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Data-breached TJX Cos. reports profits up 47

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FRAMINGHAM, Mass. (2/21/08)--TJX Cos., the Massachusetts discount retailer whose data breach last year became a wakeup call for the nation on identity theft, reported a 47% increase in its fourth-quarter profit over the same period a year ago. The company attributed the boost to improvements in inventory, cost controls and marketing (Associated Press via The New York Times Feb. 20). It also announced it cut the funds set aside for legal reserves by $19 million because of lower-than-expected costs related to the breach. The reduction means TJX's pretax charges from the breach totaled $197 million for the year. The breach compromised more than 100 million credit and debit cards, according to court documents. It stuck credit unions and other financial institutions and card issuers with the costs of replacing cards, monitoring fraud and taking fraud-prevention measures. It also prompted lawsuits and legislative measures related to data breach reimbursement and protecting consumers' information. TJX recently settled some lawsuits brought by banks, and a tentative settlement with consumers is pending a judge's approval. Other litigation and investigations are pending, said the Times. TJX's profits for the fourth quarter ending Jan. 26 rose to $301.1 million, or 66 cents per share, compared with $205.4 million or 43 cents per share during same period a year ago. The company's adjusted results are slightly more than Wall Street estimates, but the company forecast that its first-quarter 2008 profit will be slightly below expectations. TJX's full fiscal year profit was up almost 5% to $771.8 million from the $738 million in 2006. The company, based in Framingham, Mass., owns 2,563 stores, including T.J. Maxx and Marshalls.

Washington league task force seeks history

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FEDERAL WAY, Wash. (2/21/08)--The Washington Credit Union League (WCUL) Historic Preservation Task Force is seeking interviews and artifacts to display in the league’s gallery to celebrate WCUL’s 75th anniversary. “Preserving Washington State’s credit union heritage is a unique and very important project,” said WCUL President/CEO John Annaloro. Items such as photographs, newspaper clips and marketing materials will be displayed in the league’s gallery and will be accessible on a dedicated website. “Probably the most difficult aspect of this project will be convincing people to come forward with their stories,” said WCUL President Emeritus Bruce Rouillard, who chairs the task force. “As we commence work on these interviews, we anticipate that if will be as it we are reconnecting with old friends.” For more information, contact Allison Mattich at amattich@waleague.org or 800-552-0680. All items will be duplicated and returned to the contributor.

Mica to AP People need rainy day funds

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WASHINGTON (2/21/08)--People need to save more of their income to create a rainy day fund or backup, Dan Mica, president/CEO of the Credit Union National Association, told the Associated Press yesterday. Forbes published the item Wednesday. The article focuses on “America Saves” week, a national campaign starting next week that aims to help people save more--with this year’s focus on saving automatically. Numerous reports of people missing credit card payments and falling behind on mortgages should drive home the point that more savings is needed, Mica said in the article. Having money automatically transferred into savings means “you never miss it,” Mica said. Once that account is started, consumers can consider increasing their level of savings every time they receive a raise. “And anytime you get some extra money, like a tax refund or a tax rebate, a certain amount should go into savings, too,” Mica said. More than 1,000 government agencies, corporations and nonprofit groups have combined efforts in the America Saves program with a goal of increasing consumers’ understanding the need to save for emergencies, for a down payment on a home, to educate children or to finance retirement.

Texas leagues political poll gets national attention

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FARMERS BRANCH, Texas (2/21/08)--The Texas Credit Union League (TCUL) Poll of Texas Primary Voters has garnered major press attention nationwide since its release last week. The strategy of conducting a Republican and Democratic primary voter poll and releasing it Feb. 14 “was a smash success” wrote Buddy Gill, TCUL chief advocacy officer, in a league publication, The Advocate (Feb. 19). The poll was mentioned on NBC’s “Meet the Press,” MSNBC’s “Countdown” with Keith Olbermann, CNN’s “HardBall” with Chris Matthews, and CNN’s “Real Politics,” Gill told News Now. The poll also received extensive press coverage in Texas, ranging from TV and radio to newspapers and blogs, Gill said. TCUL commissions primary and general election voter surveys every two years on politics and key issues for credit unions(News Now Feb. 18). For poll results, use the link.

