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Federation weighs in on corporate policy issues

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WASHINGTON (2/25/09)--The board of the National Federation of Community Development Credit Unions adopted resolutions supporting measures to sustain the credit union system, enhance the viability and capacity of low-income credit unions, and aid low-and moderate-income families hard hit by the economic crisis. The resolutions were made during a board meeting this week in Washington, D.C. "We are concerned about the consequences of reduced net worth and return on assets (ROA) that would necessarily result from the measures that the National Credit Union Administration (NCUA) has proposed," said federation President/CEO Cliff Rosenthal. To mitigate those effects, the federation is supporting these legislative and other proposals:
* Corporate credit unions should gain direct access to the Central Liquidity Facility for liquidity and capital; * Troubled Asset Relief Program (TARP) funds should be made available to the credit union movement; and * Share insurance premiums should be spread out over as long as eight years, on parity with other financial institutions.
"These actions will help all credit unions," Rosenthal said. "However, it is important to recognize that small and low-income credit unions are especially vulnerable during this crisis." Last year the pace of liquidations and mergers of low-income credit unions doubled and far exceeded that of the rest of the credit union industry. "If this trend continues," Rosenthal said, "the capacity our credit unions have painstakingly built up over the last 30 years will be dismantled, leaving many low-income communities with little or no access to affordable financial services." The federation expressed particular concern about the potential for a drop in net worth of credit unions resulting from the corporate stabilization measures. It is proposing that NCUA modify the policies of the Community Development Revolving Loan Fund (CDRLF) to enable it to make loans to low-income credit unions for secondary capital. Access to additional sources of secondary capital would help credit unions meet Prompt Corrective Action (PCA) capital standards, bring in additional deposits and expand lending in low-income communities, the federation said. "We are asking NCUA to take the necessary regulatory or policy steps to utilize the CDRLF for secondary capital loans," said Rosenthal, adding that the proposal would involve no additional taxpayer liabilities or expense.' The federation board also endorsed the "Helping Families Save Their Homes in Bankruptcy Act of 2009" (S. 61/H.R. 200). "Because this bill only applies to mortgages where foreclosure is imminent and where the borrower has requested a modification," Rosenthal said, "we believe it is a reasonable proposal."

Erie FCU earmarks 40 million for auto loans

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ERIE, Pa. (2/25/09)--Erie (Pa.) FCU has earmarked $40 million this year for auto loans. Because he thinks a shortage of money for car loans is a big reason for auto sales dipping in 2008, Erie CEO Norb Kaczmarek is pledging the largest amount the credit union has ever set aside for auto loans (Erie Times News Feb. 20). “It’s not going to be invested long-term [and] it’s not going to be put into the mortgage market,” Kaczmarek told the newspaper. “It’s set aside for [car loans]. “I just think there are a lot of people who aren’t lending anymore,” Kaczmarek added. He expects the $259.3 million asset credit union’s auto loan business to grow despite a significant slowdown in the auto industry, due to fewer sources of money being available to consumers, Kaczmarek told the paper.

Nominations open for NACUSO awards

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NEWPORT BEACH, Calif. (2/25/09)--The National Association of Credit Union Service Organizations (NACUSO) is accepting nominations for the 2009 CUSO Collaboration and Innovation Award from NACUSO members. The award will be presented to the winning CUSO on May 4 during the 2009 NACUSO Annual Conference in Las Vegas. Deadline for nominations is at the close of business on March 27. For more information on general rules, criteria and submission on nominations, visit the award link.

MarylandD.C. CUs in Roll in the Dough campaign

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BALTIMORE (2/25/09)--Five Maryland and District of Columbia credit unions are promoting the Roll in the Dough savings campaign. The Maryland and District of Columbia Credit Union Association (MDDCCUA) is a community partner in the program. The two-week campaign, which began Monday and will end March 7, aims to stimulate the public to initiate or increase their savings to reach their personal goals. Individuals can visit one of 52 participating locations and enter a free drawing that will award a $1,000 certificate of deposit, said MDDCCUA (FOCUS Newsletter Feb. 23). Participants include Andrews FCU, Clinton, Md.; FedChoice FCU, Lanham, Md.; HEW FCU, Alexandria, Va.; Money One FCU, Largo, Md.; and MECU of Baltimore. Maryland Gov. Martin O'Malley will proclaim the two weeks as "Maryland Saves Weeks" to bring savings awareness to all Marylanders. The campaign will run in Maryland, D.C., parts of Virginia and Pennsylvania. Other prizes include eight $100 prizes and other giveaways. The event is tied to America Saves Week, which ends Sunday.

