to help consumers receive the best rates on auto loans. The tip mentioning credit unions’ rates was listed as No. 1. To read the full article, use the link.

TowerGroup Be a technology leader

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NEEDHAM, Mass. (12/11/09)--Consumer-based financial institutions, including credit unions, either can choose to be technology leaders or be pulled into a wake created by competitors, according to TowerGroup research. TowerGroup recently released a study, “Emerging Consumer-Facing Technology Trends: Change is the Only Constant,” which focuses on the technological changes that will affect financial institutions in the future. “Web 2.0, mobility, rich Internet applications and social networking must be come part of a consumer banker’s vocabulary, or the phrase ‘Do you want fries with that’ will,” the study said in its findings. Technology vendors also should help financial institutions create realistic business cases for emerging technologies and demonstrate their business value--more than just their “coolness.” Several consumer self-service technologies have already demonstrated economic value--such as account alerts, e-statement and check images, account-to-account transfers, and expedited payments, TowerGroup added.

Virginia CU sponsors school CU to educate students

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HAMPTON, Va. (12/11/09)--A Virginia credit union is sponsoring a full-service student-run credit union inside Windsor (Va.) High School primarily to give students a financial education. Operated under the supervision of Hampton (Va.) Road’s Educators CU (HRECU), the Blue’s Gold Student-Run CU--a reference to the school’s colors--opened Oct. 30 (Daily Press Dec. 9). The move to place a credit union in the high school comes in advance of an initiative from the Virginia Board of Education that requires schools to teach personal finance classes in a proposed Standards of Learning for Economics and Personal Finance test, the newspaper said. The test will be effective for students entering the ninth grade in the 2010-2011 school year. The school credit union functions in the same manner as a regular credit union, allowing students, faculty and staff to make withdrawals and deposits, and cash checks Tuesdays and Fridays during the school’s three lunch periods, Stephanie Adams, HRECU marketing coordinator, told the paper. “We have lots of really good support from school staff and teachers,” she told the paper. “It gives us a chance to push for financial education.” Blues Gold CU, situated in the school’s main hall connecting the gym and cafeteria, is designed to help students learn how today banking is and lending works “before they go off to college and are left to fend for themselves,” Adams told the paper.

CUs make Googles Zeitgeist 2009 list

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MADISON, Wis. (12/11/09)--Several credit unions made Google’s Zeitgeist 2009 list, meaning that they have been some of the most popular searches for residents of cities nationwide. The lists are divided by city, region, entertainment, celebrities and news items. The list that credit unions were featured prominently on was divided by major U.S. cities-- including Atlanta, Chicago, Washington, D.C., Boston, Phoenix, Pittsburgh, San Francisco and others. Credit unions receiving top hits in their respective cities include:
* Johns Hopkins FCU, Baltimore; * A+ FCU, Austin, Texas; * Boeing Employees CU, Seattle; * GTE FCU, Tampa; * Arrowhead CU, Los Angeles; * Community America CU, Kansas City; * Dade County FCU, Miami, Fla.; * OnPoint CU, Portland, Ore.; and * Grow Financial CU, Tampa.
Other popular search terms on cities’ Top Ten lists were for local schools, colleges, transportation, sports teams and local city or government websites. Major banks did not make the lists. For the full list, use the link.

Maryland CU adopts families through housing commission

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ROCKVILLE, Md. (12/11/09)--MCT FCU in Rockville, Md., adopted four underserved families this holiday season for its third annual Holiday Wishes donation drive. The families all receive housing subsidies from the Housing Opportunities Commission (HOC) of Montgomery County. MCT will collect monetary donations in its branches from community members and employees through Dec. 18. Member contributions will be used to purchase movie-themed gift baskets for each family, which will include a DVD player, family-friendly DVDs, and a grocery store gift card for a holiday meal. MCT employees will participate in the holiday giving by “adopting” the children of these families and purchasing gifts and clothing for them. The mission of HOC is to preserve and expand affordable housing in Montgomery County, to make housing available to eligible families of low- and moderate-incomes, and to provide necessary support services to encourage resident self-sufficiency, MCT said. HOC’s use of mixed-income developments has contributed to Montgomery County’s reputation for innovation in affordable housing solutions, the credit union said. MCT FCU has $414.6 million in assets.

Pa. assoc. CUs popular alternative to big banks

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HARRISBURG, Pa. (12/11/09)--Even though credit unions only own a 3% to 5% financial market share in Pennsylvania, they remain a popular alternative to larger banks, the Pennsylvania Credit Union Association (PCUA) told the AltoonaMirror.com Monday. With 550 credit unions and $27 billion in assets, Pennsylvania has the most credit unions of any state, Mike Wishnow, PCUA senior vice president, told the newspaper. The number of Pennsylvania credit unions reached its zenith at 1,593 in 1980, with membership totaling 1.74 million. While the consolidation trend in the business community during the 1980s and 1990s affected the credit union movement, membership rose to nearly 3.5 million in 2008, the paper said. “We have seen membership growth over the last two years,” Wishnow told the paper. “The national growth over the last quarter was 1.9%; Pennsylvania's rate increased by 2.2%.” Most credit unions are small, with less than $10 million in assets, Wishnow added. “Many banks won’t even open a branch unless it has $25 million in assets or higher,” he said. Despite current troubles with the economy, the future for credit unions is bright, Wishnow told the paper. “We did not get caught up in the mortgage and securities crisis,” he added. “The economy has been different, but we think we are better-positioned than any of the competition to weather the storm.” To read the article, use the link.

CU System briefs (12/10/2009)

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* MADISON, Wis. (12/11/09), CLARIFICATION--The offices of the Illinois Credit Union League in Naperville, Ill., and CUNA Mutual Group in Madison, Wis., were open on Wednesday. In a story about snowstorms in the Midwest and its effect on credit unions, News Now reported that the offices were closed ... * COLORADO SPRINGS, Colo. (12/11/09)--Ent FCU raised $119,170 for
Click to view larger image Click for larger view
the United Way, surpassing its goal of raising $100,000. The credit union offered fundraisers such as online auctions, casual days, barbeques, and tickets sold to a breakfast cooked by Ent FCU management staff. Pictured are David Vincellette (left) and Julie Gwisdalla, Ent’s co-chairs for the credit union’s fundraising campaign. Ent FCU, based in Colorado Springs, Colo., has $3 billion in assets. (Photo provided by Ent FCU) ... * ALBANY, N.Y. (12/11/09)--Community Resource FCU, Latham, N.Y., has joined the Universal Sharing Network (UsNet). The credit union is now a part of UsNet’s shared branching network. Betsy Kindlon, Community Resource FCU president/CEO, said participation in UsNet’s network allows the credit union to expand branch locations at manageable costs. UsNet, a partner of CO-OP Shared Branching, provides shared branching for credit unions. Community Resource FCU has $65 million in assets ...

Storm closes leagues CUs in Midwest

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MADISON, Wis. (12/10/09)--Some leagues and many credit unions were closed Wednesday as a massive snow storm made its way through the Midwest Tuesday and Wednesday. The Madison, Wis., offices of the Credit Union National Association, and other entities such as the World Council of Credit Unions, were closed Wednesday, although some staff worked online. News Now's Madison-based staff worked from their homes to put out today's issue. CUNA had announced Tuesday night it would be closed during the blizzard. Madison saw a rash of snow blower injuries and stuck snow plows. And 3,000 students at the University of Wisconsin (as well as 900 students at UW in Milwaukee) participated in two massive snowball fights on their campuses. The Wisconsin Credit Union League also was closed Wednesday as were credit unions throughout the state. Gov. Jim Doyle announced a snow emergency throughout the state and asked government workers to stay home while the state cleared up to 18.5 inches of heavy, wet snow. The Iowa Credit Union League office in Des Moines was closed because of the snow and was working with a skeleton crew of 20 people, the league told News Now. Des Moines received more than 11 inches of snow. The Illinois Credit Union League said that it had talked with several credit unions but had not heard of any operational difficulties. In Minnesota, Minnesota Credit Union Network Director of Communications Rachel Kuenzel said she had not heard of any credit union closings in the state. Minnesota did get some snow, but not as much as Wisconsin, she told News Now. Wednesday night, the state's temperatures plunged, as did temperatures in several other northern states. The Michigan Credit Union League was open Wednesday, saying the state had just a couple of inches of snow. However, the league was bracing for more snow Wednesday night. The Indiana Credit Union League in Indianapolis also was open Wednesday. The area had high winds but just a little snow. As the storm moved east, more states were facing heavy snowfall and more closures, which could affect other leagues and credit unions.

Court reverses Centrix bankruptcy decision

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DENVER (12/10/09)--A U.S. Court of Appeals in Denver has reversed a decision by a lower court and remanded it back to that court for reconsideration of the Chapter 11 bankruptcy plan for Centennial, Colo.-based Centrix, a company that financed subprime auto loans for credit unions (Leagle.com Dec. 9). The bankruptcy plan was approved by the U.S. Bankruptcy Court in May 2008. The plan proposed to pay creditors with proceeds from any successful litigation and from the 2007 sale of its assets for $30 million to Kendrick CF Acquisition Inc., now known as Peak 5. Unsecured creditors' recovery depended on Centrix pursuing claims against its CEO, Robert E. Sutton, who helped establish Kendrick (News Now Jan. 22, 2008). Sutton and two companies--6762 S. Potomac LLC and Centrix Consolidated--appealed the rulings and final decisions entered by the bankruptcy court after it ruled their objections as "equitably moot," using a five-prong test. The appellants contended the district court erred in adopting the doctrine of equitable mootness, and, should the doctrine be deemed appropriate to the case, it erred in applying the relevant criteria. The appellant court formally adopted the equitable mootness doctrine in 2009 in another case but instead of a five-part test, it set forth a six-part test for determining whether an appeal is equitably moot. The sixth question in the test is whether appellants' challenge to the plan is legally meritorious or equitably compelling "based upon a quick look at the merits." The lower court had applied as one of the factors whether the relief requested would affect the success of the plan; however, the appellate court's test requires a court to analyze the likely impact of an appellant's challenge to the plan upon a successful reorganization of the debt. The appeals court committed the equitably moot matter to the lower district court's discretion. "This is not a case where we can affirm the district court's discretionary dismissal as a matter of law, on the basis 'that it would have been an abuse of discretion for the district court not to dismiss [the appeal],'" said the higher court. "Therefore, we conclude that a remand is appropriate in this case, to allow the district court to weigh and apply those factors in the first instance," the appeals court said in its ruling Tuesday.

Arizona FCU citing economy to close eight branches

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PHOENIX (12/10/09)--Arizona FCU, Phoenix, announced Tuesday it will close eight of its 23 branches by January to ensure “long-term success.” By Jan. 16, Arizona FCU will close a Buckeye, Ariz., branch inside a retail establishment; a Phoenix branch inside a YMCA; and a Peoria, Ariz., branch inside a Wal-Mart (Phoenix Business Journal Dec. 8). By Jan. 30, the credit union will close two Wal-Mart branches in Phoenix and one each in Chandler, Ariz., and Avondale, Ariz. It also will close another branch in Chandler, its website said. In a letter to members of the credit union, President/CEO Ron Westad said the move “continues our efforts to consolidate our branch resources to meet the economic reality we all face, and helps to position us for future success,” according to the Journal. All employees displaced by the closures will be relocated to other branches or departments within the Phoenix-based organization, the credit union said. Arizona FCU lost $5.6 million in the third quarter. Through the first nine months of the year, the credit union lost $41.9 million, largely attributed to a loan loss provision of $77 million, the Journal said. Arizona FCU has $1.8 billion in assets. Calls to Arizona FCU by News Now were not returned by press time.

TJX hacker to plead guilty to breaches

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BOSTON (12/10/09)--The man responsible for the TJX Cos. data breach in 2007 and 2008 has agreed to plead guilty to two of the largest data breaches in history--the Heartland Payment Systems and Hannaford Bros. grocery chain breaches--as well as breaches at 7-Eleven stores. According to a filing on Dec. 2 with the U.S. District Court in New Jersey, where the Heartland charges were brought in August, Albert Gonzalez, 28, of Miami, Fla., has entered into a plea agreement (Reuters Dec. 9 and wired.com Dec. 8). The hacking compromised millions of cards and accounts, and caused headaches and losses for thousands of credit unions and other financial institutions, spawning class action lawsuits against the companies breached. The breaches also raised questions about the effectiveness of payment card industry security standards and who should pay for losses incurred when financial institutions had to reissue cards to millions of consumers. A federal judge Tuesday transferred the New Jersey case to Massachusetts, where Gonzalez is seeking to merge the case with two others in which he already has entered guilty pleas. In the New Jersey charges filed in August, Gonzalez and two unnamed Russian hackers were accused of stealing more than 130 million debit and credit cards from Heartland, a card-processing company, and the retailers. A former Secret Service informant, Gonzalez was charged with 10 other suspects in May 2008 in New York and August 2008 in Massachusetts with hacking TJX, OfficeMax, Dave& Buster's restaurants, and others. Gonzalez pleaded guilty to the charges and was to be sentenced Dec. 21 in Massachusetts on both cases. He faces 15 to 25 years in prison on the earlier charges.

