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Second insurer sues to block claims in mortgage fraud

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NEWARK, N.J. (3/1/10)--The liquidating trustee of U.S. Mortgage Corp./CU National Mortgage LLC filed its response last week to a lawsuit by Lloyd's of London that seeks to block any potential claims from credit unions related to their losses when the mortgage companies went bankrupt after fraud was discovered. The case was filed in U.S. Bankruptcy Court for the District of New Jersey Tuesday. Lloyd's had issued Mortgage Bankers and Mortgage Brokers Professional Liability and Fidelity policies to U.S. Mortgage, the parent company of CU National Mortgage. The mortgage companies closed in 2009 after it was discovered they sold mortgages on behalf of credit unions to Fannie Mae without their knowledge and pocketed nearly $140 million. The insurance company is attempting to block claims from three credit unions that have filed suits in the matter--Picatinny FCU, Dover, N.J.; Suffolk FCU, Medford, N.Y.; and Sperry Associates FCU, New Hyde Park, N.Y. The three say they were bilked out of more than $50 million by U.S. Mortgage President Michael McGrath. Lloyd's is asking the court to rescind the fidelity bond it held for the mortgage company because McGrath confessed to fraud. It says it is endangered by the possibility of inconsistent judgments in the cases. If granted, that would mean it would not be liable for the claims. Nearly 30 credit unions have claims for more than $125 million. Lloyd's is the second insurer to seek a block on the claims. CUNA Mutual Group is also seeking a court order related to the bond it holds for 23 of the credit unions bilked by McGrath. Attorneys for the liquidating trustee, Anthony R. Calascibetta, filed a motion seeking relief from the automatic stay requested by the insurance company. The trustee maintains that Lloyd's had full and early notice of the bankruptcy cases pending and the confirmation plan in the bankruptcy. It added that the insurance policy is a core matter and claims regarding it should be decided by the Bankruptcy Court. A hearing is scheduled for 11 a.m. Tuesday on the objection.

CU System briefs (02/26/2010)

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* MADISON, Wis. (3/1/10)--UW CU in Madison, Wis., has announced a partnership with the Wisconsin Home and Economic Development Authority (WHEDA), which will add the WHEDA Fannie Mae Advantage mortgage program to the credit union's line of mortgage products. Available March 1, the WHEDA-backed loans will be available through UW CU for qualified buyers. The mortgage offers up to 100% financing on 30-year fixed-rate loans for first-time homebuyers. Borrowers won't be required to buy private mortgage insurance. The program includes guidelines for purchase price and borrower income limits, which are set per county. "This is an accessible, affordable program for first-time homebuyers," said Paul Kundert, president/CEO of the more than $1 billion asset credit union ... * MACOMB, Ill. (3/1/10)--Western Illinois CU is poised to assist members who are Western Illinois University employees through the state's budget crisis. "We want our WIU members to know we will be there to help them if there is a problem," said WICU President Brenda Coker. "We do not want to alarm our members; we only want to let them know we are prepared to help them." If the state's cash flow problems worsen, the credit union said, members can arrange for short-term loans to help pay their monthly bills. They can schedule a meeting with the credit union to discuss opportunities available for assistance. The credit union services faculty and staff at the university as well as employees of the county school system, including former employees, and their families ... * DES MOINES, Iowa (3/1/10)--Murray Williams, chief operating officer of the Iowa Credit Union League, earned his Certified Association Executive (CAE) credential from the CAE Commission of the American Society of Association Executives (ASAE). Williams was one of 278 association executives nationwide, and one of only two in Iowa, who successfully completed the CAE examination on Dec. 4. He joins 3,600 industry leaders worldwide wit the CAE designation ...

Colorado CU Brighton FCU boards OK merger

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LITTLETON, Colo. and BRIGHTON, Colo. (3/1/10)--The Board of Directors for Colorado CU, Littleton, Colo., and Brighton (Colo.) FCU unanimously approved a merger between the two credit unions. The National Credit Union Administration and the Colorado Department of Financial Services authorized the merger, which was effective Dec. 1. The merger creates a credit union with more than $100 million in assets and three branches, serving more than 8,500 members. Members, assets and employees will be integrated under the Colorado CU name, its state charter status. It will serve eligible multiple select employee groups and Littleton residents. “When evaluating this merger opportunity, it quickly became evident how both memberships would benefit from uniting these two strong credit unions,” said Mike Williams, Colorado CU president/CEO. He noted the credit union will serve the Brighton membership and the Brighton community “with expanded services and competitive rates.” In addition to expanded products and services, the credit union will maintain financial stability and excellent member service, said Roxene Auen, Brighton FCU’s former president and new Colorado CU Brighton branch manager.

Vermont league CEO testifies re state-owned bank

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MONTPELIER, Vt. (3/1/10)--Joe Bergeron, president/CEO of the Association of Vermont Credit Unions (AVCU), recently addressed Vermont’s House Ways & Means Committee regarding legislators’ interest in exploring how a Bank of North Dakota clone might work in Vermont. Bergeron and other panelists had more questions than answers about the merits and practicality of starting a state-owned bank in Vermont, AVCU said. The Vermont legislature isn’t the only state legislature considering the only state-government-owned bank in the country. Florida, Oregon and Washington legislatures also are looking into a state-owned bank (Newslines Express Feb. 26). The Bank of North Dakota has only one office, no drive-up and no ATMs. Although it can do business with the general public by law, it rarely does. Instead, in Vermont terms, it’s an amalgamation of the Vermont Housing Finance Agency, Vermont Student Assistance Corp., and Vermont Economic Development Authority, with some of the corresponding services of a corporate credit union added in, said AVCU. The bank was created 95 years ago, long before the first North Dakota credit union and before most banks. The difference between those institutions and counterparts elsewhere is that they’ve worked with the Bank of North Dakota as a source of student lending, mortgages, business lending and check settlement since their inception. States like Vermont have long since created other relations to fill these needs, posing resistance to major change, AVCU said. However, the knowledge that North Dakota’s state general fund received half of the bank’s profit of $60 million last year likely drew the attention of Vermont legislators, AVCU said.

Prime Financial CU closes branch drive-through

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CUDAHY, Wis. (3/1/10)--Prime Financial CU in Cudahy, Wis., announced it will close its Pewaukee, Wis., branch and a drive-through location in Wauwatosa, Wis. The closings will take effect March 13, said the $185.7 million asset credit union, which will continue to operate six other branches (The Business Journal of Milwaukee Feb. 26). “These were difficult but necessary decisions to help strengthen the credit union and reduce operating expenses,” said Christine Dawe, Prime Financial interim CEO. “We are confident that these steps will help Prime Financial CU continue to be a stable and strong credit union.” In March 2009, the Wisconsin Office of Credit Unions took control of Prime Financial and appointed Dawe to run it, the Journal said. The credit union had assets of $185.7 million as of June 30--the most recent report available. Prime Financial reported a net loss of $3.1 million for the period ending June 30.

Five CUs offering NYC SafeStart Accounts

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NEW YORK (3/1/10)--Five credit unions in New York City are participating in the NYC SafeStart Bank Account program highlighted by Mayor Michael Bloomberg during his 2010 State of the City Address as the first of its kind to assist the unbanked and underserved. The account is an ATM-based started account designed to help New Yorkers avoid costly fees such as overdraft fees or monthly account fees. Fees are the top reason that unbanked city residents do not use--or stop using--banks or credit unions, according to a city survey. The account, which can never be overdrawn, is being offered in partnership with 10 banks and credit unions, said a press release from the New York City Department of Consumer Affairs. Credit unions participating are Bethex FCU, Bronx; Brooklyn Cooperative FCU, Brooklyn; Lower East Side Peoples FCU, New York; Neighborhood Trust FCU, New York; and Union Settlement FCU, New York.

Louisiana league honors Mica for dedication to CUs

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HARAHAN, La. (3/1/10)--The Louisiana Credit Union League Board of Directors has honored Credit Union National Association President/CEO Dan Mica with a resolution and a contribution to the Credit Union House for his dedication to the credit union movement. Mica recently announced he will retire in January of 2011. The league board adopted a resolution in his honor at its December board meeting. "During his 13 years of service to the credit union movement, he has always been a true believer in the credit union philosophy of 'people helping people' and has provided invaluable leadership," the league said. It noted his integral role in establishing credit unions as "a powerful, ongoing and highly visible presence" in Washington. "He has raised awareness of credit unions across the nation as safe havens for consumers in the midst of the current financial crisis," the league said. He has "worked with CUNA to provide many invaluable services to credit unions and leagues, including regulatory advocacy, compliance and information, public relations, continuing professional education and business development." The league delivered the resolution along with a $5,000 contribution to CU House, a permanent presence for credit unions on Capitol Hill that serves as a welcoming embassy for credit union visitors in Washington D.C. and as a grassroots advocacy tool. It was the first league to recognize Mica with such a resolution and contribution.

MnCUN CEO touts safety difference in newspaper

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ST. PAUL, Minn. (3/1/10)--Mark D. Cummins, Minnesota Credit Union Network (MnCUN) president/CEO, used the pages of Finance & Commerce newspaper last week to educate readers about the credit union difference. A regular columnist for the publication, his article, titled “Credit unions as safe as banks, often more accessible,” was published in the newspaper’s “Association Update” section Thursday. The article explained the essence of the credit union difference, noting credit unions’ not-for-profit cooperative structure, democratic nature, and field of membership restrictions. Cummins also said that credit unions are critical to the financial stability of ordinary Minnesotans because they provide high-quality, low-cost financial services--which is as important in today’s economy as it was when credit unions were founded in the U.S. 100 years ago. “With the common philosophy of ‘people helping people,’ never have credit unions been more relevant as the industry helps Minnesota consumers ensure their own financial health and well-being,” Cummins wrote. The continued safety and strength of credit unions also was central to Cummins’ message. He used the forum to reassure consumers that credit unions are a viable alternative with deposit insurance coverage that is at the same levels as banks. “Credit unions are a vitally important part of Minnesota’s financial services landscape … and provide competition and choice,” Cummins wrote. “When credit unions provide exceptional service to their members, they raise the bar for all other financial institutions. Ultimately, all consumers benefit.” To read the column, use the link. MnCUN’s next column is slated to run March 26.

MBLs GAC speakers draw media attention

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WASHINGTON (2/26/10)--Comments by key congressional supporters of raising credit unions' member business lending cap that were made during the Credit Union National Association's (CUNA) Governmental Affairs Conference (GAC) were the focus of a number of media reports this week. Market News International and MarketWatch Wednesday reported on the issue. In the article, "US Rep Says Congress Should Increase Credit Union Lending Cap," Market News International began with Rep. Ed Perlmutter's (D-Colo.) comments at the GAC that Congress needs to support credit unions by raising the lending cap to allow credit unions to help more small businesses. It noted that credit unions currently can lending a maximum of 12.5% of total assets to small businesses and that the Small Business Lending Enhancement Act (H.R. 3380 and S 2919) proposes to raise the cap to 25%. It also noted CUNA estimates the measure would increase lending by $10 billion in the first year and create roughly 100,000 jobs without any cost to the taxpayer. The article also quoted Sen. Mark Udall (D-Colo.), noting the importance of small businesses to the economy, and Rep. Spencer Bachus (R-Ala.), chairman of the House subcommittee on financial institutions and consumer credit, who said it is very important that the government's attempts at financial reform "don't punish our credit unions." The MarketWatch article reported Rep. Brad Sherman (D-Calif.)'s comments "to a cheering crowd at the credit union conference," that "we look at credit unions who didn't cause the problem, who aren't asking for a bailout or taxpayer money. They are asking for Congress to get out of the way and allow for reasonable sources of capital." MarketWatch also reported Federal Reserve Chairman Ben Bernanke arguing that changing credit unions would raise additional questions. When Sherman asked about the legislation, Bernanke told a House committee that credit unions enjoy "tax-favored" status because there are certain restrictions placed on their activities. "The banks would complain obviously that if credit unions are allowed to do everything banks can do, why are they tax favored?" He noted it was a trade-off. Other topics brought up during the GAC also have been addressed in the media. Bloomberg via Business Week (Feb. 25) reported House Financial Services Committee Chairman Rep. Barney Frank (D-Mass.) telling the GAC that interchange fees are "not on our agenda this year," reported And Reuters News (Feb. 24) reported that Senate Banking Committee Chairman Christopher Dodd (D-Conn.) told reporters at the GAC that a financial regulatory reform bipartisan agreement may be reached "soon." The New York Times News Service also reported his comments at the GAC. A number of media also reported comments by Assistant Treasury Secretary Michael Barr about banks benefiting from a Consumer Financial Protection Agency and mentioned he made the comments at CUNA's conference. They included Reuters (Feb. 23), and The New York Times and CNNMoney.com (Feb. 24). National Credit Union Administration Board member Gigi Hyland's speech at the GAC was reported in Sources World (Feb. 23).

Study marks consumers transitions in FI relationships

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LITTLE ROCK, Ark. (2/26/10)--The economy has changed consumers' relationships with their financial institutions--and those relationships are in transition, according to an inaugural Retail Banking Consumer Dynamics study by Acxiom Corp., a marketing and management consulting group. The study is designed to help marketers understand shifting consumer behaviors emerging from the recession and financial institutions' challenges in growing business across three fronts--a crisis of trust, regulatory changes, and the emergence of virtual and mobile banking. Everyone surveyed has made adjustments in response to economic pressures, with 38% focused on paying down debt, said the Little Rock, Ark.-based firm. Regardless of economic status, one in four customers will shop around buying financial products, the study found. The study focused on 12 consumer segments. Mainstream and retired groups surveyed are more likely than affluent consumers to prefer local or community banks, while affluent consumers leaned toward national, super-regional/regional banks and credit unions. Of those surveyed, 32% would consider distributing their business across multiple institutions. Consumers are still wary of financial institutions and prefer to spread their risk across financial institutions, with affluent segments most likely to spread their wealth. said Acxiom. The strongest target for retail financial institutions' marketing is young adults, the study found. The group avoids running up debt and takes advantage of favorable conditions to make large-ticket purchases such as homes and furniture. Although members of this group have modest means, they are more likely than the other groups studied to buy a home within the next six months. That intent and their renewed financial responsibility make them prime for establishing long-term banking relationships, the study concluded. "It's a unique time to establish relationships with these young customers and communicate with them about products such as mortgage financing, retirement savings and investment education," said Randy Watson, vice president of account management at Acxiom. Affluent families don't want to give up much of their lifestyle aspirations and needs but they realize they need to better control their finances during a downturn, said the report. While they are more likely to buy big-ticket items soon, they also are trying to pay down debt and pay with cash when possible. The survey also found that virtual banking, although growing, still represents only 3% of all banking relationships. Those preferring virtual banking are mainly in the affluent and younger market segments, which means the virtual channel should not be ignored. Traditional brick and mortar branches may want to consider incorporating online banking solutions with incentives as part of a multichannel product offering, the survey said. "Now, more than ever, financial institutions need to pay attention to important emerging segments such as young adults, focus on competing at the product level instead of the overall brand level, and continue to engage consumers in multichannel relationships," said Watson.