Wisconsin league warns of scam targeting small biz

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PEWAUKEE, Wis. (2/25/09)--Scam artists again are taking advantage of current economic uncertainty with a new scam attempt targeting small businesses. The Wisconsin Credit Union League has sent a warning to credit unions in that state so they can alert members. The scam involves letters printed on what appears to be U.S. Small Business Administration (SBA) letterhead and claiming to be from the SBA. The letters request financial account information to qualify the small business for federal tax rebates under the Economic Stimulus Act. However, SBA has not authorized these letters. The scam serves as a reminder to small businesses and consumers that they should be especially wary of communications--whether by phone, e-mail or mail--that ask them to update, validate or confirm account information, said the league. The league sent the warning because many members use credit unions for their business loans or other financial services “Typically you’ll see scam artists posing as financial institutions trying to trick account holders into divulging personal information," said league President/CEO Brett Thompson. "In this case, the scammers are just trying to reach members of a financial institution using a different angle. But no legitimate business--including Wisconsin credit unions, the League or the SBA--would ever solicit financial account information via phone, mail or email.” Businesses receiving the letter should not respond but instead report the letter to SBA’s Office of Inspector General by calling 800-767-0385 or by e-mailing OIGHotline@sba.org.

Banking Commissioner testifies on N.J. CUs strength

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TRENTON, N.J. (2/25/09)--New Jersey Commissioner of Banking and Insurance Steven Goldman noted the strength of the state's credit unions when he testified at a legislative committee hearing on the global economic crisis and the condition of banking and financial services industry in the state. During his testimony before the New Jersey Assembly Financial Institutions and Insurance Committee, Goldman commented that "New Jersey state-chartered credit unions have a combined net worth ratio--that is, ratio of net work to total assets--of 13.83%, which is well above the minimum capital ratio of 6%," said the New Jersey Credit Union League (The Weekly Exchange Feb. 16). Committee Chairman Gary S. Schaer (D-36) noted that the state "is probably in better shape than many of us have thought and understood." Also testifying were representatives from the Federal Reserve Bank of New York, New Jersey Economic Development Authority, New Jersey Bankers Association, and WISS & Co.

New Jersey state funds legislation includes CUs

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TRENTON, N.J. (2/25/09)--A New Jersey legislator has introduced state legislation that would extend the range of investment vehicles used by the New Jersey Cash Management Fund and state pension fund moneys, provided the Federal Deposit Insurance Corp. (FDIC) or the National Credit Union Share Insurance Fund (NCUSIF) guarantees the obligation. Existing statutes already grant the director of the New Jersey Division of Investment to place fund moneys in these investment vehicles, but they do not recognize NCUSIF insurance, says the New Jersey Credit Union League (The Weekly Exchange Feb. 16). The legislation (S-2552), introduced by Senate Majority Leader Steve Sweeney (D-3), would extend for up to one year the range of vehicles allowed for investments of the state funds that are intended for investment in fixed-income, debt securities and non-convertible preferred stock. Similar to municipal deposits legislation that Sweeney also has sponsored, the new measure marks the second time the state has proposed that credit unions be given equal footing with FDIC-insured depositories for state and local government funds. Sweeney said he hopes to spur economic growth by creating additional lending capacity among the state's depository institutions, enabling them to make more and cheaper capital available to small business and individual borrowers.

