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Identity fraud dropped 28 during 2010

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SAN FRANCISCO, Calif. (2/9/11)--Credit unions that have applied more stringent criteria to authenticate users and determine credit risk will be happy to learn their efforts work. The number of identity fraud victims in 2010 dropped by 28% to 8.1 million U.S. adults--the largest single-year decrease since 2003. And the total amount decreased to $37 billion--the smallest amount in eight years. However, consumers out-of-pocket expenses rose significantly--63%, said a new study. The survey, independently produced by San Francisco-based Javelin Strategy & Research and whose results were released Tuesday, is the nation's longest-running study of identity fraud. It was sponsored by Fiserv, Intersections Inc., and Wells Fargo & Co. (Business Wire Feb. 8), and is based on 5,004 telephone interviews. Intersections Inc. is a CUNA Strategic Services provider. The 8.1 million fraud victims were three million fewer than in 2009, and the total amount decreased from 2009's $56 billion to $37 billion. Javelin said consumers' costs rose significantly due to the types of fraud that were successfully perpetrated and an increase in "friendly fraud." The study defined identity fraud as unauthorized use of another person's personal information to achieve illicit financial gain. "Identity fraud underwent a marked decline and shift over the past year. This great news is a testament to the significant efforts businesses, the financial services industry and government agencies are making to educate consumers, protect data, and prevent and resolve identity fraud," said James Van Dyke, Javelin's president and founder. "Economic conditions also appear to have contributed to this year-over-year decline, as well as increased security measures and some significant law enforcement successes." He noted the increase in out-of-pocket costs "carries a warning: Consumers cannot put their finances on autopilot or ignore important safeguards. Simple safeguards may dramatically reduce fraud risk, such as frequently monitoring banking, credit and other financial activities, securing computers and paper records, and activating electronic alerts to help prevent fraud and address the situation quickly when it occurs." Among other findings:
* The mean fraud amount per victim declined to $4,607 from $4,991 in 2009. A likely factor, said Javelin, was the significant drop in reported data breaches. Industry reports indicated 404 breaches in 2010 with 26 million records exposed. That compares with 604 the year before with 221 million records exposed. * The mean consumer out-of-pocket cost due to identity fraud increased in 2010 to $631 per incident from $387 in 2009. The report attributed the rise to changes in the types of fraud perpetrated. These include new account and debit card fraud, and they highlight the need for continued consumer vigilance, said Javelin. The costs include those incurred by the victim toward payoff of any fraudulent debt as well as legal and other fees to resolve the fraudulent claims. * The most damage was caused by new account fraud. Although all types of fraud declined the past year, new account fraud--in which accounts are opened without the victim's knowledge--was responsible for the largest amount--$17 billion. Javelin reasoned this type of fraud is harder to detect and is the most likely to severely impact victims. Existing card fraud amounts declined by 38% to $14 billion from $23 billion in 2009. * Friendly fraud, or fraud perpetrated by people known to the victim such as a relative or roommate, grew 7% last year. Consumers between 25 and 34 years old were most likely to be victims in this type of fraud and most likely (41%) to report theft of their Social Security number. * Fraud inversely mirrors retail sales. The amount of fraud almost perfectly inversely mirrored retail sales over the past seven years. When retail sales increase, fraud has decreased. That, said Javelin, points to economic hardships as an overall contributor to fraudsters committing an identity crime.
Watch News Now later this week for more details about the findings.

