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Three-way merger means competition for Canadas largest CU

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EDMONTON, Alberta (2/12/08)--Three of the four largest credit unions in Alberta, Canada, are proposing a three-way merger that, if successful, would produce an $8.5 billion asset credit union (The Edmonton Journal Feb. 9). Servus Credit and Common Wealth Credit, both credit unions in Edmonton, and Community Savings, a credit union in Red Deer, said Friday talks are underway and they could call for a membership vote on the proposal as early as March. The combined credit union would have 357,000 members, 1,825 employees and 95 branches. The fourth large Alberta credit union, First Calgary Savings, with 100,000 members and assets of $1.9 billion, has declined to join the proposed merger. Canada's largest credit union is the $12.3 billion asset Vancouver City Savings in Vancouver, British Columbia. It has 2,300 employees and 57 branches. Contributing to the merger plan is potential competition with VanCity and other British Columbia credit unions under a provincial free-trade agreement between British Columbia and Alberta. The agreement will take effect in April, 2009. British Columbia-based credit unions have competitive advantages because they can operate with less capital and go into fields denied to Alberta credit unions--such as insurance brokerages, reported the article.

Kirkwoods CU mourns members reopens Thursday

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KIRKWOOD, Mo. (2/12/08)--Kirkwood (Mo.) Municipal CU, which lost three members in Thursday's shootings at Kirkwood City Hall, is back in its City Hall location but will resume full hours on Thursday, according to the Missouri Credit Union Association. The shootings, which killed five people, closed City Hall, and the credit union had to relocate to temporary quarters in the city's Parks Department building. City Hall is scheduled to reopen today. The credit union will have special hours this week so employees can attend memorial services for the victims who were members: Kirkwood Police Officers William Biggs and Tom Ballman, and Public Works Director Kenneth Yost. Yost's service was Monday. Today is Ballman's service, and the credit union will reopen at the City Hall location from 12:30 p.m. to 3:30 p.m. On Wednesday, it will be open from 11:30 a.m. to 3:30 p.m. Credit Union President Bob Dielschneider expects to resume normal hours on Thursday and Friday. The shootings occurred when Charles Lee "Cookie" Thornton arrived at a City Council meeting and began shooting, killing the police officers and three city officials. Thornton was shot to death by police. The mayor, who was shot twice in the head, remains in critical condition.

Maryland fin lit task force bill to have two CU seats

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ANNAPOLIS, Md. (2/12/08)--A Maryland financial literacy task force would have two credit union seats, if pending legislation is approved. One representative would be from a state-chartered credit union and the other from a federal-chartered credit union headquartered in Maryland (Focus Newsletter Feb. 11). The bill was introduced in the Maryland House of Representative and the State Senate. Sen. C. Anthony Muse (D-Prince Georges County) introduced the Senate version Feb. 1, said the Maryland and District of Columbia Credit Union Association. The bill was assigned to the Education, Health and Environmental Affairs Committee. State Del. Dana Stein (D-Baltimore) introduced an indentical bill in the House last week. The bill, “The Task Force to Study Mandatory Financial Literacy Education in Maryland,” would create a task force to improve financial education in Maryland public schools.

100 increase in new phish targets reported

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ARLINGTON, Va. (2/12/08)--Credit unions and other financial institutions continue to be top targets for phishing attacks, accounting for nine out of 10 new brands targeted during fourth quarter last year, says a new report. In 2007, more than 900 new brands were first-time targets of phishing attacks. That's more than a 100% increase in new targets compared with new targets in 2005 and 2006, said Cyveillance, a cyber intelligence company, in its latest "Online Financial Fraud and Identity Theft Report." Broad-based phishing attacks aimed at new companies and industries reached its high point of 431 during first quarter 2007 then decreased significantly the rest of the year. About 106 new brands were targets in the fourth quarter. The data indicates the attacks were more focused throughout 2007, repeatedly targeting prominent brands in key industries, said the Arlington, Va.-based Cyveillance. During the year, phishing attacks became more sophisticated and evolved to incorporate legitimate brand names and URLs. Attacks leveraging compromised websites grew to 51% in fourth quarter from 38% in third quarter. The use of compromised websites complicates the attack shut-down process for the targeted organization because it requires specific URLs be removed without disrupting the site's legitimate operations. Also, the use of targeted brands within the URL of phishing sites increased to more than 50% of all attacks. Phishers often include the brand in the URL to help legitimize their spoofed pages. In addition to changes in phishing scams, the report also identified a 30% increase in malware attacks targeting users outside the U.S. Attacks against U.S. citizens decreased to 45% in the fourth quarter from 75% in first quarter. France and Japan saw significant increases in malware attacks. To download the report, use the resource link.

