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CU System Archive

CU System

West Virginia CUs dodge the mortgage bullet

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CHARLESTON, W. Va. (2/13/08)--Members at more than 100 credit unions across West Virginia can be thankful their credit unions have managed to avoid the subprime mortgage problems that cut profits of many lenders in the state, says the West Virginia Credit Union League. Ken Watts, league president, told the state's largest newspaper that the league has kept a keen eye on the mortgage problem to make sure members aren't affected (Charleston Gazette Feb. 10). In fourth quarter, Huntington Banks lost nearly $240 million through a relationship with subprime lender Franklin Credit Management Corp., noted the newspaper. Rich Schaffer, vice president of the league, said the state's credit unions traditionally hold large amounts in reserve to protect against bad loans. West Virginia typically has the highest ratio of net worth to assets when compared with other Mid-Atlantic states. As of last June 30, West Virginia had a 12.14% ratio, compared with 11.4% for credit unions nationally. Also, Watts said, credit unions' historically haven't made mortgage loans. In the state's credit unions, mortgage loans make up a little over one-third of total loan volume. Still, the state's mixed economy, with an ever-present threat of layoffs, means managers are extra vigilant about who they lend money to, Schaffer said. Watts noted concerns about consumer confidence--how it trickles down to credit unions--and about whether consumers will borrow. Credit unions' personal service will turn to their advantage in the economy, Watts said. They know their members better and can offer loans only to their members. Watts also noted that while credit unions aren't growing hugely, they do give back to their communities, through scholarships and more.

CU System briefs (02/12/2008)

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* TOLEDO, Ohio (2/13/08)--U.S. Rep. Marcy Kaptur (D-Toledo), a member of two credit unions, praised Ohio credit unions' financial education efforts during the launch of the Ohio Credit Union League's financial education initiative Monday in Toledo. The initiative is called MoneyAndStuff. Bob Tracy, CEO of TPS CU, Toledo, said credit unions have educated more than 20,000 students in 200 schools about finances. Also on hand for the launch at Toledo Bowsher High School were State Sens. Teresa Fedor (D) and Mark Wagoner (R); State Rep. Barbara Sears (R); school principal Larry Black; and credit union leaders. (Photo provided by the Ohio Credit Union League) … * ARVADA, Colo. (2/13/08)--The Credit Union Association of Colorado and the Credit Union Association of Wyoming (CUAC/CUAW) have promoted Michael O'Neill, CUAC/CUAW's Bank Secrecy Act compliance specialist, to director of member services. The promotion will be effective at the end of February. With more than 17 years' experience in compliance, strategic planning, and finance areas, O'Neill served as an association consultant for three years. He also has served as loan manager for Aurora FCU, a personal banker with US Bank and as assistant bank examiner with the Federal Reserve Bank of Denver. O'Neill also was chairman of the Supervisory Committee of UNIWYO FCU, Laramie, Wyo. … * BOSTON (2/13/08)--The National Association of State Credit Union Supervisors (NASCUS) conducted its second 2008 regional regulators' meeting in Boston on Feb. 8. NASCUS management and Chairman George Reynolds of Georgia met with regulators from Connecticut, Massachusetts, Maine, Pennsylvania, Rhode Island and Vermont at the offices of the Massachusetts Division of Banks, the meeting's co-host. Discussion focused on current economic challenges, effects of the subprime-lending market, credit quality, member business lending and unrelated business income tax (UBIT). The remaining meetings will be in Chicago on June 11 and Nashville, Tenn. on Sept. 18. NASCUS already held a regional meeting in San Francisco in January … * SAN JOSE, Calif. (2/13/08)--The Mexican American Community Services Agency Inc. (MACSA) received 10 computers donated by Walnut Creek, Calif.-based Pacific Service CU. The computers--Dell PCs with Pentium 4 processors and 15-inch flat screen monitors--will go to MACSA's youth centers in San Jose and Gilroy for after-school programs. More than 2,500 youth will have access to them. In the photo, Pacific Service CU Chairman Charlie Diaz (second from left) meets with MACSA staffers, from left: MACSA's Alex Ontiveros; Aurora Cepeda; CEO Olivia Soza-Mendiola; and Yvette Castro-Farias. (Photo provided by Pacific Service CU) …