Three separate mergers of credit unions completed

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MADISON, Wis. (2/9/11)--Three mergers of credit unions have been completed, announced the credit unions involved this week. Alliant CU, Chicago, has completed its merger with Tempe, Ariz-based Continental FCU. The merger adds more than 23,000 employees, family members and retirees of Continental Airlines and U.S. Airways as new members of Alliant. Alliant CU is the sixth largest credit union in the U.S. with more than $7 billion in assets and nearly 280,000 members nationwide. Formerly known as United Airlines Employee CU, Alliant has 75 years’ experience serving the financial needs of people in the airline industry. The merger extends Alliant’s reach into three large metropolitan areas: Tempe, Houston, and Newark, N.J. Alliant also serves Chicago, Denver, Los Angeles, Oakland, San Francisco, San Mateo, Calif., and Washington D.C.--Dulles. In Wisconsin, Milwaukee-based A-B CU merged with Madison-based Heritage CU, effective Jan. 31 (Madison.com Feb. 8). A-B was established in 1932 as the Allen Bradley Employees CU to serve Allen Bradley Co. employees. It had $56 million in assets but had suffered losses the past two years. Heritage now has $210 million in assets and serves 26,000 members. It has two locations in Madison, plus branches in Milwaukee, Sauk City, Prairie du Sac, Chetek and Ladysmith. It also has branches in Rockford, Ill., and Galesburg, Ill. In Illinois, ABBCO Community CU, East Alton, has merged with Scott CU, Collinsville, as of Monday. Scott gains ABBCO's $2 million in assets and 600 members. ABBCO served employees of Smurfit-Stone and Simmons-Cooper Law Firm, plus residents living or working in Madison County and their families (St. Louis Business Journal Feb. 7). Scott CU, headed by President/CEO Frank Padak, is open to anyone who lives or works in a 17-county area, plus anyone active in or retired from the military. It has nearly $700 million in assets and more than 81,000 members. Scott CU has 15 area locations.

CU System briefs (02/08/2011)

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* HARRISBURG, Pa. (2/9/11)--A large basket filled with Pennsylvania goodies, including Hershey's chocolate, is headed to the Wisconsin Credit Union Foundation as payoff for a Super Bowl wager between the Pennsylvania and Wisconsin foundations, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Feb. 8). The basket also includes a few fun items such as a Terrible Towel. The Wisconsin foundation plans to conduct an auction for the basket, with proceeds benefitting its financial literacy program. "While we are disappointed that our Steelers didn't bring the Super Bowl championship home to Pittsburgh, we are pleased that the wager we lost will help provide financial education to Wisconsin consumers through the Wisconsin Credit Union Foundation," said Jim McCormack, PCUA president/CEO. (Photo provided by the Pennsylvania Credit Union Association) … * WAUSAU, Wis. (2/9/11)--During the past month, employees such as
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these at Wausau, Wis.-based Connexus CU raised more than $700 for the American Cancer Society Relay for Life and donated more than 200 items to the Salvation Army. The money was raised through donations by employees who wanted to show their Packer pride in the form of casual days before and after playoff games and Sunday's Super Bowl XLV. The credit union also held a celebratory potluck for employees who donated cans of soup or other items on the Friday before the big game. 2011 marks Connexus' 17th year supporting the Relay. It has been the presenting sponsor for several years. Beyond the sponsorship dollars, Connexus employees raised $15,500 for the Relay last year. This year's goal is $17,000. (Photo provided by Connexus CU) … * SKOWHEGAN, Maine (2/9/11)--Joshua Lieberman, 21, who was convicted as the getaway driver in a 2008 robbery of Skowhegan-based Franklin-Somerset FCU broke his probation last week by entering a branch of the credit union and trying to get a loan--so he could pay the restitution mandated by the court for the robbery. His probation stipulated he was not to return to the credit union. Breaking probation could cost him seven years in prison under the "three strikes" rule. Lieberman said it was an honest mistake--he didn't know the branch was a Franklin-Somerset. His hearing on the matter is today (Kennebec Journal Feb. 8) … * MOUNT VERNON, Wash. (2/9/11)--North Coast CU could tell the man was not the typical depositor: he was pushing a wheelbarrow loaded down with pennies--56,600 pennies. The $566 deposit by Rand O'Donnell weighed 300 pounds. O' Donnell said he is trying to raise $1 million--in pennies--to help needy families in Mount Vernon, Wash. He already has raised more than $4,000 for the "Mountain of Hope" fund. O'Donnell hopes the fund will generate enough interest income to provide a steady revenue source for the Skagit County Community Action Agency, which helps families with emergency food, fuel and clothing (Press-Telegram Feb. 8) …