Potential Latino CU in Toledo seeking a CEO

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TOLEDO, Ohio (2/26/10)--Nueva Esperanza Community CU, a proposed state-chartered, federally insured community development credit union in Toledo, Ohio, is seeking candidates to be its CEO. The credit union is being established to serve the increasing Latino-American population in the Toledo area (e-Lumination Feb. 24). Finding a CEO is one of the next steps in the formation and chartering of the credit union, said the Ohio Credit Union League. One of the credit union’s goals is financial education, counseling and outreach to working-class Latinos. Another is providing a safe, reasonably priced alternatives to many high-fee financial services such as certified checks, savings accounts and international money transfers, the league said.

Ohio league elects board officers

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COLUMBUS, Ohio (2/26/10)--The Ohio Credit Union League’s (OCUL) Board of Directors elected its 2010 officers during February quarterly meetings. Jennifer Ferguson, Bay Area FCU, Oregon, was elected league chair (eLumination Feb. 24). Other league officers are:
* Vice Chair: Tim Boellner, AurGroup Financial CU, Fairfield; * Treasurer: Barry Shaner, Directions CU, Toledo; and * Secretary: Stan Barnes, CSE FCU, Lake Charles, La.
Elected to the OCUL Services Corp. Board were:
* Chair: Tamlyn Straight-Schervish, Unity Catholic FCU, Parma; * Vice Chair: Bill Burke, Day Air CU, Kettering; * Treasurer: Shaner, and * Secretary: Phil Meyer, Ohio University CU, Athens.

Former bankers employed at CUs learn the CU way

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MADISON, Wis. (2/26/10)--Some employees at credit unions who used to work for banks say their work experience is significantly different when their clients are not just customers but also owners, according to a publication for bankers. Several advisors and program managers who switched jobs to credit unions from banks said the genuine service culture perpetuated by credit unions creates member loyalty worth noting (bankinvestmentconsultant.com March 1). “The relationship with members is just incredibly compelling, and the internal support is also amazing, because the employees at a credit union have a real drive to make a difference in the members’ lives,” Michael Gradl, a program manager at Redwood CU in Santa Rosa, Calif., told the publication. Larry Braley moved from Guaranty Bank in Stockton, Calif., to the Kern Schools FCU in Bakersfield, Calif., because, with $1.8 billion in assets and 185,000 members, it was the biggest financial institution in Bakersfield. Initially, he worked for CFS, a credit union-owned broker-dealer, but the investment program moved in-house when it grew to five representatives and three assistants, the publication said. “When our logo changed from KFS to Kern Schools FCU, it gave us instant credibility,” he added. “It turns out that link with the members is critical. Within weeks of that change, referrals jumped like crazy.” While some people say that credit unions’ characteristics are similar to community banks in terms of service and community loyalty, some of the former community bankers interviewed say that isn’t the case. “At a bank, even a community bank, even when they put a focus on service, it’s still ultimately about sales,” Donna McNeely, who in mid-February left a bank job to become program manager at Premier America CU in Chatsworth, Calif., told the publication. “At a credit union, even if they try to increase sales, the focus is still on service to the members,” she added. She also noted that there’s collaboration-- rather than competition--among different credit unions. To read the article, use the link.

CUNA Mutual Heritage Challenge nets funds for NCUF

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WASHINGTON (2/26/10)--The hundreds of Governmental Affairs Conference attendees who participated in CUNA Mutual Group’s “Heritage Challenge” helped raise $2,500 for the National Credit Union Foundation (NCUF).
CUNA Mutual Group’s Jerry Pavelich, chief financial officer, left, presented a $2,500 check Tuesday to Tom Decker, National Credit Union Foundation (NCUF) program director, and Tom Candell, NCUF interim executive director and managing administrative director, at the Credit Union National Association’s Governmental Affairs Conference in Washington, D.C. (Photo provided by CUNA Mutual Group)
The challenge, an interactive game, tested players’ knowledge of the long and often overlapping history shared by credit unions and CUNA Mutual. CUNA Mutual pledged a donation to NCUF for every point scored, and attendees responded by earning a $1,750 donation. CUNA Mutual added an additional $750 to bring the total donation to $2,500, which will be targeted to NCUF’s Development Education Program. The activity helped launch CUNA Mutual’s 75th anniversary celebration in 2010. “Our 75th anniversary is the perfect time to remind ourselves of the cooperative character that binds us,” said Christopher Roe, CUNA Mutual senior vice president of corporate-legislative affairs.” The funds and additional support provided by CUNA Mutual enable NCUF to sustain and grow its Development Education Program, said Tom Candell, NCUF interim executive director and managing administrative director. “More than 900 credit union professionals and volunteers have experienced developmental education training, which helps put into action the cooperative values and principles that make credit unions uniquely socially responsible,” Candell said. All who took the challenge were given a commemorative box containing a 1935 penny, symbolic of CUNA Mutual’s humble beginnings and its roots in the credit union movement, said the company.

CU System briefs (02/25/2010)

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* NEW YORK (2/26/10)--Terri J. Fowlkes, former director of the National Federation of Community Development Credit Unions' CDCU Mortgage Center LLC, has rejoined the federation in an expanded role as director of the Community Development Investment Program. Fowlkes succeeds Alice Greenwald, who had been with the federation for five years. Greenwald had just helped the federation complete its $25 million capital campaign, the largest in the organization's history. She has agreed to serve on the federation's Community Development Investment Advisory Committee. Fowlkes is founder and principal of TJF & Associates LLC, a strategic planning and consulting firm. She also has served in management positions at Citi, Carver Federal Savings Bank, and the New York Community Investment Co. LLC, and has taught financial courses at Seton Hall University, South Orange, N.J., and York College in Jamaica, N.Y. Part of her new duties will include overseeing the mortgage center ... * FT. LAUDERDALE, Fla. (2/26/10)--City County CU in Ft. Lauderdale has joined Mokugift's 1,000 Ways to Plant A Tree campaign. The credit union will plant a tree for every member who opts-in to paperless e-statements. As of Wednesday, the $294 million asset credit union has planted 168 trees, which will absorb an average total of 9,300 lbs. of carbon dioxide per year (PRWeb Feb. 25). The campaign enables innovative companies to invent new ways to plant a real tree as a gift for members at $1 apiece. The campaign aims to plant 100,000 trees by July 29. If the goal is reached, those trees would absorb an average of five million pounds of carbon dioxide per year ... * OAK RIDGE, Tenn. (2/26/10)--ORNL FCU President/CEO John McKittrick has been presented the Oak Ridge (Tenn.) Chamber of Commerce's Eugene L. Joyce Lifetime Achievement Award. The award honors him for his community service, professional achievement, dedication, leadership and personal values. Past recipients have included former Sen. Howard Baker, former State Rep. Gene Caldwell, and Oak Ridgers Tom Hill, Wanda Craven and George Matthews. McKittrick has been with ORNL FCU since 1989, when he became operations manager. He became president/CEO in 1994. He is a former chair of the Tennessee Credit Union League. ORNL has more than $1 billion in assets and more than 140,000 members ...

Two robbery suspects charged with attempted murder

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GURNEE, Ill. (2/25/10)--Two brothers have been charged with robbery and two counts of attempted murder for shooting multiple times at a Gurnee, Ill., police officer while fleeing a Jan. 29 robbery of Community Trust CU in Gurnee. Rashe Watkins, 33, and Julius Watkins, 29, both of Waukegan, Ill., also were charged with an Oct. 10 robbery of a bank branch in Long Grove. They are considered suspects in two other robberies of Great Lakes CU, Libertyville, and a PayDay Loan in McHenry (The News Sun Feb. 6). The men are being held on $2 million bond. The Federal Bureau of Investigation had posted a $20,000 reward for information leading to the arrest of two men who brandished a handgun with a target-marking laser sight during the robbery of the Community Trust CU. A police officer responding to the robbery alarm saw the laser beam when one of the men fired shots at him before getting in a getaway car driven by a second man. The arrests occurred at a field house and sports and fitness center in Waukegan after a SWAT team surrounded the center and used flash grenades or concussion grenades to smoke out the men.

Kern Schools FCU to close four branches

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BAKERSFIELD, Calif. (2/25/10)--Kern Schools FCU, located in Bakersfield, Calif.--an area hard hit by the recession--has announced it will close four of its 14 branches, effective March 9. The branches are East Hills, Save Mart Wasco, Save Mart Hageman and Ridgecrest, according to an announcement on Kern Schools FCU's website. Kern Schools President/CEO Steve Renock told The Bakersfield Californian (Feb. 24) the closures will result in 40 layoffs as part of a plan to trim the credit union's budget. Half the layoffs will come from the branch closings. Some staff at those branches will transfer to other branches. The other layoffs will be from back-office lending operations and the credit union's communications center. In January, the $1.7 billion asset credit union announced it had losses totaling $40 million for 2009 from borrowers having difficulty paying their auto laons and mortgage payments as the recession progressed. East Hills branch was closed because another larger branch exists about two miles away. Both Save Mart supermarket branches were closed because each require a staff of eight people and cannot provide services beyond those available at ATMs. The Ridgecrest branch is located two hours away--beyond the area the credit union can serve effectively, Renock told the newspaper.

Montana group Expand CU payday-loan pilots

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HELENA, Mont. (2/25/10)--Credit unions piloting short-term loans are supported by an anti-payday lending coalition in Montana. The coalition, calling itself "400% is Too High," has proposed an initiative to cap the annual interest rates of payday loans to 36%. It aims to put high-interest payday lending and title loans on the state's election ballot. Tom Jacobson, executive director of Rural Dynamics, a nonprofit consumer education organization backing the initiative, described the predicament many borrowers find themselves in once they've gone to a payday lender (Public News Service February). There's no doubt families struggling to make ends meet need access to small loans, which is why pilot short-term programs at credit unions could be expanded, he added. He noted the loans are offered at 18% and have other benefits. "And we can actually start getting them [borrowers] the financial counseling, the financial education, and start building them towards economic independence rather than keeping them trapped," he said. The organization has garnered support from a number of groups such as AARP Montana and the Center for Responsible Lending.

CUNA Mutual Group reports 50M in profits for 2009

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MADISON, Wis. (2/25/10)--CUNA Mutual Group reported a $50 million profit in 2009 after sustaining a $150 million loss in 2008. “All of our key capital measures improved in 2009, compared to year-end 2008,” Jim Buchheim, vice president of corporate communications, told News Now. “In many ways, 2009 was year full of challenges--with the economy being No. 1 and weather challenges in the first two quarters that increased the claims we had to handle. We were very pleased with how we performed from a capital standpoint. “We also feel good about the products we brought to credit unions,” he added. “We introduced new products and enhanced established products. We’re looking forward to a good 2010.” Some of the new offerings were: a new whole-life insurance product, a management and professional liability product added to bond coverage for credit unions, and a Medicare supplement product added to CUNA Mutual’s MemberCONNECT program. CUNA Mutual’s 2009 assets were up $1.2 billion year-over year. The company’s 2009 operating gain is anticipated to be roughly $80 million after taxes, Buchheim said. The company paid $883.1 million in claims during 2009--up from $852 million in 2008. CUNA Mutual will report a GAAP surplus of $1.599 billion--a jump of $395 million from 2008, and a risk-based capital ratio of 330% to 340%.

Oregon public funds bill passes Senate

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BEAVERTON, Ore. (2/25/10)--The Oregon Senate passed a credit union public funds bill, HB3700, Tuesday, 24-6. The bill, to be implemented in January 2013, removes the current $250,000 limitation on the amount of public fund deposits a credit union can receive, according to the Credit Union Association of Oregon (CUAO). “As our communities work to rebuild and rethink how best to support local, sustainable growth, the ability for public entities to invest more funds into credit unions provides them with additional local options," said Sen. Rick Metsger, a key supporter of the bill. "Since credit unions by definition serve a local community, those public fund deposits will stay and be reinvested in that community through consumer and business loans as well as sustaining and creating jobs. It’s a positive cascade effect," he added. Throughout the bill’s process, supporters have emphasized that the bill would extend the choice of public entities to seek a fair and competitive rate of return on “the people’s money.” A choice of depositories and competition for deposits of public funds is in the people’s interest, they say. “There are approximately 4,000 public agencies in Oregon that receive public funds and require the services of financial institutions to house those funds," said Pamela Leavitt, CUAO senior vice president of governmental affairs and public relations, in explaining why credit unions pursued the bill. "For years, credit unions have been hearing from local public entities that they would like the option of choosing a credit union. This bill simply gives them that option,” Leavitt added. In response to critics who indicated that credit unions’ not-for-profit status should preclude them from receiving public funds, CUAO reiterated that credit unions pay the same share of federal, state, and local taxes as any business, including real and personal property tax and employment taxes. Their tax exemption applies only to corporate income tax because of their not-for-profit structure. As in any cooperative, credit union members pay taxes on their dividend, CUAO said. In the 2003 legislative session, legislators passed a bill to allow public entities to deposit in Oregon credit unions up to the federally insured amount--which was then $100,000. Since federal deposit insurance limits increased to $250,000 per account, the current limit for public entities is $250,000. Since 2003, many public entities have indicated the current $250,000 limit is a great impediment and limits their ability to choose credit unions as a deposit option. The bill provides an open marketplace where all public agencies will be able to secure the most advantageous depository arrangements for the public's dollars, said CUAO.

Hot Springs FCU to merge into Diamond Lakes FCU

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HOT SPRINGS, Ark. (2/25/10)--Members of Hot Springs (Ark.) FCU voted this week to merge into Diamond Lakes FCU, Malvern, Ark. The merger, set to be finalized April 30, will result in member shares and loans of the $8.6 million-asset Hot Spring FCU being subsumed into the $1.4 million asset Diamond Lake FCU (Malvern Daily Record via Malvern-online.com Feb. 23). Hot Springs FCU employees will become employees of Diamond Lakes FCU, the newspaper said. Orientation and training for new employees will take place during the next two months, the paper added.