CU System briefs (02/11/2008)

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* ARVADA, Colo. (2/12/08)--The Credit Union Associations of Colorado and Wyoming (CUAC/CUAW) is preparing to move to new headquarters later this year. In an effort to "go green," it is recycling its old electronic technology and computer equipment in partnership with Luminous Recycling. "With the limited life expectancy of today's computers and electronics, finding ways to recycle the equipment in a practical and environmentally responsible manner is critical," said Dale Rupp, director of information technology at CUAC/CUAW. John Dill, CUAC/CUAW president/CEO, said disposing of obsolete electronics is one example of the associations' commitment to supporting "green" alternatives. Here, Rupp, left, and Rob Stahl, lead technical at CUAC/CUAW, organize old computers, printers, typewriters, scanners, cell phones and keyboards for pickup. (Photo provided by the Credit Union Associations of Colorado and Wyoming) … * CHARLOTTE, N.C. (2/12/08)--Charlotte Metro CU isn't as high profile as large bank competitors, but the $146.2 million asset credit union is working to change that. It ran two new ads during the Super Bowl. Last year, the credit union launched a campaign featuring Muggsy Bogues, the diminutive former NBA star. In the ad, he acted as a proxy for the credit union, shooting and scoring over a trio of taller "big banks." This year's ads feature Bogues, Coach Sam Vincent and rookie forward Jared Dudley of the Charlotte Bobcats. The credit union has a marketing partnership with the team, and Bogues is a member of the Bobcats' radio team (Charlotte Business Journal Feb. 8) … * SAN DIEGO and EDISON, N.J. (2/12/08)--Pinnacle FCU, a $173 million asset credit union based in Edison, N.J., has joined the American Consumer Council as a sponsoring member, representing members in the national consumer organization's New Jersey service region. Pinnacle will offer ACC members financial and educational services to ACC members in the region as well as low-cost financial products and services when they open a savings or checking account. Pinnacle serves employer groups throughout New Jersey, New York and Pennsylvania … * NORTHVILLE TOWNSHIP, Mich. (2/12/08)--Beth Troost, education partnership coordinator at Community Financial Members FCU, has been hired as financial education coordinator for the Michigan Credit Union League, effective Feb. 18. The new position will work with Michigan-based and national financial literacy initiatives such as Michigan Jump$tart Coalition, the National Endowment for Financial Education (NEFE) and the league's Financial Literacy Legislative Challenge. Troost has with the credit union since 2002, developing and conducting classroom presentations, establishing relationships with community service organizations and helping expand its student-run credit union program to 26 schools (Michigan Monitor Feb. 11) … * NORTHVILLE TOWNSHIP, Mich. (2/12/08)--Michigan State Sen. Ray Basham (D-Taylor) and 15 credit union people braved winter weather to attend the Michigan Credit Union League's (MCUL) Downriver Chapter Legislative Breakfast Feb. 4. Discussion centered on issues related to Michigan credit unions and the Downriver community. The breakfast was a solid grassroots event feature substantive conversation and good relationship building, Patrick La Pine, MCUL executive vice president, told the Michigan Monitor (Feb. 11). Shown here with Sen. Basham are, from left, Cassandra Velasquez and Susan Rafko Bayer of Monroe Area FCU. (Photo provided by the Michigan Credit Union League) …

