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Year-end 2008 call report analysis now live

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MADISON, Wis, (2/26/09)--The Credit Union National Association (CUNA) has posted on its website the preliminary analysis of the National Credit Union Administration (NCUA) call report data for year-end 2008 and a state by state summary. CUNA Economics and Statistics Department obtained the data Tuesday night and began a preliminary analysis of the results. The results are in two documents: "U.S. Credit Union Profile: A Summary of Year-end 2008 Credit Union Results" (February 2009) and "State by State Credit Union Financial Summary." To access these, use the resource links.

Heartland Numbers elusive but breach costs significant

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PRINCETON, N.J. (2/26/09)--Costs related to the data breach of Princeton, N.J. Heartland Payment Systems will be significant, but the company still cannot estimate how many consumer accounts were compromised, Heartland said Tuesday. The number of financial institutions--including credit unions--that have said their member/customers' credit or debit cards were compromised because of the breach has reached more than 500 so far, according to (Feb. 23), which is tracking disclosures by financial institutions about the breach. Another estimate is that the breach compromised about eight million accounts, so far (Las Vegas Sun Feb. 25). "At this time, we do not have information that would enable us to reasonably estimate the amount of losses we might incur in connection of such claims" by cardholders, card issuers, the brands, regulators and others, said Heartland Chairman/CEO Robert Carr at a press conference announcing fourth quarter financials for the company. Heartland officials reported that despite the economy, net revenue for the quarter was up 31.3%, total transaction processing volume up 23% to $16.5 billion, and an operating margin on net revenue of 13.9%. Carr said the company has been named in numerous lawsuits and is the subject of several governmental investigations and inquiries. They include a formal inquiry by the Securities and Exchange Commission, a related investigation by the Department of Justice, and inquiries by the Office of the Comptroller of the Currency and the Federal Trade Commission (American Banker Feb. 25). "We intend to vigorously defend any such claims, and we believe we have meritorious defenses to those claims that have been asserted to date," he said in the press release. He also said Heartland faces a second challenge--managing the potential impact of the breach on day-to-day operations of its business. Heartland President and Chief Financial Officer Robert Baldwin noted that the company still cannot estimate how long the malicious software program that sniffed data from its system ran, how many card accounts were affected, or how much the company will have to spend related to the incident. The news conference came as word of a second card processor's breach was being made public (News Now Feb. 24). The company involved has not been identified by MasterCard and Visa, but it involves a number of credit unions, as did the Heartland breach. Meanwhile more credit unions and banks across the country were reporting the effects of the Heartland data breach this week. Several hundred accounts at Boulder Dam CU in Boulder City, Nev., are being reissued cards. The credit union told the Las Vegas Sun said that although the breach was at Heartland, the credit union is responsible for $1,000 to $2,000 stolen from members' accounts. Gold Coast FCU, West Palm Beach, Fla., told the Palm Beach Post (Feb. 24) that about 2,600 members are receiving new debit cards in the mail. That will cost about $13,000, at a cost of $3 to $5 per card, said the credit union. In Endicott, N.Y., Visions FCU took out a newspaper ad acknowledging that some members were affected by the breach and emphasizing that the credit union itself experienced no breach of internal security. The credit union, which has more than 90,000 credit and debit cards, will reissue credit cards to protect members whose accounts are compromised ( Feb. 25). The publication also reported that Horizons FCU, Binghamton, N.Y., had taken measures to protect its members. The credit union said nearly one-third of its card base has been breached over the past three or four weeks--about 1,400 accounts. It has cost Horizons $15,000 so far to cover fraudulent charges, issuing new cards will cost between $3,000 and $4,000. Thieves in different parts of the country are buying items such as gift cards with the stolen data, Horizons President Mario DiFulvio told Press & Sun-Bulletin Tuesday (via

Hanscom offers members support for tough times

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HANSCOM AFB, Mass. (2/26/09)--Hanscom FCU is offering its members free credit score enhancements with a trained adviser. Members can avoid the fee normally charged for obtaining a credit score and receive a complete explanation of their credit reports, and advice on how to improve their scores, announced the $650 million asset credit union. The credit union also provides free financial counseling services through a partnership with the BALANCE financial fitness program. Members receive personalized advice on budgeting, getting out of debt, purchasing a new home or vehicle, and other topics. A no-fee debt-management service helps members consolidate debt and--in some instances--reduce interest rates and fees, said the credit union. In January, Hanscom FCU introduced CU Thrive, an account that offers a favorable rate when members build savings through a monthly automatic transfer from their checking accounts. “Individuals and families everywhere are looking to do the right thing with each and every dollar, and the financial institutions that serve them should be looking for ways to make that easier,” said Paul Marotta, Hanscom board chairman. “A responsible, educated membership can only be good for all of us as the country moves forward.”