Summit CU State Central CU announce plans to merge

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MADISON, Wis. (2/25/10)--Summit CU in Madison, Wis., and Milwaukee-based State Central CU Tuesday announced plans for a merger, slated to become effective in June. Members of State Central will become Summit members. “We wanted a merger partner that shared our business philosophy of strong commitment to member service, and would be able to bring enhanced value to our membership,” said Jim Coraggio, State Central CEO. Coraggio will retire when the merger is complete. “This merger will benefit our respective memberships tremendously,” said Andy Faust, Summit CEO. The credit union will expand its services in Milwaukee, “and provide greater convenience and financial offerings to our combined membership.” With the merger, Summit will add two locations in Milwaukee, one in Waukesha, Wis., and one in West Bend, Wis. The merger is contingent on final approval from State Central’s membership, both boards of directors and regulators. Employees of the two credit unions were notified of the proposed merger last week. They were advised that no material changes in employment are planned. Summit CU has $1.362 billion in assets. State Central CU has $74.1 million in assets.

Date set for oral arguments in N.Y. mortgage tax case

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WASHINGTON (2/25/10)--The Credit Union National Association (CUNA) and the Credit Union Association of New York (CUANY) have learned that oral arguments for Hudson Valley FCU's challenge against a New York State tax requirement on credit union mortgage loans will be March 25. "This will be the first opportunity for the parties to make their arguments and may result in some indication of the judge's reaction to some of the issues in the case," CUNA General Counsel Eric Richard told News Now. CUNA and CUANY have filed a joint amicus curiae brief in the case brought by the Poughkeepsie, N.Y.-based credit union before the Supreme Court for New York County, which is a trial-level court located in Manhattan. The trade associations filed the brief in order to take a stand to defend the right of federal credit unions in New York to claim their tax-exempt status from state and local taxes within the context of the Federal Credit Union Act, according to CUNA. The credit union is suing to declare that its mortgages are exempt from the state's mortgage recording tax, which is used by New York as a general revenue collecting mechanism (as opposed to a fee to cover just the cost of operating the state's mortgage recording office, like in most states). The state claims that the federal credit unions must pay the recording tax based on arguments such as that federal credit unions are not federal instrumentalities and that the tax is a "privilege tax" (for the so-called "privilege" of recording a mortgage) that is paid "voluntarily." Hudson Valley FCU has paid nearly $3 million in Mortgage Recording Tax to New York on “no closing cost” loans which it made to members, according to a recent letter to the editor of Origination News (Feb. 1) written by the credit union's President/CEO Mary Madden. The oral arguments will pertain to the state's motion to dismiss the case and the credit union's counter motion for a summary judgment. Attorneys in the case have posted a news alert outlining the history and the issues to increase awareness and support for the case among other New York-based credit unions. To access the news alert, use the resource link.

Payment companies tackle social networking

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MADISON, Wis. (2/25/10)--Two online payments companies--Pay Pal Inc. and ClickandBuy International Ltd. of the United Kingdom-- have introduced applications that allow users to make purchases on Facebook Inc.’s social networking website. PayPal said customers can use its service to buy Facebook credits--used to buy virtual items in online games--and ads (ATM&Debit News Feb. 24). ClickandBuy has created a Facebook application that allows users to purchase virtual goods, content and services offered on the site, and conduct person-to-person fund transfers. Credit unions using social networking media to attract the younger set may want to monitor the new type of applications for possible future innovations. The two companies’ applications are indicative of the coming together of real-world and virtual currencies--particularly for low-value transactions, Beth Robertson, director of payment research at Javelin Strategy and Research, told the publication. “One of the key points of our payments platform is the ability for it to be integrated into what other people are developing,” Anuj Nayar, PayPal director of global communications, told the publication.

Oregon credit histories bill exempts FIs

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SALEM, Ore. (2/24/10)—Oregon’s state legislature has passed a bill that will bar many employers from checking the credit history of job seekers. However, banks, credit unions, and law enforcement agencies are exempt. According to the bill’s backers, thousands of people have bad credit because of events beyond their control—such as layoffs and medical bills—and their credit has nothing to do with their job qualifications (StatesmanJournal.com Feb. 23). Opponents say the legislature should not interfere with business personnel decision. More than half the nation’s businesses use credit histories in hiring decisions. The measure also exempts employers if the credit information is “substantially job-related” and the applicant receives disclosure of the credit check. The bill passed in the House Monday on a 33-26 vote. It had cleared the Senate earlier. The billis on its way to Gov. Ted Kulongoski.

Irish Central Bank New standard would affect CUs

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DUBLIN, Ire. (2/24/10)—The Central Bank and Financial Services Authority of Ireland have raised questions over the impact of proposed new accounting standards on credit unions, saying the cost of the extra requirements would not lead to benefits for members. The Central Bank made the statement in a letter to the Accounting Standards Body (ASB), which proposes to expand the use of the International Financial Reporting Standards (IFRS) (Sunday Business Post Feb. 21). The Central Bank questioned whether the extra requirements would “improve financial reporting for credit unions.” Credit unions also are seeking to be excluded from the definition of public accountability in the proposed rules. The Irish League of Credit Unions in a comment letter said that the “vast majority” of credit unions are very small and often rural organizations. Credit unions should be exempt because they are democratic, not-for-profit bodies with strict limits on loans, and are, by their very nature, different from other financial institutions, said the league.

Hong Kong CUs fighting tax battle

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HONG KONG (2/24/10)—China’s Inland Revenue Department is requiring credit unions in Hong Kong to pay tax for the first time in four decades, reports South China Morning Post (IHS Global Insight Daily Analysis Feb. 13). Some credit unions would be forced to pay millions of dollars in back taxes for the past seven years. The Credit Union League of Hong Kong said its member credit unions received the payment requests in March 2000 and that they have appealed. However, they received tax return forms for the current year last month. Total assets of the 42 credit unions were HK$5.3 billion (US$502.8 million) with a police credit union alone accounting for HK$3 billion (US$284.6 million). The Inland Revenue Department said credit unions don’t fit the definition of a club outlined by law and that they should be viewed as businesses and subject to tax on any profits from sale of assets or property. The league argued that credit unions only gather deposits from members to provide loans for “provident or productive purposes.” They cannot charge interest rates above 1% per month on loan balances.

NY City Council committee hears league on deposit choice

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NEW YORK (2/24/10)—The Credit Union Association of New York (CUANY) testified Monday before the New York City Council’s Committee on Community Development, calling on the council to join Mayor Michael Bloomberg and Gov. David Paterson in support of municipal depository choice. Municipal depository choice would allow government entities such as cities, towns, counties, public schools, fire districts and public libraries the option of depositing public funds in local credit unions or community savings institutions. While most states, including Connecticut and New Jersey, allow municipal deposit choice, and the Federal Credit Union Act authorizes federal credit unions to accept local government deposits, commercial banks in New York State own a monopoly on such deposits, said CUANY. “Credit unions have the potential to help state and local officials in a way that doesn’t cost state or local taxpayers a dime, but instead will save them money and increase the range of financial options available to elected official in New York City and throughout the state as they deal with the great recession and the growing budget crisis,” said Linda Levy, CEO of the Lower East Side Peoples’ FCU (LESPFCU), while testifying on behalf of CUANY and 4.3 million credit union members in the state. “Municipal deposit choice allows these public funds to stay local, allows for more reinvestment in our communities, helps local governments increase revenue, and creates savings for the taxpayers,” continued Levy. “In short, municipal deposit choice puts more public dollars back into Main Street.” Councilman Albert Vann is sponsoring City Council Resolution 17, which calls upon the state legislature to adopt and the governor to sign legislation allowing credit unions, savings banks, and savings and loan associations to accept and secure municipal deposits. Vann’s resolution builds on the support recently demonstrated by Paterson and Bloomberg. Paterson included the expansion of municipal depository choice in his proposed 2010-11 budget, and Bloomberg proposed an investment of up to $25 million in New York City credit unions to foster investment in low-income areas. “It is time for New York State to allow the city to invest its money in these community development financial institutions (CDFIs). While major commercial banks have decreased their amount of lending, these local CDFIs have provided lending opportunities in neighborhoods throughout New York City,” said Vann, who represents the city’s 36th District in Brooklyn. “Many of these institutions have given a lifeline to New York City’s small businesses that are struggling to find capital, while also offering opportunities to individuals traditionally without bank accounts or banking and financial services,” Vann added. In her testimony, Levy noted that LESPFCU serves the Lower East Side and Central Harlem, employees and volunteers of several non-profit organizations and local businesses, and low-income residents throughout the five boroughs. Credit unions make a larger percentage of loans to low- and moderate-income borrowers than banks and thrifts, according to Home Mortgage Disclosure Act data. Ninety-six percent of members in federal credit unions have household incomes of less than $100,000 per year, according to the National Credit Union Administration. “Allowing these institutions to accept municipal deposits will only strengthen the communities they serve by offering competition and an alternative to commercial banks, who often have no significant relationship to the communities they serve,” continued Vann. He urged the state legislature to adopt and the governor to sign “this much-needed change into law so that the economic vitality of communities throughout New York City can be improved and strengthened by community-based financial institutions.” William J. Mellin, CUANY president/CEO, said that “in recent months, a variety of publications and organizations have been urging consumers to ditch their ‘big banks’ in favor of credit unions or community banks. This broad support confirms that the credit unions’ member-owner operating model works, and I’m confident that local government entities, like more and more consumers, will soon be jumping on the credit union bandwagon as long as they are given the freedom to do so.” Levy added, “The governor’s proposal simply gives those localities that wish to deposit funds in credit unions or savings banks the authority to do so. While the big banking special interests are lobbying hard to deny local governments that option on the grounds that credit unions are non-profits and don’t pay corporate taxes, the fact is the banking industry constantly misrepresents the true tax status of credit unions. The simple truth is that credit unions do pay taxes, including payroll taxes and local property taxes, to the very local entities looking for help through municipal deposit freedom.” Access to municipal deposits would allow credit unions to further reinvest in their local communities, via loans to members and local small businesses, said CUANY. In the year ending September 2009, credit union loans grew by nearly 3%, while banks reduced their loans by nearly $575 billion, a decline of 7.2%, according to the Federal Deposit Insurance Corp. and NCUA.

Several vendors at GAC get media coverage

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WASHINGTON (2/24/10)—While most of the media attention garnered by credit unions this week is related to new credit card rules and member business lending, several vendors exhibiting at the Credit Union National Association’s (CUNA) Governmental Affairs Conference (GAC) in Washington this week were featured in numerous articles. A new alliance between CUNA Strategic Services (CSS) and Fynanz Inc., a private student loan provider, was announced Monday. It also was reported Monday’s editions of St. Louis Business Journal and IT News Online. Panini, which has partnered with CSS to provide check scanners, announced it will launch an initiative aimed at rolling out Check 21 to credit unions during the GAC. That news was reported by Cox News Service Monday, as well as Dayton Daily News and Finextra. It also made news in the Spanish language Document Management. A Personal Teller Machine—a so-called super ATM—being promoted at the GAC by Sandy, Utah-based uGenius Technology was the topic of a number of articles. The machines let a motorist talk to a teller at a remote location 24/7. The company has sold almost 50 of the machines to credit unions and banks in Michigan, North Carolina, New York and Pennsylvania, said the reports. So far the company and its demonstration at the GAC have been reported in: Monday’s issue of BostonHerald.com, Yahoo! Finance Canada , Daily Finance Blog, LocalNews8.com, and MyFox Utah, and Tuesday’s issue of Deseret Morning News (Feb. 23).

New Mexico Association rebates CUs dues

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ALBUQUERQUE, N.M. (2/24/10)--The Credit Union Association of New Mexico (CUANM) board of directors announced that a dues rebate from CUANM will be sent back to its affiliated credit unions. After completing CUANM’s 2009 end-of- the-year financial report, the rebate--calculated from CUANM’s remaining adjusted net income for 2009--equals about 20% of the credit unions’ normal dues it was determined. “Associations such as ours were built to support the credit union world and that means more than just collecting dues,” said William Jacobs, chairman of the CUANM board and CEO/president of White Sands FCU, Las Cruces, N.M. “The role of the association is to know when it is time to give back and that’s exactly what we have done,” he added. “This rebate represents years of hard work that put us in the financial position to accomplish this. I am very proud of what that association is doing for the good of the credit union world.”

CUs cards featured in INY TimesI ICBS NewsI ICNNI

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MADISON, Wis. (2/24/10)--The advantages of credit union-issued credit cards were the subject of several national media-outlet reports Monday, including CBS News, The New York Times and CNNMoney.com. Ondine Irving is a credit card consultant who works with credit unions nationwide to develop a fair and ethical credit card program for consumers. Her work with First Community FCU in Kalamazoo, Mich., was the subject of a report on Monday’s CBS Evening News with Katie Couric. The $405 million-asset First Community sold it credit card portfolio in 2001-2002, but after some concern was expressed by its members, it decided to take back its card business. The credit union realized it could run a credit card program better, more ethically and more effectively than a bank, Irving told CBS. At credit unions, “profits go back to members in terms of lower loan rates and better savings rates,” she said. Meanwhile, bank profits go to pay banks’ “enormous marketing expenses and huge bonuses to CEOs and executive staff,” Irving added. While only about 50% of U.S. credit unions issue credit cards, credit unions generally keep their interest rates under 18%, charge late fees of $25 and under, have no penalty pricing, and no balance transfers charged, Irving said. Credit unions do all that and make money; banks also could do that, but they choose not to, she added. To see the video, use the link. In a Monday article about banks pressuring customers on overdraft fees as provisions of the Credit Card Accountability, Responsibility and Disclosure Act take effect, The New York Times ends with a favorable contrast of a credit union’s consumer-friendly approach compared with some other financial institutions. “At least one credit union is using the new Fed rules to try to differentiate itself from its competitors,” the Times said. “On its website, the UW CU in Madison, Wis., says, ‘While we expect some financial institutions may aggressively market the idea of a consumer opt in within the boundaries of this regulation, we have no such plans.’” To read the article, use the link. Credit unions tend to have lower fees and better rates, CNN.Money.com said Monday, specifically citing Pentagon FCU, Alexandria, Va., for terms of its Visa Gold card and Navy FCU, Vienna, Va., for its CashRewards card. To read the article, use the link.