Centrix hearing on expedited discovery motion is today

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DENVER, Colo. (2/13/08)--A non-evidentiary hearing in the subprime auto lender Centrix Financial bankruptcy case will be held today about a motion asking the judge to reconsider her order granting expedited discovery in the case. The telephone conference hearing before Judge Elizabeth E. Brown of the U.S. Bankruptcy Court for the District of Colorado is set to begin at 1:30 p.m. MST and will likely involve scheduling further meetings. A debtors committee, representing the several Centrix-affiliated companies, filed an objection Monday to a motion filed Friday by the Ad Hoc Committee of Credit Unions, a group of creditors. On March 27, 2007, the Ad Hoc Committee of Credit Unions filed a motion for administrative expenses for making a substantial contribution in the cases. The debtors committee objected but also began settlement negotiations with the Ad Hoc Committee to try to avoid more litigation expenses, according to the debtors committee filing. During the negotiations, which continued throughout 2007, the debtors committee said it believed the administration matters could also be resolved consensually. It was surprised when the Ad Hoc Committee contested the contribution motion but began to prepare for a hearing and drafted discovery requests. The Ad Hoc Committee said it couldn't compile the information requested within 14 days and asked the judge to reconsider her expedited-discovery order. The committees were formed because there were so many debtor companies and so many credit unions represented as creditors in the bankruptcy case. In another development, a letter to the court from the regional director of the Employee Benefits Security Administration, withdrew the U.S. Department of Labor's claims related to Centrix Financial's 401(k) plan. The Secretary of Labor had filed a proof of claim on Jan. 8, 2007, to protect the interests in the plan and any participants who incurred losses, according to court documents. On July 11, 2007, the fiduciaries of the company's plan "restored all losses that may have been incurred by participants and paid the full amount" of the claim, the letter, which was received by the court Feb. 6. Meanwhile, trade press have reported that the insurer for Centrix Financial, Lyndon Property Insurance, has sued about three dozen credit unions alleging they worked with Centrix to commit insurance fraud by not reporting all Default Protection Insurance (DPI) claims. The credit unions, reported Credit Union Journal Monday, have asked the bankruptcy judge for a jury trial.

Arizona CUs collect signatures for 08 candidates

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PHOENIX (2/13/08)--The Arizona Credit Union League and member credit unions collected signatures for U.S. Reps. Jeff Flake (R-6) and Raul Grijlava (D-7) Super Tuesday, Feb. 5, on behalf of petitions for 2008.
Among the Arizona credit union people who collected signatures for candidates to appear on the 2008 election ballots were these Desert Schools FCU employees: from left: Kelly Tylwalk, Meredith Boggs, and Matt Osborn. (Photo provided by the Arizona Credit Union League)
Twenty-five credit union volunteers collected more than 450 signatures at polls in Gilbert, Chandler and Litchfield Park. Flake expressed his appreciation through an e-mail to Austin De Bey, league vice president of government affairs. State law requires all federal and state candidates to collect signed petitions to be placed on the ballot. The petitions need to be signed by registered voters from the party of the candidate or independent voters who reside in the represented district.

Alliance CU hasnt had a foreclosure in years

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FENTON, Mo. (2/13/08)--Alliance CU, Fenton, Mo., reported a record year in 2007 for mortgage lending, despite the housing market crisis, and said it hasn’t had a foreclosure in years. “Our loan officers take great measure to ensure that our members are placed in a mortgage product that they understand and makes sense for them,” said Becky Smith, Alliance mortgage loan manager. A large percent of the credit union’s new home loans were sourced from a current member referral, said Dennis Sommer, Alliance president/CEO. The average home loan is six to seven years, so an adjustable loan designed to stay at a low fixed rate for 10 years makes sense for many individuals. If a member decides to stay in the loan longer than the fixed rate term of three to ten years, annual adjustments will not exceed 2% of the first year or 1% every year thereafter, with a lifetime cap of 5%, the credit union stated. Alliance offers local processing and servicing, adjustable-rate mortgages that do not adjust during the fixed period, no up-charge for jumbo loans, no pre-payment penalties and no escrow requirement.