Ohio league board positions filled

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COLUMBUS, Ohio (2/25/09)--The Ohio Credit Union League’s (OCUL) Boards of Directors elected their 2009 officers and filled positions during the February quarterly meetings (eLumination Feb. 18). Positions filled were:
* Jennifer Ferguson, Bay Area CU, Oregon, was elected league chair; * Tim Boellner, AurGroup Financial CU, Fairfield, vice chair; * Barry Shaner, Directions CU, Toledo, treasurer; and * Stan Barnes, CSE FCU, North Canton, secretary.
On the OCUL Services Corp. board:
* Tamlyn Straight-Schervish, Unity Catholic FCU, Parma, was elected chair; * Bill Burke, Day Air CU, Kettering, vice chair; * Barry Shaner, Directions CU, Toledo, treasurer, and * Phil Meyer, Ohio University CU, Athens, secretary.
On the Ohio Credit Union Foundation’s Board of Trustees:
* Kathy Kanipe, Parish FCU, Toledo, was elected chair; * Bill Herring, Cincinnati Central CU, vice chair, * Sonja Delaney, Midwest Community FCU, Defiance, treasurer, and * Tom Furrey, Western CU, Columbus, secretary.

Oklahoma CUs new branches planned before economy sank

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TULSA, Okla. (2/25/09)--Three Tulsa, Okla.-based credit unions have recently opened new branches, which were planned a year-and-a-half to two years ago, but now expansion should slow as the economy has slowed down, according to a local newspaper. The $740 million asset Tulsa Teachers CU opened its 11th branch last month; the $423 million asset Tulsa Federal Employees CU opened a branch last month and expects to start construction on another later this year; and the $89.3 million asset Western Sun FCU plans a fourth location and hopes to absorb another credit union and turn it into a branch in April (The Journal Record Feb. 24). The credit unions’ efforts--during a time when many businesses have cut back or closed--represent positive growth steps and statements of continued faith in their business plans, the newspaper said. Tulsa Teachers CU’s new 3,000-square-foot Claremont, Okla., branch is in a rented space costing $367,000. The credit union has changed the way it intends to continue to grow branches, Kristi Brook Cohea, vice president of marketing and member relations, told the paper. Tulsa Teachers aims to run “very mean and lean,” operating with as small of a staff as possible. It will determine whether it would be better to occupy vacant buildings in the area instead of building new spaces, she added.

IBaltimore SunI Couple with credit woes should join a CU

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BALTIMORE (2/25/09)--A couple who is experiencing financial difficulties should join a credit union for help, consumer advocates said in a Baltimore Sun personal finance column Tuesday. Two years ago, Bank of America (BofA) gave Brian DeCunzo and his wife a $40,000 unsecured line of credit--two-thirds of their annual income. However, BofA recently lowered their credit limit to $24,300. Now the couple is maxed out. A bank official told them their credit limit was lowered because their debt level had gone up, the newspaper said. However, DeCunzo told the paper they have less debt now than when they first took out the line of credit. While a $40,000 unsecured line of credit is very generous, the bank’s sharp cut available credit was “heavy-handed,” consumer advocates told the paper. The DeCunzos should join a credit union to obtain more favorable credit terms, the advocates suggest.

In hard times people turn to co-ops CUs

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PORTLAND, Maine (2/25/09)--When economic times get tough, people often turn to cooperatives, including credit unions, according to an article in the Portland Press Herald Monday. In addition to credit unions, cooperatives also can include local grocers and food-buying clubs, and cooperatives to provide housing or to provide electricity, the article said. When difficult economic conditions arrive, consumers are seeking security and the ability to combine resources for savings--whether it is financial or otherwise, John Murphy, president/CEO of the Maine Credit Union League, told the newspaper. This trend has been evident in other economic downturns such as the 1980s and 1990s when consumers turned to credit unions for safety, security, local ownership and control--factors that provided people with a level of comfort, he added. Maine credit unions experienced 7.7% asset growth last year, compared with 6% the year before, the paper said. Also, credit union loans rose 5.1%--up from 4% the previous year. Savings grew 6%--down from 6.5%. Considering the troubled economic conditions, 2008 was a very good year for credit union growth in Maine, Murphy told the paper.