CU System briefs (02/23/2010)

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* RIDLEY, Pa. (2/24/10)--A former executive vice president and marketing director of Boeing Helicopters CU, based in Ridley, was sentenced Monday to 28 months in prison and ordered to pay restitution totaling $1.25 million for taking kickbacks to arrange loans for unqualified applicants. According to the U.S. Attorney's Office, Anthony Forte, 43, of Glen Mills, pleaded guilty to charges of conspiracy, loan fraud and bank bribery. His brother, David Forte, 39, Prospect Park, who has a malignant brain tumor, was sentenced to one day in prison and ordered to pay more than $178,000 in restitution. The Fortes allegedly received about $100,000 in kickbacks from more than $2.2 million in fraudulent loans. David Forte was not an employee of the $106 million asset credit union but was recruited to find applicants for the loans (Associated Press and Philadelphia Business Journal Feb. 22) ... * PONTIAC, Mich. (2/24/10)--Genisys CU President/CEO Dianne Addington has announced she will retire April 15 after a 37-year career. She spent 22 years as CEO of T&C FCU, then Genisys CU after a 2008 merger with USA CU (Michigan Monitor Feb. 22). Addington was inducted into the Michigan Credit Union Hall of Fame and recently was presented the Glenn H. Friedt Sr. Business Medal of Honor by Cleary University. Jackie Buchanan will succeed her as CEO. Buchanan has worked with Addington for 19 years at both T&C CU and Genisys as executive vice president and chief information officer. Tom Alter, who has spent 15 years with USA CU and Genisys CU, will be appointed as president/chief operating officer ... * LONGVIEW, Texas (2/24/10)--Telco Plus CU President/CEO Diane Hollis will retire Friday after 45 years in the credit union industry (News-Journal.com Feb. 21) . She had served in the position since 1988. Her career began as a bookkeeper at LeTourneau FCU. Succeeding Hollis as president/CEO will be Betty DeWeese, who has been executive vice president of Telco Plus since 2006. DeWeese began her career in August 1983 at East Industrial Employees CU and began working for Telco when East Industrial merged with East Texas Telco CU in 1998. Telco Plus CU has $52 million in assets and is based in Longview, Texas ... * LANSING, Mich. (2/24/10)--Bobby J. McCulley, chairman of the board of OMNI Community CU, died Feb. 14 in Kalamazoo, Mich., according to the Michigan Credit Union League (Michigan Monitor Feb. 22). He was 72. McCulley served in a variety of roles as a volunteer with the credit union the past 20 years, including board vice chairman and board chairman. He also was on the board of directors at Ralston Purina CU and elected to the credit committee when Ralston and the Battle Creek, Mich.-based OMNI merged. He was elected to OMNI's board in 1988. He is survived by his wife, two sons, four grandchildren, two great-grandchildren, a brother, two sisters, and two nieces ...

Pay attention to card changes Hampel tells readers

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SAN DIEGO (2/23/10)--New rules for credit cards went into effect Monday, and consumers will need to monitor changes that their card issuers may implement, Credit Union National Association (CUNA) Chief Economist Bill Hampel told a San Diego newspaper. "The new rules are leading to changed behavior by card companies, and consumers would be very well advised to pay particular attention to terms and conditions, fees and rates on their cards to make sure they have the best deal," Hampel said in The Daily Transcript (via San Diego Source Feb.20). The new rules refer to certain provisions of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 that became effective Monday. They limit interest rate hikes, restrict penalties and provide protections to help consumers pay their bills on time, said the newspaper. The article also referred to a recent study by CUNA and the Consumer Federation of America, which found that 85% of consumers are aware that the new regulation was going into effect Monday but they lacked specific knowledge of how the new law might impact their pocketbooks. The study found 36% of consumers believe that the new law caps late fees at $35, and 31% believe the cap is at 20%. The law does neither. While most organizations say the CARD Act is a step in the right direction, the newspaper reported, they also believe that consumers must be proactive in managing their debt and stay vigilant in monitoring their accounts for abuse.

CUs touted in IWall Street JournalI ICNNI

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NEW YORK (2/23/10)--CNN and The Wall Street Journal, in their coverage about the new credit card rules that became effective Monday, told consumers worried about increases in their credit card rates that they can go to credit unions for lower rates. On Monday, CNNMoney.com's Gerri Willis discussed the changes from several provisions of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009. Calling the act a "new era with credit card companies playing by new rules," she noted that card companies will lose $11 billion a year in interest and fees, and to make that up, they will create new fees. Consumers who don't want to pay higher fees on their credit cards have several alternatives, Willis said. The first she mentioned was credit unions. "You can go to credit unions, which are less likely to charge fees and penalties on credit card accounts than banks do," she said. Willis noted one must be a member of a credit union through an organization. To find a credit union to join, "ask your employer or your college alumni association or go to creditunion.coop to find one." To see the broadcast, use the link and click on "Gerri's Top Tips" on credit cards. Saturday's issue of The Wall Street Journal also discusses the changes that began to take effect Monday. "Credit unions often offer lower rates than large banks, although some of their rewards programs are less generous than those of big banks," the Journalsaid. "There are more than 8,000 credit unions in the U.S., and they tend to have pretty expansive definitions of who can join. The criterion for joining some credit unions is as simple as your ZIP Code," the article said. "Navy Federal, the nation's largest retail credit union, offers rates as low as 7.9% on a basic platinum Visa card for three million members of the Army, Navy, Air Force, and Marine Corps and their families," said the Journal. "That compares with an interest rate as low as 11.99% on a Citibank Platinum Select MasterCard, touted as one of the cheapest rates around by Lowcards.com, a card-comparison website," the newspaper said. The average rate at the end of last year was roughly 14%, according to the Federal Reserve," the Journal reported. To view the article, use the resource link.

Southwest Corporate launches site to assist in comments

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DALLAS (2/23/10)--Southwest Corporate has launched a resource site on its website to assist and encourage credit unions to write comment letters about the National Credit Union Administration's (NCUA) Proposed Rule for Corporate Credit Unions (Reg. 704). The site contains links to the proposed rule, a copy of Southwest Corporate's comment letter, an executive summary of the letter and general tips to aid credit unions in offering their own comments. NCUA's deadline for comments is March 9. In a letter to Southwest Corporate's member credit unions last week, CEO John Cassidy urged interested credit unions to write comment letters asking NCUA to revise sections of its proposed rule. "Southwest Corporate believes its ability to continue to serve its member credit unions will be severely curtailed unless certain provisions of the proposal are modified," Cassidy said. In its comment letter to NCUA on Feb. 17, the corporate identified 14 issues that it said needed attention, including two key issues. The first is NCUA's proposed cash flow mismatch limitations. Under the proposal, cash flows of a corporate credit union's assets and liabilities would be so closely matched "that corporates would be unable to generate sufficient earnings, and the sustainability of any future corporate business model would be questionable," Cassidy said. "Unless this rule is modified, Southwest Corporate will not be able to comply with the retained earnings requirements that are also included in the proposal." The second issue relates to the transition period for corporates to meet the proposed rule's minimum risk-based capital requirements. It sets the effective date for two new risk-based capital requirements at one year after publication of Part 704 in final form. Southwest Corporate recommends the transition period be set at one year after the effective date of the publication of the revised Part 704 in its final form or one year after the implementation of a legacy asset solution--whichever comes later. "Such a transition period would provide all credit union industry participants with sufficient time to communicate, to implement a recapitalization plan, and to revise their respective business models," Cassidy noted. Southwest Corporate is also developing more Web-based resources to enable credit union leaders to explain to their members the background of corporate credit unions and the role they play in the cooperative credit union structure, said the corporate. For more information about the corporate's comment letter, use the resource link. The Credit Union National Association's (CUNA) Task Force released its report Monday at CUNA's Governmental Affairs Conference. (See RELATED STORY in News Now's Washington section, "CUNA task force calls for new corporate model.")

CU System briefs (02/22/2010)

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* GUERNEE, Ill. (2/23/10)--Guernee, Ill., police and the Federal Bureau of Investigation have offered a $20,000 reward for information leading to the arrest of a thwarted credit union robber who fired shots at police while exiting the building. The Jan. 29 incident involves a takeover attempt at the Community Trust CU, Gurnee. The lone robber forced his way into the credit union at 7 p.m. as it was closing, brandished a handgun and threatened employees. He used plastic zip ties to bind the hands of credit union employees, then tried to gain entry into the vault. He fled with $4 he took from an employee. As he exited he spotted a police officer responding to the robbery and opened fire. The officer was not injured. The suspect then fled behind a building. Police believe there was a getaway car waiting (The News Sun Feb. 4) ... * RALEIGH, N.C. (2/23/10)--State Employees' CU (SECU) members through the SECU Foundation are providing a 0% $500,000 construction loan for a new With Friends Residential Maternity Home in Gaston County, N.C. SECU Foundation's partner in the project is North
Click to view larger image Click for larger view
Carolina Housing Finance Agency. The foundation loan will provide an estimated savings of $30,000 to $40,000 for With Friends Inc., a nonprofit that services youth who are homeless, runaways or in crisis. The new home serves seven counties and will benefit pregnant teens or parenting homeless or displaced girls with babies. From left are: Ralph Robinson; Tuga Adams (directly behind Robinson); Mayor Jennie Stultz; Dr. Pat Krikorian; Nakeita Norman; Robert Becker; Mary Reca Todd; Stacy Cooper, vice president of SECU's Gastonia-Cox Road branch; and a local youth. (Photo provided by State Employees' CU) ... * LANSING, Mich.(2/23/10)--Members of NuUnion CU, headquartered in Lansing, Wednesday approved a merger with Detroit Edison CU (DECU), headquartered in Plymouth. The merger is pending approval from the Michigan Office of Finance and Insurance Regulation, the National Credit Union Administration, the Federal Trade Commission and the Department of Justice. It will create the fourth-largest credit union in Michigan--at $1.5 billion in assets--and positions the credit unions to serve both memberships with increased access to branches and ATMs, a stronger capital position and enhanced products and services. The new organization will become Lake Trust CU. "The Lake Trust name is representative of the new organization which will stretch from Lake Michigan to Lake Huron and Lake Erie," said Steve Winninger, NuUnion president/CEO. He will serve as the new credit union's CEO, while DECU CEO William J. Thiess will become president ... * PLANO, Texas (2/23/10)--EDS CU President/CEO Kent Lugrand announced that the credit union has changed its name to InTouch CU. The change was effective Feb. 16. "The new name defines our commitment to our members and our affiliated sponsor companies while also broadening the scope of our membership," Lugrand said. "As we look to enhance our financial position through sponsor companies, member and georgraphic growth in the communities served, changing our name was important to our fugure growth." With the new name comes a new logo and web address www.itcu.org. Lugrand noted the core values of the credit union and commitment to service will remain the same. "Our reason for being is to be 'in touch' with what our members want," he said ...

Oklahoma ECU site assists members on furlough

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OKLAHOMA CITY (2/23/10)--Oklahoma Employees CU launched a new website to help Oklahoma residents who are on job furloughs because of state budget cuts. The website, http://www.helpingok.com, contains furlough news, financial tools, resources, a blog and frequently asked questions (The Daily Oklahoman Feb. 21). “We were looking for a furlough resource site to recommend to our members and we realized that none existed for Oklahomans,” Mark Kelly, Oklahoma Employees CU president/CEO, told the newspaper. “We saw a need and made the decision to fill it. “We are hopeful that other organizations can become involved and offer special discounts on the site as well,” he added. Oklahoma Employees CU, based in Oklahoma City, has $289.3 million in assets.

ISt. Louis Post-DispatchI CUs a payday loan option

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ST. LOUIS (2/23/10)--Credit unions offer consumers a viable option to high-interest-rate payday loans, the St. Louis Post-Dispatch said Sunday. “Several area banks and credit unions have developed short-term, low-dollar loan products to compete with the payday lenders,” wrote Post-Dispatch columnist Mathhew Hathaway. “These loans--sometimes described as unsecured, revolving lines of credit or even ‘enhanced’ overdraft protection--aren’t cheap, but they’re a much better buy than the payday loans.” Financial institutions have difficulty contacting consumers considering a payday loan--often due to money mismanagement or a financial setback--but there’s a need for this type of loan product, Eric Acree, executive vice president of Vantage CU in Bridgeton, Mo., told the paper. “There’s probably some embarrassment, so they might not want to talk to us,” Acree added. “But they need to sit down with someone at their bank or credit union and talk about what else is available to them.” To read the column, use the link.

Iowa state leaders support CUs Little Guy (02/22/2010)

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DES MOINES, Iowa (2/23/10)--The Iowa Credit Union League (ICUL) held its annual Legislative and Regulatory Issues Conference Feb. 16-17 in Des Moines. More than 100 Iowa credit union representatives convened to learn more about the legislative issues affecting the credit union industry and interact with their legislators.
Click to view larger image Pictured at the Iowa Credit Union League’s annual Legislative and Regulatory Issues Conference Feb. 16-17 in Des Moines, are, from left: Jim Hagerman and John Houck of Lynn Area Community CU, Cedar Rapids, Iowa; State Sen. Swati A. Dandekar (D-18); Deb Salz and Alice Hagerman, Linn Area Community CU; and State Rep. Nick Wagner (R-36). (Photo provided by the Iowa Credit Union League)
Speakers included Iowa Senate Majority Leader Mike Gronstal and Iowa House Republican Leader Kraig Paulson, Gov. Chet Culver, Chairman of the Iowa Republican Party Matthew Strawn, and Tom Henderson, Polk County Democratic chairman. Culver praised the work credit unions do for Iowa communities and commended the on-going effort of credit unions to fully serve their members. Gronstal noted that credit unions are able to continue providing valuable financial service to their members, which is a testament of what makes Iowa’s credit unions so strong. Gronstal and Paulsen agreed that Iowa credit unions are an ideal model of the credit union movement’s cooperative spirit. Conference participants and state legislators were also introduced to “The Little Guy” who represents the Iowa men and women that credit unions serve.