Foreclosures delinquencies up in Maine

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AUGUSTA, Maine (12/10/09)--Home foreclosures in Maine are modestly increasing, but they appear to be lower than other states, said the state Bureau of Financial Institutions. The foreclosures do not threaten the stability of Maine-chartered financial institutions, according to Lloyd LaFountain III, bureau superintendent. "Although the upward trend in home foreclosures is modest and does not threaten the solvency of Maine-chartered banks and credit unions, we recognize that too many individuals and families find themselves in very difficult situations," LaFountain said. "We are encouraged, however, that new mortgage activity has remained relatively strong through three quarters this year." During the third quarter of 2009, foreclosure proceedings were started on 76 first mortgages--0.16% of all outstanding first mortgages. However, foreclosure proceedings initiated on junior mortgages decreased, the bureau said. Completed foreclosures in the third quarter of 2009 totaled 55 mortgages, compared with 159 in 2008. Maine credit unions and banks had 85,248 mortgage loans at the end of September, with 48,538 first mortgage loans and 36,710 junior lien mortgage loans. Of the 85,248 loans, 271 were in process of foreclosure (IPF). IPF loans were at 0.32% during the third quarter--up from 0.30% during the second quarter of 2009, the bureau said. The data was obtained from 32 state-chartered Maine banks and credit unions from 2006 through September 2009. It does not include federally chartered credit unions.

TraceSecurity Search engines funnel fake sites

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SAN FRANCISCO (12/10/09)--Fake websites can trick search engines into giving them top billing so they can prey on consumers, according to a security expert from TraceSecurity, a CUNA Strategic Service. TraceSecurity Chief Technology Officer and co-founder Jim Stickley was recently featured by ABC News in a story on the fake sites. To illustrate the dangers posed by the fake sites, Stickley created a fictitious website purporting to be from Credit Union of Southern California. Stickley created a domain that appeared to be from the credit union--creditunionofsc.org--and placed several links on the site to give the appearance of depth, even though the links only led to pictures of the credit union’s front page (ABC News Dec. 8). Stickley was able to trick search engines Yahoo! and Microsoft’s Bing! into placing his fake site high on their search lists--even ahead of the Whittier, Calif.-based credit union’s real site. Google, however, did not place the site high in its search rankings. The search engine also placed a warning for users that the site may contain malicious content. The experiment caused Credit Union of Southern California to think about protecting its website more aggressively--by purchasing domain names that closely match its own, ABC said. Purchasing the domains would prevent scammers from creating a similar-looking website to harm the credit union’s members. To read the full article, use the link.

N.Y. association meets with congressman

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ALBANY, N.Y. (12/10/09)--The Credit Union Association of New York recently met with Rep. Paul D. Tonko (D-N.Y.) to discuss pending legislative issues critical to credit unions in New York and nationwide.
The Credit Union Association of New York recently met with Rep. Paul Tonko (D-N.Y.) in Albany, N.Y. From left are: Tonko, Amy Kramer, association vice president of governmental affairs; William J. Mellin, president/CEO; and Michael Lanotte, senior vice president and general counsel. (Photo provided by the Credit Union Association of New York)
Association President/CEO William J. Mellin, Vice President of Governmental Affairs Amy Kramer and Senior Vice President/General Counsel Michael Lanotte discussed Congress' proposed Consumer Financial Protection Agency, overdraft protections, credit unions' member business lending cap and a controversy surrounding interchange with Tonko. "The congressman listened to and is considering credit unions' point of view on the issues we reviewed, especially in relation to interchange," Mellin said. "We will continue to follow up with his staff on all matters to keep the credit union perspective front and center." "District meetings are extremely beneficial," added Kramer. "They present a unique occasion to capture the ear of our legislative leaders when they are away from the hectic daily routine they experience within the halls of Congress."

Mich. CUs report record growth in members deposits

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LANSING, Mich. (12/10/09)--Michigan’s 335 credit unions continue to show growth in loans, deposits and membership by adding a record 59,000 members in 2009--the most in five years, the Michigan Credit Union League (MCUL) said. In the third quarter, 11 new branches were opened, bringing the total of Michigan credit union branches to 1,043 with 59 shared branches. New-auto loans at Michigan credit unions grew 5.8% over the past 12 months preceding September 2009. Michigan credit unions now hold $2.33 billion in new-auto loans. Credit unions' “Invest in America” program, which has facilitated 215,000 vehicle sales, helped drive the growth in new-auto loans with discounts through General Motors and Chrysler, the league said. Used-vehicle loans grew 5.1% over the same period, equating to $3.9 billion. Deposits showed growth with an 11.8% annualized rate, leading to an 11.7% increase in credit union assets to $37.4 billion. “As other financial institutions have made it more difficult for consumers to get loans or added new fees on checking and savings accounts, credit unions have continued to offer consumer-friendly alternatives,” said MCUL President/CEO David Adams.

Snow storm closes CUNAs Madison office

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MADISON, Wis. (12/9/09)--Due to severe weather conditions in Wisconsin Tuesday and today, the Madison, Wis. offices of the Credit Union National Association's will be closed today. CUNA's Washington, D.C. offices remain open. News Now will provide a weather update in its regular edition Thursday.

Hampel to media Consumer holiday spending OK

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MADISON, Wis. (12/9/09)--News-Journal Online mentioned a Credit Union National Association (CUNA) economist’s comments on consumer holiday shopping being decent this year, and also cited the CUNA/Consumer Federation of America holiday shopping survey. “Consumers are telling us they will not cut back as much on spending as last year, but more so than in previous years,” Hampel said in a prepared comments about the survey that the publication picked up. “The survey also found that consumer concerns--at least where paying debts is concerned--is easing somewhat,” the Journal said. “Many Americans say they remained concerned about their financial condition, but it is good news that fewer people are concerned about meeting monthly debt payments this year than last,” Stephen Brobeck, consumer federation executive director, told the Journal. To read the article, use the link.

CU System briefs (12/08/2009)

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* BATTLE CREEK, Mich. (12/9/09)--OMNI Community CU, Battle Creek, Mich., is returning a dividend of $750,000 to its membership. Qualifying members will receive an extra 0.22% back on their 2009 average yearly loan and account balances (Michigan Monitor Dec. 7). Qualifying loans include auto loans, credit cards, home equity loans, mortgages, savings account, money market accounts, checking accounts, certificates of deposit and non-investment individual retirement account balances. Members also can visit www.omnicashback.com to calculate their rebate. OMNI has given back more than $1.4 million to its members through dividends ... * MIAMI LAKES, Fla. (12/9/09)--The Puerto Rico branch of JetStream FCU has partnered with Iniciativa Comunitaria de Investigacion Inc. to provide free AIDS testing for local residents. The event will take place Dec. 16 at the Puerto Rico branch. More than 26 of 100,000 people in Puerto Rice have AIDS--nearly double that of the U.S., according to the Centers for Disease Control. Employees at the credit union also recently wore red clothing to support International Combat AIDS Day. JetStream FCU has more than $122 million in assets ... * FARMERS BRANCH, Texas (12/9/09)--Huey May, director and immediate past chairman of City CU in Dallas, died Nov. 29. “May’s dedication and commitment to the credit union spirit was irreplaceable,” said the Texas Credit Union League (LoneStar Leaguer Dec. 8). Funeral services will take place Thursday ... * HARRISBURG, Pa. (12/9/09)--Kathy Cropper, 55, former manager of A&S CU, Aliquippa, Pa., died Dec. 5 after battling a lengthy illness (Life is a Highway Dec. 8). Cropper would have been 56 on Dec. 31 ...

Tenn. CU gives back 1 million to members

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CLARKSVILLE, Tenn. (12/9/09)--A Tennessee credit union will be giving $1 million in patronage dividends back to its members this year. The $334.2 million asset, Clarksville, Tenn.-based Fort Campbell FCU’s more than 36,600 members will see the patronage dividend deposited into their share savings accounts this week, the credit union said (The Leaf-Chronicle Dec.8). “We have given over $6 million back to members of the credit union over the past five years alone and we're so proud to be able to continue this tradition,” said Stewart Ramsey, Fort Campbell president/CEO, in a prepared statement. The amount that each member will receive is based on length of membership and number of services used, including checking, loans and online banking. “Credit unions are unique in the financial services industry in that they are cooperatives and therefore members directly benefit when the credit union has a successful year,” Ramsey told the paper. “Without stockholders to pay, Fort Campbell FCU is able to return those savings to members. “We are committed to investing in our community and giving back to our members, because the credit union was started here in 1954 and our members and employees call this home,” Ramsey concluded.

Filene announces two partnerships to help CUs

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MADISON, Wis. (12/9/09)--The Filene Research Institute announced two new partnerships to help credit unions move from think to do, from ideas to actions, which Filene said builds on its history of young-adult and innovation research. Filene is partnering with:
* Matt Davis, a former executive at Members CU in Winston-Salem, N.C, who will advise and help credit unions implement i3 innovation plans; and * Brent Dixon, a leading designer and credit union innovator, who will advise and help credit unions launch young-adult product and outreach strategies.
“Filene refuses to retrench,” said George Hofheimer, Filene chief research officer. “We’re investing in innovation during this downturn. We think there are unique opportunities to help credit unions right now.” Davis will help credit unions implement ideas from Filene’s innovation and i3 catalog. He has been at the center of credit union innovation since 2004. Projects such as What are you saving for? and Football Pick’em have earned Davis international recognition, including features in Fast Company, Yahoo! Finance, Bankrate.com and credit union publications. Davis’ innovation portfolio will focus on helping credit unions help their members:
* Build wealth; * Navigate financial waters; * Meet life’s milestones; * Make community connections; and * Borrow responsibly.
“The Filene Research Institute’s i3 program has developed a significant portfolio of financial services innovations over the years,” Davis said. “My goal is to help as many credit unions as possible deliver these programs to their memberships.” Dixon will help credit unions customize and build products and programs to attract young-adult members, employees and volunteers. Dixon is the founder of The Haberdashery, a creative studio based in New York City. He spent five years as creative director of Trabian, an Indianapolis-based interactive agency. He has worked with dozens of credit unions and with credit union organizations, such as the Credit Union Executive Society and the National Credit Union Foundation. Dixon’s young-adult portfolio will build on Filene research to help credit unions attract young adults. Dixon will help credit unions develop:
* Social media and online advertising campaigns; * Young-adult-oriented transaction and credit products; * Improved physical and e-delivery of products; and * Initiatives that recognize changing financial behavior and decision-making models.
“Young adults and credit unions are two groups that desperately need each other right now, yet have the darndest time looking each other in the eyes,” Dixon said. “I am floored about the opportunity to help credit unions bridge that gap.”

Czech Republic CUs membership grows to 44000

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CZECH REPUBLIC (12/9/09)--The number of Czech Republic credit union members grew by 8,000 to 44,000 in the first three quarters of 2009, according to recently released statistics. Roughly 11,000 joined credit unions, while 3,000 ended their memberships, according to Czech National Bank statistics (CTK Business News Dec. 4). Assets of 17 credit unions in the country also rose to roughly $95.7 million from $37.5 million. Deposits at the credit unions have grown steadily since 2002. “Credit unions are now a legitimate and firm part of the Czech financial market,” the newspaper added.

Citing economy Elevations CU to close branch Jan. 30

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BOULDER, Colo. (12/9/09)--Elevations CU, Boulder, Colo., announced that it will close its Erie branch on Jan. 30 and eliminate 13 staff positions. The changes will result in an annual savings of $1.2 million, the credit union said in a press release. Employees working at the Erie branch will be transitioned to other open positions within the credit union. The branch opened in September 2008. “The branch in Erie was the first time we had entered into an emerging and undeveloped market,” said Gerry Agnes, president/CEO. “In the initial analysis, there was a significant projected increase in the number of households within the market area, in addition to large retail developments that were planned for this area. “The projected growth and economic assumptions simply did not materialize, and we do not foresee the market conditions changing substantially over the next several years,” he added. Elevations has eight other branches that serve Boulder and Broomfield counties. The credit union opened two branches in 2008--serving Broomfield/Westminster and Longmont, Colo. “Both are doing well with no changes planned,” the credit union said. “The difference was that these two branches were opened in established market areas with an adequate number of households and businesses nearby.” Members affected by the Erie closing can use shared branching, the CO-OP ATM network and online banking to meet their banking needs, Elevations added. Elevations CU has $920 million in assets.

