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CU System briefs (02/18/2009)

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* LANSING, Mich. (2/19/09)--General Motors (GM) has announced it is supplying dealers with special incentives and a merchandising kit to support the Invest in America credit union auto loan program. A special Presidents Day Event offers incentives for buyers and dealers to use credit unions for financing through March 2, according to a letter to credit union CEOs from Mark LaNeve, GM vice president, vehicle sales, service and marketing, and David Adams, CEO of CUcorp and the Michigan Credit Union League. For more information about the nationwide auto loan program, visit www.lovemycreditunion.org … * HARAHAN, La. (2/19/09)--The Louisiana Credit Union League has scheduled several chapter informational sessions about the National Credit Union Administration's Corporate Stabilization Program. Lake Charles Chapter will meet Friday; Alexandria Chapter will meet March 4; Shreveport Chapter, March 5; and Monroe Chapter, March 10. The East and West Orleans Chapters and the Baton Rouge Chapter conducted sessions earlier this week … * SAN JOSE, Calif. (2/19/09)--San Jose police are seeking a man responsible for four armed robberies since Oct. 20 of two San Jose credit unions and a retailer. He is wanted in the Oct. 20 robbery at lst United FCU (now a branch of Sacramento-based The Golden 1 CU); an Oct. 30 heist of a shoe store; and the Dec. 10 and Jan. 14 robberies of KeyPoint CU (CBS5 Feb. 17 … * VIRGINIA BEACH, Va. (2/19/09)--A Virginia Beach, Va., man was sentenced to 38 years in prison Tuesday for robbing Virginia Beach Schools FCU, on July 20, 2006. Dwight G. Simpkins, 48, was convicted by a jury on armed robbery, armed burglary, and firearm charges in June. Simpkins walked into the credit union with a handgun and fled with $13,000. He was arrested three days later (The Virginian-Pilot and The Ledger Star Feb. 18) …

Tulsa Federal ECU changing to fed charter to expand biz lending

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TULSA, Okla. (2/19/09)--For the first time in 15 years, a state-chartered credit union in Oklahoma has received approval to change to a federal charter. The Oklahoma State Credit Union Board approved the charter change of Tulsa Federal Employees CU, a $423.1 million asset credit union based in Tulsa (The Journal Record Feb. 18). Tulsa Federal President Phil Hart told the newspaper the credit union sought the change for two reasons: to potentially expand its commercial business lending and to be regulated by the National Credit Union Administration, which regulates only credit unions. The Oklahoma Banking Department regulates both credit unions and banks. A federal charter would allow a loan participation waiver of the credit union's business and commercial loan limitations, boosting the amount from 12.25% of assets to the 20%. The credit union doesn't have a waiver and there is no provision under state law to get a waiver. The last credit union to switch from state to fed charter in Oklahoma was Oklahoma City-based Tinker FCU, which received a federal charter in 1994. A charter conversion means the state board would have 22 state-chartered credit unions to oversee out of the state's 98 credit unions.

Wisconsin CUs share view on foreclosures at hearing

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MADISON, Wis. (2/19/09)--Two Wisconsin credit unions provided the credit union viewpoint on foreclosures during testimony last week before a state Assembly Financial Institutions Committee hearing, according to the Wisconsin Credit Union League. Bob Bruemmer, executive vice president of Landmark CU, New Berlin, and Brian Punty, CEO of Antigo-based CoVantage CU, shared how they and other credit unions in the state have worked to help their members avoid foreclosures and stay in their homes (The League Feb. 18). "I believe our willingness to work with our members is common among credit unions," Prunty told the committee. "For instance, credit unions contacted and responding had heartwarming stories of success working with their members to keep them in their homes. In short, credit unions believe taking care and working with member-owners is a vital part of their missions." He explained how the $678 million asset CoVantage CU tried to help those facing foreclosure by other lenders. "Last fall, our board approved a 'Rescue Refinance' program, which … allows us to extend loans to families who are in foreclosure with another lender, or to those in trouble due to an extreme rate increase under an adjustable-rate mortgage with another lender," Prunty said. He noted the credit union can extend money to people with lower credit scores and limited equity, provided the debt ratio is within the guidelines. "In the four months that we have adopted this program, we have saved three families from potentially losing their home to out-of-state lenders," Prunty said. Bruemmer also shared stories about how the $1.2 billion asset Landmark CU helped members avoid foreclosures. Last year, he said, members of a Hmong family needed an interpreter to translate the loan documents. "They had taken out an adjustable mortgage for $110,000 two years ago and that loan had a current principal balance of $130,000. Their monthly payment was not sufficient to pay the interest due and the difference was just added to the loan balance. Their ‘real’ payment had increased to the point that when the reduced payment option ended, there was no way for them to make the required monthly payments. "They came to us and we were able to refinance their mortgage with a fixed-rate loan, pay off the other institution, and save their remaining equity," Bruemmer said. To read the full testimonies, use the links.