WOCCUs Bierecki tapped for Polish national council

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WARSAW, Poland (2/23/10)--Grzegorz Bierecki, World Council of Credit Unions’ (WOCCU) second vice chair and president of the National Association of Cooperative Savings & Credit Unions (NACSCU), has been named to Poland’s National Development Council.
Grzegorz Bierecki, president of Poland’s National Association of Cooperative Savings & Credit Unions, explains Polish credit unions’ media strategy to a U.S. credit union delegation. Bierecki was named to Poland’s National Development Council. (Photo provided by World Council of Credit Unions)
The council is a newly established nonpartisan advisory body that offers input on social and economic issues to Polish President Lech Kaczynski. The appointment of Bierecki, who heads WOCCU’s member organization in Poland, was made Feb. 15 at Kaczynski’s invitation. “The appointment of the council is an expression of my well-established belief that a strategic plan is needed for the development of Poland from a long-term perspective,” Kaczynski wrote to Bierecki in a letter thanking him for his participation. “I do hope that the works of the council will introduce a new quality into the debate about the future of Poland. It is extremely necessary these days given both the national and international challenges that our country faces.” Kaczynski convened the council to better address issues critical to Poland’s social and financial well-being. Of the council's 44 members, Bierecki is the only representative chosen from among Poland’s financial institutions. The council’s 10-member financial team is rounded out by four university finance professors and five former finance ministers and deputy ministers. “The nomination of Grzegorz Bierecki is another example of the importance that President Kaczynski attaches to Poland’s credit unions, as well as to the personal role Grzegorz has had in their re-establishment,” said Pete Crear, WOCCU president/CEO. “Under his leadership, Poland’s credit union movement has become a true success story, not only in its rapid development, but in terms of the comprehensive financial services its credit unions provide to two million Polish families.” In addition to finance, council discussion topics will include Poland’s demographics, infrastructure, educational and scientific development and other subjects. The group will convene its next meeting in Warsaw on Thursday to discuss conditions and perspectives on Poland’s public finance situation. “Credit unions have played an important role in the transition of the Polish economy and society from communism to a market economy and democracy,” Bierecki said. “Now is the time to define their role in serving the future of Poland.”

iBelong campaign increased consumer awareness

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HARRISBURG, Pa. (2/23/10)--Three days of filming new iBelong commercials ended Saturday in the Philadelphia area, said the Pennsylvania Credit Union Association (PCUA). The commercials, which explain the benefits of credit union membership, aim to bring more consumer awareness about credit unions.
Syretta Washington, a credit union member, is participating in a video shoot for the Pennsylvania Credit Union Association's new iBelong commercial. (Photo provided by the Pennsylvania Credit Union Association)
The new spots feature various home and workplace settings and more than 20 randomly selected credit union members. They will begin airing in early April (Life is a Highway Feb. 22). In 2009, the iBelong campaign aired 12,149 television spots and 9,921 radio spots. Across the state, at least 83% of women ages 25 to 49 saw or heard an iBelong commercial at least five times a month, PCUA said. A survey of heads of nonmember households in the state found:
* Awareness of credit unions is up 10.2%; * Awareness that credit unions are owned by members is up 22.9%; * Awareness that credit unions have unique strengths is up 7.8%; and * Awareness that credit unions offer no or low fees is up 3.4%
Pennsylvania credit unions saw growth in membership that outpaced the national average for the last two quarterly reports, said PCUA. Member growth in the state was 2.3%, compared with the national growth rate of 1.6%.

National foundation presents four Wegner Awards

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WASHINGTON (2/23/10)--For the second straight year, the National Credit Union Foundation (NCUF) presented four Herb Wegner Memorial Awards at its annual dinner Monday night. Nearly 900 credit union leaders and supporters attended the event held in conjunction with the Credit Union National Association's Governmental Affairs Conference in Washington, D.C. "This year’s winners join an elite group of 43 individuals and 19 organizations whose extraordinary efforts over the past 22 years have earned the credit union movement’s highest national honors,” said emcee Bob Schumacher, CEO of MountainCrest CU, Arlington, Wash. Awards and recipients include:
* Lifetime Achievement Award: Richard Marriott Heins, retired president/CEO of CUNA Mutual Group, Madison, Wis.; * Individual Achievement Award: Richard “Dick” L. Ensweiler, president/CEO of Texas Credit Union League; * Outstanding Organization Award: MultiCultural Banking Center, Harbor One CU, Brockton, Mass.; and * Outstanding Program Award: National Financial Literacy Program, the Emmy-awarding public broadcasting show Biz Kid$, Washington Credit Union League.
Schumacher, who also chairs NCUF’s Awards and Recognition Committee, remarked that “Each year when I attend this special event, I re-dedicate my life to advancing our great credit union movement. The achievements of every Wegner Award winner can inspire in all of us a desire to do our very best to better the lives of credit union members.” For more information about the winners and the awards, use the resource link.

Altura CU to close Coachella branch

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RIVERSIDE, Calif. (2/22/10)--Riverside, Calif.-based Altura CU will close its Coachella branch on March 24, according to Altura President/CEO Mark Hawkins. The branch originally was scheduled to close May 7, 2009. At that time, the City Council of Coachella intervened and asked Altura to reconsider, said Hawkins' announcement. The council, concerned about losing one of only two financial institutions in town, requested Altura keep the branch open at least through Dec. 31, 2009. "We understood their concerns and decided to give the location more time," said Hawkins. "Unfortunately, difficult economic conditions continue to affect the Inland Empire, including Coachella." Hawkins noted the area's high unemployment and foreclosure rates "created challenges for all financial institutions, us included. It was a very difficult decision and one we hoped we wouldn't have to make in 2010." All positions at the branch are being eliminated. "Our Coachella employees have been offered severance packages, outplacement services and Altura's loan modification packages to assist them in this transition," Hawkins said. Altura has $890 million in assets.

Vermont CUs planning iBelong campaign

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SOUTH BURLINGTON, Vt. (2/22/10)--Vermont's credit unions are planning a spring 2010 iBelong television campaign to tout the benefits of credit union membership, said the Association of Vermont Credit Unions (AVCU). AVCU's Marketing Committee chaired by Matt Levandowski of Heritage Family FCU, Rutland, is creating the campaign, which is based on materials from the iBelong program created by the Pennsylvania Credit Union Association (Newslines Express Feb. 19). The two associations signed an agreement last year allowing Vermont to use the Pennsylvania campaign. Commercials will begin airing in broadcast and cable markets throughout the state the week of April 12 and will continue until Memorial Day, said AVCU. Prior to the launch, the iBelong website will debut upgraded credit union locators and search engine optimization that will bring up the iBelong site as a first option when someone enters "Find a credit union" into a search engine like Google.

Silver State Schools CU gets infusion from ASI

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LAS VEGAS (2/22/10)--Silver State Schools CU has received a capital infusion to bolster its general reserves from its private share insurer, announced President/CEO Dave Rhamy. In a bulletin to members on the credit union's website Thursday, noted the credit union's plan, announced in December, "to immediately increase our reserves through a cooperative effort with our deposit insurance provider. "I am pleased to announce that we have successfully completed this transaction," Rhamy said. "This capital infusion bolsters our general reserves now, and positions us to continue to help our members as we move forward." A specific amount was not mentioned, but a local newspaper said the state's largest credit union had received $22 million from its insurer, Ohio-based American Share Insurance (ASI) (Las Vegas Review-Journal Feb. 19). On the credit union's website, Rhamy said the credit union has "seen periodic downturns in the national economy, but certainly nothing compares to the past two years." In 2008, the credit union reported a record $10 million net income from operations but set aside $10 million in reserves for potential loan losses, Rhamy said. During 2009, as property values continued to ecline and record numbers of members experienced reduced income, the credit union recorded $8.1 million net income from operations but set aside $59 million to cover current and potential future loan losses. "We have plans to replace those set asides, but the replacement rate will be slow given the continued sluggish economic recovery," he said. According to the local newspaper, local banking professionals said the collaborative effort is "extremely unusual and possibly unique." Nevada is one of five states hit hardest by the recession. The 60-year-old credit union serves primarily teachers and their families.

More pubs see CUs as lending option for small biz

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MADISON, Wis. (2/22/10)--Credit unions could lend and are looking to lend more to U.S. small businesses, according to two publications. The California Credit Union League and the Credit Union National Association (CUNA) support legislation that would allow expanded lending to small businesses. The California league is supporting the federal Small Business Lending Enhancement Act (House Resolution 3380 and Senate Bill 2019) that would raise credit unions’ small business lending cap to 25% of total assets from 12.25% reported the San Gabriel Valley Tribune (Feb. 19). The article also was published in the Pasadena Star-News. Whittier Daily News and USA Today featured a link to the Valley Tribune. Passage of the legislation could infuse up to $10 billion into the national economy and create more than 100,000 jobs--at no cost to taxpayers, Bob Arnould, league senior vice president of government affairs, told the newspaper. For California, raising the lending cap could potentially result in more than $2 billion in new loans, he added. “We came through this current economic crisis without any [Troubled Asset Relief Program] money,” Arnould told the paper. “We think we can create 25,000 jobs in the state of California by freeing up credit unions to expand lending.” About 180 credit unions nationwide are at their lending limit and can’t lend more unless the cap is raised, CUNA said in the Entrepreneur.com (Feb. 18). Because credit unions are nonprofits and offer lower interest rates than other financial institutions, an increase in their lending capabilities could be especially positive for small businesses, the publication said. To read the articles, use the links.

Move money to CUs suggested in Nevada revenue hunt

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CARSON CITY, Nevada (2/22/10)--The state of Nevada should move its corporate accounts from major banking institutions to Nevada’s credit unions and community banks, according to a state policymaker. State Senate Majority Leader Steven Horsford (D-Las Vegas) told The Nevada Appeal that many businesses cannot obtain loans from national financial corporations. Horsford spoke to the newspaper regarding ideas policymakers have to generate more revenue for the state and reduce budget cuts. The state budget has an estimated $881 million shortfall (Nevada Appeal Feb. 19). The state should put its money into credit unions and banks, Horsford said, and then provide businesses incentives to invest in them. To read the full article, use the link.

CU System briefs (02/19/2010)

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* PARKERSBURG, W.Va. (2/22/10)--CORRECTION: In its original article posted Friday about West Virginia Corporate CU's financials for 2009, News Now reported three facts incorrectly. The correct facts are: The corporate's net income for December was $22,000. The corporate's losses totaled $2.9 million in 2008, and the corporate is located in Parkersburg, W.Va. News Now regrets the errors ... * LOUISVILLE, Colo. (2/22/10)--Boulder Valley CU opened its second student credit union branch in the Boulder Valley School District at Monarch High School Feb. 12. The Coyote Student CU, named for the school's mascot, will provide an opportunity for students to learn about financial services and credit responsibility through experience in a safe environment with parents' involvement and support. It will feature an Educational Student Visa Credit Card that requires a parent's signature and joint involvement. Students are required to take an online credit responsibility course provided by a financial literacy website. A Boulder Valley CU branch manager will oversee day-to-day operations. Attending the ribbon-cutting ceremony were, from left: Coyote Student CU student staffers Rochelle Bergen, a senior, and Mandy Murray, a junior; U.S. Rep. Jared Polis (D-Colo.); Monarch Principal Dr. Jerry Anderson; and Coyote student employee Andrew Eberhardt, a sophomore. (Photo provided by Boulder Valley CU) ... * GRAND RAPIDS, Mich. (2/22/10)--Lake Michigan CU, a $1.7 billion-asset, Grand Rapids, Mich.-based credit union, more than doubled its net income in 2009 while recording double-digit volume growth. The credit union said it recorded net income of $15.6 million last year, compared with $6.2 million in 2008. Last year’s financial results include an “unbelievable” 2.7% net interest margin, said Sandy Jelinski, president/CEO. She added that 2010 should be an even better year because an improving economy should generate greater loan demand (Mlive Feb. 19) … * MANHATTAN BEACH, Calif. (2/22/10)--Kinecta FCU announced that Korn/Ferry International, a recruiting firm, will help the credit union search for a new president/CEO. The firm was selected based on its track record of attracting highly qualified and diverse candidates, the credit union said. Steven Lumm, Kinecta interim president/CEO, is working with the board to advise the CEO search process and is overseeing Kinecta's operations. Kinecta has 3.5 billion in assets ...

Total collected for Haiti--805621

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MADISON, Wis. (2/22/10)--Money collected for credit unions’ Haiti earthquake relief efforts is $805,621, announced the Worldwide Foundation for Credit Unions. The foundation is the World Council of Credit Unions’ (WOCCU) charitable arm. Of this total, the U.S. credit union movement raised $383,964.57 through CUAid, credit unions’ online disaster relief system--$383,964.57, according to Jill Stevenson, marketing and communications coordinator for the National Credit Union Foundation (NCUF). Photos taken of Haitians and the aftermath of the earthquake will be displayed at WOCCU’s booth at the Credit Union National Association’s Governmental Affairs Conference in Washington, D.C., according to Valerie Breunig, executive director of the Worldwide Foundation for Credit Unions. The conference kicks off Sunday and ends Thursday. WOCCU will be located at booth #304. The photos were taken by WOCCU staff and photographer Christian Kober. In addition to contributing to the credit union disaster relief fund, credit unions nationwide have been assisting with Haiti relief efforts in other ways:
* Springfield, Mo.-area credit unions volunteered for Convoy of Hope, a nonprofit organization that feeds the hungry and provides pure drinking water to people worldwide. Credit union employees helped Feb. 9 with sorting, packing, labeling and taking inventory of supplies sent to Haiti, according to the Missouri Credit Union Association (The Missouri difference Feb. 12); * Pacific Service CU, Walnut Creek, Calif., donated $10,000 to Haiti relief efforts through the American Red Cross; * Melrose CU, Queens, N.Y. collected $100,500 to help Haitians affected by the earthquake. About $500 was collected through donation jars in the lobby. The credit union’s board also approved a $100,000 donation to be distributed among five organizations--with much of the donation going to NCUF in connection with WOCCU, Melrose CU said; and * Freedom CU, Warminster, Pa., donated shoes, crutches and other medical supplies to a relief effort. Freedom employees donated 52 pairs of shoes through Soles4Souls, a charity that collects and distributes shoes. Freedom also gave $1,000 to disaster relief efforts in late January.
To support Haiti's credit unions and members through the international credit union disaster fund, make payments, via check, credit card or wire to: Worldwide Foundation for Credit Unions Inc. 5710 Mineral Point Road Madison, WI 53705, USA Donations also can be made online with a credit card at www.woccu.org/give. For wire transfer information, contact Valerie Breunig, Worldwide Foundation for Credit Unions at 608-395-2055 or via e-mail vbreunig@woccu.org. Please indicate the donation is designated for the Haiti Disaster Relief Fund. U.S. credit unions also can support WOCCU’s relief efforts by donating through CUAid. Use the link.

