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CU System Archive

CU System

Breach at L.A. waterpower department affects 8300

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LOS ANGELES (2/20/08)--About 8,300 Los Angeles Department of Water and Power (DWP) employees could be susceptible to identity theft after a computer containing their personal information was stolen from an outside vendor last week in Fullerton. H. David Nahai, DWP general manager, sent a letter about the theft and potential data breach to employees last week. The theft took place at Systematic Automation--the vendor that DWP had contracted with to print retirement booklets for employees (Los Angeles Daily News Feb. 16). The stolen data included names, Social Security numbers, birth dates, identification numbers, salaries, work locations, health benefits and insurance plan coverage, the newspaper said. Because the data is encrypted, the thieves may not be able to get at it, Nahai added. The department is taking steps to protect the employees’ data, including subscribing to a credit monitoring service. It also notified Water and Power Community Credit Union, which serves DWP employees, the newspaper said.

No buzz yet on Beehive conversion vote

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SALT LAKE CITY, Utah (2/20/08)--The membership vote results related to the proposal by Utah-based Beehive CU to convert to a mutual savings bank have not been announced yet. Voting began in late January, with a special membership meeting held on Feb. 13. The credit union said at the meeting it would announce results this week. The state-chartered credit union announced the conversion proposal last March. It applied for a bank charter with the Office of Thrift Supervision on Sept. 10, 2007 (News Now Oct. 5, 2007). The credit union says conversion would allow it to offer more branches, larger business loans and more competitive financial services. A state law passed in 1999 prevents the credit union from building another branch in Utah County. At a conversion meeting last year, the credit union's board told members the state's banks have attempted to limit credit unions' service and take away their tax-exempt status. Scott Jorgensen, CEO of the credit union, has told local newspapers there are no plans to take Beehive public after a conversion.

ITodayI host buys earrings from BizKid participant

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WASHINGTON (2/20/08)--Today Show co-host Meredith Vieria purchased a pair of earrings from BizKid$ participant Christian Wright, a guest on her morning television show Monday. Wright, from Seattle described how his successful jewelry design and marketing business helped him purchase a motor bike. The BizKid$ TV show was introduced, and a short clip was shown to viewers (Life is a Highway Feb. 19). On the show, Wright advised parents to use “tough love” and not to bail out their kids when financial difficulties arise, since risk is an important element of any business. Wright also advised kids to conduct their businesses online, since it is the best venue to identify and serve the largest number of potential customers. Customers’ needs also can be fulfilled most efficiently online, he added. BizKid$, a TV series underwritten by America’s Credit Unions to teach children about money, is scheduled to air on more than 290 PBS stations in 47 states (News Now Feb. 18). The show is produced in association with Junior Achievement Worldwide and WXXI Public Broadcasting. Funding is led by the National Credit Union Foundation and the Washington Credit Union Foundation.

Kansas blog Banks suppress consumers choice

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TOPEKA, Kan. (2/20/08)--A blog by a credit union member in Sunday's online Topeka Capital Journal suggests that banks are trying to limit consumers' choices by pressing for a Kansas state law that limits the field of membership of credit unions. Glenda Overstreet, a volunteer in the community, wrote that she went to her credit union to conduct a transaction and was asked if she'd be willing to sign a petition against a bill banks are sponsoring in the state legislature: Kansas S.A 17-2205. The bill would limit credit union organizations to groups having a common bond of occupation or association or to groups in a well-defined neighborhood, community or rural district. She equated the choice as one of whether "to support Kansas credit union members and owners in preserving the right to select the financial institution of one's choice and to not support the banking industry's legislative efforts to eliminate consumer choice. "I signed immediately and asked for a few more forms to get to friends and relatives so they could sign as well," Overstreet wrote. Although she's not against banks, she said, "I'm against any effort that would restrict the freedom of choice because I believe competition keeps companies focused on ensuring quality customer service." Overstreet urged readers to support the Kansas Credit Union Association-backed House Bill 2676, in which credit unions define who they are able to serve. HB 2676 indicates that membership of a credit union may include any combination of one or more groups of both large and small membership having common bonds of occupations, associations or geographic areas. Geographic areas in the bill mean "all or portions of one or more counties." Many people believe "many banks, with the exception of a few, don't meet the needs of the community when it comes to providing financial alternatives for small-business loans, emergency personal loans or financial matters that help meet low-income or working-poor challenges," Overstreet said. Use the resource link to access the full article.