CUNA Brokerage Services helps sick children

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ATLANTA (12/9/09)--Members of CUNA Brokerage Services’ Senior Advisor Leadership Team recently met in Atlanta to help sick children as part of the team’s Give Back Program. Give Back allows team members to give back to communities and families in need. Fifteen team members traveled across the country to meet in Atlanta for the event.
Click to view larger image CUNA Brokerage Services volunteers recently visited a children’s hospital in Atlanta as a part of the team’s Give Back program. Pictured are, from left, Stewart Conover, Cornerstone Community CU, Lockport, N.Y., and Greg Rhodes, Valley First CU, Modesto, Calif. (Photo provided by CUNA Brokerage Services)
Stewart Conover, financial adviser and event organizer, said the experience was life-changing. “We spend every day helping individuals plan and prepare for their financial future, while many of these kids are fighting to have a future,” he said. During their trip to Children’s Healthcare of Atlanta Pediatric Hospital, team members played games, sang songs, and worked on craft projects with patients and their parents as a part of Camp Children’s, a program that allows corporate groups to interact with young patients. “Having community members come in and provide this kind of outlet for patients is great,” said Stephanie Oprea, special events coordinator at Children’s Healthcare of Atlanta. “It allows the kids to be kids, rather than just hospital patients. These are kids who want to draw pictures and sing songs and do all the things they would do if not in the hospital.” Oprea said the children who participated in Camp Children’s with the CUNA Brokerage Services volunteers are suffering from life-threatening diseases or chronic illnesses. CUNA Brokerage Services also donated money to Camp Children’s.

CU files suit against CUMIS

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MADISON, Wis. (12/8/09)--A Maryland-based credit union affected by fraud at U.S. Mortgage/CU National Mortgage Corp. has filed a civil suit against CUNA Mutual Insurance Society (CUMIS) to recover losses under a bond issued by CUMIS. In the complaint, Education Systems FCU, Greenbelt, said it purchased the bond to protect it from losses incurred under events such as the CU National Mortgage Corp. fraud. However, “the specific circumstances of this claim aren’t covered by our bond,” Phil Tschudy, CUNA Mutual Group media relations manager, told News Now. “We believe other entities have liability for the losses the credit unions have suffered and we are continuing to look for ways to assist the affected credit unions in seeking compensation for those losses,” he added. Madison, Wis.-based CUMIS filed two declaratory judgment actions in June and August in Wisconsin state court asking the court to declare that the bond did not cover the losses suffered by Education Systems FCU. Education Systems FCU said it was served with the August 31 action on Nov. 23. “The declaratory judgment action we filed seeks only to have the court resolve the question around coverage,” Tschudy said. “The action doesn’t seek damages against the credit union. “We were hoping not to have to move forward with the litigation and have been working toward that end,” he added. “However, in fairness to all of our policyholders, we need to abide by and defend the limits of our coverage to avoid having some credit unions subsidize the inactions of others. We remain hopeful this can be resolved in a manner that is fair for everyone." Education Systems FCU experienced losses when a servicing contractor hired to collect mortgage loan payments sold the loans to a third party without Educational Systems’ authorization and kept the proceeds, the complaint said. Education Systems FCU was one of 19 credit unions defrauded by CU National Mortgage, which closed this year after filing for bankruptcy in February. Its president, Michael McGrath, pleaded guilty in June to defrauding about $139.6 million from the credit unions and Fannie Mae. McGrath admitted to conspiring with others to fraudulently sell credit union loans and use the proceeds to finance U.S. Mortgage's operations and investments for himself and the company (News Now June 12).

Ohio league CUs support public funds bill

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DUBLIN, Ohio (12/8/09)--The Ohio Credit Union League and Ohio credit unions are meeting with state legislators to generate support for legislation that would allow Ohio credit unions to become eligible depositories for public funds. The bill, H.B. 317, is jointly sponsored by Ohio Majority Floor Leader Tracy Maxwell Heard (D-Columbus) and State Rep. Peter Ujvagi (D-Toledo) and 20 co-sponsors (eLumination Dec. 4). The bill would include credit unions as eligible depositories for state, communities, schools and other public entities. Under the bill, credit unions also could participate in the Ohio Department of Development’s Minority Business Enterprise Program and Capital Access Loan Program for small businesses. Credit union members would have access to linked deposit programs from the Treasurer of State, including GrowNow, SaveNow, Ag Link, ECO Link and Bid Ohio, the league added. Credit union leaders have met with State Rep. Nancy Garland (D-New Albany), a co-sponsor; State Rep. Ted Celeste (D-Grandview Heights), and State Sen. Tom Patton (R-Strongsville). During a meeting with Ujvagi, credit union leaders thanked him for supporting the legislation.

Texas Project NEFE Network reflects on success

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FARMERS BRANCH, Texas (12/8/09)--The need for financial education programs and delivery channels has increased significantly in recent years, and the Texas Credit Union Foundation (TCUF) has remained at the forefront of this necessity, most recently by raising awareness of the National Endowment for Financial Education (NEFE) program, said the Texas Credit Union League. The Third Annual Project NEFE Network meeting held last month in Dallas brought more than 75 Project NEFE Network members together for an all-day event that reflected on the accomplishments in 2009, recognized efforts being made by program advocates statewide, and prepared for the years ahead (LoneStar Leaguer Dec. 3). “Texas was the first state to launch the newly revised NEFE program in 2007 and since its implementation, the results made possible through statewide support across all institutions, from credit unions to community colleges, are genuinely impressive,” noted Courtney Nickles, TCUF executive director. Staci Zale, TCUF associate director and Project NEFE Network liaison, confirmed the results through a presentation that revealed:
* As of Nov. 19, more than 71,800 NEFE High School Financial Planning Program (NEFE HSFPP) students guides have been provided through Texas; * An HSFPP online training video will be coming in 2010, through support and assistance from members statewide; * The “Make the Difference” campaign, through which events in communities are held to benefit students and young adults as they pursue financial education awareness, successfully gave out 18 grants through the program; and * In 2009, TCUF provided $40,000 in financial literacy grants, contributing to the $184,000 in general grants provided for the year.

Broker for liquidated CU accused of fraud

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NEW LONDON, Conn. (12/8/09)--A late New London, Conn., stockbroker linked to the disappearance of $12 million from a defunct Connecticut credit union has been accused of fraud, according to documents filed with a securities firm regulator. Edwin F. Rachleff, a former employee of A.G. Edwards, is accused of misappropriating $7.5 million from one of his clients, according to online records from the Financial Industry Regulatory Authority (FINRA). FINRA is an independent regulator for securities firms in the U.S. Rachleff, who committed suicide in August 2008, handled investments for New London Security FCU, New London, Conn. The credit union was liquidated in July 2008 by the National Credit Union Administration (NCUA). Authorities did not tie Rachleff’s death to the credit union’s failure. Rachleff’s estate was sued by NCUA in March for $11.8 million in losses. The suit alleged that Rachleff created fraudulent account statements (News Now Aug. 4, 2008 and March 12).

CU System briefs (12/07/2009)

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* NEW BEDFORD, Mass. (12/8/09)--Southern Mass CU (SMCU) recently had a groundbreaking ceremony for the credit union’s first branch in 80 years. The building, located in New Bedford, Mass., will have four teller stations, three drive-up teller lanes and a drive-up ATM. It is expected to be finished next summer (SouthCoastToday.com Nov. 30). The credit union, founded in 1922 as Southern Massachusetts Telephone Workers’ CU, had office space in an older telephone building until it moved its headquarters to a new location in Fairhaven, Mass., in 1991. The credit union has $157 million in assets ... * NEWARK, Del. (12/8/09)--Louviers FCU has opened the first student-run credit union at Newark High School in Delware (Delaware Online Dec. 3). The credit union will offer auto loans and free checking to faculty, students and immediate family members. The credit union also will help students studying banking in school. Six tellers work at the credit union, which is open three days per week. Louviers, based in Newark, Del., has $181 million in assets ... * SUITLAND, Md. (12/8/09)--Andrews FCU, Suitland, Md., joined with Armed Forces Financial Network to present $3,000 in holiday gift cards to Joint Base Andrews Fisher House. Andrews FCU also presented another $3,000 in gift cards for a total of $6,000. The cards will be distributed to families at Fisher House while their loved ones are treated at a local medical center. “We hope these gift cards will help defray some of the personal expenses incurred by these families and make their stay more comfortable,” the credit union said. Andrews FCU has $841 million in assets. From left are: Chris McDonald, Andrews FCU president/CEO; Janet Grampp, Joint Base Andrews Fisher House manager; and Rosalind Bishop, Andrews FCU branch manager. (Photo provided by Andrews FCU) ...

W.Va. league CUs work with those ignored by banks

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CHARLESTON, W.Va. (12/ 8/09)--With 27% of West Virginia households unbanked or underbanked, according to a Federal Deposit Insurance Corp. (FDIC) survey, credit unions are stepping up to work with families ignored by the banking industry, said the West Virginia League. Credit unions are banks’ archrivals, West Virginia Credit Union League’s Rich Schaffer told The Charleston Gazette (Dec. 5). “Credit unions continue to work with struggling families who are often ignored by the traditional banking establishment,” Schaffer added. “Now, more than ever, credit unions are available to serve as an alternative to paying high fees for basic financial services.” The FDIC survey identified households as unbanked it they didn’t have a checking or savings account, the newspaper said. Households were defined as underbanked if they had a financial account but relied on check-cashing services, non-bank money orders, payday loans, rent-to-own agreements or pawn shops at least once or twice a year, or refund-anticipation loans at least once in the past five years, the paper added. The majority of the state’s unbanked are low-income people, and most poverty is found in rural counties, Sally Cline, West Virginia banking commissioner, told the paper. To read the article, use the link.

Hit man at CU gets death sentence

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NEWPORT NEWS, Va. (12/8/09)--A hired hit man convicted in July of the murder of a naval officer outside a Virginia credit union in 2007 was given the death sentence Friday in U.S. District Court. In July, a U.S. District Court jury ruled that David A. Runyon, 37, met the criteria to be considered for execution for his role in the April 2007 shooting death of Navy Communications officer Cory Allen Voss, 30, which took place outside a Langley FCU ATM in Newport News. The murder was designed to look like a random robbery that went awry, authorities said (Daily Press July 23). In August, the same jury that found Runyon guilty also recommended he receive the death penalty. When U.S. District Court Judge Rebecca Beach Smith asked Runyon--a former police officer and U.S. Army soldier--if he wanted to say anything before she handed down the sentence, he answered, “No, Ma’am” (Daily Press Dec. 5). Last year, Voss' wife, Catherine Ann Voss, pleaded guilty to masterminding the plot so she could be with her boyfriend and collect roughly $500,000 in Voss' death benefits. In November, she was sentenced to four life terms (News Now July 24). Police say surveillance footage shows Runyon holding Voss at gunpoint. Voss went to the ATM at about 11 p.m. April 29. His wife reported him missing the next morning, and police found his body in the driver's seat of his pickup truck (News Now Dec. 18). A man convicted of being an accomplice in the murder of Voss was sentenced in November to three life terms in prison. Michael A. Draven, 29, was sentenced Nov. 17 in federal court in Virginia, after being found guilty July 17 of conspiracy to commit murder for hire, carjacking resulting in death, and murder with a firearm in relation to a crime of violence (States New Service Nov. 17).