Ex-NCUA Chairman Johnson takes on Iowa CU oversight

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DES MOINES, Iowa (2/9/11)--Iowa's state credit union regulator, the
Click to view larger image In this 2005 photo, former Office of Thrift Supervision Acting Director Richard Riccobono; former NCUA Chairman JoAnn Johnson; and former Texas Department of Banking Commissioner Randall James prepare to testify during a House subcommittee on financial institutions and consumer credit hearing on financial services regulatory relief. (CUNA archive photo)
Iowa Division of Credit Unions (IDCU), will soon be led by former National Credit Union Administration Chairman Joann Johnson. Johnson served the NCUA for a total of six years starting in 2002, and led the agency for her final four years. Johnson previously served in the Iowa State Senate, chairing both the Iowa State Senate's Ways and Means and Commerce Committees during her time there. Upon becoming the new Iowa credit union regulator Johnson said in a statement she will "work tirelessly to ensure that the interests of the more than 785,000 members of Iowa credit unions are protected through thorough analysis and evaluation." Iowa Credit Union League CEO/President Patrick Jury in a release said that he is confident that the former NCUA head will be successful in her new position, adding that the league looks forward to working with her. James Forney announced his retirement as head of IDCU Monday. The National Association of State Credit Union Supervisors thanked Forney for his service, both to that organization and for his regulatory career. The group added that NASCUS is eager to work with Johnson "as she joins the state regulatory community."

Charlotte Metro CU creates buzz with Super Bowl ad

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CHARLOTTE, N.C. (2/9/11)--Charlotte (N.C.) Metro CU ran a 30-second local ad during Sunday’s Super Bowl in an attempt to recruit new members. The ad shows an alien-like creature flying past Charlotte landmarks and then walking inside a branch of the $226.3 million asset Charlotte Metro (Charlotte Business Journal Feb. 8). Created by Limerick Studios in Charlotte, the ad ran between the first and second quarters of the game. A teller narrates the spot in a manner akin to being interviewed for a science-fiction documentary. She is asked what she did when the alien walked into the credit union and asked to open an account. “We approved him,” she says, breaking into a grin. “Anyone can be a member.” “We’ve worked with Limerick Studios before and the work they did created a real buzz for us," Bob Bruns, president of Charlotte Metro, told the Journal. “I came to them with the seed of an idea I had for a new TV spot--and they made it bloom into something spectacular and meaningful to our audience.” To see the video, use the link.

Small-biz loans still lagging

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MADISON, Wis. (2/9/11)--Small-business loans in the U.S. still are lagging for several reasons behind recent increases in other types of loans to companies and consumers, according to a Tuesday article in The Wall Street Journal. Credit unions continue to step up to fill the gap. The Federal Reserve reported last week that 10% of large U.S. banks said they eased loan terms for small businesses in the past three months, according to the Journal. In third quarter 2010, U.S. banks and saving institutions had $631 billion in outstanding “small” loans to businesses--a 5% reduction from $667 billion as of March 31, said the Federal Deposit Insurance Corp. In the third quarter, the number of small-business loans and lines of credit were more than 70% less from their pre-crisis peaks, according to data from about 380 banks, credit-card companies and other lenders, Small Business Financial Exchange and Equifax Inc. told the Journal. Healthy, profitable U.S. banks say they are geared up to increase small-business lending, the Journal said. This is something credit unions have done throughout the recession, when they haven’t hit the MBL lending cap, the Credit Union National Association (CUNA) said. CUNA and credit unions are trying to get Congress to increase credit unions’ member business loan (MBL) cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $10 billion in loans into the economy and create as many as 100,000 new jobs, with no cost to taxpayers, CUNA says. Small-business optimism increased to 94.1 in January from 92.6 in December, according to the National Federation of Independent Business (NFIB) Small Business Survey (Moody’s Economy.com Feb. 8). January’s gain is the fifth increase in the past six months. The improved optimism on the part of small businesses is based on expectations for real sales during the next six months, NFIB said.

NBA star applauds Maine CUs raising 402K for hunger

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PORTLAND, Maine (2/9/11)--Maine’s credit unions celebrated their efforts towards “thawing” out hunger at the Thaw to End Hunger Celebration Event, Feb.7 in Portland. This year’s funds raised total $402,740, an increase of nearly $27,000 over last year’s record. The funds will allow food pantries across Maine to purchase nearly $5 million dollars of food through the Good Shepherd Food Bank.
Click to view larger image John Murphy (from left), president of the Maine Credit Union League; Luke Labbe, chair of the Maine Credit Union League’s Social Responsibility Committee, and National Basketball Association Hall-of-Famer Rick Barry prepare to hold the check with the record-setting amount raised by Maine’s credit unions in 2010 through the Maine Credit Unions’ Campaign for Ending Hunger. (Photo provided by the Maine Credit Union League)
The celebration luncheon featured an address by National Basketball Association Hall of Famer Rick Barry. Barry cited the accomplishment of Maine’s credit unions as “evidence of what can be done when you work as a team,” and applauded their efforts. “I applaud credit unions for taking on this cause and giving back to their communities and for the credit unions and their members for answering the call to action,” he said. “This is an extraordinary achievement, especially in these economic times." In addition to his keynote address on community service and the importance of ending hunger, Barry unveiled the check announcing the new record for Maine’s Credit Unions Campaign for Ending Hunger. Representatives from each credit union in attendance also had their picture taken with Barry, as he presented them with certificates and envelopes containing the total funds each credit union will distribute in their own community. The campaign “not only had a record setting year but it formed new relationships with food pantries across the state,” said John Murphy, president of the Maine Credit Union League. “These enhanced efforts are extremely important, as food pantries continue to see a significant increase in requests during these difficult times. The generosity of the over 600,000 credit union members in Maine is extraordinary. This marks the 15th consecutive year that the campaign has raised a record-setting total--a remarkable effort in such a challenging economy.” Since 1990, the campaign has raised $3.9 million to help end hunger in Maine.