Global hacking attack raises security concerns

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NEW YORK and HERNDON, Va. (2/19/10)--During the past 18 months nearly 75,000 computers at about 2,500 companies and government agencies have been hacked in what computer security experts say is a coordinated global attack (The Wall Street Journal Feb. 18). And the attacks are still operating. More than 374 are U.S.-based organizations, said NetWitness Corp., a Herndon, Va.-based company that uncovered the Kneber botnet attack last month (ComputerWorld Feb 18). Kneber, which began in Germany, is a variation of the Zeus botnet. It is working in tangent with another bot, the Waledac, making taking down the malicious software more difficult. Companies compromised in the U.S. include Fortune 500 companies; local, state and federal government agencies; Internet service providers, and educational institutions. The Wall Street Journal named pharmaceutical company Merck & Co., Cardinal Health Inc., Paramount Pictures, and software company Juniper Networks Inc. as among the companies with compromised computers. It is not known if credit unions are directly involved, but data stolen include banking information such as login credentials mainly for financial accounts, credit-card transactions and intellectual property. However, NetWitness Corp. told Computerworld the bot also appears to be harvesting other kinds of information that suggest Zeus is being put to broader uses than just stealing bank credentials. The Wall Street Journal reported that in more than 100 instances, hackers gained access to corporate servers storing large quantities of business data such as company files, databases and e-mails. Computers of at least 10 government agencies were accessed. For some companies, enterprise systems were compromised as a result of "drive-by downloads," while others were targets of "spear phishing" campaigns designed to get individuals to open up e-mails with malicious links and attachments. More than half the machines infected are also infected with a peer-to-peer bot called Waledac, with the Kneber bot actively logging Waledac activitiy and downloading it to machines it has infected. This makes it harder to take down both bots. When one is removed, it triggers another to insert it back into the compromised system. NetWitness said that rival cyber gangs are teaming up in the cyberattacks. The news comes just after Google Inc. disclosed it and more than 20 other companies had been breached by hackers from China. The hacking affected 196 countries, with the highest concentration of infected computers in Egypt, Mexico, Saudi Arabia, Turkey and the U.S.

UW-Oshkosh moves to direct lending on student loans

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OSHKOSH, Wis. (2/19/10)--The University of Wisconsin-Oshkosh announced this week it is changing its federal student loan process by requiring students borrow from the federal government--not from banks or credit unions. The new policy will begin this summer. In a press release, the university said the move is prompted by its joining "thousands of other U.S. higher education institutions in the Federal Direct Student Loan Program." Chancellor Richard H. Wells said the university compared two student loan programs, the Federal Family Educational Loan Program and the Federal Direct Student Loan Program, before its decision. "Many banks are no longer servicing student loans or are restricting who will receive loans," he said. The program "ensures funds are available for students," he added, saying that with direct lending, funding is secure, fees and interest rates are more favorable and processing is streamlined. As a result of the change, UW-Oshkosh students with federal Stafford, Grad PLUS and Parent PLUS loans will borrow funds from the federal government instead of from multiple private banks and credit unions. Students participate in the program by filling out a Free Application for Federal Student Aid (FAFSA), signing an electronic master promissory note and participating in online entrance counseling. Changes in federal student loan processes the past three years have prompted some credit unions to get out of the student loan business. Others have joined private student loan networks to fill the gaps between federal student loans and students' needs. Two companies that have proved popular with credit unions entering the private student loan market are Fynanz Inc., which powers cuStudentLoans.org, a private lending marketplace, and Credit Union Student Choice, a credit union service organization. Fynanz currently serves 30 credit unions in its turnkey program, and Credit Union Student Choice announced its 100th credit union client this week.

Appeals court Resentence exec in embezzlement case

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MICHIGAN CITY, Mich. (2/19/10)--A credit union executive convicted of embezzling about $339,000 should be re-sentenced, according to a recent ruling by the Michigan Court of Appeals. Terry L. Brandt, 58, was convicted in September 2008 of embezzling from Michigan Center, Mich.-based Cascades CU while he was chief financial officer and treasurer of the credit union. Brandt wired money from the credit union's general account to his personal trading accounts at least nine times between October 2006 and January 2008, according to court records (News Now Sept. 5, 2008). In October 2008, Brandt was sentenced to five to 20 years in prison for the offense. However, Court of Appeals judges said his sentencing guidelines--a point system used to calculate a spectrum of possible penalties--were incorrectly calculated by the lower court judge (Jackson Citizen Patriot via Mlive.com Feb. 17). The prosecution in the original case argued that when Brandt committed the crime he abused his authority status--and he was assessed points for this, the newspaper said. The appeals court found that, as defined by law, Brandt did not abuse his authority by exploiting a victim--in this case, the credit union, the paper said. “He simply was in a position to take the money and hide the transfers,” according to the court’s written decision released in January. Jerrold Schrotenboer, chief appellate attorney for Jackson County, Mich., said he is appealing the decision, according to the paper.

100000 missing from CU in Tennessee

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CLINTON, Tenn. (2/19/10)--The Tennessee Bureau of Investigation has launched a criminal probe after Anderson County Employees FCU in Clinton, Tenn., reported that more than $100,000 was missing. The money shortage was discovered during a routine audit Jan. 19 of the $1.8 million-asset credit union, said Jim Sanderson, chairman of the credit union’s board (The Knoxville News-Sentinel Feb. 18). Between $100,000 and $200,000 is missing, Sanderson told the paper. Shirley McKinney, the credit union’s office manager, was put on supervised leave without pay the day the shortage was discovered, Sanderson added. “We have taken action to protect everybody,” Sanderson told the paper. A letter that’s being drafted for review by the credit union board soon will be sent to members notifying them about the incident, Sanderson added.

Corporate CEO Support corporates because of liquidity they provide

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HIGHTSTOWN, N.J. (2/19/10)--It is a critical time for credit unions to support corporates because of the liquidity services they provide, according to Jay Murray, president/CEO of Mid-Atlantic Corporate FCU. Murray spoke Tuesday at the Shore/South Jersey Chapter Meeting about corporate credit unions. He focused his discussion on the concept of rethinking the future of the corporate network, said the New Jersey Credit Union League (The Daily Exchange Feb. 17). Communication and collaboration between credit unions and corporates also is key, Murray said. Corporates have maintained “too much of a vendor status” with their credit unions, and it is critical now more than ever that they work together, Murray added. He also discussed the National Credit Union Administration’s proposed Regulation Part 704. Comments for the proposal are due March 9. The regulation could be a turning point that could set the course for the industry’s future, Murray said. The proposal requires that corporate directors be made up of individuals who currently hold the position of CEO, chief financial officer, or chief operating officer at their credit union. This makes it almost impossible for corporates whose smaller members do not have these titles and it limits some other very qualified people, Murray said. He cited the example of a current Mid-Atlantic board member--a former credit union CEO--who is also a CPA and attorney. Under the new regulation, the board member would not be eligible to serve. Murray also discussed board governance, criticizing the regulation’s six-year turnover for those serving on the board. Six years is too short for a board member to make any progress. A balance between the proposed limitations and current freedoms so corporates can keep daily operations efficient and effective also is important, he added. Regulation 704 has good intentions, but is attempting to put a stop to what has already happened, “closing the barn door after the horse has ran out,” Murray said. To solve this economic and credit crisis, he said, capital needs to be restored and preserved now. “We’re not where we need to be, but we’re getting there,” Murray concluded.

CORRECTION W. Va. Corporate meets today to discuss losses

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PARKERSBURG, W. Va. (2/19/10)--(News Now's original story had several errors. This story is the corrected version. News Now regrets the errors.) West Virginia Corporate CU will have a special informational membership meeting today in Charleston, W.Va., to discuss the National Credit Union Administration’s proposal for a rewrite of regulations for corporate credit unions and to provide an update on the corporate’s capital position. The meeting will be led by Board Chair Tom Brewer and CEO Charles Thomas, according to the corporate’s website. The corporate has released its unaudited financials as of Dec. 31, indicating a $10 million loss for 2009, compared with a $2.3 million loss in 2008. The corporate experienced a $11.3 million loss in capital held in U.S. Central FCU, with $1.1 million of U.S. Central member capital shares still on its balance sheet in December. All of its U.S. Central paid-in-capital was depleted. Net income for December was $22,000 compared with a loss of $2.9 million the year before. West Virginia Corporate CU, based in Parkersburg, W.Va., has $245 million in assets.

CU System briefs (02/18/2010)

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* MARLBOROUGH, Mass. (2/19/10)--The Massachusetts Credit Union League Social Responsibility Committee will conduct its 10th Annual Children's Book Drive in April, said the league (E-Weekly Feb. 17). Last year, the league and 41 credit unions participating in the month-long event collected 19,211 children's books for nonprofit agencies throughout the state. They have collected 190,300 books since the project began. Credit unions participating can choose their collection method for new and used books and the length of time they will collect ... * HERNDON, Va. (2/19/10)--The Northwest FCU Foundation has been selected as a participating organization in "Disney's Give a Day. Get a Disney Day" promotion. The promotion began Jan. 1 and will run through Dec. 15 or until the limited number of tickets are gone, whichever comes first. Hoping to inspire one million people to volunteer, the Disney Company is giving individuals who commit to participate in their community a free one-day admission to either Disneyland, or Walt Disney World Resort. Gerrianne Burks, foundation chairman and president/CEO of Northwest FCU, noted. "By participating as a community partner, we hope to also inspire people to give back and practice acts of kindness" ... * SAN DIEGO (2/19/10)--Staff from San Diego-based Point Loma CU (PLCU) will discuss its college scholarship program and answer questions from viewers during a Scholarship Bank broadcast on Spanish language Univision Channel 34. The broadcast will air 6 p.m. to 7 p.m. Wednesday. PLCU Business Development Managers Joyce Parra and Adriana Brunner will outline the program and explain the application process. Each year, the credit union awards $7,500 in scholarships to local high school students headed for college. Recipients can receive an additional $1,000 per year for their sophomore, junior and senior years as long as they meet certain academic requirements. The credit union was invited to participate in the broadcast because of its relationship with San Diego County Office of Education's Migrant Education Program, which helps migrants improve their lives and finances ... * HARRISBURG, Pa. (2/19/10)--Ed Cialella, longtime board president of First Choice FCU, New Castle, Pa., and former president of the Shenango Valley Chapter of Credit Unions, died Monday, according to the Pennsylvania Credit Union Association (Life is a Highway Feb. 18). He was 82. Cialella was a credit union volunteer more than 35 years. "He was the cornerstone of First Choice FCU," Marilyn Wehr, CEO, told the association. Funeral services were held Thursday ...

Rhea appointed to Georgia Centrals board

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DULUTH, Ga. (2/19/10)--Georgia Central CU’s Board of Directors appointed John Rhea, CEO of Robins FCU in Warner Robins, Ga., to serve as a director. Rhea will complete the unexpired term of Charm McCall, formerly of CSRA CU, which merged with Associated CU late last year. Georgia Central CU is a corporate credit union based in Duluth, Ga. “He has more than 30 years of experience in the financial industry, with 14 of those years spent enriching Georgia credit unions,” said the corporate Chairman Lin Hodges, CEO of Associated CU, Norcross, Ga. Rhea began his credit union career at Robins FCU in 1996 as vice president of operations. After a brief hiatus during which he served at another Georgia credit union, Rhea returned to Robins FCU in 2006 to become the executive vice president/chief operating officer. He stepped into the CEO role just a few years later. Rhea currently serves as a board member of Cooperative Services Inc. and sits on the Georgia Credit Union Affiliates’ Finance Task Force. He also is a past president of the Middle Georgia Credit Union Chapter.

Tempers flare as Canadian CU strike delays service

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NELSON, B.C. (2/19/10)--Long service delays at a Canadian credit union that reduced its hours after about 50 staffers went on strike produced hot tempers and a broken glass door Wednesday. Angry about the long delay in getting his check cashed, an unidentified man kicked and smashed the glass in the front door at Nelson, B.C.-based branch of Nelson and District Credit Union (The Canadian Press Feb. 17). Another man yelled at staff placing tape to seal off the broken door until it could be repaired. The striking workers, represented by United Steelworkers Union, went on strike at the Nelson, Rossland and Crawford Bay branches. CEO Doug Stoddart told the publication that the credit union is trying to keep the branches open with management staff. The striking workers have been without a contract since May 2008. Stoddart said another offer is on the table and the credit union hopes to resolve the situation "in due course."

Tax refund fraud is among latest scams

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WASHINGTON (2/18/10)--Credit unions should warn members that tax-filing season brings out tax-preparation frauds. The latest scheme involves tax refunds transmitted as a direct deposit or automated clearing house (ACH) credit. CUNA Mutual Group alerted its policyholder credit unions Monday of the ACH Tax Refund fraud scam and urged credit unions to inform employees that consumers are being drawn in to fraud schemes by individuals claiming to be tax preparers (The Daily Exchange Feb. 17). In this type of fraud, the victims unwittingly provide the bogus tax preparers with personal information such as their name, Social Security number, bank account numbers, investment information and more so the preparers can complete the tax forms. The tax preparer inflates the information with fraudulent information to obtain a larger refund. Some victims have found their tax preparers have claimed children they don't have, day care expenses and so on. The tax refunds are transmitted as a direct deposit (ACH credit) to a newly created account or to an existing account with an impersonator added as a joint owner. These accounts are established by an impersonator or a recruiter. Once the tax refund is deposited into the account, the impersonator or recruiter withdraws the tax preparation fee. The remainder of the ACH credit goes to the refund recipient. CUNA Mutual told credit unions that the Internal Revenue Service (IRS) will attempt to reclaim the ACH credits involving fraudulent tax returns. Credit unions, as the receiving depository financial institutions, are not liable if funds have been removed from the member's account and no funds are available to return, said the insurer. Credit unions should not honor a return request from the IRS since IRS warrants the liability, the company said. To mitigate risks, credit unions should be alert to these situations:
* The addition of new joint owners on a member's account. Consider freezing the account if the credit union suspects this involves a fraud. * New account openings receiving an ACH credit into the account from IRS. * The scammer has already removed the funds. In this case, the credit union is not required to return the ACH credit to the IRS if the credit union was unaware of a misdirected payment.
CUNA Mutual suggested these actions:
* Contact the association the credit union works with for ACH questions. * If the credit union has encountered this fraud situation, it should contact the local IRS, even if the credit union has not taken a loss: and * File a Suspicious Activity Report (SAR).
Last year the IRS prosecuted more than 200 people as phony tax preparersn said Seattle-based (Public News Service Feb. 17). The IRS is already busy checking up on new tax scams, ranging from filing false returns to convincing clients they don't need to pay income taxes, The agency warns consumers about tax fraud scams every year. Richard Panick, field media relations specialist with the IRS, warned consumers to be extra careful when a preparer bases the fee on a percentage of promised refund. Consumers should also avoid preparers who claim to know something special or that they can get more money than anyone else, Panick told the news service. Also plan to sit with the preparers as they fill out the tax forms. Never just sign a blank form and trust them to file it, he said.