Delfin leaving NCUF to head Americas Charities

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WASHINGTON (12/8/09)--National Credit Union Foundation (NCUF) Executive Director Steve Delfin is leaving the foundation to become president and CEO of America's Charities effective Jan. 4, NCUF Chairman Allan Kemp McMorris has announced. The NCUF board will initiate a search for Delfin’s replacement in the near future, added McMorris, who also is CEO of Oakland County CU, Waterford, Mich. The board has appointed Tom Candell, foundation managing administrative director, to serve as interim executive director while the board conducts the search for a permanent replacement. The NCUF board will focus on the process and procedures for the search at its next meeting in early January. Candell has been with the foundation for the past four years. Previously he was senior financial director for Meriter Hospital in Madison, WI. He has spent much of his career as a chief financial officer for nonprofits. McMorris thanked Delfin for his service and the work the foundation has accomplished since Delfin joined the organization five years ago. “The foundation during Steve’s tenure has stood out for the caliber of its development work and thought leadership, especially on such issues as serving the underserved and emerging markets, and strategic philanthropy. On behalf of the NCUF board of directors, we want to thank Steve for all of his contributions, and we wish him the best in his next endeavor,” he said. Delfin said his decision to leave was based on the specific opportunity with America’s Charities, a federation of 180 national and local nonprofits that work with employers and employees to improve the effectiveness of their workplace charity donations using payroll deductions. “This was a very difficult decision because the work we are doing at NCUF is so important. But I’ve always had a passion for and have stayed engaged in expanding strategic workplace philanthropy.” Credit Union National Association (CUNA) President/CEO Dan Mica also wished Delfin well and recognized key accomplishments that took place during his five-year tenure, particularly the organization’s work around REAL Solutions. “Since January 2007, when NCUF took on REAL Solutions as its ‘signature’ program, the initiative has grown to encompass 33 states, with over 800 participating credit unions. It has tremendous potential for even more growth and sustainability,” Mica noted. During that five-year period NCUF also nearly doubled the number of Development Educators through its Credit Union Development Education Program, initiated an Innovation Grants Program that more strategically aligns NCUF grants to credit unions and credit union organizations to REAL Solutions strategic goals and objectives, helped raise and distribute more than $4 million for financial education programs like the PBS BizKid$ TV series, and raised another $4 million-plus for credit union disaster relief.

No harm no foul rule upheld in Missouri breach case

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ST. LOUIS (12/7/09)--A federal judge in Missouri has dismissed a consumer class-action lawsuit against a benefits company over a 2008 data breach, citing a position that other judges have taken in similar cases: Without actual harm, consumers can seek no damages. Magistrate Judge Frederick Buckles said the plaintiff in the case, John Amburgy, failed to show how the data breach at St. Louis-based pharmacy benefits company Express Scripts had caused him any direct injury or put him in imminent danger of any injury (Computerworld Dec. 3). The judge said abstract injury is not enough to demonstrate injury in fact. "The injury or threat must be concrete and particularized, actual and imminent; not conjectural or hypothetical." The case is of interest to credit unions because they and their members have been impacted by a number of data breaches the past two years involving TJX Cos., Hannaford Brothers and Heartland Payment Systems. The Maine Supreme Court has been asked in a trial against Hannaford Bros. whether time and effort spent in mitigating the impact of a breach constitutes a cognizable injury under Maine law (News Now Dec. 2). As in data breaches involving credit union members, the suit against Express Scripts claims financial accounts were affected during the company's breach. Amburgy claimed that as a result of the company's failures to maintain adequate security measures, he and others whose records were compromised by the breach were at increased risk of identity theft and extortion. He and others similarly impacted had to spend time and money monitoring their credit accounts and reports, prescription records and other financial accounts, the suit claimed.

UBIT trial begins today in Colorado

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DENVER (12/7/09)--The Greenwood Village, Colo.-based credit union challenging the government's unrelated business income tax (UBIT) will make its case in a federal court in Denver this week. The Bellco CU v. U.S. trial is set to begin this morning in the U.S. District Court for the District of Colorado. Bellco will argue why income derived from credit life and disability insurance, as well as royalties from accidental death and dismemberment (AD&D) insurance, should not be subject to UBIT. Presiding over the trial will be U.S. District Judge Christine M. Arguello. In November Arguello issued a summary judgment on another aspect of the case, finding that income from investment products--such as stocks, bonds, mutual funds and annuities--that the credit union made available to its members is not subject to UBIT because the products were "substantially related" to Bellco's tax-exempt purpose. However, income from such products sold to nonmembers was ruled as not "substantially related" to Bellco's tax-exempt purposes and therefore could be subject to tax (News Now Nov. 13). In the summary judgment, Arguello also said the trial should address the issue of whether sales of certain insurance products to people who are not members to Bellco but who do belong to other credit unions, should be exempt from UBIT because the products further Bellco's tax-exempt purposes. Bellco brought the lawsuit in May with the support of the UBIT Steering Committee, which includes the Credit Union National Association (CUNA), CUNA Mutual, the American Association of Credit Union Leagues, and the National Association of State Credit Union Supervisors. CUNA General Counsel Eric Richard will be attending the trial, which is scheduled to end Friday afternoon. Bellco is seeking a refund of $199,293 in tax paid on income from AD&D insurance, credit life and disability insurance, and financial products and services in 2000, 2001 and 2003, as well as statutory interest. Lead attorney on the case is Michael M. Conway of Foley & Lardner LLP, who was also lead counsel in another UBIT trial earlier this year in the U.S. District Court for the Eastern District of Wisconsin. In that case, Community First CU of Green Bay, Wis., won its challenge against the Internal Revenue Service's interpretation of the UBIT rule related to three insurance products (News Now May 15). The government did not appeal that decision.

National Maxwell Herring winners announced

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MADISON, Wis. (12/7/09)--Recipients of the 2009 Dora Maxwell Social Responsibility and Louise Herring Philosophy in Action Awards have been chosen from among the state winning entries by the Credit Union National Association’s (CUNA) national awards committee. The 2009 Dora Maxwell Award winners include:
* Great Horizons FCU in Hammond, Ind.; * Pee Dee FCU in Florence, S.C.; * Hawaii First FCU in Kamuela, Hawaii; * Latino Community CU in Durham, N.C. * CASE CU in Lansing, Mich.; * Rogue FCU in Medford, Ore.; * Chartway FCU in Virginia Beach, Va.; and * Credit Union Miracle Day, Inc., Washington, D.C.
Winners of this year’s Louise Herring Award are:
* Communicating Arts CU in Detroit; * Down East CU in Houghton Lake, Maine; and * Credit Union 1 in Anchorage.
“These prestigious awards honor credit unions and their organizations for making commitments to innovative community involvement and to member financial education – both core values of the credit union pioneers whose names are associated with them,” said CUNA President/CEO Dan Mica. “Our hope, at CUNA, is that other credit unions will take notice of the programs celebrated by these awards and find ways to emulate their best practices in their own communities.” Maxwell was an original signer of CUNA’s constitution and a tireless organizer of hundreds of credit unions throughout the United States. She also developed volunteer organizer clubs and worked tirelessly with organizations on behalf of the poor. The Maxwell award is presented to credit unions and chapters for outstanding social responsibility projects in their communities. Herring was also an original signer of CUNA’s constitution as an Ohio delegate to the 1934 national credit union conference in Estes Park, Colo. She saw credit unions as more than just financial institutions and believed they should work to better people’s lives. The Herring award recognizes a credit union demonstrating the credit union philosophy to help better financial matters and increase financial education for its members. Winning entries will be on display at CUNA’s 2010 Governmental Affairs Conference, Feb. 21-25, in Washington, D.C. The award winners will be honored during the Feb. 24 reception. For a complete list of winners, use the link.

Ireland CUs donate 181092 to flood victims

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DUBLIN (12/7/09)--Irish credit unions donated $181,092 to help people affected by recent flooding in Ireland. More than 90 credit unions have donated money to a central fund established last week--the first time the credit union movement has organization such a fund. Credit unions also have created their own funds so members can donate (The Irish Examiner Dec. 4). The flooding in Ireland has occurred along the Shannon River, which is expected to take at least three weeks to return to normal levels. At least 70 families in the area were forced to leave their homes, the newspaper said (Nov. 26). Credit unions are seeing how the weather conditions experienced in the past week will have “real and lasting damage on the families and the communities affected by flood damage,” said Irish League of Credit Unions President Mark Bailey. St. Vincent de Paul and the Irish Red Cross were presented Friday with a check from the credit unions to help flood victims.

VSECU becomes first CU to serve all Vermonters

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MONTPELIER, Vt. (12/7/09)--Vermont State Employees CU (VSECU) is the first credit union in Vermont approved to serve anyone who lives or works in the state. The Vermont Department of Banking, Insurance, Securities and Health Care Administration recently made the decision about VSECU, said the Association of Vermont Credit Unions (Newslines Express Dec. 4). “Our long-term vision has been to make VSECU a true alternative to for-profit banks and to be available to all Vermonters,” said Steven Post, CEO of the $472 million-asset, Montpelier, Vt.-based credit union. “We now have that opportunity.” “This development is especially significant as consumers try to make sense of the bailouts, investment decisions and shortcomings in the country’s banking system,” he added. “The acquisition and merging of regional and state banks also have left Vermonters with less consumer choice and the loss of local control and servicing. We like being a local credit union, we like working with a Vermont regulator and we like being inclusive.” Prior to the decision, VSECU served residents of seven counties and state employees statewide.

Pa. CU prepared for Harley-Davidson restructuring

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YORK, Pa. (12/7/09)--Harley-Davidson Inc. announced Thursday it will retain its motorcycle operations in York, Pa., and will restructure its operations. The company credit union said it is prepared to help the motorcycle manufacturer. The company had considered moving the York plant to Kentucky. The announcement follows the approval of a seven-year labor agreement by union employees early last week (Life is a Highway Dec. 4). “[I am] pleased that they are staying in York, for all concerned,” Sherry Garner, CEO of HD York (Pa.) FCU, told the Pennsylvania Credit Union Association (PCUA). “Management at the credit union had already addressed this scenario in previous planning sessions, so it didn’t hit us with the full force some might have expected.” When talk began that the plant might shut down, the credit union began exploring its options for survival, PCUA said. With Harley-Davidson’s latest announcement, the credit union can revisit its options. “We plan on forging ahead, putting our current planning session and goals into action and remaining HD York FCU,” Garner told PCUA. “From our members’ reaction to the possible relocation and downsizing, we know they want their credit union to remain right here in York as it operates now.” Though the plant will remain in York, hundreds of employees will still lose their jobs under the new contract. The plant will employ about 1,000 hourly employees, down from the current 1,950; and 150 salaried employees, down from 270, the company said. For those impacted, the credit union will work with each member and offer options such as converting to a monthly payment plan, loan extensions, or reworking loans to lower monthly payments, Garner told PCUA. Because the new contract also contained salary decreases, the credit union is planning budgeting workshops for all members. HD York FCU has $4.3 million in assets.

Low rates prompt refinance boom in Grand Rapids

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GRAND RAPIDS, Mich. (12/7/09)--Low interest rates are triggering a mortgage refinancing boom in the Grand Rapids, Mich.-area. The Grand Rapids Press reported Thursday that Lake Michigan CU, Grand Rapids, had record-low mortgage rates Wednesday. A 30-year mortgage was going for a 4.625% fixed rate with no points, and a 15-year mortgage was selling for 4% percent. DFCU Financial, Dearborn, Mich., offered a 30-year fixed rate loan at 5.125% Tuesday. The Michigan boom is reflective of national trends. A Bankrate.com survey indicated that nationally, 30-year mortgages were going for 5% and 15-year mortgages were going for 4.47%. Three months ago, rates were a half-point higher, the newspaper said. Greg McBride, Bankrate senior analyst, told the newspaper that the record lows are due to the fact the Federal Reserve Board is showing no signs of raising short-term rates. Mike Kruczek, DFCU chief lending officer, said rates “shouldn’t be this low, but the government is keeping them low to try and stimulate the economy.” He also suggested low-rate adjustable rate mortgages (ARMs) for people who are buying homes that they don’t plan to stay in for more than five or 10 years. The credit union sells ARMs with rates locked for seven to 10 years. ARMs mean lower monthly payments for the homeowner until the mortgage resets. History shows that people don’t stay with one mortgage, even if they stay in a home longer than 10 years, Kruczek said.

Velocity CU members to vote on private share insurance

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AUSTIN, Texas (12/7/09)--Roughly 75,000 Velocity CU members are being asked to vote by Dec. 29 on whether to switch from the National Credit Share Insurance Fund (NCUSIF) deposit insurance administered by the National Credit Union Administration (NCUA) to a private insurer. The $500 million asset, Austin, Texas-based credit union’s board of directors unanimously decided to make the conversion, with support from credit union management, so Velocity “can deliver greater coverage to our members and better manage the cost of operations as it relates to deposit insurance,” the credit union said in newsletter mailed to members Aug. 26. “In 2009, due to estimated losses in the NCUSIF, the credit union’s federal deposit insurer announced a premium affecting all federally insured credit unions,” the Velocity newsletter said. “As a result, Velocity CU has been assessed a premium in 2009 of $675,106. This additional cost for federal deposit insurance adversely affects the credit union’s earnings and net capital in 2009. This premium will not affect the level of federal share insurance on members’ accounts. “As a state-chartered credit union in good standing in Texas, Velocity CU has the option of insuring member accounts through American Share Insurance Corporation (ASI), the nation’s largest credit union-owned private deposit insurer, and not the NCUA,” Velocity added. ASI is based in Columbus, Ohio. In a postcard mailed to members Tuesday, Velocity said: “ASI is a credit-union owned private deposit insurer founded in 1974 by credit unions to provide a viable alternative to federal deposit insurance that members trust and rely on. Currently, [more than] 1.3 million members belong to credit unions insured by ASI.” Ballots were mailed to Velocity members Nov. 30 and also are available in its branches, the credit union said. Federal regulations require that all members be given the opportunity to vote on the proposition to cover deposit insurance, and that a minimum of 20% of the membership must vote, Velocity said in a postcard to members. News Now received the information sent to credit union members concerning the deposit insurance conversion from Brie Franco, Velocity vice president and general counsel. The credit union did no want to comment on the matter because of federal regulations that prevent it from influencing or compromising the membership vote. “While the board unanimously supports the decision to consider converting deposit insurance to ASI, the actual resolution to do so has not been made or passed,” Board Chairman Carl Lynch said in the member newsletter. “We are anxious to hear from our members, and we are hopeful you will support this move to change deposit insurance coverage.”