Woman arrested in 26-year-old CU embezzlement

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KENNEWICK, Wash. (2/19/09)--A woman suspected in a 26-year-old embezzlement case involving two credit unions was arrested at her Mesa, Ariz., home Tuesday. Two Kennewick, Wash., detectives arrested 70-year-old Barbara Kurz, who is accused of taking $106,000 from Tri City CU, Kennewick, and possibly $4,000 from GESA FCU, Richland, Wash. (thenewstribune.com Feb. 18). She was shocked but cooperative and said she “knew this day was coming,” Sgt. Ed Wessing, spokesman for the Mesa Police Department, told the newspaper. Kurz was an employee supervisor at GESA’s Kennewick branch, and used the office space there to do paperwork for her own business--Medical CU. She has lived in Arizona since 1985, according to court documents, and under a false name since 1991, the newspaper said. Kurz was 44 years old and a married mother with four children when she left her family and credit union job behind in 1983. She’s being held on a warrant for first-degree theft and faces extradition to Benton County in Washington.

Mortgage originations up 11 at Nevada CUs last year

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LAS VEGAS, Nev. (2/19/09)--Mortgage originations at Nevada credit unions went up 11% last year, bucking the national trend at most U.S. lending institutions during the national economic downturn, said the Nevada Credit Union League. Total mortgage loan activity grew 2.3% during the third quarter. Two forces are behind the growth: Credit unions have more funds, and they are willing to lend, said Daniel Penrod, industry analyst for the league (Las Vegas Review Journal Feb. 18). Credit union lending standards are the same as they have been in the past--whether it be three years ago, five years ago or 10 years ago, Penrod told the Journal. Credit unions didn’t lower their lending standards during the mortgage boom to garner more profits and therefore didn’t experience the troubles associated with more exotic loans that have plagued other institutions, he added. Overall, credit unions are remaining optimistic about growth this year--which will be dependent on whether federal government intervention pushes mortgage rates down, Penrod said. A substantial decline in interest rates could spark the refinancing market and entice new home buyers, he added. Credit unions will continue to see increased lending activity this year because of their conservative lending standards and their ability to accommodate increased demand for lending products, he told the Journal.

CU sees opportunity in down environment

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STOCKTON, Calif. (2/19/09)--Finance Center CU sees opportunity in the down economic environment, its leader told the Record newspaper Wednesday. The newspaper, which serves the San Joaquin, Calif., area, interviewed three banks and Finance Center CU about challenges in planning their future courses and surviving the economic downturn (Recordnet.com Feb. 18). “In times of crisis, you can utilize the crisis to do things you forget about doing in normal times, to make yourself more efficient, to rethink your processes, to analyze what the industry is doing and what your place in the industry is,” Michael Duffy, president/CEO, told the newspaper. The $285.7 million asset, Stockton, Calif.-based credit union made a decision as far back as 2004 not to purchase new products that would have made it more competitive in the real estate market at that time. When Finance Center CU decided to stick with 20% down on mortgages, “people laughed at us,” Duffy told the paper, adding that it’s now clear the decision was the right one.

Study Crisis effects bank customers satisfaction

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ANN ARBOR, Mich. (2/19/09)--Credit unions have outshone banks in yet another customer satisfaction survey, this one for fourth quarter 2008 when the full effects of the financial industry's credit crisis began hitting consumers. According to the American Customer Satisfaction Index (ACSI), customer satisfaction with overall finance and insurance sector services was up 0.7% to 76 on a 100-point scale during the fourth quarter. But not so for banks. Banks retreated from the previous year's results, dropping 4% to a score of 75. The study attributed customers' dissatisfaction to banks that "cut costs across services in order to offset large financial losses from the subprime mortgage crisis." Wachovia, included for the last time before becoming a part of Wells Fargo, saw satisfaction drop 4% to 76. Still, it led the banking scores. Wells Fargo climbed 4% to 72, leaving Citigroup, with a score of 69, at the bottom of the banking category. Credit unions debuted in the ACSI with a score of 84--much higher than banks, said ACSI. "Credit unions are typically smaller than most banks, and their higher customer satisfaction follows a pattern in many industries where smaller companies tend to offer a better and more individualized service," the index said in a press release. ACSI noted that as the current recession has deepened, consumer behavior has changed much more than in earlier economic slowdowns. Consumer spending has continued to weaken while savings have risen, suggested The index, produced by the University of Michigan's Ross School of Business in partnership with the American Society for Quality and CFI Group, is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the U.S. It is updated each quarter.