Suncoast Schools awards 100000 grant to career center

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TAMPA, Fla. (2/26/09)--A Suncoast Schools FCU foundation awarded a $100,000 grant to fund a financial assistance program at a high school and middle school career center in Tampa. The Suncoast for Kids Foundation provided the grant to the career center of D.W. Waters schools to help fund a program dubbed “Project Success,” which aims to help students with financial or social obstacles (Tampa Bay Business Journal Feb. 24). Project Success will boost students’ financial literacy by helping them make good educational and professional decisions, said Mary Tlachac, foundation executive director. About 79% of D.W. Waters’ 290 students are economically disadvantaged, according to the school. Suncoast Schools FCU, based in Tampa, Fla., has more than $6 billion in assets.

Survey notes recessions adverse impact on savings

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WASHINGTON (2/26/09)--The second annual America Saves Week survey revealed declining percentages of Americans who believe they are saving enough for retirement and expect to pay off their home mortgage before retirement. However, the survey also found that more Americans are concerned about the impact of the current recession on their personal finances (77%) with over half (53%) being “very concerned.” The survey was commissioned by America Saves and the American Savings Education Council. It was conducted by Opinion Research Corp. Results were announced Monday. Comparing the data collected by the 2008 and 2009 February surveys reveals some of the impacts of the current recession on consumers:
* The proportion of respondents who indicated they are saving enough for retirement declined to 49% from 52%. Those who said they are saving for retirement in workplace programs fell to 51% from 55%; * Mortgage holders who said they expect to pay off their mortgage before retirement fell to 74% from 76%. And the proportion of Americans surveyed who said they own property and either have no mortgage debt or are paying down this debt declined--to 62% from 67%; and * The proportion of respondents who said they do not spend all their income but save the difference fell slightly--to 73% from 74%. Respondents who said they have “sufficient emergency savings to pay for unexpected expenses like car repairs or a doctor visit” rose slightly to 72% from 71%.
“For most Americans, to-date recession-related financial concerns have been greater than financial losses,” noted Stephen Brobeck, Consumer Federation of America executive director and a leader in America Saves. “But tens of millions who still have their jobs and have suffered little or no loss of retirement savings worry that a deepening recession will eventually cost them income or even their jobs.” Americans can better prepare for an uncertain future by understanding their financial condition, developing realistic spending and savings plans, and saving automatically, survey analysts concluded. However, only about half the country have taken these prudent financial measures. The survey also indicated:
* Little more than half of respondents (54%) know their net worth, the same percentage as last year. * Three-fifths (60%) have a savings plan with goals, but less than half (47%) have a “spending plan that allows you to save enough money to achieve the goals of your savings plan.” These percentages are down a little from last year’s 62% and 49%, respectively. * Less than half of respondents (42%) save automatically, outside of work, through regular preauthorized transfers from checking to savings or investments. This percentage of “automatic savers” did not change from last year. * The good news is that more consumers are making an effort to pay down and pay off consumer debt. The proportion who said they are reducing this debt rose to 44% this year from 38% in 2008. And those who said they are now consumer “debt-free” rose slightly to 40% from 39%.
“Research shows that those who plan borrow less and save more,” said Brobeck. “And anyone, regardless of income, can develop useful spending and savings plans.” A number of credit unions across the country are active in America Saves Week, which ends Sunday.

Consumer complaints about banking industry up 15

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ARLINGTON, VA. (2/26/09)--The banking industry received the third-highest number of complaints in 2008 out of all U.S. industries, according to the 2008 annual report released earlier this month by the Better Business Bureau (BBB). Banks received 21,021 complaints, an increase of 15% over the previous year. It was the highest increase of all the industries studied. The cell phone industry was first in complaints and new car dealers ranked second. However, the BBB report indicates that these industries also have a higher rate of resolution with consumers than the average rate--73%--across all industries in 2008. Banks resolved 96% of complaints, the BBB report said. “While BBB saw a 7% increase in [overall] complaints, we also experienced a 15% increase in requests from consumers for pre-purchase information on the reliability of businesses,” said Steve Cox, BBB spokesperson. "Given the current economic recession, consumers are being more cautious on where and how they spend their money and are looking for objective information that helps them easily and quickly make informed decisions on the reliability of businesses,” he added. “Industries that do a large volume of business are naturally going to have a larger number of complaints. This is why it’s important to look at how a company responded when BBB approached them with consumer complaints, and not just the sheer number of complaints,” Cox said. Of the top 10 industries for complaints, only two saw a decrease in complaints: Internet services saw a 16% decrease, and furniture store complaints decreased 3%.