Regulator Associate directors have some responsibility

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OLYMPIA, Wash. (2/12/08)--Washington state-chartered credit unions who want to add “associate” nonvoting board members to their board of directors must ensure that associates meet all of the same statutory requirements that apply to full board members, says the state regulator. This information was sent in an interpretive letter last month by Linda Jekel, director of credit unions at the Washington State Department of Financial Institutions (DFI), in response to a request for guidance from state-chartered credit unions. “Associates must meet all of the same statutory requirements for fiduciary duty, confidentiality, meeting attendance, and avoidance of conflict of interest that apply to full board members,” Jekel wrote. “A state-chartered credit union wishing to utilize associate board members must vote to amend its bylaws to include associates, and delineate the limits and conditions under which they serve.” Associate board members are a growing trend at some U.S. credit unions, but unlike elected board members, they are nonvoting, are appointed by the board, rather than elected by members, and may be appointed for shorter terms than elected board members, Jekel wrote, adding that many serve for one-year terms. Some credit unions believe that having associates on their boards helps with recruitment and retention of qualified full board members, by acting as a training program, Jekel wrote. Associates can help with succession planning, can efficiently replace elected board members who are no longer able to serve, and could provide useful back-up and business viability in the event that a disaster--such as avian flu--reduces the board, she added. However, problems can result from adding associate board members, Jekel wrote. “Care should be taken to assure that associates are truly qualified, representative of the credit union’s membership, and not merely the buddies of current full board members,” she added. “Prudent management practices require that associates be adequately screened and trained and that they acquire a basic understanding of Washington State credit union law. Associates may need to be covered by insurance, just like full board members.”

Southwest Corporate webinar discusses portfolio revenues

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PLANO, Texas (2/12/08)--Southwest Corporate plans a webinar later this month to provide member credit unions with an overview of its investment portfolio, financial results, and related credit risk management and oversight process. The date and time will be announced soon, said President/CEO John Cassidy, in a special notice from the corporate, prompted by press reports of the deteriorating mortgage market and its effect on U.S. Central. He noted the corporate continues to have confidence in U.S. Central and its financial strength. Last week, Standard and Poor’s changed its rating for U.S. Central FCU to AA+ from AAA. Fitch Ratings reaffirmed the credit union’s AAA rating one week before. Standard and Poor’s change aligns U.S. Central’s rating with the same AA+ rating it has held from Moody’s, Cassidy said. About 95% of U.S. Central’s long-term marketable securities are rated AAA, with the remaining 5% rated AA. The AA+ rating is the second-highest rating possible for a financial institution. After the mortgage market began to deteriorate, Southwest Corporate began publishing monthly financial reports for its members last fall. The reports are available on Southwest Corporate’s website.

IRnet surpasses 2 billion expands to Peru

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MADISON, Wis. (2/12/08)--World Council of Credit Unions’ (WOCCU) International Remittance Network (IRnet) last year surpassed $2 billion in total remittance transactions since its inception in 2001. It also recently expanded its program to Peru by adding 11 credit unions with 31 points of service in the country. With the addition of Peru, credit unions in 10 countries now distribute remittances with IRnet. More than 1.5 million transactions in 2007 carried $578 million across borders, bringing the total number of transactions performed through IRnet to more than five million. There were 128 U.S. credit unions offering Vigo money transfers through WOCCU’s program at year-end 2007. “Three billion dollars in remittances were sent to Peru last year,” said Manuel Rabines, second vice chairman of WOCCU and general manager of Federacion Nacional de Cooperativas de Ahorro y Credito del Peru (FENACREP). “Offering remittances through credit unions is a way to attract new members and expand product development. “For example, Peruvians living here and abroad want to purchase land for building homes and need affordable ways to finance their children’s education. They can do this with access to remittance-linked products through credit unions,” he added. WOCCU has formed strategic alliances with Vigo, MoneyGram and Coinstar--all established money transfer organizations--so credit unions can offer members and non-members affordable options for sending and receiving remittances via IRnet. Consumers can perform not only credit union-to-credit union transactions, but also can send to or from retail outlets offering remittances through the same money transfer organization. The security, convenience and affordability of IRnet is an attractive way to introduce the unbanked to credit unions around the world and add value to member service, especially when credit unions link their products to incoming remittances, said WOCCU. For a list of credit unions and networks participating in the IRnet program, use the link.