More lawsuits filed in Heartland breach

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MADISON, Wis. (2/19/09)--Two new lawsuits have been filed in the Heartland Payment Systems data breach, bringing the total to three lawsuits related to the breach, which affected credit unions and their members nationwide. The Philadelphia law firm of Berger & Montague filed a class action lawsuit in U.S. District Court for the District of New Jersey, alleging that Heartland failed to safeguard cardholder data when the company’s computer system was compromised and cardholder data were stolen. Fraudulent activity has occurred on some of the cards, the law firm said (bankinfosecurity.com Feb. 16). Schiller P.C., also a Philadelphia law firm, filed suit in February in U.S. District Court for the District of New Jersey against Heartland, alleging similar charges as the Berger & Montague lawsuit. Previously, a lawsuit was filed Jan. 27 in U.S. District Court for the District of New Jersey in Trenton, N.J., by Chimicles & Tilellis LLP of Haverford, Pa., on behalf of Alicia Cooper, a Woodbury, Minn., resident. The suit alleges that Heartland “made unreasonable, belated and inaccurate statements concerning the breach” (BankinfoSecurity Jan. 29). The Cooper complaint further alleges that Heartland didn’t offer any credit-monitoring services or other relief to consumers affected by the breach. The complaint also says “there are materially misleading statements and omissions in Heartland's public description of the breach and its consequences.” Card payments processor Heartland Payment Systems announced in January that its processing system was breached last year by a malicious software program in what could be the largest data breach to date, with possibly more than 100 million credit cards compromised (News Now Jan. 21). The information breached included card numbers and cardholders’ names. It did not include merchant data, cardholders’ Social Security numbers, unencrypted personal identification numbers, addresses or telephone numbers, said the Princeton, N.J.-based company in a press release.

GAC attendees can sign commitment to CUs

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WASHINGTON (2/19/09)--Attendees at the Credit Union National Association (CUNA) Governmental Affairs Conference (GAC) can pledge their commitment to credit unions and in the process raise money for the National Credit Union Foundation (NCUF). CUNA Mutual Group will contribute $5 each to NCUF for GAC attendees who demonstrate a commitment to credit unions by adding their signature to a “Sign of Commitment.” CUNA Mutual’s booth in the GAC exhibit hall (booth 401) will display a 5-by-8-feet signature wall. Everyone who adds their name to the Sign of Commitment will be given a wristband to wear as a symbol of their commitment to the credit union movement. “This challenging economic environment is the perfect time to remind ourselves of the cooperative character that binds us,” said Christopher Roe, CUNA Mutual’s senior vice president of corporate and legislative affairs. “The Sign of Commitment is one way CUNA Mutual wants to show support and reinforce the movement’s philosophy of ‘people helping people.’” NCUF Executive Director Steve Delfin said the additional support provided by CUNA Mutual will enable the foundation to sustain and grow the Credit Union Development Education (DE) program. “Over 800 credit union professionals and volunteers have experienced DE training, which helps put into action the cooperative values and principles that make credit unions uniquely socially responsible,” said Delfin. “CUNA Mutual’s ongoing commitment to NCUF and Development Education is greatly appreciated.” Throughout 2009, the centennial year of the first credit union law, CUNA Mutual plans to take the Sign of Commitment to other events as an opportunity to honor credit unions and their members.

Kinecta FCU youth wins 1100 from IGoogolplexI

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MANHATTAN BEACH, Calif. (2/19/09)--A 16-year-old member of Kinecta FCU in Manhattan Beach, Calif., is the first grand prize winner in a year’s worth of photo contests offered by C-Note, the high school level of the Credit Union National Association's (CUNA) online youth periodical, Googolplex.
Click to view larger imageRebecca Lin, age 16, accepts her $1,000 Googolplex grand prize from Kinecta FCU’s Shannon Doiron. Use the link to view her grand prize-winning photo. (Photo provided by CUNA)
Rebecca Lin’s entry, “A Walk in the Park--and Rain,” attracted the most reader votes in the first round of competition (Things I Like to Do for Free) and won $100. In the grand prize round against other $100 winners, Rebecca’s photo again garnered the most votes, and won an additional $1,000. "I'll definitely be saving the money in my Kinecta Youth Account to put toward college," she said. Kinecta Director of E-Commerce and Creative Services Shannon Doiron used the C-Note photo contest to help get young members involved in the credit union. “We’re trying to establish our website as a focal point, a primary communication channel, with more features and dynamic, age-segmented marketing. Googolplex allows us to add topical content regularly without us having to do everything," he said. "If we didn’t provide it, we’d have a lot less activity on our website," Doiron said. "When we pass young members off to Googolplex, they get what we want to give them to make good connections and build relationships for the future.” Other $100 contest winners and finalists for the $1,000 grand prize included:
* Tanya, 16, Heartland CU, St. Paul, Minn.; * Sammi, 14, Dairyland Power CU, La Crosse Wis.; * Alston, 14, First Choice CU, West Palm Beach, Fla.; * Alex, 13, Fox Communities CU, Appleton, Wis.; and * Lauren, 17, Cessna Employees CU, Wichita, Kan.
Googolplex’s "C-Note" photo contests are open to U.S. residents of the 50 states and the District of Columbia who are age 13-19 years old at time of entry. March 1 is the deadline for entries in the current contest (I Had to Look Twice) and to vote on finalists for the previous contest (My Hopes for 2009).