Superhacker Iceman sentenced to 13 years

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PITTSBURGH (2/18/10)--A former computer security consultant from San Francisco was sentenced Friday in Pittsburgh to 13 years in prison for stealing nearly two million credit card numbers from financial institutions, businesses and other hackers. Max Ray Vision, 37, who recently changed his name from Max Butler and was known as "Iceman," pleaded guilty in June to wire fraud and identity theft charges. He received the longest hacking sentence in U.S. history--for now. In addition, he will face five years of supervised release and must pay $27.5 million in restitution to his victims. Vision faced life in prison but has been cooperating with authorities. Vision was arrested with 1.8 million stolen credit card numbers belonging to thousands of financial institutions, possibly including credit unions. The fraudulent charges totaled more than $86.4 million, said Wired.com (Feb. 12). He even stole from other criminals. Vision ran an online forum for thousands of identity thieves called CardersMarket.com, where he sold credit card magnetic stripe data for about $20 a card, said Wired.com. He hacked into carder forum websites where criminals bought and sold stolen card numbers, wiped out their databases and forced them to conduct their business through CardersMarket.com, said Computerworld (Feb. 12). In the late 1990s he provided information to the Federal Bureau of Investigation on security and piracy threats and created an open source library of attack signatures used to detect computer intrusions. However, in 2001, he was sentenced to 18 months in prison for launching an attack that launched malicious software on thousands of Pentagon systems. In prison, he met former bank robber Chris Aragon, who became his partner. Aragon, whose trial on related state charges in California is pending, allegedly used Vision's stolen card data to create counterfeit cards, complete with holograms, and recruited shoppers who used the cards to snap up designer merchandise for resale on eBay, said police. Vision's plea deal wraps up a separate federal case in Virginia, where he was charged with staging the first documented "spear phishing" attack against employees of a financial institution by unlawfully accessing the corporate network of Capital One bank. His record sentence likely will be broken next month when confessed TJX Cos., Heartland Payment Systems and Hannaford Bros. hacker Albert Gonzalez is sentenced. Gonzalez has two sentencing hearings. One of his plea agreements is considering a term of 17 to 25 years in prison.

CU is first in West Virginia to hit 300M assets

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WEIRTON, W.Va. (2/18/20)--First Choice America Community FCU, based in Weirton, W.Va., is the first credit union in West Virginia to surpass $300 million in assets, according the Daily Times Online (Feb. 16). During First Choice's 71st annual membership meeting, West Virginia Credit Union League President Ken Watts explained the credit union has continued to grow when other financial institutions have had difficulties and it continues to stand as the largest credit union in the state, the newspaper reported. Watts noted that although 2009 did not have a lot of bright spots, "One of them was right here with your credit union." Board member Edward Kennedy said First Choice has been able to increase the number of loans and deposits while keeping its delinquencies lower than many other banks and credit unions.

The real difference--media spotlight on CUs

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MADISON, Wis. (2/18/10)--Monday's deadline for certain provisions of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act presented a flurry of opportunities for media coverage of credit unions' lower rates. At least five credit card-related articles in the past two days brought consumers' attention to credit unions. That's on top of a two-week long media spree that featured national publications discussing credit unions related to credit cards, member business lending, and an anti-big bank consumer movement to "Move Your Money" to credit unions. Two separate stories, written by CreditCards.com staff, were published by Fox Business's website. Entitled "One in 10 has given up--or lost--credit cards in the past eight months," it reports a survey by the Consumer Federation of America and the Credit Union National Association (CUNA) that found most Americans don't clearly understand the CARD Act and its implications (foxbusiness.com Feb. 15). In it, CUNA Chief Economist Bill Hampel explains that it's no wonder consumers are confused. "They've been inundated by changes," he said. "Given the significant volume of mailings consumers have received from the credit card companies and the number of pages that are in those mailings, actually knowing what changes are involved is no trivial feat." The CFA/CUNA study is also cited in a second article, "White House to answer consumer questions about Credit CARD Act," about consumers' unawareness of the new protections in the act (foxbusiness.com Feb. 15). In The Lantern, Ohio State University alumna Jamie Chase, co-inventor of American Debt Relief Challenge, says Americans who took the challenge saved $20 million by transferring their debt from banks to credit unions. She compares typical bank interest rates (18%-20%) with credit unions' rates (6%-12%). "Banks exist to make a profit. Credit unions are more like libraries; they only exist to serve," Chase told the publication. She added, "They only exist to make life better, and a lot of people don't know that." Chase also mentioned a credit union program in Mali, West Africa and the PBS's BizKid$ money management show for children that is underwritten by credit unions. "Credit Union Credit Cards May Bring Better Rates and Lower Fees Than Banks," an article in the blog, Red, White, and Blue Press, advises several times to look into a local credit union and compare rates and fees on credit cards. "On average, customers of a credit union with a credit union credit card are getting better rates and fees than at banks." The article also discusses how credit unions are different from banks (rbwpress.com Feb. 16). An Associated Press article addressed to consumers fed up with their bank's credit card fees and terms and asking "Would switching to a credit union bring any relief?" is still making the rounds after the initial article was published in The New York Times early last week. The latest version surfaced Monday in the Grand Junction Free Press.

Georgias Mercer advises readers on managing card debt

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DULUTH, Ga. (2/18/10)--While the new Credit Card Accountability, Responsibility and Disclosure Act of 2009 going into effect Monday will bring some changes to the credit card landscape, consumers still need to be fiscally responsible and look for the best card deals, said a Georgia credit union official. “Unfortunately there’s no magic formula to make bad debt go away or keep people from overspending,” Mike Mercer, president/CEO of Georgia Credit Union Affiliates, said in the Savannah Morning News Wednesday. “My advice today is the same as it would always be: make payments on time, pay more than the minimum, and shop around for the best rates,” he added. “There’s really no way around it,” said Mercer. “We just have to live within our means, and we can’t be reckless with credit.” Credit unions historically have lower interest rates because as nonprofits they have no incentive to make large profits, he added. To read the article, use the link.

Bucks First FCUs IYouTubeI commercial a hit

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BRISTOL, Pa. (2/18/10)--A Bucks First FCU’s YouTube commercial has received more than 300,000 views, said Hilary Reed, Bucks First vice president of marketing. “Including the behind the scenes videos, we’re totaling more than 600,000 views. We think this is awesome for all credit unions across the nation ... the more we can spread the word about credit unions, the better,” Reed told the Pennsylvania Credit Union Association (Life is a Highway Feb. 17). The humorous 90-second commercial touts how the credit union takes care of “bucks” (money) better than banks. It went live Feb. 3. Bucks First FCU, based in Bristol, Pa., has $88 million in assets. To view the commercial, use the link.

League opposes Honolulu plan to up property tax

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HONOLULU (2/18/10)--The Hawaii Credit Union League testified before the Honolulu City Council Budget Committee Feb. 10, opposing a bill that would raise or eliminate a deeply discounted property tax on nonprofit institutions such as credit unions. In addition to credit unions, the city’s $100 minimum tax for nonprofits applies to churches, private schools and other social service organizations (Honoluluadvertiser.com Feb. 17). However, because Honolulu is grappling with a $140 million budget shortfall for the coming fiscal year, the $100 minimum tax is becoming harder to justify, Nestor Garcia, City Council Budget Committee chairman, told the newspaper. Although the committee deferred two proposals that would raise or eliminate the minimum tax, the measures could be reintroduced during budget deliberations slated to begin in March, Garcia told the paper. The league opposes a proposed cap on the real property tax exemptions credit unions for several reasons, Michael Leach, league legislative/regulatory affairs manager, told the committee. News Now obtained a copy of Leach’s testimony. Leach said the league seeks to retain the “real property tax exemption for credit unions” because:
* Credit unions are not-for-profit, member-owned financial cooperatives with the sole purpose of serving member needs, particularly members of modest means; * The cost of any tax paid by a credit union is a cost paid by that credit union’s member-owners; * Unlike for-profit financial institutions that are able to access capital from external sources (issuing common or preferred stock for instance), a credit union can add to (strengthen) its capital only by retention of net income; and * As a consequence of deriving capital only from credit union members, any impairment on a credit union’s net income will reduce its ability to grow capital needed for safe and sound operations, especially in this troubled economy.

W.Va. CUs loan growth remarkable says league

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PARKERSBURG, W. Va. (2/18/10)--Loan growth at West Virginia credit unions is “remarkable,” the West Virginia Credit Union League told the Charleston Gazette Sunday. As of Sept. 30, loan growth was 5.5%--or $1.5 billion, Rich Shaffer, league senior vice president of marketing and communications, told the newspaper. The growth is remarkable because the last four quarters were some of the worst economic declines in history, he added. Assets also grew by 8.5% last year and savings increased by 7.6% in the same time period. West Virginia has 107 credit unions as of Sept. 30 with combined assets of $2.6 billion and savings of $2.1 billion. Shaffer also commented on an independent national survey that showed credit unions scored higher than banks in 10 of 11 interest-rate categories. Banks do poorly in such surveys because their structure is to maximize profits for stockholders, whereas credit unions are nonprofit institutions, Shaffer told the paper (Feb. 14). The article, “Credit unions are low-cost alternative to banks,” also noted that credit unions have garnered positive media coverage from personal finance guru Suze Orman, who talked about credit unions on CNN’s “Larry King Live,” and Diane Sawyer, who mentioned credit unions in a story appearing on ABC’s “World News Tonight.” Orman and Sawyer said that many consumers are moving their money to credit unions from banks because they are tired of banks’ poor customer service and high fees.

SECU partners on IDAs for homeownership

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RALEIGH, N.C. (2/18/10)--State Employees’ CU (SECU), Raleigh, N.C., will serve as the primary financial institution for a program that will offer eastern North Carolina residents individual development accounts (IDA) to help them purchase homes. SECU is supporting River City Community Development Corp.’s efforts to help residents attain homeownership with grant funding from the North Carolina Department of Labor. The grant will help create the IDA programs in the state. SECU will open IDAs for current and potential members who quality for the program. The program will allow residents of Chowan, Fates, Pasquotank, Dare, Camden, Currituck and Perquimans counties to open IDA accounts and receive matching funds to make a down payment on a home. Every dollar saved up to $1,000 will be matched at a 2-to-1 ratio. “Northeastern regions of our state have higher concentrations of low-income residents who often struggle to save and attain long-term goals such as homeownership,” said Tyrone Tyler, senior vice president of SECU’s Elizabeth City-Halstead Boulevard branch. SECU has $18 billion in assets.

CU System briefs (02/17/2010)

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* LOS ANGELES (2/18/10)--California Bear CU board member Sherman Grancell celebrated his 100th birthday and 58 years of service on the board Friday. Grancell became a board member of the credit union
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in 1952 while working as a judge and deputy commissioner for the state's Workman's Compensation Board. He continued on the board after he left state employment in 1979 to start a law firm, Grancell, Kegel and Tobin, and still is an active board member today. A life-long resident of Southern California and one of the founding members of UCLA, Grancell graduated from University of Southern California Law School. He is a major sponsor of the arts in Los Angeles, having established scholarships to four music schools and cultural centers. "The greatest thing about having someone like Sherman on our board is the depth of knowledge about and the perspective that he can give on the issues facing our credit union and the industry today," said credit union CEO Jennifer Oliver. Grancell is shown here with his sister-in-law, Ruth Kaufman. (Photo provided by California Bear CU) ... * RENO, Nev. (2/18/10)--Members of Frontier Financial CU, an $85
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million asset credit union based in Reno, Nev., raised more than $10,601 during 2009 for Children's Miracle Network, a national organization that benefits patients at children's hospitals across the country. Frontier Financial President/CEO Bruce A. Rodela presented a check for $10,601.80 on Feb. 9 to representatives of the Renown Health Foundation. Pictured are, from left: Rebecca Johnston, Frontier Financial CU; Kiemmy Boc, Renown Foundation; Rodela; Becky Haas, Renown Health; and Joel Muller, Renown Foundation. (Photo provided by Frontier Financial CU) ...

Consumer satisfaction strong at CUs--new survey

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ANN ARBOR, Mich. (2/17/10)--Credit unions just added another notch to the consumer satisfaction belt. Credit unions--again--outscored other financial institutions in customer satisfaction--this time in the just-released University of Michigan's American Customer Satisfaction Index (ACSI). The study report, released Tuesday, found that big banks lost ground this year, while credit unions maintained a steady hold on consumers' satisfaction levels with their financial institutions. Credit unions overall received a rating of 84 on a 100-point scale. That score is the second highest score and the same rating they received last year--an accomplishment in today's credit market upheavals. Banks received a 75, also the same as last year. However, some big banks slid in the most recent survey. Customers were especially dissatisfied with Bank of America (whose score was 67--an industry low and an 8% drop from the last survey) and JPMorgan Chase ( which dropped 7% to 68.) The only other financial services category was "finance and insurance industry," which scored 77.1, an improvement over last year's 76. The high score--85--was nabbed by only two of the 44 industry categories studied: soft drinks, and personal care and cleaning products. Several industries had the same score as credit unions but none are related to the financial services. They were automobiles and light vehicles, breweries, and full service restaurants. The latest study adds to other recent surveys by Forrester, the Chicago Booth/Kellogg School Financial Trust Index (News Now Feb. 5), and the Rasmussen Index, which all showed credit unions to be more trustworthy than banks. (See RELATED STORY, "CU safety, soundness tops in CUNA nationwide poll," in News Now's Washington section).

VolCorp reports 2009 losses doesnt expect more

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NASHVILLE, Tenn. (2/17/10)--Volunteer Corporate CU (VolCorp) announced its 2009 unaudited financials, saying it continues to have positive retained earnings of $2.8 million after writing off all its remaining capital at U.S. Central--$2.1 million--on Dec. 31. Losses for 2009 totaled nearly $19.4 million, compared with $6 million in losses for 2008. Retained earnings is the cushion that protects the Nashville, Tenn.-based corporate from absorbing losses, said President/CEO Rick Veach in a letter to VolCorp's members posted on the corporate's website. Unrealized securities losses, or the difference between book and market values, have declined to $2.3 million as of Dec. 31, 2009, from $10.9 million on Dec. 31, 2008. "VolCorp remains unique in that our members' capital accounts have not been depleted, thanks to our positive Retained Earnings position," Veach said in the letter. "We continue to believe that we will not have to ask members to impair their capital with us in the future," he added. He cited as reasons:
* VolCorp has no further capital exposure to U.S. Central; * Its core earnings--earnings exclusive of write-downs on VolCorp's capital accounts with U.S. Central--remain strong at $3.2 million for the 12 months ended Dec. 31; * The corporate continues to receive strong support from its member credit unions, with almost $2 billion in assets under management; * It has added to its revenue base by adding eight new credit unions; * VolCorp's unrealized securities losses have declined significantly; and * It has budgeted $2.6 million in core earnings for 2010 (or 21 basis points).
Total capital position, including the $2.8 million in retained earnings and $51.2 million in membership capital shares, was $54.1 million. Use the link to access the unaudited financials on VolCorp's website.