BizKid to air in Indiana through foundation grant

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INDIANAPOLIS (2/12/08)--The Indiana Credit Union Foundation (ICUF) has provided a grant so BizKid$ can air on all eight of Indiana’s PBS stations. Many stations began broadcasting the show in January. The stations are located in Bloomington, Evansville, Fort Wayne, Indianapolis, Merrillville, Muncie, South Bend/Elkhart and Vincennes. “Indiana’s Credit Unions” will run two 15-second spots adjacent to the shows in each market. The stations also will offer “tune in” promotional mentions with some stations putting information on their websites, running ads in printed program guides and promoting the show locally. “To be part of the group that is bringing quality programming with a financial focus to young people across the country is exciting,” said ICUF Chairman Barbara Berghoff. “And to help bring the show to viewers throughout the state of Indiana on behalf of our state’s credit unions is tremendous.” The ICUF is one of several national sponsors to help produce the 26 episodes of BizKid$. A coalition of 132 credit unions, leagues, national and league foundations, affiliated system organizations and service providers across the nation are sponsoring the program. BizKid$ uses kids as real-life examples to teach fiscal responsibility. The show is produced by the creators of “Bill Nye the Science Guy” and Junior Achievement Worldwide.

IDow Jones NewsI CUs in good shape to make loans

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NEW YORK (2/12/08)--Most credit unions have strong balance sheets and near-record capital levels, which allow them to make any type of loan despite the subprime crisis, Bill Hampel, chief economist for the Credit Union National Association, told Dow Jones Monday. While some credit unions have experienced “collateral damage” due to the subprime turmoil, most are “going to make any loan they possibly can make,” Hampel told the paper (Dow Jones & Company Feb. 11). Executives from three credit unions also were quoted in the article. Because credit unions want to hear the story behind why members have credit problems, credit unions are often more flexible in making loans because they are “story” loans, Steve Renock, executive vice president, Orange County Teachers FCU, Santa Ana, Calif., told the paper. Chris Shockley, executive vice president, Virginia CU, Richmond, Va., told the paper that his credit union tries to help its members before they default on loans. Virginia CU has an in-house collections department to contact borrowers after they’ve fallen behind on a payment or two. HarborOne CU, Brockton, Mass., has converted 15,000 square feet of office space into a “multicultural banking center” that features classrooms and offices for social service agencies to help members and nonmembers alike, according to James Blake, president/CEO of the credit union. By emphasizing education, credit unions help equip consumers to avoid mortgage gimmicks and use mainstream financial products, Blake told the paper. Through the refinancing of existing mortgages and educating consumers who are getting ready to take out mortgages, HarborOne will build trust and hopefully create future members, he added. Because credit unions “offer more personalized service” than banks do, they “can make the difference between members getting approved and refinanced out of a loan,” Allen Fishbein, director of housing and credit policy for the Consumer Federation of America, told the paper.

Thirty lawmakers attend Idaho leagues GAC

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BOISE, Idaho (2/12/08)--The Idaho Credit Union League held its 10th Annual Governmental Affairs Conference (GAC) Thursday in Boise with more than 30 legislators joining more than 70 credit union professionals and volunteers statewide. Financial education for youth was one of the conference’s main topics. John Parfrey, director of the National Endowment for Financial Education’s (NEFE) High School Financial Planning Program, spoke about the league’s efforts to bring the free, non-commercial curriculum to all high school students statewide. State Sen. John Goedde (R-Coeur d’Alene), chair of the state education committee, and State Rep. Marge Chadderdon (R-Coeur d’Alene), who serves on the state’s education and business committees, offered their support to increase the visibility of the program to Idaho’s teachers. The full-day conference included call-ins from all of Idaho’s congressional delegation, who each addressed credit union-related issues and took questions from the audience. Michele Johnson, director of legislative affairs at the Credit Union National Association (CUNA), reported on national issues. State credit union leaders will travel to Washington, D.C., in early March for the CUNA GAC to share their views and concerns on the Hill.