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Washington breach-reimbursement bill passes committee

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OLYMPIA, Wash. (2/7/08)--The Washington Insurance, Financial Services & Consumer Protection Committee approved a bill on an 8-1 vote that would give financial institutions the ability to hold accountable businesses that handle and store unencrypted sensitive consumer information negligently. Sponsored by State Rep. Brendan Williams (D-22), HB 2838 now moves to the House Rules Committee for further consideration. “In the fight against identity theft, this is a big score for Washington consumers,” said John Annaloro, Washington Credit Union League president/CEO. “This bill provides incentives to financial institutions to proactively protect personal consumer information, including credit and debit card numbers.” The 8-1 committee vote was a surprise, considering the growing opposition to the legislation from retailers, restaurants, grocers, the National Federation of Independent Business and banks, said the league. “After negotiating at least four substantive draft versions of the legislation at this point, we’ve reached the crux of the issue--should negligent data breachers be held accountable for the costs incurred by a credit union trying to protect consumers from harm,” said Stacy Augustine, league senior vice president and general counsel. The Senate Financial Institutions and Insurance Committee is tentatively scheduled to consider companion bill SB 6425 this week. The Senate version of the bill is sponsored by State Sen. Rosa Franklin (D-29) and faces similar industry opposition, the league said.

New Jersey league elects board officers

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HIGHTSTOWN, N.J. (2/7/08)--The New Jersey Credit Union League (NJCUL) elected new board officers Jan. 28. New board officers are:
* Chairman of the board: Steve Schlundt, president/CEO, Atlantic City Firemen’s FCU, Northfield; * Vice Chairman: Cindy Rein-Zima, president/CEO, Hamilton Horizons FCU, Hamilton; * Treasurer: Bob Steeves, president/CEO, Essex County Teachers FCU, Bloomfield; and * Secretary: Christina Olender, president/CEO, Parlin DuPont Employees FCU, Parlin.
Past Chairman Rina Pantano, who served in that capacity from 2005 to 2008, remains on the NJCUL board.

Weather affects CUs operations

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MADISON, Wis. (2/7/08)--Dozens of tornados, snowstorms, thunderstorms--you name it and credit unions in a number of states had to deal with it Tuesday and Wednesday. Credit unions reported little or no damage from being under the weather, although several experienced power outages and some closed operations in severe weather. Tuesday's storms killed at least 52 people--28 in Tennessee, 13 in Arkansas, seven in Kentucky and four in Alabama (MSNBC.com Feb. 6). Credit union leagues from seven states--Arkansas, Alabama, Mississippi, Tennessee, Kentucky, Kansas and Missouri--reported to CUNA Mutual Group yesterday morning that credit unions contacted were okay. The Mississippi Credit Union Association had been in contact with Dover Elevator CU, in Olive Branch, which is near Southhaven, Miss., directly south of Memphis, Tenn., said Amy Manley, corporation relations manager at the association. One of the tornados hit five miles from the credit union. "Elevator CU reported no physical damage to the credit union," she said. "However, the storm did affect the credit union's power and communication lines," which were being repaired Wednesday. Later the association's president reported the credit union was back in operation. One Arkansas credit union in Pope County was near an unconfirmed tornado sighting. The main damage in that state was in a northern area where there are no credit unions. The Tennessee Credit Union League said it had contacted all credit unions in the western part of the state, which bore the brunt of the tornado damages. There were a few power outages among credit unions in the Jackson area, but everyone appeared okay. Jackson is where Union University is located. The university took a direct hit from one tornado, which injured more than 50 students. While leagues in those states were checking with their credit unions about tornado damage, other states were bracing for the front to move eastward and a snowstorm was blowing through midwestern states. Ohio was expecting localized flooding from storms later Wednesday. That storm resulted in at least 10 inches of snow in southern Wisconsin and northern Illinois. The Credit Union National Association's Madison, Wis., offices, which began Wednesday with a three-hour snow delay, closed at 2 p.m. CST because of 10 inches of snow accumulated during the day.

Missouri CU Association proposes dues reduction

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ST. LOUIS (2/7/08)--The Missouri Credit Union Association (MCUA) is taking steps to reduce dues for its member credit unions. At its Feb. 4 meeting, the MCUA board of directors voted to propose a reduction in membership dues through a new formula that will result in as much as a 17% reduction for some member credit unions. “We recognize the economic pressures and increasingly tight margins that credit unions face today,” said MCUA President/CEO Rosie Holub. “The league is adequately capitalized and in a position to demonstrate the cooperative spirit. The board felt it was appropriate to do what we can to help support those member credit unions that support us through their investment in the three-tier system. “This reduction will have a significant impact on a number of our smaller credit unions,” she concluded. Member credit unions will vote on the dues formula change at the MCUA annual business meeting April 1 in Jefferson City.

9 of small businesses surveyed consider CU as PFI

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BOSTON (2/7/08)--While 9% of small businesses surveyed consider credit unions to be their primary financial institutions, 68% of credit unions are focusing their attention on building up their business products and services, according to an Aite Group study. The study, “How Can U.S. Credit Unions Survive in the Small Business Space?” indicated that credit unions’ top two information technology priorities over the next two years are commercial and business banking-oriented solutions. Credit unions also have plans in place to broaden their small-business product offerings and enhance their online capabilities. Succeeding in the small-business marketplace requires investing time and money, and offering the right products and online capabilities to meet the demands of small businesses, said Christine Barry, Aite Group research director and report author. "Many credit unions are at a crossroads: Most recognize the opportunities associated with targeting the small-business segment, but the level of importance and effort they plan to allocate to attracting small-business membership divides them,” she added. Credit unions should increase their information technology budgets for business initiatives and hire individuals that understand small-businesses needs, the study recommended. “The road ahead is not an easy one for credit unions, but those willing to take the necessary steps are likely to be greatly rewarded,” the study said. More than 50% of the credit unions surveyed have member bases consisting of less than 10% business. Eighty-one percent do not have a dedicated small-business banking offering but offer retail banking solutions to small businesses. Most credit unions are either maintaining a traditional credit union strategy, or shifting from traditional practices to a more commercial path, the study said. Credit unions in the first group are reaching out primarily to “mom-and-pop” businesses to focus on retail services. The second group hopes to capitalize on opportunities that small businesses could bring and plan to offer more services, the study said.

Hoel to represent Norlarco on Public Service CU board

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DENVER (2/7/08)—Bob Hoel, former director of and now a fellow at the Filene Research Institute in Madison, Wis., and a former chairman of Norlarco CU, will serve on Public Service CU (PSCU)’s board of directors. Hoel joins the board after PSCU was awarded the right to acquire Norlarco CU’s assets by the National Credit Union Administration (NCUA). NCUA had placed Norlarco into conservatorship in May 2007 after the credit union lost money in construction loans in Florida (The Coloradoan Feb. 6). Hoel’s appointment will be official next month. His position was made possible because a board member resigned to make room for a Larimer County board member, PSCU President/CEO David Maus told the newspaper. Hoel, who chaired Norlarco’s board of directors from 1987 to 1991, said he will actively work to restore members’ faith in the credit union. The merger between Norlarco and PSCU is a “good thing” for Norlarco’s members. No money or equity was lost, he told The Coloradoan. The acquisition will add $230.5 million in assets, 100 employees, 42,000 members and six Larimer County branches to PSCU.