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CU System briefs (02/03/2012)

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  • DES MOINES, Iowa (2/6/12)--A man has been convicted on all charges related to a May 13 robbery of Tradesman Community CU, Des Moines, Iowa (Des Moines Register.com Feb. 3).  Robin Brooks Jr. was found guilty by a jury of bank robbery, possessing a .45-caliber pistol as a felon, and using the gun in a crime of violence. Police said a robber entered the credit union and passed a threatening note to a teller, who placed a tracking device inside the $5,900 stolen from the credit union. Police tracked it to a motionless but still idling van. Brooks faces up to 35 years in prison …
  • OSHKOSH, Wis. (2/6/12)--An Oshkosh, Wis., woman accused of selling fake shares of Facebook stock last fall also has been charged with using a counterfeit cashier's check for $250,000 from Winnebago Community CU, Oshkosh, to buy real estate in August 2011. Marianne A. Oleson, 46, was charged Wednesday with 33 fraud and drug-related felony charges and one misdemeanor drug charge. She faces, if convicted, a maximum of 218 years in prison and $418,000 in fines (Oshkosh Northwestern Feb. 1) …
  • LOWELL, Mass. (2/6/12)--Jeanne D'Arc CU  in Lowell, Mass., will celebrate its 100th anniversary Sunday, kicking off a yearlong celebration with events planned for members, employees and the community, according to the Massachusetts Credit Union League (Values & Visions Jan. 23).  Founded in 1912 as a cooperative credit society to encourage frugality and economic self-sufficiency among Lowell's Franco-American population, the credit union has grown into a $913.4 million asset institution. The credit union will sport a new logo, which incorporates spindles from former textile mills to illustrate the number 100 …
  • NEW YORK (2/6/12)--New York City-based Municipal CU (MCU) has launched the NYMCU Mobile Banking app, which allows members to bank safely and securely on the go 24/7 from their iPhone, iPad or iPod Touch. Members can manage their accounts, check balances, transfer funds between accounts, and find the closest branch or ATM in MCU's network. The app is available free from the iTunes app store. According to Steve Kibitel, MCU vice president of marketing, the app provides convenience to members, expands the credit union's offerings of high-tech services, and will help attract new members, "especially younger members who are comfortable with and often prefer to use digital technologies to conduct all types of transactions, including banking." …

Michigan First launches foundation scholarships

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LATHRUP VILLAGE, Mich. (2/6/12)--Michigan First CU has launched its Michigan First Foundation and an inaugural college scholarship contest with a $10,000 grand prize.

The foundation will continue the credit union's support for dozens of educational and community-focused organizations and causes across metro Detroit.

The scholarships are offered through the Young & Free Michigan program. Students  age 18-25 who plan to attend college in the fall can submit a 60-second video answering the question, "What impact will your education have on where you will be in 10 years?" The foundation is encouraging applicants to "get creative" with the video process and share the contest within their social networks. For more information, use the YoungFreeMichigan.com link, where voters will choose the 10 finalists.

In addition to the grand prize, the foundation will award scholarships of $5,000 for second place, $2,500 for third place and an iPad2 for the "People's Choice" winner of online voting. 

The foundation also will continue Michigan First's separate $1,000 high school scholarship program for the 11th year. High school seniors enter through their school counselors at participating schools, while college students apply online at the Young& Free Michigan site.

"We began as a credit union for Detroit teachers, and we'll never forget that heritage or diminish our deep commitment to education," said foundation President and Michigan First CU President/CEO Michael Poulos.

Judge orders NCUA to show cause in Wachovia case

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WICHITA, Kan. (2/6/12)--A federal judge in Kansas has ordered the National Credit Union Administration (NCUA) to show cause why NCUA's lawsuit against Wachovia Capital Markets LLC (now known as Wells Fargo Securities LLC)  over residential mortgage-backed securities (RMBS) sold to corporate credit unions should not be dismissed for lack of prosecution.

The Jan. 31 order by U.S. District Judge Julie A. Robinson of the U.S. District Court for the District of Kansas, Wichita, said NCUA had filed the case on Nov. 28, but there were no filings or court docket entries since the initial filing. It directed NCUA to show good cause in writing to the court by Feb. 26.  The Kansas court has jurisdiction because U.S. Central FCU, one of the corporates that bought the RMBS,  was headquartered in Lenexa, Kan.

To date, NCUA has not filed anything with the court confirming whether the complaint has been legally served on Wachovia.In the complaint filed in court, NCUA said the underwriting documents on the securities sold by Wachovia to U.S. Central FCU and California-based Western Corporate FCU contained untrue statements of material fact and omitted to state material facts related to the RMBSs sold. The NCUA's complaint pointed out it is not alleging fraud in the case.

The complaint alleged that originators of the RMBS had systematically abandoned the stated underwriting guidelines, resulting in riskier RMBS that the corporates would not have bought, had they known, said NCUA.  Wachovia representatives sold about $100 million in RMBS to the two corporates in 2006, and U.S. Central purchased approximately $80 million in RMBS underwritten by Wachovia, according to court documents.

