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CU System briefs (02/08/2010)

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* CENTRALIA, Wash. (2/9/10)--A suspect in the Jan. 25 attempted robbery of TwinStar CU in Centralia, Wash. says he hid in brush next to the credit union for 12 hours while SWAT teams, believing he was still inside the branch, worked just feet away (The Olympian Feb. 7). According to court documents, Michael Lar allegedly escaped through the same window he'd used to gain access to the building. During the incident, he held a teller hostage with a gun to her head and knife to her throat. At one point he struck her in the head with a pellet gun. When an officer arrived, the teller met him at a door, mouthed "He's got a gun," and pointed to the robber. The officer grabbed the teller and fired two shots, wounding the suspect in the hip and elbow. Police thought the suspect was inside the credit union and attempted to contact him before finally detonating flash grenades. When they entered the credit union, no one was there. Lar was arrested when a taxi driver and hotel employee reported he acted suspiciously and appeared to be injured. He faces robbery, kidnapping and assault charges ... * HARAHAN, La. (2/9/10)--The New Orleans Saints' victory Sunday in the team's first Super Bowl resulted in Harahan, La.-based ASI FCU giving an extra, unofficial holiday to more than 200 employees. "Our staff is our biggest resource, and they deserve to share in this celebration. Morale is important," ASI CEO Mignhon Tourne told the Times-Picayune (via nola.com Feb. 8). Early last week, ASI decided it would close all 14 branches on Monday after the Super Bowl. The Saints beat the Indianapolis Colts, 31 to 17 in the 44th bowl game ... * WARMINSTER, Pa. (2/9/10)--For the third year in a row, Freedom CU will sponsor Biz Kid$, the Emmy Award-winning television series underwritten by America's Credit Unions, where kids teach kids about money and entrepreneurship. Freedom will sponsor the program every Sunday morning from March 7 to May 30 on WHYY TV 12 from 8:30 a.m. to 9 a.m. ET. Freedom is supporting the show because of the program's focus on educating school-aged children about saving, budgeting, investing and giving back to the community. Since 2006, Freedom has provided financial education materials to more than 250 classes, reaching roughly 29,000 students. In 2007, it created the "Voices of Inspiration" Award for Teaching Excellence, which recognizes 23 exemplary educators each year in Montgomery County ...

Zimbabwe considering setting up a CU in UK

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LONDON (2/9/10)--An organization in Zimbabwe is seeking authorization from the United Kingdom's (UK) financial regulator, the Financial Services Authority, to become a credit union. The Zimbabwe Diaspora CU Ltd., would provide financial services to Zimbabweans who live and work in Great Britain and Northern Ireland (zimdiaspora.com Feb. 8). The organization is also seeking registration with the Association of British Credit Unions, which is a member of the World Council of Credit Unions. Barbara Nyagomo, one of the idea's promoters, said in a memo that the credit union would reward sustainable behavior by offering better interest rates for loans, mortgages and supportive loan programs for members who lack credit ratings.

Cross Valley FCU branch damaged by water

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HARRISBURG, Pa. (2/9/10)--A branch of Cross Valley FCU was heavily damaged by nearly 20,000 gallons of water when a water pipe ruptured more than a week ago, says the Pennsylvania Credit Union Association (PCUA). The branch was located at 280 North Sherman Street in Wilkes-Barre, Pa.. The credit union is encouraging members to use other branches or visit its eVirtual Branch at www.crossvalleyfcu.org until a temporary site is up and running later this week, said PCUA (Life is a Highway Feb. 8). "We appreciate the understanding of our members who typically use this branch location. We are working to be able to provide a temporary facility at this same site so members will be able to transact business until all repairs are complete," said Cross Valley FCU President/CEO Leonard Shimko. The credit union will make a formal announcement after the site becomes available, he added. The credit union posted pictures on Facebook. To view, search "Cross Valley Federal Credit Union."