New paper focuses on strategic tech planning

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MADISON, Wis. (2/9/11)--A new white paper from the CUNA Technology Council shares industry-expert insights on developing and following strategic technology plans, and includes four credit-union case studies. Among the topics addressed in “Strategic Technology Planning: Align Planning with Your Credit Union’s Goals”:
* Developing a technology strategy; * Operational considerations; * Selecting technology; * Technology trends; and * Common technology planning mistakes.
CUNA Council members are entitled to complimentary copies of this and more than 200 white papers; non-members may purchase the papers for $50 per copy.

MnCUN provides commissioner insight on CU issues

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ST. PAUL, Minn. (3/9/11)--Minnesota Credit Union Network (MnCUN) staff held an introductory meeting Monday with newly appointed Minnesota Department of Commerce Commissioner Mike Rothman to continue efforts to deepen government officials' knowledge of the credit union movement. Representing MnCUN were Mark Cummins, president/CEO; Mara Humphrey, vice president-governmental affairs; and John Wendland, general counsel. They provided Rothman with an overview of the current challenges and opportunities facing Minnesota's credit unions. The visit focused on continuing MnCUN's open line of communication with the regulatory agency, which experienced personnel shifts due to the election of a new governor. They discussed the importance of having a strong state credit union charter and the benefits this charter option offers to Minnesota credit unions. The group also outlined issues credit unions are monitoring at the federal level, including member business lending, supplemental capital and the Federal Reserve's proposed change to debit card interchange fees. Rothman expressed a desire to work with the movement on issues affecting the financial services industry and the state. He outlined his vision for the Department of Commerce, stating he will focus on protecting Minnesota consumers, providing business opportunities to grow, and effectively executing regulatory oversight. "Our meeting with Commissioner Rothman provided us the opportunity to discuss the various ways we can work with the Department of Commerce to advance the issues important to the agency and the credit union movement," said Cummins. "Fostering this open line of communication further develops the solid working relationship we have built with our state regulator." Rothman officially introduced himself to the movement during his keynote address at MnCUN's Credit Union Day at the Capitol last Thursday. There, he acknowledged that credit unions are critical to Minnesota's economy.

Advantis CEO on Fed-San Francisco advisory group

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SAN FRANCISCO (2/9/11)--Ronald A. Barrick, president/CEO of Advantis CU, Milwaukie, Ore., is among the nine members appointed to the newly formed Twelfth District Community Depository Institutions Advisory Council (CDIAC), announced the Federal Reserve Bank of San Francisco. The board of governors of the Federal Reserve System has created a national CDIAC to broaden the scope of input on economic credit conditions. To complement the national effort with regional perspectives, each Federal Reserve Bank is establishing a District Council comprising representatives from community banks, thrifts and credit unions. “I am looking forward to representing Advantis Credit Union and my credit union colleagues when sharing with the Federal Reserve what our members are actually experiencing on the ground and steps that might be taken to aid economic growth in the Pacific Northwest," said Barrick. "To have strong Oregon representation on this important advisory council will strengthen the Northwest’s influence and increase the focus the San Francisco Fed has on our district,” said Northwest Credit Union Association President Troy Stang. The Twelfth District council, drawn from communities across a nine-state region, will meet twice a year to provide input to the San Francisco Federal Reserve Bank’s senior management on topics such as economic and banking conditions, regulatory policies and payments issues. Members of the San Francisco Fed’s CDIAC will serve three-year terms.