Registration opens for CU Development Education

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MADISON, Wis. (2/21/08)--Registration is open through March 17 for the first 2008’s two Credit Union Development Education (DE) classes--to be held April 3-9 at the University of Wisconsin-Madison. “DE training is open to everyone from new employees and volunteers who need a credit union orientation, to seasoned executives who need to recharge,” said Tom Decker, program director. “The interactive six-day class focuses on cooperative principles, social impact, and credit union uniqueness as a competitive advantage.” Graduates have cited many personal benefits, such as:
* Trainees acquiring skills in public presentations, credit union outreach initiatives, problem solving and technical assistance; * Graduates earning certification as Credit Union Development Educators (CUDEs), a networking group of 434 active volunteers nationwide and in 10 other countries; and * Graduates returning to their jobs with a new understanding that local issues may be global, and that credit unions can improve the lives of people everywhere by working cooperatively.
“The DE program is worthwhile to become involved in, regardless of how long you’ve been in the credit union movement,” said Mary Cunningham, president/CEO of USA FCU, San Diego, and a graduate of the DE Class of 1997. “Even after many years of loving credit unions, I was forced to step outside of my comfort zone and explore a whole new world of cooperatives. Through doing so, I’m re-committed to be sure I never compromise the credit union ideals in my organization.” Credit union and cooperative leaders with questions about Development Education can call Decker at 800-356-9655, ext. 4374, or e-mail tdecker@ncuf.coop or kroosmalen@ncuf.coop. The National Credit Union Foundation is the primary sponsor of the DE program. Support is provided by the World Council of Credit Unions, the Credit Union National Association, CUNA Mutual Group, and state credit union leagues and foundations.

Paper outlines things to consider in offering gift cards

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DES MOINES, Iowa (2/21/08)--Credit unions shouldn’t wait another year to offer gift cards, even though the busiest holiday season has just passed, says a new white paper. The white paper, released Tuesday by The Members Group (TMG), covers a number of topics that include how to evaluate a gift card program, as well as how to market a program in other buying seasons. TMG is a card solutions provider for credit unions. All gift cards are not the same, the paper asserts, and credit unions should keep in mind a few factors when evaluating gift card programs:
* Reseller vs. Issuer. A reseller program is typically a generic solution that offers a limited selection of plastics, as well as opportunity for revenue. An issuer program involves more resources, but there is more opportunity for reward; * Interchange Income. How much is coming back to the credit union? Again the difference may be in choosing between a reseller and an issuer model; * Branding. When and how will the logo and credit union name be visible on the card? Many programs offer generic cards that may or may not permit a credit union to put its logo on the card; * Marketing support. Because a credit union’s resources are at a premium, look at what type of support the vendor offers; and * How does the overall program grow in the future?--Does the gift card partner provide both a reseller and issuer model? Does the vendor offer other types of products a credit union might choose to offer to its members?
“We continue to be surprised by the number of credit unions waiting for the right time to get into the gift card market,” said Joe Falk, TMG director of product development. “The right time really is now, even though sales will be significantly less than the holiday season that stretches from late November through the first of the year. “Credit unions need to establish their footing in the market as a place to get a great gift card product,” he continued. TMG understands that with limited resources available to launch new products, credit unions may be reluctant to enter the market before a product is established, Falk said. “With competition coming not only from banks, but also retailers, it is important for credit unions to stake out their market now,” he added.

Study Market volatility to change consumer lending

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NEEDHAM, Mass. (2/21/08)--Credit unions and other consumer lenders must remain on alert to the full ramifications of the subprime mortgage meltdown, which are yet to be felt, says a new study. "Market volatility will remain a fact of life among U.S. consumer lenders in 2008," said the Needham, Mass.-based TowerGroup, which identified top business drivers and trends for consumer lending for 2008. The subprime fallout has lowered financial performance expectations for many lenders but also offers opportunities for those that adapt and plan ahead, said the study. Because the loan market is volatile, consumer lenders are in "a defensive mode," with revenue and profitability expected to decline across most consumer lending business lines, said Bobbie Britting, senior analyst, TowerGroup's Consumer Lending practice. The consumer lending industry must "refocus and begin taking steps toward a broad reformation of credit," said Britting. Institutions must focus their organizational, operational, financial and technology operations on addressing gaps that contributed to the crisis and prevent new ones, said TowerGroup. Paying attention to key business drivers and reforming outdated strategies will be critical to providing the types of products consumers want and can understand. TowerGroup noted these business drivers for consumer lending in 2008:
* Topline metrics (lending volume, revenue, profits, home sales, home prices, auto sales and college costs) will worsen this year; * Lenders will face increasing regulatory burdens and will need the right information technology systems to adjust rapidly. Technology, especially core lending systems, will have a major role in enabling consumer lenders to remain viable. * Institutions will need a broad credit reformation encompassing product, service and channel innovation; improved risk assessment and loss mitigation; and increased focus on the member/customer. * Fundamental business actions by lenders will include: integrated systems to understand better households, with a holistic view of their relationship with the financial institution; better use of data to develop successful products; and automation to engage in these activities consistently, compliantly and cost effectively. * Innovation, integration, transformation, automation and optimization are no longer buzz words, but represent key initiatives supporting credit reformation. * A potential wildcard: any new crises in other types of highly leveraged credit instruments that would exacerbate consumer credit market volatility globally and again reshuffle lenders' strategic responses.
"A credit reformation is needed across all areas of consumer lending, including mortgage lending, loan securitization and loan servicing," said David Hamermesh, senior analyst, TowerGroup's Consumer Lending practice, and co-author of the report.