Phishing continues to be problem in Quad Cities

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NAPERVILLE, Ill. (2/20/08)--Internet scammers, or phishers, are getting more sophisticated in their fraud attempts as evidenced by activity in the Quad Cities region, according to an area credit union and the Illinois Credit Union League. In the past few weeks, members of the $590 million asset, Moline, Ill.-based IH Mississippi Valley in the Quad City region--Davenport, Iowa; Bettendorf, Iowa; Moline/East Moline, Ill., and Rock Island, Ill.--have been targeted by scams originating in Korea (Quad Cities Times Feb. 18). Credit union members and staff were quick to alert each other in each instance of a scam, said Laura Ernzen, IH Mississippi vice president of marketing. One scam told members that the credit union had suspended their accounts, while another attempted to acquire members’ debit card numbers by asking for confidential information in return for an offer of $50 to $80 to take an online survey, Ernzen said. Generally, there is a five-to-10-day period when a specific financial institution might be targeted, with scammers flooding the area financial institutions, she said. If one fake website gets shut down, the scammer might resort to a phone version of the same scam, Ernzen added. Illinois has 455 credit unions serving more than 2.7 million members, said William Willie, public relations coordinator for the Illinois Credit Union League. The scams are getting more sophisticated and more frequent, he added. Member credit unions can help identify the guilty parties when they become the target of an Internet scam. The Illinois league’s information technology department usually can determine where the bogus e-mail is being hosted, Willie said. However, by the time the league finds the scammers, they usually have moved to another host site to continue sending out additional e-mails, he added.

Former Miss Americas affordable loan is from a CU

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NEW YORK (2/20/08)--Former Miss America Kate Shindle now owns a home in East Harlem thanks to her credit union, Actors FCU in New York. Actors FCU serves members working in the theater industry. Shindle, who earned the title of Miss America in 1998, makes her living acting on Broadway. She joined the credit union in 2006 to get a loan for a 2003 Thunderbird (New York Daily News Feb. 18). Shindle had used Citibank in the past to get mortgages, but after conducting online research, realized that her credit union offered the lowest rates. When she decided to buy a two-bedroom apartment in East Harlem for $465,000, she asked Actors for a loan, the newspaper said. Like many of the credit union’s borrowers, Shindle got an adjustable-rate mortgage with a fixed rate for the first five years. She put down $200,000 for a down payment after selling her previous apartment, and also paid off the balance of her car loan--about $12,000, said the Daily News. Though the city of New York required Shindle to show several documents to verify her income, the credit union’s approval was much simpler. The credit union was “laid back” and understood artists’ incomes, she told the newspaper. Actors FCU has $90 million in assets.

NYC resolution favors municipal deposits for CUs

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LATHAM, N.Y. (2/20/08)--A resolution introduced before the New York City Council calls for the state legislature to pass a measure allowing credit unions and other savings financial institutions to accept municipal deposits. Under current state law, only commercial banks can accept and secure deposits from municipal corporations, said the New York State Credit Union League. Queens Council member and Council Finance Committee Chair David Weprin (D) introduced the resolution and spoke in its support, emphasizing the need for elected officials statewide to seek depository choice. "There is no reason why a credit union shouldn't be a part of the competition for municipal deposits," he said. "If commercial banks can thrive as they have for years, why shouldn't a credit union reap the same benefits of this competition?" The resolution is similar to ones approved by the Albany, Syracuse and Ithaca Common Councils. "By retaining local money in our respective communities through municipal deposits, credit unions will be adding funds to the lending pool," said Alan Kaufman, CEO of Melrose CU, Briarwood. "In so doing, credit unions will be helping to reduce the cost of funds, making it possible to offer lower loan rates while creating more affordable loan products for our communities," he added. The resolution will be discussed soon at a public hearing of the City Council Finance Committee. Four municipal deposits bills have been launched in the state Assembly and three in the state Senate. The league said it would continue to work behind the scenes to introduce similar resolutions in other cities across the state as part of its strategy of securing visible support for municipal deposits from local elected officials and encouraging passage of the municipal deposit amendments to current banking law.

CU System brief (02/19/2008)

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* EAST ST. LOUIS, Ill. (2/20/08)--Three men have pleaded guilty and are awaiting sentencing for their roles in a July 26, 2007, robbery of an armored car outside the Alton, Ill., branch of Olin Community CU. Jermaine McIntyre pleaded guilty Friday to two felonies in the robbery. Earlier, co-defendants Herbert Williams and William Giles III entered guilty pleas to the same charges. A fourth defendant, Lamorris Wilford, will be in court Friday. Police said McIntyre, an employee of Garda Security Service, gave his accomplices information and uniforms to use in the robbery, which netted $195,000. The actual guards were armed but no shots were fired (Associated Press Newswires and The (Alton) Telegraph Feb. 19) …

Wisconsin CUs boost reserves weather slowing economy

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MILWAUKEE (2/20/08)--Despite an economic slowdown, Wisconsin credit unions stayed healthy the past year by boosting their assets, according to a Wisconsin Office of Credit Unions financial report. Assets grew $887 million, or 5%. Net worth increased by $102 million, an increase of 5.92%, and total net worth was $1.9 billion. Earnings increased to $113 million, from $107 million the previous year. Credit unions prudently increased their reserves by 20%, which would offset any potential loan losses due to the economy, Suzanne T. Cowan, Office of Credit Unions director, told the Milwaukee Journal-Sentinel (Feb. 19). Loans increased to $13.3 billion, an increase of 4.8% from 2006. Savings grew slightly more rapidly than loans during 2007, so the loans-to-savings ratio declined to 95.9% compared with 96.6% in 2006. Delinquent loans were at 1.27% compared with 1.09% in 2006. Loan losses were at $52.1 million, up from $43.3 million the year before. Provisions for loan loss expense increased to 0.31% from 0.28%. Wisconsin’s credit unions are healthy and continue to perform well based on the information reported at year-end 2007, Cowan concluded in the report.