CU System briefs (12/04/2009)

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* ST. LOUIS, Mo. (12/7/09)--When First Community CU, Chesterfield, Mo., learned the Humane Society of Missouri urgently needed supplies, staff acted fast, reports the Missouri Credit Union Association (The Missouri difference Dec. 4). The animal shelter and adoption agency had received more than 150 pit bull puppies as a result of a multi-state dog-fighting raid. The $1.5 million asset credit union encouraged employees to bring in jars of peanut butter, new dog toys and clean linens by offering a dress down day. Employees donated more than 300 jars of peanut butter and toys. "We have a lot of 'dog people' at First Community so I'm not surprised so many employees wanted to help a great organization like the Humane Society," said President Glenn Barks. "We hope when these puppies get adopted their new owners will bring them through our drive-ups for a free dog treat." … * HARRISBURG, Pa. (12/7/09)--James McCaw, president/CEO of Viriva Community CU, Philadelphia, was featured recently on WPHL TV-17's "Better Philly" show about the Credit Card Accountability, Responsibility and Disclosures Act, says the Pennsylvania Credit Union Association (Life is a Highway Dec. 3). McCaw told the station that "Consumers are strongly encouraged to shop around," even if they've accumulated a balance on their card. He said the opportunity to save money is still available by transferring the balance from their high interest rate card to a lower interest rate card. However, consumers must make sure they are aware of any balance transfer fees … * MONTPELIER, Vt. (12/7/09)--Colin M. Ryan has been selected to spearhead the Association of Vermont Credit Unions' (AVCU) Concerts for Financial Literacy project, which will debut at several high schools in the state early next year. Ryan has background as a journalist, a radio station general manager, and film school graduate. AVCU said his background made him the best choice to connect with Vermont's 14- to 18-year-old population (Newslines Express Dec. 4) … * BELLEVUE, Neb. (12/7/09)--Gail DeBoer, president of Bellevue, Neb.-based SAC FCU, received the Bellevue Chamber's Woman of the Year Award at Bellevue University's Student Center. DeBoer was recognized for significant contributions to the nearly $400 million asset credit union and the business community since becoming president in January 2007. During that time, the credit union changed its logo and received several awards, including an ethical business practices award from the Better Business Bureau; and the Best of Omaha award in 2007, 2008 and 2009, and more … * BATON ROUGE, La. (12/7/09)--The Baton Rouge chapter of the
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Louisiana Credit Union League began building its house for Habitat for Humanity on Oct. 31, says the league's newsletter, eNews (Dec. 2). The chapter raised more than $75,000 for the building. Each Wednesday and Saturday volunteers such as these from all Baton Rouge area credit unions work on the home. The league said the project is scheduled to be completed in February. (Photo provided by the Louisiana Credit Union League) … * LA PLACE, La. (12/7/09)--Louisiana FCU bucked the mortgage financing trend by celebrating the grand opening of its Mortgage
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Operations Center Nov. 12, reports the Louisiana Credit Union League (eNews Dec. 2). "Even though we've all witnessed the national crisis in mortgage financing combined with a significant decline in new housing in St. John's residential growth rate, we're very optimistic about some more recent trends," said Louisiana FCU President/CEO Rhonda Hotard. "With recent growth rates showing a steady increase coupled with an overwhelming interest in mortgages, our members are looking for affordable financing options, and we are able and ready to help them achieve this financial milestone." The new center will be open weekdays from 9 a.m. to 5 p.m. The La Place-based credit union offers first mortgages, home equity loans, construction and land loans and other real estate financing options. (Photo provided by the Louisiana Credit Union League) …

CUs weigh in on FDICs unbanked study

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MADISON, Wis. (12/4/09)--Several credit unions had a chance to weigh in with local media about a Federal Deposit Insurance Corp. (FDIC) report that found roughly nine million U.S. households have no checking or savings account while another 21 million use payday lenders and other nontraditional services. In Great Falls, Mont., 9.1% of households with income below $30,000 are unbanked and 25.3% are underserved., according to the FDIC survey, released Wednesday. Julie McCamley, marketing director of the Great Falls Teachers FCU, a $75 million asset credit union, said the survey should help insured financial institutions understand the demographic of the unbanked and underbanked population (Great Falls Tribune Dec. 3). "You'd be surprised, it's often times people you don't expect--single moms with good jobs that need money right away [and] that are often going to places that charge big interest rates," McCamley told the publication. "Sometimes they are people who are intimidated or have had a bad experience with a financial institution." The credit union participates in several outreach efforts to the underbanked, such as an income tax refund anticipate loan program with Rural Dynamics designed to steer people away from high-interest products. "But sometimes you think you are hitting the bull's-eye, and often we are not, so it's good to see this information and find out where the areas are that we are not reaching," she said. In San Antonio, a columnist for WOAI.com (Dec. 3) , reported on the FDIC study and included advice from the Consumer Credit Counseling (CCC) of Greater San Antonio for how to avoid high-priced check cashers. Although CCC said to check with several different banks, the columnist said: "Check with credit unions; the organization says credit unions may be even more likely to give you a second chance." A columnist in the Tampa (Fla.) Times (Dec. 2) offered Tampa-based GTE FCU as an example of how a credit union has moved to provide services in a neighborhood where banks feared to tread. "In 19 days, a new GTE FCU branch opens in the heart of Midtown, a St. Petersburg neighborhood that's been scrapping to attract basic consumer services for years," wrote columnist Robert Trigaux. He noted Sun Trust bank years ago committed to building a branch in Midtown, "but the land it bought remains vacant." "Earlier this year, the Tampa-based GTE credit union heard that St. Petersburg was looking anew for a financial institution for Midtown. GTE stepped up quickly. "What SunTrust chose not to do for years, the credit union did in months. I mention this because a new government study was released Wednesday that shows who uses and who does not use banking service," he wrote. Trigaux noted three reasons why banks won't attract the segment of the population.
* They've never been anxious to reach out to the unbanked or underbanked because banks do not consider them profitable customers. * People who do not use banks do so for a reason--living paycheck to paycheck and lacking funds to deposit into accounts. * Today's best innovations aimed at providing services to the unbanked/underbanked come not from banks but from other financial and non-financial companies.
In Oceanside, Calif., Daniel Scott, president of Faith Based FCU, which works with low-income residents, said people in lower income brackets tend to be poorly educated and have little idea how to manage their money. Noting that rich people don't pay fees while poor people do, Scott told North County Times (Dec. 3): "They pay fees based on not knowing how to control their resources to avoid fees." The fees lead to a mistrust of the banking system, said Scott, and they end up using payday loans or other high-cost methods to take out loans. "It doesn’t really help them to build wealth. It basically marginalizes their economic capacity," he said, calling it a Band-Aid, not a longer-term strategy.

Corporate Fed discount window action has no impact on ops

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WARRENVILLE, Ill. (12/4/09)--Members United Corporate FCU says the Federal Reserve Board's revocation in October of the corporate's access to the Fed discount window should have no impact on its operations. "Based on our current liquidity position and other sources of funds, we do not foresee this as having any impact on our ongoing operations," Ronald E. Koza, chief investment officer, told News Now. The revocation isn't new, and the Warrenville, Ill.-based corporate's members already know about it, but recent press reports have brought the situation to a broader audience. "The Fed telephoned us in early October and told us that our discount window access was being revoked due to their internal analysis of our financial position," Koza said, noting that the decision was reported to the corporate's members in its October Portfolio Update and Financial Reports, published Nov. 20. The corporate has never needed to use the discount window. "We have not borrowed from the discount window and did not anticipate a need to borrow from the window due to our strong liquidity position," Koza said. "Members United is currently above expected seasonal trends for liquidity, and has been for most of 2009," he said in a statement. "With the implementation of the Temporary Corporate Credit Union Share Guarantee Program, access to the discount window as a source of back-up liquidity is less important today for Members United than it was at the beginning of the year, when we first put the facility in place as a contingency. Collateral maintained at the Federal Reserve Bank has been released and is available for other borrowings," Koza said. Other sources of funds include secured borrowing from brokers and dealers, U.S. Central, and guaranteed borrowings from the fed funds market, Koza told News Now. "If the situation warranted, we have the option to establish a debt issuance program with a guarantee similar to that of our deposit program." So how does the corporate get back its access to the discount window? "Through later research we found out that we could request reinstatement once our financial position had changed," said the corporate in an e-mail to News Now. "Unless we request reinstatement, we do not know when or if the Fed might review this again." Koza noted that Members United "continues to participate in the Temporary Corporate Credit Union Share Guarantee program, which has insured member deposits are safe and has provided us with enhanced liquidity. We have deliberately changed our investment strategy to invest cash or cash equivalents in this volatile market, and have been doing so over 18 months." The corporate clarified that the Fed's action was not taken as a result of the corporate's October financial results. The action was taken before the corporate reported a $149.6 million loss for October and a $295.1 million loss for 2009. Members United also clarified that it began the process of developing access to the discount window based on its own review of its liquidity situation and as a backstop in the event of a severe liquidity stress. "This was prior to the deposit guarantee program instituted by the National Credit Union Administration, which provided much more stability of deposits and liquidity" with a government agency guarantee, the corporate said.

Votes due Dec. 18 on REAL Solutions videos

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WASHINGTON (12/4/09)--Dec. 18 is the deadline for voting on five finalist videos illustrating how the National Credit Union Foundation’s (NCUF) signature program, REAL Solutions, is impacting the credit union movement. The finalists are:
* Guadalupe and Thomas Bryan, who found financing to open their restaurant, Boom Boom Mex Mex, with the help of Cooperative FCU in Syracuse, N.Y; * The Gregory Family adopted a son and bought a house to raise him in with the help of Community First CU in Appleton, Wis.; * Deborah Decker, who shared the financial difficulties she faced after leaving an abusive husband without an exit plan. She received expert financial advice and compassion from Episcopal Community FCU in Los Angeles; * Luis Lozoya, who talked about the joy of being a first time homebuyer and opening up a restaurant through Guadalupe CU in Santa Fe, N.M.; and * Dorothy James, who sought financial advice from Spectrum CU in San Francisco to pay off her credit cards, buy a car and reach her goal of buying a home.
The winner will be chosen by the voting public by Dec. 18. To cast a vote, visit the REAL Solutions website (use the resource link below) and click the “Vote” link on the homepage. Each voter can cast only one on-line ballot. The grand prize-winner will earn free trips to Washington for the winning league, credit union and member. As guests of NCUF, the winners will share the stage at a VIP event prior to the Wegner Awards Dinner, which is held during the Credit Union National Association’s (CUNA) Governmental Affairs Conference, Feb. 21 to 25. “Hearing and seeing a member passionately talking about how their credit union experience has made the real difference is what this contest is all about,” said Lois Kitsch, NCUF national program manager. “While we can only have one contest winner, each story exemplifies what makes credit unions unique and special.” The field was narrowed by NCUF staff from 40 videos to 15 that were the most compelling examples of credit unions in action. Then, an external judging committee representing CUNA, CUNA Mutual Group, Filene Research Institute, leagues and credit unions voted, narrowing the field down to five entries.

CUs card loans up banks cut lines by 1 trillion

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WASHINGTON (12/4/09)--Credit unions are stepping up their lending through credit card programs because banks continue to ease back, according to a recent webinar. Credit unions’ credit card loans were at $33.8 billion and unused credit card lines were $74.4 billion. Banks’ credit lines fell by $1 trillion over the past year, according to third quarter data from a Callahan and Associates webinar, “Trendwatch 3Q 2009.” The webinar noted a Maryland-based credit union that offered a no-fee credit card with a 7.5% interest rate. The card triggered threefold growth of the credit union’s card program in new accounts and outstanding balances. A recurring theme at the webinar was the financial resilience and stability of the credit union system during the nation’s financial crisis. Credit unions have benefited from consumers’ confidence in them and are growing. Liquidity was up by $60 billion last year, and all share categories posted higher growth this year, Callahan said. Callahan and Associates is a Washington, D.C.-based firm that provides research on credit union issues.