L.I. editorial Include CUs small banks in bill

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LONG ISLAND, N.Y. (2/9/10)--Allowing credit unions to expand their small business lending programs makes sense now that President Barack Obama has announced a program to lend community banks $30 billion, according to an editorial in the Long Island Business News. “The Credit Union National Association, which obviously supports any legislation that would expand its members’ scope, argues that the legislation would create 7,000 jobs in New York without government expenditures,” the Business News said. “The pitch as a whole makes sense, but we’ve worried that linking credit unions to small businesses while also bailing out giant banks would leave community banks in the cold. “Now, however, there is a plan to include community banks in the economic turnaround,” the publication continued. “In his State of the Union address last week, President Obama advocated a new government program that would lend community banks $30 billion. That money would then be lent to small businesses. "And once those banks are involved, allowing credit unions to expand their business-loan programs would be a lot less offensive,” the Business News concluded. U.S. Sen. Kirsten Gillibrand (D-N.Y.) wrote an op-ed piece in the Jan. 29 issue of the Business News and explained why she backs member business lending (MBL) at credit unions. She co-sponsors a bill that would raise credit unions’ MBL cap and increase the loan amount that would trigger the cap (News Now Feb. 1). To read the editorial and the News Now article, use the links:

Some CUs walking away from VisaHeartland settlement

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HOUSTON (2/9/10)--More than 50 credit unions that walked away from a $60 million settlement offered by Heartland Payment Systems to Visa card issuers for the losses they incurred during a massive data breach are pursuing additional litigation. The litigation is in its early stages, Michael Caddell, a Houston attorney representing the credit unions, told News Now. There is a motion to dismiss the case that is pending, but Caddell said he expects the motion to be unsuccessful and the lawsuit to go forward. “We feel good about it,” Caddell said. The credit unions involved in the litigation rejected Heartland’s $60 million settlement because they would be receiving “a few pennies on the dollar,” for their losses, Caddell said. The institutions account for a few million of Visa accounts affected by the breach--which represent more than $100 million in losses, Caddell estimated. The Heartland Payment Systems data breach cost financial institutions up to thousands of dollars for affected accounts because of fraud charges and card replacements. Some of Caddell’s clients were offered less than 10 cents on the dollar, and some were offered less than one cent on the dollar. Though some are choosing not to accept the settlement, Caddell said he is not surprised that many institutions did accept the deal. Many feel their relationship with Visa is important. “Some of my clients are concerned about crossing Visa,” Caddell said. Another reason the settlement may have been accepted is because about 20 of the largest institutions involved own the vast majority of affected accounts. Heartland negotiated directly with the largest accounts, he said. “Once you take them out, you overcome the 80% benchmark [for the settlement],” Caddell said. About 97% of the affected institutions accepted the settlement, which was announced last week. Last Thursday, Visa extended the deadline institutions had to accept the offer. The deadline was artificial to begin with, because nothing in the marketplace required rapid action, Caddell said. “Why didn’t they give them more time?” he asked. “They wanted to rush people into the deal.” Caddell said he expects that another 50 million MasterCard accounts may be involved with a future settlement. As they did before, “Heartland may try to buy them off for a few pennies on the dollar,” he said. Heartland also has settled with American Express card issuers. MasterCard has not settled with Heartland.

IWash. PostI Save to Win produces stunning results

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HIGHLAND PARK, Mich. (2/9/10)--Eight Michigan credit unions have achieved “stunning results” through their Save to Win contest, which promotes member savings, The Washington Post said Sunday. In an article titled, “Credit unions launch a savings lottery, and everyone hits the jackpot,” Anne Stuhldreher wrote that the credit unions tried to get members to increase their savings by combining “the excitement of the lottery with the certainty of socking away cash.” With the program’s inception in January 2009, the participating credit unions said that for every $25 members saved, they would earn one entry into a drawing for the $100,000 prize one year later, the newspaper said. The credit unions also gave out monthly prizes of up to $100. Through the contest, credit unions also aim to attract new members and grow deposits. Participants could simultaneously join credit unions and open an account to compete for the prize, the paper said. “More than 11,000 Michigan residents opened accounts through the contest, saving $8.6 million throughout 2009,” Stuhldreher wrote. “People can open the accounts--they’re like certificates of deposit--with as little as $25. They need to keep their money in for at least a year and can make deposits as small as $1 as often as they like. “More than half of the participants said they hadn't saved regularly before opening their accounts,” she added. “About 60% admitted they played the lottery during the past six months. And 44% earned less than $40,000.” The Save to Win Program also was the topic Monday on MSNBC. Michigan Credit Union League President/CEO David Adams appeared on the network to discuss the program’s success. To read the Washington Post article, use the link.

