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Richmond Fed names Ratcliff to regional CDIAC

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RICHMOND, Va. (2/28/11)--The Federal Reserve Bank of Richmond has appointed Carl Ratcliff, president/CEO of ABNB FCU, Chesapeake, Va., to its regional Community Depository Institutions Advisory Council (CDIAC). Ratcliff, who will serve a term that will expire Dec. 31, 2014, is the only credit union representative appointed to the 13-member council. The CDIAC will provide input to the Richmond Fed on the economy, lending conditions and other issues. Members were selected from representatives of banks, thrifts and credit unions in the Fifth Federal Reserve District. One member of the council will serve with counterparts from other Reserve Banks on the national CDIAC of the Federal Reserve Board, which will meet with the board twice a year in Washington. For the full list of appointees, use the link.

NCUA files second amended complaint in WesCorp suit

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LOS ANGELES, Calif. (2/28/11)--The National Credit Union Administration (NCUA) filed its second amended complaint in its $6.8 billion lawsuit against directors and officers of Western Corporate FCU (WesCorp) in a U.S. District Court in Los Angeles. The allegations in the complaint, filed Feb. 22, do not deviate much from NCUA's first amended complaint. In that complaint, NCUA alleged negligence and breach of fiduciary duties. The second amended complaint alleges that WesCorp officers and directors breached fiduciary duties by failing to impose "prudent concentration limits" on WesCorp's increasing concentration of private label mortgage backed securities (MBS) and Option ARM MBS. Defendants in the case will have the opportunity to answer the second amended complaint by filing another motion to dismiss the case. The court has not yet established the timetable for filing such pleadings in the case. U.S. District Judge George Wu allowed NCUA to file the second amended complaint during a tentative ruling that favored the former directors. In that tentative ruling, Wu warned that NCUA would have to prove the directors are not covered by California's Business Judgment Rule, which provides directors "broad discretion in making corporate decisions and [allows] these decisions to be made without judicial second-guessing in hindsight (News Now Feb. 3). He also ruled in another tentative ruling that the allegations of improper motives or conflict of interest are insufficient and said "the end result [of the amended complaint] might very well be the same."

Vote for ICU Day theme is due March 8

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MADISON, Wis. (2/28/11)--Credit union staff can vote for this year's theme for International Credit Union Day, which will be Oct. 20. The U.S. team is looking for two themes to submit to the international committee for consideration. Follow the link to rank the six themes suggested by U.S. credit unions. The poll is open through March 8. Themes to be ranked include:
* It Pays to Belong to a Credit Union; * Credit Unions: Here to Serve. Here to Stay; * Make the Change to a Credit Union; * Credit Unions: People Helping People Succeed; * A Smarter Choice: Credit Unions Build a Better World; and * Credit Unions Build a Better World.
Credit unions can also receive updates on the ICU Day theme, art, coloring page and celebration plans by subscribing to a free newsletter. Use the link. ICU Day was established in 1948 and celebrates the history, tradition and spirit of the international credit union movement. It is held annually on the third Thursday of October.

CU System briefs (02/25/2011)

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* MADISON, Wis. (2/28/11)--Scott Sysol, CUNA Mutual Group chief information security officer and vice president of information technology, has been named the 2011 Chief Security Officer of the Year by SC Magazine. The publication's awards recognize security's key contributors and outstanding products. It recognized Sysol's efforts in leading CUNA Mutual's end-to-end data protection project, which involves meeting or getting ahead of compliance mandates, while simultaneously addressing internal security policies and privacy concerns. Illena Armstrong, editor-in-chief of SC Magazine, noted that "corporate executives view Scott as a leader who tempers serious security needs with what is best for the business, given current circumstances. At the end of the day, it's about protecting sensitive information." Information technology security vendor companies nominate entries for the awards … * POUGHKEEPSIE, N.Y. (2/28/11)--Hudson Valley FCU (HVFCU) was named one of the 23 large sized Best Companies to Work for in New York for 2011 by the New York State Society for Human Resource Management and the Best Companies Group, an independent company managing the Best Places to Work programs on state, regional and national levels in the U.S. The Poughkeepsie-based HVFCU will be recognized at an awards dinner May 5. Companies were evaluated on their workplace policies, practices, philosophies, systems and demographics … * LATHRUP VILLAGE, Mich. (2/28/11)--Michigan First CU is searching for a Gen Y spokester for its new Young & Free Michigan program. The spokester will connect with young people through social media networks, local events and more, and develop entertaining educational content, tips and tools to help Generation Yers manage their lives and finances. Applicants must submit a 60-second YouTube video and write a blog post that demonstrates their writing, editing and creative skills by April 4. Three finalists will be selected,and the winner will be selected in an online vote. The winner will become an employee of the credit union for one year, receiving a salary of $30,000 and perks such as a smart phone, Apple laptop and digital video camera. The Lathrup Village-based credit union is the only credit union in Michigan offering the program …