CUs savings is fastest growth since 2001

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MADISON, Wis. (12/4/09)--Through October, year-to-date credit union savings balances rose 10.2%, setting up credit unions for the fastest growth since 2001, according to a Credit Union National Association (CUNA) economist’s analysis of CUNA’s monthly sample of credit unions.
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Credit union savings balances increased 1.6% in October 2009 and 10.3% during the first 10 months of 2009. During October, share drafts rose 7.3%, followed by regular shares (2.6%), and money market accounts (1.8%). One-year certificates increased 0.8%, while individual retirement accounts decreased 0.6%. “With members in no mood to take on additional debt, credit union investment portfolios rose almost 30% so far this year,” Steve Rick, CUNA senior economist, told News Now. “This will put downward pressure on asset yields and net income as the asset mix shifts towards low-interest-rate investments and away from higher yielding loans.” Credit union loans outstanding decreased 0.1% during October 2009, but rose 1.8% during the first 10 months of 2009, down from a 6.1% increase during the same period of 2008.
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During October, home equity loans led loan growth, rising 2.3%, followed by used-auto loans (0.2%) and credit card loans (0.1%). Adjustable-rate mortgages decreased 0.1%, fixed-rate mortgages fell 0.4%, and unsecured personal loans declined 0.6%. New-auto loans and other mortgages decreased by 0.6% and 2.1%, respectively. “Credit union loan balances were essentially unchanged in October from September,” Rick said. “Mortgage, new-auto and unsecured loan balances all declined in October. The underlying loan growth trend cycle is now around 0.2% per month, the lowest since the recession of 1991. Loan growth will be weak in 2010--about 3% to 4%--due to low consumer confidence, a weak labor market and falling home prices.” Concerning asset quality, credit union 60-plus-day delinquencies remained roughly constant at 1.8% in October. “Credit union overall loan delinquency rates rose to 1.81% in October, up from 1.76% in September and 1.14% one year ago,” Rick said. “The jobless economic expansion and further declines in home prices will keep upward pressure on loan delinquency and charge-off numbers through the first half of 2010. “We believe net job creation and home-price stabilization will occur in the second half of 2010, slowing the deterioration in loan quality,” he added. The credit union movement’s overall capital-to-asset ratio remained constant at 10% in October. The total dollar amount of capital is $90 billion. The loan-to-savings ratio decreased to 76.9% in October. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--increased to 20% from 19% in September.

At WOCCUs behest Polands president opposes CU bill

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WARSAW, Poland (12/4/09)--Poland President Lech Kaczynski filed an application Monday with Poland’s Constitutional Court to examine the legality of a new bill that would affect the way Polish credit unions, or SKOKs, are supervised. The World Council of Credit Unions (WOCCU) opposes the bill, saying it could weaken SKOKs. The proposed act would limit credit unions’ business powers and require them to pay income taxes. It also dismantles the existing mandatory deposit stabilization fund of Polish credit unions by eliminating the sector’s supervisory capacity, and does not offer credit unions complimentary access to the Banking Guarantee Fund, according to WOCCU. In filing an application with the court, Kaczynski is questioning the legislative nature in which the act was passed, the possible interference in Polish credit unions’ autonomy, and the limited time credit unions are given under the new law to comply with new capital requirements and other provisions. “Such actions bring an unnecessary level of risk to Polish depositors and are in contradiction to European Union regulations for mandatory deposit insurance,” said David Grace, WOCCU vice president of association services, in a letter to Kaczynski. Under the act, credit unions also would have to meet new capital standards within nine months of the bill’s enactment. The capital requirement was not preceded by a thorough analysis of the current financial situation of credit unions by its supervisor, the National Association of Cooperative Savings and Credit Unions (NACSCU), WOCCU added. NACSCU is WOCCU’s member organization in Poland, headed by Grzegorz Bierecki. WOCCU also noted that the act does not follow the recommendations of the G-20 Leaders Summit in London in March. The G-20 recommends that nonsystemically important financial institutions could be subject to some form of registration requirement or oversight, depending on the type and degree of risk posed. Polish credit unions serve two million households, but hold only 1.1% of the bank sector assets and are not the type of institution that the G-20 was concerned about in its recommendation, WOCCU said. Dame Pauline Green, co-president of Cooperatives Europe, also opposes the legislation. “The new law on credit unions in its approved form violates the independence of the cooperatives, ignores the autonomy of the sector, abandons not-for-profit principle and last but not least, does not eliminate the existing fiscal discrimination of the credit unions against the commercial banking sector,” Green wrote in a letter to Kaczynski. The Polish credit union system is the second largest financial system in Poland, said Brian Branch, WOCCU executive vice president and chief operating officer. “During the financial crisis, the Polish credit unions maintained the strongest prudential financial standards and continued to provide credit services to Polish citizens when credit was not available from other financial institutions,” Branch said.

Another scam wave hits CUs in several states

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MADISON, Wis. (12/3/09)--Another wave of texting and phishing scams has swamped credit unions and other financial institutions in several states--this time in the Western half of the nation--prompting them to alert members and the public. Two scams circulating in Northern Colorado involve texting to cell phones of members and nonmembers. The messages invoke the name of a defunct credit union, Norlarco CU, which was acquired by Public Service CU in Denver (Coloradoan.com Dec. 1). The text messages say recipients' accounts have been restricted and they must call a toll free number. To unlock the account, they are instructed to enter their debit or credit card number, personal identification number (PIN) and expiration date. Several members of Public Service CU received the message, according to its website. The credit union told members to not respond in any way to the message and to "Delete it immediately. It is a scam." In Cheyenne, Wyoming, Warren FCU, members received a similar scam, prompting the Better Business Bureau serving Northern Colorado and Wyoming to tell the Coloradoan, "It seems like credit unions are specifically targeted." In California, credit unions in Redwood City and Merced were targeted with the same kinds of messages. San Mateo CU, Redwood City, said on its website it had not sent a text message received by consumers. In Merced, another credit union as well as customers of AT&T cell phone accounts were targeted, reported the sheriff's office (Merced Sun-Star Nov. 26). Bridgeton, Mo.-based Vantage CU, which was been targeted before in previous waves of scams, said fraudsters started sending text-message phishing scams again to members and non-members last weekend in the credit union's name. Eric Acree, vice president, told the St. Louis Post-Dispatch that the credit union is trying to educate members about its security procedures so they don't fall for the fake messages. The credit union never contacts accountholders with an unsolicited text message, he told the newspaper. In Nampa, Idaho, police said scammers sent text messages with an emergency notification about their accounts to consumers. Mountain Gem CU was targeted by the scammers, and Northwest Christian CU and IDADIV CU used their websites to warn consumers about the scam (The Idaho Statesman Nov. 25).

Union president admits taking loan kickbacks

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PHILADELPHIA, Pa. (12/3/09)--The president of one of Delaware County, Pa.'s, largest labor unions pleaded guilty to accepting kickbacks for illegal loans while working at a credit union. Anthony Forte, president of United Aerospace Workers Local 1069, was charged with fraud, bribery and conspiracy. He told U.S. District Judge Berle Schiller that he was involved in the scheme while serving as executive vice president of Boeing Helicopters CU, a $107 million asset credit union in Ridley Park, Pa. (The Philadelphia Daily News Nov. 18). Indictments said Forte, his brother and six others made $105,000 in fees on $2.54 million in loans to unqualified loan applicants. The credit union's field of membership included employees working at Boeing and their families. But Forte, who was in charge of signing up select employee groups, allowed nonemployees with credit problems to receive loans. Loan applications listed phony relatives and included inflated income. Cheryl Altieri, president/CEO of the credit union, told News Now that Forte no longer works at the credit union and no other employees were involved in the scam. He will be sentenced early in 2010.

Southwest Corporate outlines losses for October

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DALLAS (12/3/09)--Southwest Corporate FCU Monday outlined its losses related to U.S. Central FCU holdings for the month of October and for year-to-date 2009 in its monthly financial report. October losses for Southwest will total more than $40.2 million. Year-to-date will be recorded at nearly $130 million, the corporate said in its report. And the corporate has a retained deficit of $37.1 million at the end of October. U.S. Central depleted an additional 25% of its corporate membership capital shares in October as a result of its third-quarter portfolio assessment. "The impact of this action depleted $43,190,000 of Southwest Corporate's membership capital shares in U.S. Central, leaving $19,079,000 remaining in membership capital shares as of Oct. 31," said Melissa Wardell, senior vice president/chief financial officer, in a summary of the report. As a result, Southwest Corporate recognized a net loss of $40,249,000 in October." The year-to-date net loss is made up of net losses on investments of more than $158 million, partially offset by operating earnings prior to investment losses of more than $29 million, the corporate said. As initially reported to member credit unions in September, the corporate depleted 33% or nearly $159 million of members' capital accounts in October to cover the retained deficit as of Aug. 31, as directed by the National Credit Union Administration (NCUA) in its NCUA Letter to Credit Unions 09-CU-10. As a result of the additional depletion of U.S. Central membership capital shares in October, Southwest Corporate has a retained deficit of $37.1 million as of Oct. 31, the corporate said. For the complete report, use the resource link.

In media CU advises FIs fighting fraud

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MARLBOROUGH, Mass. (12/3/09)--A credit union official shared insights in a Wednesday interview with Bank Info Security on how financial institutions, including credit unions, can fight fraud in light of new regulatory compliance and security initiatives that spell changes for financial institutions. Kris VanBeek, senior vice president of information systems at the $4.1 billion asset, Marlborough, Mass.-based Digital FCU, told the publication that changes in compliance and pending regulation that are looming this year and well into 2010 portend the possibility that financial institutions could lose efficiency. The transitions to meet new compliance requirements also could help fraudsters, he added. “Some of the real risk is the changes themselves …” VanBeek said. “Whenever you introduce changes to a system, if you didn't properly test them, whether it be an actual bug or maybe the logic wasn't there or it wasn't implemented in the most optimal method, so there is another risk there. “And then probably the most profound risk is the actual compliance regulations themselves,” he continued. “I think a good example of one of the major changes is some of the Reg CC changes with the Federal Reserve consolidating its processing centers into a single kind of super center in Ohio. What that does is changes Reg CC in terms of availability, and what better way for a fraudster to look at a potential opportunity than to change funds availability. “So again, whether you are going into an ATM, whether you are going into a branch, whether you are using remote capture to deposit an image from home or from some other source, the requirements of the funds to be available in a shorter timeframe presents an opportunity for fraudsters who are technically savvy and understand the process really well--sometimes as well as financial institutions themselves,” Van Beek said. To read the full interview, use the link.