Minn. officials CUs discuss foreclosure legislation

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ST. PAUL, Minn. (2/9/10)--As the Minnesota Legislature kicked off its 2010 session Thursday, State Rep. Debra Hilstrom (DFL-Brooklyn Center) and Kermit Fruechte of the Minnesota Attorney General’s Office, met with credit union professionals and volunteers to discuss the details of mortgage mediation legislation.
Click to view larger image Seeking credit union insight, from left, Minnesota State Rep. Debra Hilstrom (DFL-Brooklyn Center) and Kermit Fruechte of the Minnesota Attorney General’s Office discussed mortgage foreclosure prevention legislation with members of Minnesota Credit Union Network’s Political Involvement Committee on Thursday. (Photo provided by the Minnesota Credit Union Network)
Speaking with members of the Minnesota Credit Union Network’s (MnCUN) Political Involvement Committee, Hilstrom and Fruechte sought credit unions’ support for a bill to help state residents struggling to pay their mortgage. For the past year, the Homeowner-Lender Mediation Act has been a main focus of Minnesota credit unions’ advocacy efforts. Initially introduced in the Minnesota Legislature in 2009, the bill would require financial institutions to enter into mediation with borrowers who are in foreclosure. Throughout last year’s session, MnCUN staff and members of Minnesota’s GrassRoots Education and Action Team worked with elected officials to reduce the legislation’s scope and negative impact on credit unions. While the bill was ultimately vetoed by Minnesota Gov. Tim Pawlenty, the Minnesota Attorney General’s Office is pushing again to pass the legislation. At Thursday’s meeting, Hilstrom and Fruechte explained the bill’s provisions and received credit union insight on the issue. In their discussion with credit union representatives, the officials acknowledged credit unions’ efforts to work with members experiencing financial troubles. “Credit unions have not been part of [the mortgage] problem. You really are the people’s bank,” Hilstrom said “You were leaders when it came to the farmers’ crisis in the 1980s, and I am hoping that you will once again rise to the occasion.” During the conversation about the bill, the credit unions provided insight into their operations and asked questions about the legislation. They provided the policymakers important industry perspectives and raised issues not previously considered during the bill writing process. “The fact that Hilstrom and Fruechte desired to hear credit unions’ perspective on this issue demonstrates the value they find in the legislative feedback credit unions provide,” said Mara Humphrey, MnCUN vice president-governmental affairs. During the meeting, “We reinforced the fact that credit unions’ main focus is on serving members, not on making a profit.” The committee provides input and recommendations in the areas of legislative and regulatory efforts at the state and federal level and works with MnCUN staff to form MnCUN’s positions on legislation.

IL.A. TimesI and IAPI offer advice on switch to CUs

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LOS ANGELES and NEW YORK (2/9/10)--Prominent newspapers and a news service--the Los Angeles Times and the Associated Press via The New York Times--featured articles this weekend with advice about switching credit cards and checking accounts to credit unions. In Sunday's Los Angeles Times, finance columnist Liz Pulliam Weston answered a question from a reader who wanted "to stop supporting the greedy banking industry by changing my checking account from a big bank to my local credit union." The reader asked what would he have to give up to use a credit union. "You may not have to give anything up, and you may gain a few things, depending on how you bank," Pulliam wrote. She discusses the structure of credit unions, the fact that many consumers are drawn to credit unions because of better rates and lower fees "compared with those charged at banks." Pulliam advises that before switching, the consumer "review your transactions over the past few months and think about what loans or services you're likely to need in the future. Make a list and ask your credit union what it provides and what fees it charges." An Associated Press article in Monday's New York Times asks if switching to a credit union would bring any relief for consumers fed up by their bank's credit card fees and terms. It quotes statistics from the Credit Union National Association and from a recent study by the Pew Charitable Trusts citing lower rates at credit unions. "Many don't realize that credit unions are nonprofits owned by their members. The result is that they tend to offer more favorable terms," said the article. However, anyone making a switch can expect trade-offs and limitations, the article noted. Some credit unions might not have specific services such as rewards programs for credit cards. "If you're considering a credit card from a credit union, however, chances are that your main concerns are fees and rates." "Whether the lower fees and rates make it worth switching over to a credit union depends on your habits," said the article. "If you regularly carry a balance, the difference in financing charges may add up quickly." To access the articles, use the links.