Heritage Family Shared branching big hit with members

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RUTLAND, Vt. (2/28/11)--A little more than a year after it was rolled out, shared branching is a hit with members of Heritage Family FCU, Rutland, Vt. Heritage Family FCU has received positive feedback from members who like the convenience of accessing their accounts when they’re not near a branch, Matt Levandowski, executive vice president of marketing at the credit union, told the Association of Vermont Credit Unions (Newslines Express Feb. 25). “We’ve had stories from University of Vermont students who have their account with us here in Rutland and are able to access it at a North Country FCU or Vermont FCU branch rather than having to open up another account in Burlington,” he said. Levandowski also told the story of a couple who was in New York City to visit their son. When they arrived, their son was carrying $800 in cash and asked the father to hold onto it for him. The father didn’t want to have that much cash in New York, so he logged on to the Heritage Family FCU website, found a shared branch two blocks away, and walked down and deposited the money into his account, “which he thought was the coolest thing in the world,” he said. Levandowski discussed the volume of transactions that members of other credit unions have conducted at Heritage Family FCU branches. “It’s amazing to note that all of our branches handle transactions from people from other credit unions,” he said. Heritage Family FCU, with $254 million in assets, has members nationwide. “We’ve had transactions from Heritage members in 38 out of 50 states,” Levandowski said. “It’s great, especially for people in the armed forces.”

St. Louis Fed taps Barks Rissel for regional council

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ST. LOUIS (2/28/11)--The Federal Reserve Bank of St. Louis announced the appointment of 12 executives of smaller financial institutions--including two credit union CEOs--to the bank’s new Community Depository Institutions Advisory Council (CDIAC). Glenn Barks, CEO, First Community CU, Chesterfield, Mo., and William J. Rissel, president/CEO, Fort Knox FCU, Radcliffe, Ky., were appointed to three-year and two-year terms, respectively. The council, drawn from communities across the Eighth District, will meet twice a year at the St. Louis Fed to advise President James Bullard on local credit, banking and economic conditions. The Eighth District includes the state of Arkansas, and parts of Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee. “Community financial institutions are vital in creating and sustaining economic growth in our nation’s communities,” said Bullard. “As a key source of credit for small businesses, these institutions provide an important perspective on the relative health of the U.S. economy. “The 12 appointees to our council are leaders in their communities and bring with them a diverse range of backgrounds and experiences that will help us paint a more complete economic picture of our region,” he added. The St. Louis Fed CDIAC will hold its inaugural meeting March 1-2.

Maine league testifies on youth fin lit before lawmakers

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PORTLAND, Maine (2/28/11)--Maine credit unions’ and the Maine Credit Union League’s efforts in coordinating and growing Financial Fitness-Money Management Experience Fairs received an enthusiastic response from members of the Maine Legislature’s Education Committee during a recent hearing, the league said. Testifying in support of L.D. 184--bill that would promote the financial literacy of high school students--Quincy Hentzel, league director of governmental affairs, highlighted the leadership role that Maine’s credit unions have taken to build and promote money management skills to Maine students (Weekly Update Feb. 25). Members of the Education Committee said they were impressed by the efforts of Maine’s credit unions and the innovative approach to exposing more students to money management skills, the league said. The league also distributed a one-page flyer highlighting and explaining the resources and initiatives Maine’s credit unions have available to partner with schools on financial education. On Wednesday, the committee voted 10-3 to Ought To Pass a bill that requires the Maine Department of Education to pull together information on all financial literacy programs available to schools and disseminate that information annually to all schools in the state. The programs offered by credit unions would be part of that listing. Also, during the league’s testimony to the Education Committee on the Financial Literacy bill, the committee expressed interest in an online education program that contains modules to help students and young adults learn about money management and personal finance. “The committee really loved [the program] and the fact that credit unions are offering this program at no cost to schools and to members,” Hentzel said. “Everyone realizes how important financial literacy is, and credit unions are clearly at the forefront of this issue and the committee recognized it,” Hentzel said.