CU System briefs (12/02/2009)

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* TALLAHASSEE, Fla. (12/3/09)--Steven L. Stubbs, chief financial officer of Tallahassee (Fla.) Memorial Hospital FCU, died late Monday night of a self-inflicted gunshot wound, according to Wakulla County Sheriff's Office (wjhg.com. Stubbs, 29, shot himself at his home with a rifle after an eight-hour standoff, said the sheriff's office. He had been charged with the murder of his girlfriend, Leslie Dyan Drew, a 28-year-old teachers aide. Drew was found shot to death in the Apalachicola National Forest Sunday afternoon (The Tallahassee Democrat Nov. 30) … * INDIANAPOLIS (12/3/09)--Clarian FCU, a $19.5 million asset credit union based in Indianapolis, has agreed to absorb Indianapolis-based Community Choice FCU, the credit unions announced Wednesday (Indianapolis Business Journal.com Dec. 2). Officials said they expect the merger to be completed by year's end. The proposal was approved by the National Credit Union Administration on Nov. 10. The combined credit union will have more than 8,700 members and more than $20 million in assets. Community Choice's members will benefit with access to 40 different retail locations through a shared-branch network, and to online banking and bill payment services … * SYDNEY, Australia (12/3/09)--Two Australian credit unions--Companion CU and Community CPS Australia--will merge Jan. 1, forming one of Australia's largest credit unions and serving more than 180,500 members. More than 95% of members of Companion CU at a meeting Nov. 25 voted for the merger. The credit union will be known as Companion CU, a division of Community CPS Australia Ltd. in the Hunter and Gunnedah regions. Members will benefit from an expanded branch network, enhanced products and services, and reduced risk due to greater market diversification. Companion employees also will have a national job network and comprehensive training programs, the credit unions said (Cessnock Advertiser Dec. 2) … * SALT LAKE CITY (12/3/09)--H. Floyd Tanner, longtime board chairman at Mountain America CU, Salt Lake City, has died, said the credit union. Tanner had been chairman for 16 years and a board member for 39 years. He served in numerous capacities, including 10 years on the Supervisory Committee, with the credit union. In 2008, he was named Credit Union Executives Society's Director of the Year. Tanner was retired from the Utah State Tax Commission, where he worked for 27 years. He also worked with J&F Ranch, and Tanner and Tanner Enterprise. "Floyd Tanner has been an important part of the success of Mountain America CU," said President/CEO Sterling Nielsen. "His dedication, wisdom and management have provided consistent direction to the credit union for over 39 years." Tanner's wife, Joyce, preceded him in death earlier this month … * HARRISBURG, Pa. (12/3/09)--Russell Bergstedt, president, Mon Valley Community FCU, Allenport, Pa., died Nov. 24, according to the Pennsylvania Credit Union Association (Life is a Highway Nov. 30). Bergstedt had been president for more than 25 years and was one of the founders of the annual Mon Valley Chapter ARC golf tournament. "Russ was a strong leader for credit unions in the state and Mon Valley, and also for the United Steel Workers Union," said PCUA CEO Jim McCormack … * COLUMBUS, Ohio (12/3/09)--Wendell I. Lilly Jr. died Sunday at the age of 67. A retired tool and dye tradesman for General Motors, Lilly served as a member of the board, treasurer, and as chairman of Western CU, Columbus, Ohio. He is survived by his wife, two sons, and eight grandchildren (The Columbus Dispatch Dec. 1) …

California Coast EPA team up on green autos

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SAN DIEGO (12/3/09)--California Coast CU is offering reduced auto loan rates for members who purchase or refinance “SmartWay” vehicles, which the U.S. Environmental Protection Agency (EPA) considers to be more environmentally friendly. The SmartWay designation signifies the vehicle has greater fuel efficiency and lower greenhouse gas emissions and other air pollutants. California Coast is the only credit union in California and among only six financial institutions nationwide that have partnered with the EPA to provide loan rate discounts for the SmartWay program, the $1.8 billion-asset, San Diego-based credit union said. The program has been popular with members of the credit union. Many are surprised to find their vehicle qualifies under the EPA’s SmartWay guidelines, said California Coast. “When you think of environmentally friendly vehicles, you usually think of hybrids,” said Rene’ McKee, California Coast’s vice president of marketing. “But our members are pleasantly surprised the loan discounts are not just for hybrids and that actually hundreds of foreign and domestic models qualify.” California Coast’s SmartRate Auto Loan program rewards its members with loan rates starting at around 4% annual percentage rate, and encourages them to help protect the environment. The program is for new, used or refinanced vehicles. Prospective buyers can check the credit union’s website to see if their vehicle qualifies.

CUNA board election ballots due Dec. 18

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MADISON, Wis. (12/3/09)--Some of the Credit Union National Association’s (CUNA) board of directors election ballots are due later this month. Credit unions in District 6, Class A--those with less than 20,000 natural person members--are reminded to cast their ballot for their CUNA board representative. Ballots were sent Oct. 23 and must be received by the independent auditing firm, Johnson Lambert & Co. LLP, no later than Dec. 18. Candidates are Jon Hernandez, CalCom FCU, Torrance, Calif., and incumbent Susan Streifel, Woodstone CU, Federal Way, Wash. To receive a duplicate ballot, contact CUNA’s Corporate Secretary at thanson@cuna.com or call 800/356-9655, ext. 4013.

CUs holiday efforts focus on troops

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MADISON, Wis. (12/3/09)--Credit unions are focusing some of their holiday outreach efforts to help members of the armed forces. The efforts range from providing ways for families to keep in touch with their loved ones overseas to helping those affected by the recent shootings at Fort Hood in Texas. Aberdeen Proving Ground FCU, Aberdeen, Md., collected more than 500 wireless phones, chargers and accessories for Cell Phones for Soldiers. The items will be recycled into 22,000 minutes of prepaid calling cards and given to U.S. soldiers overseas. The donated phones are sent to ReCellular, which pays Cell Phones for Soldiers for each phone. Andrews FCU, Suitland, Md., donated $1,000 to the Association of U.S. Army Central Texas-Fort Hood Chapter’s Community Response Fund to help soldiers and families affected by the recent shootings at Fort Hood (Focus Newsletter Nov. 30). The credit union also is sponsoring several military holiday greeting spots airing on various networks in the Washington, D.C., area. Greetings from deployed service members will air during commercial segments of “Regis,” “The View,” “Good Morning America,” and during ABC 7 and News Channel 8 local news segments. Viewers can watch the holiday greetings Dec. 7-Dec. 20. “The holidays are a difficult time for families to be apart,” said Chris McDonald, Andrews Federal president/CEO. “As we gather with our families this holiday season, Andrews Federal wants everyone to keep service members in mind as they serve our country and protect our freedoms.” Ent FCU, Colorado Springs, Colo., will host taping sessions for military families on Dec. 15 through the nationwide Operation Best Wishes program, sponsored by Western Corporate FCU in San Dimas, Calif. (States News Service Dec. 1). Family members and loved ones of military members stationed overseas can send a live, free video-based Web cast to soldiers overseas. Each participant has 10 minutes to record a greeting. Military members can log in at their location and view the live message or watch it later. Louviers FCU, Newark, Del., is collecting greeting cards and other items for stocking stuffers that will be shipped to members serving in Iraq and Afghanistan (Together Nov. 30). The credit union hopes to ship at least 6,000 stockings.

Hannaford judge questions Maine Supreme Court

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PORTLAND, Maine (12/2/09)--True to his word, a federal judge has asked the Maine Supreme Court to decide whether consumers affected by the Hannaford Bros. grocery chain data breach, and who have been reimbursed, are entitled to damages. U.S. District Judge D. Brock Hornby last week submitted questions to the state's highest court asking the court to consider whether Maine consumers reimbursed by their financial institutions and credit card companies for losses in the breach are entitled to seek damages for the time and effort they spent straightening out their accounts, according to the Bangor Daily News and WGME.com (Dec. 1). Hornby had indicated in October that he would seek input from the state Supreme Court because the question has no precedent in Maine (News Now Oct. 8) after lawyers for the plaintiffs asked him to reconsider his dismissal of the class-action lawsuit that sought compensation for consumers from Hannaford Bros. Attorneys for Hannaford argued that existing consumer protection laws and the system of contracts among merchants, banks and credit unions, and consumers are adequate protection. Millions of credit cards were exposed to fraud during the breach, which was one of the largest in history and which occurred in late 2007 and early 2008. At least 1,800 of the numbers stolen during the breach were used for fraudulent purchases.

High Deductible Health Plans HSAs subject of CU study

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CHICAGO (12/2/09)--High Deductible Health Plans (HDHPs) coupled with Health Savings Accounts (HSAs) can be a good fit for employers and employees, says a new study from Chicago-based Alliant CU. However, the credit union cautions that employers implementing these do so carefully. Alliant conducted a marketing analysis and surveyed 1,020 people employed in companies of various industries and sizes to gauge employees' knowledge and perceptions of HDHPs and HSAs. It found that companies can save 20% to 40% of their health insurance premiums and defray future premium increases by implementing an HDHP. However HDHPs have an image problem and an awareness challenge, said Alliant. Unless employees work for a company that offers the benefit, odds are they don't know what it is. The survey found 32% of employees whose companies don't offer HDHP had heard of HDHPs. When respondents were introduced to the HDHP and HSA concept during the survey, 53% said they wouldn't consider an HDHP if they had a choice. However, 32% said they would consider switching if an HDHP was offered as a company option. Employees in companies with HDHPs said they chose the option because:
* 69% preferred low premiums; * 45% liked the tax-favored HSA option; * 26% said the plan was a good catastrophic care plan/safety plan; * 36% appreciated the employer match; and * 31% enjoyed the freedom of choice for their doctors and hospitals.
Respondents declining the plan did so for these reasons:
* 44% considered the deductible too high; * 23% didn't think the price was aligned with its value; and * 20% preferred traditional coverage.
The findings are incorporated in Alliant's new white paper, "Is an HDHP/HSA the right prescription for your company?" It notes that companies have a better chance of successfully implementing HDHP if they:
* Introduce it as an option in addition to "traditional plans" such as health maintenance organizations and preferred physicians organizations; * Are transparent about employee benefit insurance costs; * Select a good HDHP, particularly a plan that covers annual checkups and preventive care before a deductible is considered; * Fund employees' HSAs (at an amount of 50% to 70% of the employees' deductible); * Do a good job of pointing out the comparative benefits among their company insurance plans, enabling employees to self-select themselves an HDHP, based on their needs and its perceived value; * Provide the HDHP within the context of other wellness programs; and * Choose the HDHP custodian wisely.
For a free copy of the white paper from Alliant Benefits Solutions, use the link.

MCUA PresidentCEO Holub to retire in 2010

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ST. LOUIS (12/2/09)--Missouri Credit Union Association (MCUA) President/CEO Rosie Holub announced Tuesday that she will retire at the end of December 2010. Holub began her tenure with MCUA in December 1999. She previously was CEO of the New Mexico and Wyoming Credit Union Leagues. She also has senior management experience at Kirtland FCU, Albuquerque, N.M., and Anchorage-based AlaskaUSA FCU and Denali FCU. While serving as MCUA CEO, Holub guided negotiations that led to the passing of a state bill that allowed state-chartered credit unions to realize growth after a seven-year bank lawsuit halted field-of-membership expansion. “In the 10 years that Rosie has served as the leader of MCUA--and indeed before that when she was with the New Mexico league--she has been a solid source of insight as to the partnership between the leagues and the Credit Union National Association (CUNA) and how we can work together on behalf of all credit unions,” said CUNA President/CEO Dan Mica. “Her very practical experience as a credit union executive has been particularly of value to me personally, and I appreciate her graciousness in giving CUNA the benefit of her advice in credit union matters. We appreciate Rosie greatly, and thank her for her service,” Mica said. Under Holub’s leadership, Missouri’s credit union assets grew 57% to more than $10 billion as of June. She also instituted a patronage rebate program for core services corporate products through Credit Union Partnership, MCUA’s wholly owned subsidiary. Other accomplishments include:
* Expanding interstate item processing services; * Expanding the shared branching program to 92 outlets from nine outlets; and * Refunding $500,000 of dues income to member credit unions during the financial crisis.
Holub is chair of Credit Union House in Washington, D.C. She also served as chair of the American Association of Credit Union Leagues; chair of the Credit Union Legislative Action Council; a member of the CUNA board and executive committee; a board member of the Filene Research Institute; and in leadership positions on committees, including CUNA’s Renaissance Commission. The MCUA board has identified a selection and recruitment process for a new CEO. The board is distributing a request for proposal to search firms.

CU extends Poinsettia Bowl title sponsorship

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SAN DIEGO (12/2/09)--San Diego County CU has extended its title sponsorship of the San Diego County CU Poinsettia Bowl college football game through the 2010 game, with options for 2011 and 2012. The credit union has sponsored the bowl since 2005, the first year it was held (News Now Dec. 6, 2005). The Make-a-Wish Foundation of San Diego has been the game’s beneficiary. One dollar from every admission ticket sold goes directly to the foundation, which grants wishes to children with life-threatening medical conditions. San Diego County CU’s sponsorship of the college football bowl made a national comic syndicate in 2008, appearing in The Washington Post, The Wisconsin State Journal, and other newspapers (News Now Jan 5). The 2009 bowl game is scheduled for 5 p.m. PT Dec. 23. Teams will be selected later this month. San Diego County CU has $4.8 billion in assets.

CUAO announces CU Services board

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BEAVERTON, Ore. (12/2/09)--The Credit Union Association of Oregon (CUAO) announced the 2010 CU Services board of directors. CU Services works to benefit member credit unions, strengthen Oregon credit unions’ affiliation with CUAO and enhance the net economic impact to the association and its initiatives. The slate of directors is:
* Chair: Bill Anderson, Mid-Oregon FCU, Bend; * Treasurer: Kevin Cole, MaPS CU, Salem; * Director: Steve Canfield, NW Preferred FCU, Tigard; * At-Large Director: Mandy Jones, Oregon Community CU, Eugene; and * At-Large Director: Scott Burgess, Rivermark Community CU, Beaverton.