Houston FCU buys three CU service centers

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SUGAR LAND, Texas (2/20/08)--Houston FCU announced Monday that it has purchased three Texas Credit Union Service Centers in the greater Houston area, which were previously owned by Credit Union Resources Inc. The closing date was Feb.18. Integration plans are underway and are scheduled to be completed soon. “The operation of these facilities will continue as they are today--serving members from all credit unions affiliated with the Credit Union Service Center network,” said Chris Choat, Houston FCU president. The $300 million asset, Houston-based credit union has 12 combined locations.

CU helps actors--even former ones--with loans

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NEW YORK (2/20/08)--Actors FCU in New York is determined to make its members homeowners--even though most of them have sporadic incomes and do not make more than $100,000 a year. The $90-million-asset Actors FCU caters to theater industry employees, who often have a hard time getting loans from banks because of their changing incomes. But the credit union understands--its mortgage underwriter, Paul Cole, used to work as an actor (New York Daily News Feb. 18). “Law and Order” star Jerry Orbach was the credit union’s first mortgage borrower. Orbach, who died in 2004, got a loan for a West Side home in 1967, when he was acting in “The Fantasticks” on Broadway. Some of the credit union’s borrowers include Donna McKechnie, who played Cassie in “A Chorus Line,” and Anika Noni Rose, who appeared in “Dreamgirls” and is now starring as Maggie the Cat in Broadway’s “Cat on a Hot Tin Roof.” When approached by a potential borrower whose only source of income is a play, Cole reads reviews and checks ticket sales to see if the show has potential for a long run. He also examines two years’ worth of account statements and the borrower’s housing costs. When analyzing credit reports, Cole focuses on behavior patterns instead of scores, he told the newspaper. If a borrower is turned down because of high debts or other issues, Cole tells the borrower to come back when the financial issues are straightened out--which takes about a year. Actors FCU officials do not approve a mortgage unless a borrower can handle it, because the credit union must protect its assets, the Daily News said. Many of the credit union’s members are laid off when their shows end. Members do not always have steady employment, but they always find ways to make ends meet--such as temping or working odd jobs, Cole told the newspaper.

Eight accused in scam against CU in Florida

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TAMPA, Fla. (2/20/08)--Eight Florida people are accused of running a scam that bilked reportedly more than $90,000 out of Suncoast Schools FCU. Three have been arrested and one turned herself in to authorities. The arrest followed a lengthy investigation into a complicated fraud scheme that targeted the $5.8 billion asset, Tampa-based credit union and several of its branches ( News-press.com Feb. 19). The scam involved a member opening a legitimate account at the credit union. Then a partner would deposit a fraudulent or stolen check into the account and immediately withdraw money from that account with the accountholder’s debit card. The two would split the proceeds. When the credit union discovered the check was stolen or fake, the accountholder would claim the debit card was lost or stolen. “We are actively working with law enforcement on this case, and we have a no-fraud tolerance policy,” Melva McKay-Bass, Suncoast senior vice president of member service operations, told News Now. “We are taking this case extremely seriously and have a great relationship with local law enforcement. We have a highly trained staff diligently working to close this case. We have been working on this case for almost two years.” Because of the ongoing investigation, she could not verify the amount stolen from the credit union, McKay-Bass said. Kimberley Denise Neal, 22, surrendered to authorities Monday night, said the Florida Department of Law Enforcement. She is charged with one count of scheming to defraud more than $50,000, a first degree felony, and one count of conspiracy to commit a scheme to defraud more than $50,000, a second degree felony. State investigators arrested three others Friday, and are looking for four more suspects. Arrested were: Klesha Day, 19, Cape Coral; Tequila Marie Ferguson, 19, Fort Meyers; and Farrah Shaneka Sturgis, 26, Jacksonville. Each was charged with scheming to defraud more than $50,000 from the credit union--a first degree felony with a maximum 30-year sentence. Warrants are still out for the four other suspects: Sonya Lavette Wilbon, 30, and Yolanda Kendrick, 30, both of Lee County; Joseph Lamar Temple, 18, Lakeland; and Bobby Gandy 31, who is serving a term in a Florida prison on an unrelated charge.