NCUA placed U.S. Central and WesCorp into conservatorship on March 20, 2009. On Oct. 1, 2010, the corporates were placed into involuntary liquidation. NCUA is suing as the liquidating agency to recoup some of the losses.

The order came a day after a tentative ruling about the possible dismissal of a similar lawsuit the agency had filed against RBS Securities Inc. in the U.S. District Court for the Central District of California, Western division. A final ruling was expected late last week.

NCUA has sued several entities for a total of $2 billion related to the sale of RMBS to corporate credit unions, including RBS Securities, JP Morgan Chase, and Goldman Sachs. NCUA also settled with Citigroup for $20.5 million and Deutsche Bank Securities for $145 million, without filing lawsuits. Neither bank admitted any fault in the settlements (News Now Dec. 20 and Feb. 1).

SandP affirms CMG Mortgage Insurances BBB rating

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SAN FRANCISCO (2/6/12)--CUNA Mutual Group Mortgage Insurance Co. (CMG MI) Friday announced that Standard & Poor's Rating Services affirmed the company's "BBB" rating, maintaining a negative outlook.

Although the report expressed concerns about the private mortgage insurance sector as a whole, it noted that, "Relative to its peers … CMG MI's operating results have improved at a faster and more stable rate."

"CMG MI has worked closely with credit union customers to actively manage our portfolio, while implementing risk management practices to ensure the quality of new business," Kim Shaul, CMG MI senior vice president and co-general manager, said about the report.  

The mortgage insurance sector is experiencing high losses amid a struggling economy and very weak job and housing markets, the report said.

"Relative to its peers, however, CMG MI's operating results have improved at a faster and more stable rate," the report added. "Compared with the same period in 2010, the third-quarter 2011 pretax statutory operating loss (normalized for changes in the contingency reserve) decreased 47% to $19 million from $36 million, and the statutory loss ratio decreased to 118% from 140%. Moreover, unlike many of its peers, CMG MI did not have significant adverse reserve development.

"We believe CMG MI's capitalization relative to its operating results compares favorably to that of its peers," the report continued. "With statutory capital of $230 million and risk-to-capital ratio of 20:1 at the end of third-quarter 2011, CMG MI is better positioned to absorb operating losses expected in 2012. We also do not expect CMG MI to exceed the risk-to-capital or minimum policyholder protection thresholds put in place by certain state regulators. Because of this, CMG MI is at lower risk of facing regulatory action."

S&P explained its rationale for CMG MI's negative outlook "reflects the current trajectory of operating performance and the potential that adverse deviation may strain CMG MI's capital position."

Regarding the outlook, the report continued: "We expect delinquencies to continue at an elevated but decreasing level throughout 2012, with a full-year default rate approaching 5% and a loss ratio falling to less than 100%. We could lower the ratings if, at any time, CMG MI's pretax statutory income is not on a trajectory toward profitability in 2013."

Top 10 iNews Nowi stories for January (02/03/2012)

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MADISON, Wis. (2/6/12)--An article about Downey, Calif.-based Financial Partners CU's recently signed agreement to provide surcharge-free ATM access at all Walgreens in California was the most read News Now article in January.

The 10 most-visited stories for the month are:

10. Consumer Reports: Largest CUs' rates beat largest banks' rates

YONKERS, N.Y. (1/4/12)--The largest credit unions' rates have beat the largest banks' rates in a side-by-side comparison cover story in the prestigious comparative-shopping venue:  Consumer Reports. And they did so in all areas compared.

9. White House to use recess appointment for CFPB director

WASHINGTON (1/4/12, UPDATE 10:16 a.m. ET)--The White House Jan. 4 said it would claim use of its executive powers to install Richard Cordray as director of the Consumer Financial Protection Bureau (CFPB) after the U.S. Congress failed to take action on Cordray's nomination before the current work break.

8. Michigan First CU offers 'Turning Point' home loans

LATHRUP VILLAGE, Mich. (1/12/12)--Michigan First CU is offering an alternative lending option for consumers who have not previously qualified for a traditional mortgage.

7. NCUA names risks as 2012 supervisory priority

ALEXANDRIA, Va. (1/5/12)--While pointing out in its first letter to credit unions of the year (12-CU-01) that credit union finances continue to improve, National Credit Union Administration (NCUA) also provided credit unions with a heads up on the risk issues it will be particularly tracking this year.

6. Thrivent plans to become CU

MINNEAPOLIS and APPLETON, Wis. (1/17/12)--Thrivent Financial for Lutherans, with dual headquarters in Minneapolis and Appleton, Wis., will convert its bank subsidiary to a credit union pending approval from the National Credit Union Administration and other regulators, several news outlets reported Friday.

5. NCUA clarifies new call report questions' intent

WASHINGTON (1/11/12)--The National Credit Union Administration (NCUA) has clarified that new questions addressing minority credit unions and workplace diversity, which were added to fourth quarter call report documents with no explanation from the agency as to why, are required by the Dodd-Frank Wall Street Reform Act.

4. Mobile banking security tops 10 security threats for 2012

MADISON, Wis. (1/10/12)--While credit unions gear up for what may be radical growth in mobile banking, they also must keep in mind that mobile security is the No. 1 security issue in the list of top 10 computer security threats for 2012, according to McAfee Labs.