IForbesI CUs best in checking credit cards

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MADISON, Wis. (12/2/09)--Credit unions offer the best deals and rates for checking accounts and credit cards for college students, according to a Forbes columnist. “By best, we mean products that charge the lowest fees and require the smallest minimum balances,” wrote David K. Randall in a Monday column titled, “Five Best Choices for College Students.” When it comes to picking a checking account, the best solution may be for college students to find a credit union, Randall wrote. “Some 600 college campuses offer access to these member-owned nonprofit institutions,” Randall wrote. “Credit unions operate like banks but return profits to members in the form of lower fees and better loan rates. Students at New York University, for example, can open free checking accounts at the New York University FCU. Members receive free checks, are not charged for using other institutions’ ATMs and are not required to deposit a minimum amount or maintain a certain balance. “JPMorgan Chase, meanwhile, will charge you $2 to use another bank's ATM and requires $25 to open an account,” he added. “Some credit unions will even waive overdraft fees if a student agrees to attend a financial education seminar.” When looking for a credit card account with low interest rates, credit unions also are the best choice, Randall wrote, citing a Pew Charitable Trust study. “Banks charge customers interest rates that, on average, are 20% higher than credit unions' as well as heftier late-payment fees,” he added. To read the column, use the link.

PCUA to close PO Box address Dec. 31

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HARRISBURG, Pa. (12/2/09)--The Pennsylvania Credit Union Association (PCUA) announced that it will be closing its post office box address as of Dec. 31. Credit unions sending mail to PCUA should use the following address:

Pennsylvania Credit Union Association

4309 North Front St.

Harrisburg, PA 17110-1618

Landmark CU United Way campaign up 35 this year

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NEW BERLIN, Wis. (12/2/09)--Landmark CU’s 17th annual United Way campaign raised 35% more money than last year, dramatically surpassing the credit union’s goal to raise 2.9% more than last year. The campaign netted a record $91,556, exceeding the credit union’s $70,000 goal. Landmark staff pledged $45,778, which was matched by the credit union. The number of staff who pledged money also increased 16% to 253 contributors. The New Berlin, Wis.-based credit union boosted involvement in the campaign by raffling two paid days off for the pledges and giving away a Green Bay Packers football that was signed by the 2008 team and coaching staff. Landmark’s campaign was held at its 17 branches and its administrative headquarters. Landmark CU has $1.5 billion in assets.

CU System briefs (12/01/2009)

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* CINCINNATI (12/2/09)--A man threatened to use a fake bomb during a robbery Friday morning of Cincinnati Central CU (The Cincinnati Enquirer Nov. 28). The man, wearing a surgical mask and carrying a black bag, told the teller that there was a bomb in a box he placed on the counter. He fled with an undetermined amount of money. The credit union was evacuated. Officers opened the box and found it contained two books … * PHOENIX (12/2/09)--Desert Schools FCU, based in Scottsdale, Ariz., is offering $5,000 for original information leading to the conviction of what police have dubbed the "first aid bandit." The bandit has robbed four financial institutions between Oct. 1 and Nov. 17, including Desert Schools' Scottsdale branch on Nov. 17, said the Federal Bureau of Investigation's Phoenix Field Office (US Fed News Nov. 21) …. * WILKES-BARRE, Pa. (12/2/09)--A man who admitted to six robberies of four banks and a credit union--all in Pennsylvania--was sentenced Nov. 23 to 10 years in a federal prison. Adam Verdekal, 29, of Hanover Township, pleaded guilty to charges of robbing the banks plus the Wilkes-Barre-based Cross Valley FCU to finance a heroin addiction. The credit union's Forty Fort branch was robbed on Feb. 5. He targeted one bank, Honesdale Bank ranch in Kingston three times--on Jan. 5, Jan. 20 and Feb. 11 (The Wilkes-Barre Times Leader Nov. 24) … * FAIRBORN, Ohio (12/2/09)--The board of Wright-Patt CU announced the credit union will pay a special patronage dividend to its membership for the second consecutive year. The dividend, which is about $1 million more than last year's dividend, totals $4 million, to be paid to eligible members on Jan. 4. The funds will be distributed to more than 160,000 members. "We never forget our members are the reason for our success," said President/CEO Doug Fecher. "The past year has been a challenging one for many of our members, and the board of directors wanted to thank them for their continued credit union loyalty in these difficult times." … * INDIANAPOLIS, Ind. (12/2/09)--FORUM CU announced its three SaveItUp Challenge winners for 2009. Grand prize winners are Morany and Kay Deamus, shown here with the credit union regional manager Brandon Speckman, left. They won a $2,500 Weekly 5 Club Account, a savings account that gives members a chance to win prizes each week, month, quarter and year by making regular deposits to their savings. They paid off two credit cards during the challenge and plan to put their prize toward their grandkids. Other winners included Mary Robison, in second place with a $1,500 Weekly 5 Club Account, and Tonii Martin, third place, winning a $1,000 Weekly 5 Club prize. FORUM will offer a revamped version of the SaveItUp Challenge in 2010. (Photo provided by FORUM CU) … * EL PASO, Texas (12/2/09)--El Paso Employees FCU CEO Ray Ponteri announced he will retire Jan. 4 after serving as president of the credit union for more than 22 years. Ponteri's career began as a volunteer and employee at the credit union in 1982. During his tenure, the credit union grew from $20 million to the current $275 million, with 48,000 members and eight branches. Ponteri spent 10 years as a director of the Texas Credit Union League and CU Resources Inc., serving in various positions and on committees. He was a member of the 2000 Credit Union National Association (CUNA) Renaissance Commission and served in local community organizations … * KNOXVILLE, Tenn. (12/2/09)--Willam R. "Bill" Brenneman, of Knoxville, formerly of Pembroke Pines, Fla., died Sunday morning after a long battle with heart disease. He was 63. Brenneman was a former employee of the Tennessee Credit Union League and a former CEO of Oak Ridge (Tenn.) Hospital Employees CU. He was retired from the Federal Deposit Insurance Corp. as a federal investigator. He is survived by his wife, one son and two grandchildren (The Oak Ridger Dec. 1) …

Top 10 INews NowI stories in November

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MADISON, Wis. (12/2/09)--Credit Card Accountability, Responsibility and Disclosure (CARD) Act stories again topped last month’s list of most-read News Now stories for the second consecutive month. CARD Act stories also topped News Now’s July and August most-read lists. The top 10 News Now stories for November are: 10. New Dodd bill would set overdraft rules WASHINGTON (11/20/09)--Sen. Christopher Dodd (D-Conn.), who heads the Senate Banking Committee, unveiled his new bill Monday that would limit the fees financial institutions can charge on overdraft protection services. 9. UIGEA compliance pushed back to June 1 WASHINGTON (11/30/09)--Just days before the compliance date rolled around—and months after urgings to delay implementation of the Unlawful Internet Gambling Enforcement Act--the Federal Reserve and U.S. Department of Treasury announced they were pushing back the law's Dec. 1 compliance date. 8. Regulation is the better overdraft approach: CUNA WASHINGTON (11/13/09)--The Federal Reserve Board's final rule on overdraft protection plans, which was released on Thursday, “should give Congress pause before it proceeds further with the various legislative proposals that are now pending,” according to CUNA President/CEO Dan Mica. 7. Opt-in featured in Fed overdraft rules WASHINGTON (11/13/09)--The Federal Reserve Board's final rule on overdraft protection plans, which would require the consent of consumers before they could be charged overdraft fees for ATM and one-time debit transactions, was released on Thursday. 6. New Yorkers flock to CUs in ‘bank revolt’ NEW YORK (11/17/09)--New Yorkers are leaving their banks and flocking to credit unions in what is being dubbed the "bank revolt of 2009," according to a Sunday New York Post article. 5. NCUA new CAMEL 3 reports aimed at preventing troubles WASHINGTON (11/23/09)--While the National Credit Union Administration has long monitored the status of CAMEL Code 4/5 credit unions, the agency is taking a closer look at CAMEL Code 3 credit unions with the recent addition of a CAMEL Code 3 slide to its monthly report on National Credit Union Share Insurance Fund (NCUSIF) and Temporary Corporate Credit Union Stabilization Fund (TCCUSF) statistics. 4. Fed rate action impacts CUs WASHINGTON (11/5/09)--Wednesday's decision by the Federal Open Market Committee (FOMC) to stay the course and keep the fed funds target interest rate between 0%-0.25% will maintain a steep yield curve for a while longer, and that will impact credit unions, says a CUNA economist. 3. Compliance questions about the 21-day CARD fix WASHINGTON (11/02/09)--Passage by the House and Senate of the CARD Act Technical Corrections Act is raising some questions by credit unions on what steps to "uncomply" with the former terms of the 21-day mailing provision. President Obama is expected to sign that bill, H.R. 3606, at any time and CUNA has urged him to act quickly. 2. Filene study finds bank fees dwarf those of credit unions WASHINGTON (11/23/09)--Bank customers pay substantially more in overdraft fees and other account fees than credit union members, with low-balance bank customers taking the brunt of that burden, a recently released Filene Research Institute study has found. 1. CARD Act 21-day fix, homebuyer tax credit are now law WASHINGTON (11/10/09)--Starting the weekend off right for credit unions, President Barack Obama on Friday signed the CARD Act Technical Corrections Act (H.R. 3606) into law. He also penned his name to the bill extending the homebuyer tax credit.

4 million grant funds museums SECU Daily Planet

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RALEIGH, N.C. (12/2/09)--Members of State Employees' CU (SECU) via the SECU Foundation have announced a $4 million grant to the North Carolina Museum of Natural Sciences, funding the centerpiece--the SECU Daily Planet--of the museum's planned Nature Research Center (NRC).
Click to view larger image The SECU Daily Planet will be the centerpiece of the North Carolina Museum of Natural Sciences' planned Nature Research Center, said the SECU Foundation in announcing its $4 million grant to the museum. (Photo provided by State Employees' CU)
The SECU Daily Planet will be a three-story multimedia program area with cutting edge audio and visual technologies to provide the backdrop for live presentations on key environmental issues and recent scientific discoveries. Also, the SECU Daily Planet will draw on live feeds of the latest science news and provide daily outreach to audiences statewide through the North Carolina Research and Education Network, Research Channel Consortium, NASA-TV, WRAL-TV, UNC-TV, North Carolina Public Radio (WUNC), webcasts and podcasts. NRC, an 80,000 square-foot wing of the museum is under construction just west of the current museum building. The museum projects the research center will attract more than 200,000 visitors annually from all counties in the state. The museum has also partnered with Microelectronics Center of North Carolina, a non-profit organization, to use networking technologies and systems to improve learning and collaboration throughout the state's K-20 education community. Its network will connect to every elementary, middle and high school in the state to facilitate delivery of distance learning programs. Dr. Betsy Bennett, museum director, said SECU gift "is the largest private gift we've received since the NRC capital campaign was launched in fall 2008." Shirley Bell, chair of the SECU Foundation board, noted that since SECU serves employees of the state's public schools, community colleges and universities, the project is "a natural fit."

Obama campaign head keynotes CUNA Council confab

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MADISON, Wis. (12/2/09)--David Plouffe, President Barack Obama's 2008 campaign manager, has been tapped to keynote the 2010 CUNA Marketing and Business Development Council (CMBDC) Conference, March 21-24 in Washington, D.C. Plouffe, who managed the Obama for America campaign, will address "Effective Use of Social Media." He will share his approach to overall strategy development and tactical implementation, harnessing technologies to help connect with people and engage them to act, and sticking to a game plan in the face of crisis and skepticism. President Obama called Plouffe "the unsung hero" who build the best political campaign in the history of the U.S. "Plouffe's session is essential to attend for many reasons, but particularly because credit unions everywhere are looking for ideas in implementing a social media strategy," said Anne Legg, chair of the CMBDC and vice president of marketing at Cabrillo CU, San Diego. Other sessions during the 17th annual conference will address these marketing and business development topics:
* Communication of mergers; * Effective websites and social media measurement; * Challenge marketing and the Young and Free story; * 2010 economic update; * National Credit Union Administration update from board member Gigi Hyland; and * Three pre-conference workshops, for an additional fee: a full day market research session, a full day apprentice workshop at the historic Ford's Theatre, and two half-day business development sessions.
The council also has debuted a Conference ROI Calculator, a tool individuals can use when talking with their CEO about attending the conference. Formatted as a spreadsheet, it allows individuals to input their expenses, check boxes of interest, and see their ROI (return on investment). "This proves that the conference is an investment in a credit union's future, not an expense," said Legg. Other events at the conference include a recognition dinner and award presentations for the Marketing Professional of the Year, Business Development Professional of the Year, and Diamond/Merit award winners and Best Practice Awards. For more information, use the link.