CU System briefs (02/24/2009)

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* WASHINGTON (2/25/09)--About 500 attendees at the Credit Union National Association's Governmental Affairs Conference (GAC) pledged their commitment to credit unions and raised $2,500 for the National Credit Union Foundation (NCUF). CUNA Mutual Group contributed $5 to NCUF for every GAC delegate who demonstrated the commitment by adding their signature to a "Sign of Commitment." The signature wall was displayed in CUNA Mutual's booth at the GAC. The funds will enable NCUF to sustain and grow its Development Education Program. From left are: Larry Blanchard, CUNA Mutual legislative consultant; Bob Trunzo, CUNA Mutual chief officer, sales; Steve Delfin, executive director, NCUF; and Steve Bosack, deputy director, NCUF (Photo provided by CUNA Mutual Group) … * MUSKEGO, Wis. (2/25/09)--The Corporate Central CU Board of Directors unanimously selected Jim Schrimpf, president/CEO of Brewery CU, Milwaukee, Wis., to fill its vacant board seat. Brewery CU is a $30 million asset, low-income-designated community development credit union serving Milwaukee and surrounding areas. Schrimpf has been active in the credit union movement for 30 years and is a past president of the Milwaukee Metro Credit Union Chapter. He also has served as a director of the Wisconsin Credit Union League and the League Services Corp., and is past president of the Milwaukee Chapter of the Appraisal Institute … * PLANO, Texas (2/25/09)--Southwest Corporate FCU Senior Vice President of Operations Jody Beck has announced she will retire, effective March 7, to build a new house and help build her husband's business. Beck has been with the corporate for 32 years, said the corporate's website. As part of Southwest Corporate's senior management, she built its information technology division from scratch, and helped the company move to new headquarters, negotiate merger opportunities, usher in the Check 21 era and maintain leadership as interim CEO for a year after Francis Lee left to head U.S. Central … * ST. LOUIS (2/25/09)--St. Louis Community CU was awarded a $3,000 grand prize for its efforts in the "You Make a Difference" advocacy program, announced the Missouri Credit Union Association (MCUA). To show appreciation for Missouri credit unions' advocacy efforts, MCUA conducted a drawing for all platinum-level recipients on Feb. 13. Here, from left, MCUA President/CEO Rosie Holub presents the check to the credit union's board Chairman Gerald Brooks and Mike O'Brien, senior vice president and chief marketing officer. (Photo provided by the Missouri Credit Union Association) …

Phish attack volume is up but not for CUs

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NEW BEDFORD, Mass. (2/25/09)--The volume of phishing attacks detected during 2008 grew 66% over the volume during 2007, said RSA Security Inc. However, attacks aimed at credit unions in the U.S. decreased 33% in December 2008 from the year before. Regional U.S. banks were the most-targeted financial institutions, with nearly 57% of that sector attacked in December--a 9% increase over November 2007. Credit unions accounted for 20% of total attacks, while nationwide banks accounted for 23% of the attacks. RSA attributed the overall increase in phishing attacks to do-it-yourself phishing kits. RSA's December 2008 statistics and report on key phishing trends and analysis for all of 2008 noted several findings:
* The number of phishing attacks detected by RSA's Anti-Fraud Command Center during 2008 totaled 135,426 attacks. That compares with more than 90,000 attacks detected in 2007. * The first half of 2008 signified the peak of attacks initiated by the Rock Phish Gang and other fast-flux initiated attacks. During that period, AFCC detected roughly 80,000 attacks. * Companies in the U.S. accounted for 68% of the worldwide attacks--10 times more than the number of brands attacked in the United Kingdom, which ranked a distant second with 6% of attacks. * During the year, phishing attacks moved to new territories such as South America, Central America and the Asia Pacific region. * In December 2008, the number of phishing attacks detected dropped by more than 20% to 8,040 attacks--the second lowest number of attacks during the year. * The number of financial institutions and other brands attacked during December 2008 dropped by almost 15%, with 178 brands attacked, compared with 207 brands attacked during November 2008.
For more information on the study, use the link.