CU System briefs (02/25/2009)

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* FORT WORTH, Texas (2/26/09)--OmniAmerican Bank--a former credit union-- reported to the Federal Deposit Insurance Corp. that counterfeit cashier's checks bearing its name are in circulation. The items display a routing number--102000979, which is assigned to JPMorgan Chase Bank, Denver. While similar to authentic cashier's checks, the bogus items display a padlock icon and security feature statement on the right side, with the word "REMITTER" in the lower left corner. Authentic checks display the routing number 122234822, which is assigned to U.S. Bank in San Diego. OmniAmerican Bank issues its cashier's checks through MoneyGram International using a payable-through account at U.S. Bank. Authentic checks also display a thermochromic security feature at the end of the signature line in the lower right corner. OmniAmerican was created in 1956 as a credit union but converted to a bank in January 2006 … * WASHINGTON (2/26/09)--Seven credit unions in District of Columbia exhibited their products and services at U.S. Rep. Eleanor Holmes Norton's Tax Fair at the Washington Convention Center Feb. 14 (FOCUS Newsletter Feb. 23). Hundreds of D.C. residents received free tax filings and were encouraged to visit the exhibit hall to learn more about, and join, credit unions. During Norton's press conference, she thanked credit unions for participating. They included: Congressional, Department of Commerce FCU, DVA, HEW, HUD, Library of Congress and Signal Financial FCUs. Here, Holmes poses with Tracy Bailey, business development coordinator of HEW FCU. (Photo provided by the Maryland and District of Columbia Credit Union Association) … * HARRISBURG, Pa. (2/26/09)--The Pittsburgh (Pa.) Chapter of Credit Unions has named Children's Hospital of Pittsburgh, a Children's Miracle Network hospital, as its official charity for 2008 (Life is a Highway Feb. 24). The chapter's credit unions, through a variety of fundraisers, raised nearly $20,267 for the hospital. Chapter representatives were given a personal tour of the new children's hospital after presenting the check Friday … * RANCHO CUCAMONGA, Calif. (2/26/09)--The California and Nevada Credit Union Leagues have promoted state and regulatory lobbyist Melissa Ameluxen to director of state government affairs. In her new position Ameluxen will oversee the state legislative and regulatory affairs for credit unions in the two states. She succeeds Keri Bailey, who is now vice president of government affairs for the California Grocers Association. Ameluxen will continue to work from the league's Sacramento office. She previously served as field representative, legislative assistant and district director for California State Assemblyman Russ Bogh, and as a campaign manager for various California state legislators, including Assemblyman Bill Emmerson …

FSCC shared branching adds CU in Micronesia

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SAN DIMAS, Calif., and MAITE, Guam (2/26/09)--Government of Guam Employees FCU, an associate member of the Defense Credit Union Council (DCUC) and based in Barrigada, Guam, is joining the Financial Service Centers Cooperative Inc.'s (FSCC) shared-branching network--just in time for a surging military buildup in the region. The credit union is the first credit union in Micronesia--a region stretching from Hawaii to the Philippines--to join a shared-branching network, said FSCC. The credit union will open its branches to thousands of military shared-branch members who are projected to travel to and through the region in the next few years. Guam is predicting 17,000 new residents will arrive on the island in the next five years. U.S. Marines stationed in Okinawa, Japan, will transfer to Guam by 2014, bringing with them thousands of new jobs and an economic boom. Already, the island reports it receives more than one million visitors a year. The credit union, which provides services to more than 40,000 of the island's 175,000 residents, will have easier access to stateside accounts and funds through the shared branch network, said FSCC. "Credit union members are demanding more access to their accounts," said Arty Arteaga, president/CEO of DCUC. "In particular, the millions of military members and their families who belong to credit unions that support the Department of Defense (DoD) need enhanced delivery channels to access their money and accounts through a quick and simple system. For many members, especially those of the DoD establishment, shared branching is a necessity," Arteaga said. Shared-branching services, which will be offered to civilian as well as military members, will be available on the island starting this spring.