3. CNN Money: CUs are best borrowing alternative

NEW YORK (1/17/12)--Credit unions are the best borrowing alternative for consumers who are fed up with big U.S. banks, according to a Friday CNNMoney article.

2. Top 25 stolen passwords for 2011 announced

LOS GATOS, Calif. (1/6/12)--What was the most stolen online password of 2011? "Password." Computer users who think switching the "o" to a zero to make it "passw0rd" didn't fare much better. Both are on the list of the 25 most common passwords used on the Internet this year, according to SplashData, a provider of password management applications.

1. CU, Walgreens sign pact for surcharge-free ATMs

DOWNEY, Calif. (1/24/12)--Financial Partners CU in Downey, Calif., said it has introduced several new technological features and services to better serve its members, including a recently signed agreement to provide surcharge-free ATM access at all Walgreens in California.

AVCU state regulator offer free investor ed to CU staff

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BURLINGTON, Vt. (2/6/12)--The Association of Vermont Credit Unions (AVCU) and the Vermont Department of Banking, Insurance, Securities and Health Care Administration (BISHCA) announced a program that offers free investor education to credit union employees, available in Vermont this spring and early summer.

The Investor Education in Your Workplace (IEiYW) program is a 10-hour online investment and financial education program that credit union employees can complete over 10 weeks (Newslines Express Feb. 3).

The program was piloted in more than 200 companies throughout Wisconsin, Pennsylvania and North Carolina. Vermont's IEiYW program will begin in April and end in July, with topics ranging from the basics of saving and investing to taxes and retirement planning.

Participation in the education program is available free for up to 250 employees of Vermont credit unions and is sponsored and underwritten by the nonprofit Investor Protection Trust.

Employees nationwide are expressing less confidence in their ability to effectively manage their finances and prepare for their futures, AVCU said. BISHCA and AVCU said they believe the program will directly benefit credit union employees and will also educate them better so they are more prepared to answer member questions about investing.

CU in Vermont doubles scholarships due to rising costs

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BURLINGTON, Vt. (2/6/12)--In response to rising education costs, Vermont FCU (VFCU), with $335 million in assets, Burlington, has doubled the size of its educational scholarships and opened up the program to more students.

VFCU has increased its educational scholarships from to $2,000 from $1,000. Students of any age who have been accepted to, or are enrolled in, an accredited undergraduate program at a college, trade school, or university for the Fall 2012 or Spring 2013 semesters are eligible to apply. Applicants must be VFCU members (Newsline Express Feb. 3).

Four scholarships will be offered. Recipients will be selected based on academic achievements, enthusiasm for their planned field of study and service to the community.

VFCU's Scholarship Committee has provided scholarships for more than eight years.

Elevations CU signs 10-year contract with university

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BOULDER, Colo. (2/6/12)--Elevations CU in Boulder, Colo., was awarded a 10-year contract to provide banking services to students, faculty and staff at the University of Colorado's Boulder campus.

The contract exemplifies a long-standing partnership between the credit union and the university, Elevations said. "Our roots run deep on campus, and we were able to show the university that we are a committed partner and are able to deliver at the highest level," said Dennis Paul, Elevations assistant vice president.  

Chartered on the campus of the University of Colorado at Boulder in 1952, the credit union is a fixture in the community, Elevations said.

"Elevations has a vested interest in meeting the needs of our University of Colorado constituency, which accounts for nearly 20% of our membership," Paul said. "We will continue our focus on education and consumer advocacy with our campus partners."

In an era when university credit unions are struggling to maintain their position on campuses throughout the U.S., Elevations continues to strengthen its relationship with the University of Colorado.

The credit union will continue its scholarship support under the new contract. The contract includes financial services, a branch in the University Memorial Center and ATMs throughout the Boulder campus. The contract also includes the Buff OneCard Campus Card program, the university's multi-purpose ID card system.

Maine leagues mortgage note amendment passes committee

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PORTLAND, Maine (2/6/12)--The Maine Legislature Joint Standing Committee on Judiciary voted 9-3 'ought to pass" on an amendment proposed by the Maine Credit Union League to a mortgage bill.

The Judiciary Committee voted last week 10-3 "ought to pass" on a bill to protect homeowners subject to foreclosure by requiring the foreclosing financial institution to provide the court with original documents, a measure opposed by the league (Weekly Update Feb. 3).

The league then worked with the committee to introduce an amendment that addressed credit unions' concerns.

The amendment ensures that credit unions have ample time to obtain the note if they are not in possession of it at the time of foreclosure, and to limit the plaintiff to one request for inspection of the original note, said the league.

Last week, the league submitted the amendment to State Sen. David Hastings (R) and State Rep. Joan Nass (R), co-chairs of the committee, for their review. Nass and Hastings agreed to hold another work session to consider the amendment.

"This has taken a lot of time and resources, but we are pleased at the progress, said league President John Murphy. "Maine credit unions received praise from many members of the committee for coming up with language acceptable to most parties involved. We anticipate participating in additional discussions as the bill proceeds."

The bill will now go before the full legislature for a vote.