Woman arrested after depositing meth in ATM

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BREMERTON, Wash. (2/13/08)--An 18-year-old member of Kitsap CU mistakenly deposited a bag of methamphetamine into her account at an ATM at the credit union, according to court documents filed in Kitsap County Superior Court. An employee of the $688.5 million asset, Bremerton, Wash.-based credit union told police a bag containing suspected methamphetamine was found in the woman’s deposit envelope (Kitsap Sun Feb. 11). The woman admitted to using meth when contacted by police, and said she may have accidentally put the bag containing the drug into her deposit envelope when she reached into her pants pocket to get cash, police documents indicated. After the bag tested positive for meth, police arrested her Thursday. She was charged Friday with one count of possession of meth.

Governor NCUA chairman to highlight Iowa CUs conference

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DES MOINES, Iowa (2/13/08)--Iowa Gov. Chet Culver and National Credit Union Administration (NCUA) Chairman JoAnn Johnson will be the keynote speakers at the Iowa Credit Union League’s Legislative Issues Conference Feb. 19 at the Embassy Suites in Des Moines. Gov. Culver will share his legislative priorities, and Iowa native Johnson will discuss the hot topics and priorities for NCUA in 2008. Iowa credit union attendees also will hear from President George W. Bush’s former political director and Dubuque, Iowa, native Sara Taylor. And a state legislative panel will help attendees learn more about key issues facing lawmakers. Also, Michael Fitzgerald, state treasurer, will share information on the Small Business Linked Investments for Tomorrow Program, which assists small-business owners in accessing capital. Credit union attendees, Iowa legislators and members of Iowa’s congressional delegation have been invited by the Iowa league to attend a reception Feb. 19.

CUs VITA sites help claim 6 million in tax credits

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RALEIGH, N.C. (2/13/08)--State Employees’ CU (SECU) and local Government FCU (LGFCU) have saved North Carolina residents $6 million in tax credits since mid-January by serving as Internal Revenue Service (IRS) Volunteer Income Tax Assistance (VITA) sites.
From left: Secretary Reginald Hinton, North Carolina Department of Revenue; Roger Burton, IRS territory manager in the Carolinas; Peggy Gavaghan, area director of Stakeholder Partnerships Education and Communication, IRS; U.S. Rep. David Price (D-4th); and SECU Board Chairman Shirley Bell. (Photo provided by State Employees’ CU)
The two Raleigh credit unions made the announcement Monday at SECU’s Parkway Branch--a VITA site--adding that they also have saved members nearly $700,000 in tax preparation fees. The VITA program offers free tax assistance to people with low-to-moderate incomes and serves North Carolina residents with household incomes of $40,000 or less. Two SECU employees at each branch location are trained as VITA representatives to prepare and electronically file basic tax returns. The focus of the program is to assure that eligible North Carolinians receive special credits such as the Earned Income Tax Credit and the Child Tax Credit. Attending the announcement were U.S. Rep. David Price (D-4th); Secretary Reginald Hinton, North Carolina Department of Revenue; Peggy Gavaghan, area director of Stakeholder Partnerships Education and Communication for the IRS; Roger Burton, IRS territory manager in the Carolinas; Jennifer Cohen, deputy chief of staff with the North Carolina Department of State Treasurer; and SECU’s Board Chairman Shirley Bell. Price commended both credit unions on their efforts to provide an alternative to high interest refund anticipation loans.

Bill would delay Arizona payday loan ban

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PHOENIX (2/13/08)--An Arizona lawmaker has proposed a bill, Senate Bill 1239, that would push a payday lending ban in the state back by two years. Under current law, payday lenders are scheduled to shut down in 2010. The proposed bill would give lenders until 2012 to close their doors (Arizona Daily Star Feb. 12). During the interim, the Department of Financial Institutions would study the loans made by payday lenders and the amount of money they collect. Sen. Robert Blendu (R-Litchfield Park), who proposed S.B. 1239, said the extra time might convince legislators to overturn the payday lending ban. Though Blendu said he is not intending to overturn the ban, he said that payday lenders serve a purpose and he wants to see if “there’s a legal place for them in Arizona,” he told the Daily Star. State Rep. Marian McClure (R-Tucson) disagreed and said payday lenders are an “equal opportunity predator.” Banks and credit unions offer small loans with reasonable interest rates, she said. The state Senate Committee on Financial Institutions, Insurance and Retirement will conduct a hearing on Blendu’s bill Monday.