CUAO op-ed Theres nothing more local than a CU

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BEAVERTON, Ore. (2/9/10)--There’s nothing more local than a credit union, Pamela Leavitt, Credit Union Association of Oregon senior vice president of governmental affairs and public relations, wrote in the Statesman Journal in a Sunday op-ed. Credit unions offer more favorable rates on savings and loan products than banks, and seek to serve their member-owners--as opposed to banks, who serve their shareholders, Leavitt wrote. She noted that credit unions are working to generate support for legislation that would allow credit unions to increase their ability to lend to small businesses. The legislation would lift the member business lending cap to 25% of assets from 12.25%. The change could provide $10 billion in new small business loans and 108,000 new jobs. In Oregon, that equals $227 million in loans and 2,400 jobs, Leavitt said. “Credit unions are actively lending while other funding sources have dried up or increased the number of hurdles to jump,” she added. To read the op-ed, use the link.

CUs take top spots in private student lending

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WASHINGTON (2/9/10)--Three credit unions have been ranked as top private student lenders by Student Lending Analytics (SLA). The credit unions are: Addison Avenue FCU, Palo Alto, Calif.; NASA FCU, Bowie, Md.; and Northwest FCU, Herndon, Va. They have partnered with Credit Union Student Choice to offer private student loans. Credit Union Student Choice is a credit union service organization founded to provide private student lending services to credit unions nationwide. The three credit unions generated four stars out of a possible five stars. Ratings were based on expected loan cost, borrower benefit savings, loan fees, repayment options, customer service and financial stability. The credit unions were ranked ahead of financial companies Discover, Wells Fargo, U.S. Bank, Chase, PNC, Citibank and Sallie Mae. SLA’s Private Loan Rankings service has been used by tens of thousands of individuals searching for private loans, said Credit Union Student Choice. Since launching in May 2008, Credit Union Student Choice and its partner credit unions have funded 12,000 loans.

CUNA awards A FCU youth 1000

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AUSTIN, Texas (2/9/10)--Alexa T., a 19-year-old A+ FCU credit union member, has received a $1,000 check from the Credit Union National Association (CUNA) for winning its 2009 national C-Note photo contest.
Click to view larger image Alexa T. (pictured with her mother) won $1,000 from a C-Note photo contest offered through Googolplex by the Credit Union National Association. Alexa went bungee jumping with her mother. She named the photo “Take a Risk, Live a Life.”
Click to view larger image Alexa T., a college student, plans to use the $1,000 grand prize she received from the C-Note photo contest to study abroad in Europe next spring. (Photos provided by CUNA)
C-Note is the high school level of the online youth magazine, Googolplex, offered by CUNA. Alexa’s photo, “Take a Risk, Live a Life,” shows her bungee jumping in New Zealand with her mom. Alexa’s caption reads, “My hope for 2009 is to take risks and live my life to the fullest.” The C-Note photo contest is open to 13- to 19-year-old credit union members. Winners are determined by online votes from the site’s visitors. Several times a year, participants submit photos for contests, whose winners receive a $100 award. Alexa’s photo originally won the “My Hopes for 2009” contest. At the year’s end, the themed-contest winners then competed for readers’ votes and a $1,000 grand prize. Alexa is in college and intends to use her prize to pay for her education. “When I won the contest, I was so excited and proud that my photo made it so far down the line,” she said. “I’m going to use it to help pay for me to study abroad in Europe next spring.” Bungee jumping was “an awesome experienced” that the C-Note contest allowed her to share with peers nationwide. A+ FCU has $760 million in assets. The customizable Googolplex provides content for elementary, middle and high school students in three separate sites, but with only one administrative site for credit unions to use.