No member data compromised in waterpower breach says CU

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LOS ANGELES (2/21/08)--No member data at the Los Angeles Department of Water and Power Community CU has been compromised as a result of a stolen computer from a city department, according to the credit union. “Our members are safe,” Linda Heidtke, director of marketing at Water and Power Community CU, told News Now. A computer from the Los Angeles Department of Water and Power (DWP) was stolen from an outside vendor, Systematic Automation, last week. The computer contained personal information on the department’s roughly 8,700 employees. “Initially a lot of people were worried,” Heidtke said. The department sent out a notice to its employees stating what had happened, causing some to panic, she added. The credit union beefed up its security, including extra staffing at branches on Saturday in case a large number of members arrived with questions. Water and Power Community CU also offered additional password protection for members’ accounts and offered members identify theft protection services. Unrelated to the computer theft, Water and Power also recently changed its online banking website. Instead of account numbers, members are required to use log-ins of their choosing. The credit union was prepared to handle a potential breach, Heidtke said. She advised members to take advantage of fraud protection. “Be aware,” she advised. “Everyone needs to be on high alert.”

CU System briefs (02/20/2008)

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* MAUMEE, Ohio (2/21/08)--Sun FCU launched its first Youth Advisory Board earlier this month. The group, ages 14 to 20, joined Melissa Gregg, senior marketing communications specialist, and Maggie Engel, executive assistant, for dinner, an overview of the board's purpose, a review of Sun Federal's products and brainstorming. The board will meet every other month in 2008 and will communicate electronically in between. From left are: front row, Laura Thomaswick, Toledo; Nicole Maher, Perrysburg; and Elizabeth Eddy, Toledo; and back row, Andrew Mizer, Toledo; Zach Hanley, Maumee; and Rex Powers III, Toledo. Not pictured are Mattie Hanley, Maumee, and Jonathan Hall, Oregon (Photo provided by Sun FCU) … * PEWAUKEE, Wis. (2/21/08)--The Wisconsin Credit Union League announced two new hires and five promotions. Michelle Haslam has been hired as compliance specialist. She was previously vice president, compliance officer at West Bend Savings Bank. Melissa Wittig is the new member communications specialist. She previously was editorial assistant at the Milwaukee Journal Sentinel for more than six years. Promotions included: Joanne Whiting, to executive vice president/chief advocacy officer; Mary Bliss to executive vice president/chief operating officer; Tom Liebe to vice president of government affairs; Jill Weber to director of member solutions; and Chad Helminak to public relations specialist. * BOSSIER CITY, La. (2/21/08)--Rod Taylor has been chosen as
president/CEO of Barksdale FCU, succeeding Arno Easterly, who will retire after serving as CEO for nearly 24 years. Taylor has been executive vice president and chief operations officer at the nearly $700 million asset credit union for the past 16 years, since 1992. He began his credit union career in 1986 with a position at OSU FCU. and has served in the financial industry since 1983. Easterly has been in the credit union business for 48 years. Prior to becoming CEO at Barksdale FCU, he was president/CEO of the Campus FCU at Louisiana State University. Easterly is past chairman and an original incorporator of Credit Union Cooperative branching, is a director and past chairman of the Southwest Corporate FCU, and served on the Credit Union National Association's Subcommittee on Supervision and Examination. He has won numerous awards, including the Louisiana Credit Union League's Distinguished Service, Political Action and Executive of the Year recognition … * CHAMPAIGN, Ill. (2/21/08)--E.J. Donaghey has been named president of the University of Illinois Employees CU, based it Champaign, effective Feb. 11, the credit union announced Tuesday. He has been executive vice president and chief operating officer of Hawthorne CU, Naperville, for the past five years. Donaghey previously served as vice president of strategic planning and business development for Baxter CU, Vernon Hills. Longtime president Charles Rutan resigned last summer. Greg Anderson served as interim president (The News-Gazette.com Feb. 20) …