Sens. Hagan Bennet write Fed on interchange

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WASHINGTON (2/28/11)--In a letter following hearings in the U.S. House and Senate on the Federal Reserve Board’s initial rulemaking on interchange, U.S. Sens. Kay Hagan (D-N.C.) and Michael Bennet (D-Colo.) called on the board to create a “meaningful and workable small issuer exemption” before issuing its final rules. Hagan and Bennet’s Feb. 23 letter was in direct response to Federal Reserve Board Chairman Ben Bernanke’s testimony to the Senate Banking Committee last week, according to the North Carolina Credit Union League (NCCUL) (Weekly Update Feb. 24). The letter echoed many concerns expressed by lawmakers from both parties in Congress, and provided a signal that the grassroots efforts of credit unions had been heard by Congress. In addition to the small issuer exemption, Hagan and Bennet’s letter also called on the Fed to more adequately study the true transaction costs for institutions that are not exempt. “We would also like the board to adequately account for fraud prevention costs, which issuers typically absorb, when determining the final rule,” the letter said. “We appreciate Sens. Hagan and Bennet taking the time to express their concerns on interchange in writing,” said Dan Schline, NCCUL senior vice president of association services. He added that the letter demonstrates that “members of Congress are deeply concerned that the Federal Reserve Board’s initial rules on interchange have missed the boat on the intent of Congress when it passed the Durbin amendment.” Schline noted that Hagan will speak to nearly 100 North Carolina credit union representatives in Washington, D.C., this week for the Credit Union National Association Governmental Affairs Conference. “It will be a great opportunity to hear from the senator and to of course thank her for her efforts on interchange,” Schline said.

CUNA WOCCU to Basel Standards burdensome to CUs

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BASEL, Switzerland (2/28/11)--The Basel Committee on Banking Supervision should keep the "principle of proportionality" in mind when it implements international standards that could negatively affect smaller financial institutions--including credit unions. That was the message shared by World Council of Credit Unions (WOCCU), Credit Union National Association (CUNA) and Brussels, Belgium-based World Savings Bank Institute (WSBI) shared with the Basel Committee earlier this month.
Click to view larger image Broad application of international financial standards without regard to size may threaten the safety of credit unions in many countries, Dave Grace, left, World Council of Credit Unions senior vice president of association services told the Basel Committee. He and Bill Cheney, right, president/CEO of the Credit Union National Association, visited the committee earlier this month. (Photo provided by World Council of Credit Unions)
The delegation cited concerns that the cumulative effect from blanket applications of anti-money laundering and terrorist financing obligations and other pending requirements could be “burdensome” to the continued growth and operations for smaller institutions. It also said those requirements already have created issues in some developing markets. The result has been an unnecessarily heavy regulatory burden for smaller institutions, including credit unions. "We're witnessing over-application of the international standards in developing and developed markets, creating a significant regulatory burden for smaller financial institutions such as credit unions,” said Dave Grace, WOCCU senior vice president of association services, who led the delegation with Bill Cheney, CUNA president/CEO. “Today, we made progress in getting this message across to financial regulators at the highest level.” Other issues that caused concern include non-proportionally adjusted application of international financial reporting standards, operational risk-management requirements, the application of Basel III requirements and pending liquidity standards. The delegation also raised concerns about aspects of the recently issued Microfinance Activities and the Core Principles for Effective Banking Supervision, specifically parts of the third principle that limit the maximum number of members and geographical scope that credit unions can serve. "(These rules) will suppress financial inclusion agendas, significantly hamper institutional sustainability and send a signal that, beyond a certain number of members, a cooperative ceases to be a cooperative," said Grace and Chris DeNoose, WSBI managing director in a follow-up letter to Stefan Walter, the Basel Committee's general secretary. One of the strengths smaller institutions have in many developed and developing countries is access to supplemental capital, a situation from which U.S. policymakers could learn, according to Cheney. "All other advanced credit union systems have the ability to access supplemental capital," Cheney said. "The global financial standard-setters clearly see a value in credit unions having access to additional capital because of the added strength and security it provides to institutions." Grace and Cheney were joined by WSBI staffers Judith Ay, senior adviser, and Matthias Blume, regulatory affairs manager, during their Feb. 17 visit to the Basel Committee.

Fox taps CUNA for credit-monitoring advice

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MADISON, Wis. (2/28/11)--The Credit Union National Association (CUNA) provided advice to consumers about credit-monitoring services, in a Thursday article by Fox Business.com. At issue is whether such services are worth the cost to consumers to keep tabs on their credit reports, improve their credit scores, and monitor suspicious activity and fraud. After shopping around for these services, consumers should consider using a brand that they know well or an institution where they already do business, Mike Schenk, CUNA senior vice president of research and statistics, told Fox Business. “It’s always a good idea to go to someone you trust--if you’ve had a relationship with a financial institution for a while and feel it operates in your best interest and the fees … are fair and transparent, that would be a good place to start,” Schenk added. “It’s a big business, so there are a lot of providers of these services out there that generate a lot of income by selling consumers protection that they don’t really need or levels of protection that are far in excess of what they need,” he concluded. To read the article, use the link.