NACUSO announces D.C. area for first regional meeting

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WASHINGTON (2/17/10)--The National Association of Credit Union Service Organizations (NACUSO) announced the Washington, D.C., area as the site for its first Regional Meeting Series. The theme is “Using Collaboration Strategies and Networked Business Design to Grow and Sustain Your Credit Union.” The meeting will be held in Herndon, Va., March 10. Guy Messick, NACUSO general counsel, will be the presenter. The series’ purpose is to help credit unions by initiating local area, one-day meetings nationwide to foster learning and collaboration, NACUSO said. The organization will share practical information on the collaborative model and how it is being used. The meeting is for staff of credit unions and credit union service organizations. For more information use the link, or contact Judy Sandberg judysandberg@gsgllc.com or Shawna Luna shawna@nacuso.org.

Dahlstrom is newest CUNA Board member

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WASHINGTON and MADISON, Wis. (2/17/10)--Voting has concluded in the special election for the District 6, Class C seat on the Credit Union National Association's (CUNA) Board of Directors. The successful candidate was Steven L. Dahlstrom, president/CEO of Spokane Teachers CU, Spokane, Wash. He ran against Dave Rhamy, president/CEO of Silver State Schools CU, Las Vegas. Dahlstrom's term begins immediately and will run through CUNA's 2012 Annual General Meeting.

Oregon House passes public funds bill

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SALEM, Ore. (2/17/10)--The Oregon House passed legislation Monday allowing the state treasurer, school districts and local governments to invest more funds in local credit unions. House Bill 3700, which for the first time allows the investment of more than $250,000 in a local credit union, passed the Oregon House on a 44-13 vote, reported the Credit Union Association of Oregon (CUAO). The bill should spur investment in local communities, helping to relieve a severe shortage of capital that can be loaned to local businesses ready to expand, said House speaker Dave Hunt (D-Gladstone). “Let’s keep these dollars here at home, working in our local communities, rather than send those dollars into a deep dark hole in some other state,” Hunt said. “The issue of local investments in local businesses has been identified by small business owners as the greatest impediment to expansion in Oregon.” Investments in local community banks is still allowed and encouraged under HB 3700. “Keeping funds here at home, whether it is in a credit union or a community bank, is a huge benefit to Oregon at a time when we need to create jobs,” said State Rep. Arnie Roblan (D-Coos Bay). “These local banks and credit unions will be anxious to invest in their local communities. And that’s a positive step forward for Oregon.” State Rep. Cliff Bentz (R-Ontario) agreed. “I support this bill because I want my local governments to have the greatest scope of safe choices possible when it comes to investing taxpayer dollars,” he said. “This bill expands safe choices for investment of public monies.” “Since 2003, we have learned from many of the public entities that the current $250,000 limit is a great impediment and limits their ability to choose credit unions as an option for their deposits,” CUAO said. “The purpose of the bill is to simply provide for an open marketplace where all public agencies will be able to secure the most advantageous depository arrangements for the public’s dollars. Many credit unions in Oregon have the staff, the facilities, the security, the assets, and the expertise to service public agencies, just as they do individual members. “The ability to accept public funds has been on credit unions’ legislative agenda for the past decade,” CUAO added. The bill will go to the Oregon Senate for consideration.

CU System briefs (02/16/2010)

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* NEWARK, Del. (2/17/10)--Louviers FCU has been approved to participate in the Delaware Economic Development Authority (DEDO) Small Business LIFT Program. LIFT, which stands for Limited Investment for Financial Traction, is a loan program to help fledging small businesses improve their cash flow. It was developed by DEDO with several state commercial banks. The credit union requested to be included in the program to make the funding available to its small business members, said the Delaware Credit Union League (Together Feb. 15). Businesses eligible must have three to 50 employees, be in business at least three years, and have an existing line of credit with and be sponsored by their financial institution. Total funding per business is a maximum of $25,000 for a seven-year term loan. There are no payments for the first two years, and the business makes principal-only payments over the next five years. DEDO makes the interest payments directly to the financial institution on the borrower's behalf ... * NAPERVILLE, Ill. (2/17/10)--Rockford, Ill.-based Generations CU, working with Goodwill of Northern Illinois and the Center for Economic Progress, has opened a free Volunteer Income Tax Assistance (VITA) site in Rockford at the Goodwill location. The site is open Tuesday and Wednesday evenings and Saturdays through April 15. The Internal Revenue Service's(IRS) VITA program offers free tax-filing help to low-to-moderate income tax filers. The site will encourage taxfilers to file returns early and apply for the Earned Income Tax Credit. In the photo, Denise Leonard, Generations CU member relations manager, announces at a press conference the credit union's role as the sole financial partner for the VITA site, saying it is a great opportunity to serve the unbanked in the community. (Photo provided by the Illinois Credit Union League) ... * MADISON, Wis. (2/17/10)--For the second consecutive year, Wisconsin Gov. Jim Doyle's Council on Financial Literacy has selected Madison-based UW CU to receive the Governor's Financial Literacy Award. The award recognizes individuals and organizations for excellence in promoting financial literacy among Wisconsin residents. UW CU's selection was based on its Financial Education Program, which includes seminars hosted by the credit union. Jaimes Johnson, director of community and campus relations at UW CU, noted the program offers timely seminars on a broad range of topics tailored to the audience. Last year it added "Managing Your Finances During Difficult Economic Times" and "Credit Repair." In 2009, UW CU provided 260 seminars reaching more than 7,700 people--a 57% increase over the number reached in 2008. "We continually strive to reach as many people as possible, especially need-based groups," said Paul Kundert, president/CEO of UW CU ... * MT. PLEASANT, Mich. (2/17/10)--Isabella Community CU (ICCU), based in Mt. Pleasant, Mich., raised more than $24,000, which it donated to 21 local organizations in 2009. Shown are, from left, ICCU's Sue Curtiss, Red Cross Executive Director Deb Birkam and ICCU's Jessica Tice during the presentation of $1,730 in proceeds from the credit union's annual Thanksgiving Pie Sale to the Isabella County Red Cross Food Pantry. Employees and members also raised $1,569 for "Into the Life Cancer Walk," participated in a fall yard cleanup effort, and tripled their United Way giving for 2010 with more than $7,730. "Being active in this community, and supporting community giving efforts are important to ICCU because 'community' is our middle name," said President/CEO Jay Anders. (Photo provided by Isabella Community CU) ... * COLORADO SPRINGS, Colo. (2/17/10)--Ent FCU, based in Colorado Springs, Colo.,
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concluded another Care and Share campaign, which involved monetary donations, an internal turkey drive and collection barrels at all its service centers throughout Colorado Springs, Denver and Pueblo. Ent provided 3,538 pounds of food plus $893 in monetary donations to the Colorado Care and Share and Food Bank of the Rockies programs. Ent employees brought in more than 128 frozen turkeys to add to the collection efforts. Here, Willard Taylor, Ent FCU's supply and mailroom coordinator, loads up donated canned goods to deliver to participating food banks. (Photo provided by Ent FCU) ...

Education First FCU gives 1M to sponsor LU athletics

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BEAUMONT, Texas (2/17/10)--Education First FCU signed on as a sponsor of Lamar University athletics with a $1 million contribution, university officials announced Monday. “This sponsorship will be a tremendous help in bringing back football to Lamar University,” said Lamar President James Simmons. “Education First FCU has had a long relationship with Lamar University (LU),” said Jimmy Lackey, president of the $270 million-asset, Beaumont, Texas-based Education First. The credit union has had an office at Lamar University in Beaumont since 1979, has been a corporate sponsor of LU athletics since 2004 and has endowed scholarships for students at the university since 1990. “We are committed to athletics,” Lackey said. “We’re also committed to higher education; hence our name--Education First. This gift is just another way to support what is going on at the university.” The credit union’s name will be the sole, static sponsor name on the Provost Umphrey Stadium 50-foot by 24-foot digital scoreboard. Education First’s sponsorship of LU athletics will also be acknowledged on marquees, video boards and in game-day publications.

AARP says CUs an option for small biz loans

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MADISON, Wis. (2/17/10)--Credit unions are a viable alternative to federal government assistance and commercial banks when small businesses look for additional capital, according to the AARP. “Credit unions are still actively lending today,” Mark Wolff, senior vice president of communications with the Credit Union National Association, told the AARPBulletintoday (Feb. 15). “Part of the reason is that credit unions have been careful lenders, with losses on their portfolio that are about one-fifth of what the banks are experiencing,” he added. The average size of a credit union small-business loan is about $215,000, Wolff told AARP. “We have tons of cash to loan,” Rick Baca, vice president of business services at New Mexico Educators FCU in Albuquerque, N.M., told AARP. However, borrowers still must “show good performance,” to obtain financing, he added. To read the Bulletin, use the link.

Pack a childrens book for GAC

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WASHINGTON (2/17/10)--Harland Clarke, a CUNA Strategic Service provider, is asking attendees of this year’s Governmental Affairs Conference (GAC), hosted by the Credit Union National Association, to bring a children’s book to the event. The books will be donated to Children’s Miracle Network, which raises money to benefit seriously ill children at children’s hospitals nationwide. Attendees can drop off new books appropriate for toddlers through teens at Booth #217 in the exhibit hall at the Washington Convention Center in Washington, D.C. The books will be displayed in the booth to demonstrate Harland’s support of the Children’s Miracle Network. The GAC kicks off Sunday and ends Thursday. Harland Clarke provides payment solutions to financial institutions including credit unions.

Virginia Corporate CEO resigns

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LYNCHBURG, Va. (2/17/10)--Virginia Corporate FCU’s (VACORP) president/CEO, Jim Hansen, has submitted his resignation to the board. His last day at the credit union is Friday. The board has begun a search for Hansen’s replacement, according to a letter Don Chapman, board member, sent to members. Chapman will serve as interim CEO and work with senior management to coordinate VACORP’s day-to-day operations. “Jim’s tireless efforts have been instrumental in growing the corporate and significantly improving the quality and range of services available to members,” Chapman said. “The board wholeheartedly thanks him for his exceptional leadership during the past seven years and extends their very best wishes.” VACORP, Lynchburg, Va., plans to host a town a meeting today in Richmond, Va.

Kansas legislators told CUs a smart choice

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TOPEKA, Kan. (2/17/10)--More than 175 individuals representing Kansas credit unions gathered at the Kansas Statehouse Feb. 10 to meet with legislators and discuss issues affecting credit unions.
Click to view larger image (From left) Angie Miller, manager of Emporia (Kan.) State FCU; Rick Krehbiel, manager, Mid-Kansas CU, Moundridge; and Stanley Schrag, volunteer, Mid-Kansas CU, talk with Kansas State Rep. Don Schroeder (R-74) Wednesday at the state Capitol.
Click to view larger image Marla Marsh (left), president/CEO of the Kansas Credit Union Association, and U.S. Rep. Lynn Jenkins (R-Kan.), met at the Kansas Statehouse Wednesday during Kansas credit unions’ day at the Capitol. (Photos provided by the Kansas Credit Union Association)
The central theme was, “Credit unions--Always a Smart Choice for Consumers,” according to the Kansas Credit Union Association. Credit union leaders shared several key messages with elected officials:
* Kansas credit unions are serving their members during the economic recession, but are concerned about the impact increasing legislative and regulatory burdens might have on their ability to do so in the future; * Consolidating the Kansas Department of Credit Unions and the Bank Commissioner’s Office does not make sense for effective oversight and will not help the budget shortfall; * Kansas credit unions support efforts to increase economic development and access to lending for small businesses; and * Kansas credit unions oppose sweeping funds from 100% fee-supported agencies--such as the Kansas Department of Credit Unions--to the state’s general fund.
“We received positive feedback with legislators agreeing with our position on several issues,” said Haley DaVee, league vice president of legislative and public affairs. “The overall feeling at the capitol was one of support and encouragement for the important work we’re doing.” Kansas credit unions represent 6.3% of the state’s market share, compared with banks’ 75.2% and savings banks’ 18.5%. The state’s credit unions have experienced loan growth of 10.9% compared with 2.2% nationally. Kansas credit unions represent 600,000 members.

Admin fees reduced for The 1 CU Conference attendees

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MADISON, Wis. (2/16/10)--Acknowledging that heightened homeland security regulations have made it tougher for some foreign nationals to enter the U.S., World Council of Credit Unions (WOCCU) and Credit Union National Association (CUNA) are reducing administration charges for registrants unable to obtain visas to attend The 1 Credit Union Conference, July 11-14, in Las Vegas. WOCCU and CUNA are jointly producing The 1 Credit Union Conference this year only. The conference replaces CUNA's America's Credit Union Conference and WOCCU's World Credit Union Conference, both of which will return as individual events in 2011. Registrants for The 1 Credit Union Conference from outside the U.S. will be e-mailed a letter of invitation upon request from conference registrars once they pay their registration fees in full. The letter serves as proof of their intent and must be presented with their credentials at the U.S. Embassy or consulate in their home countries. “Since the attempted terrorist airline bombing on Christmas Day, it has become much more difficult to enter the U.S.,” said Dave Grace, WOCCU vice president of association services. “We recognize that fact and want to make it as painless as possible for potential attendees to obtain visas, as well as reduce administration charges for those who can't.” WOCCU and CUNA require payment prior to the letter being sent to ensure recipients truly intend to attend the conference and not enter the U.S. with other purposes in mind, Grace said. Attendees who register and pay their fees prior to the May 20 early bird deadline but are unable to get visas will have their full conference registration refunded minus a $100 processing fee. Attendees who register after May 20 but do not get their visa and cancel by June 11 will have their fees refunded minus a $200 processing fee. This year the refund deadline was extended to encourage attendees to register and start the visa process early. "Attendees who require a visa could be facing a lengthy process sometimes taking many months," said Grace. "We strongly suggest that those attendees begin the process as soon as possible." Attendees from many European countries, as well as those in far east Asia may be eligible for the Visa Waiver program. Residents of Canada and Bermuda require a passport, but not a visa, to enter the U.S. Residents of Mexico require a passport and a visa or a border crossing card. For more information, use the link.

CUNA Mutual sponsors GAC late night show

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MADISON, Wis. (2/16/10)--CUNA Mutual Group is sponsoring Late Night at the GAC at the Credit Union National Association’s Governmental Affairs Conference (GAC) as part of the company’s 75th anniversary serving credit unions. CUNA Mutual will kick of its celebration at GAC with several activities, including Late Night at GAC on Feb. 23 at the Rennaissance Hotel in Washington, D.C. The Rat Pack Tribute Show re-creates the energy and music of Las Vegas Entertainer icons Fran Sinatra, Dean Martin and Sammy Davis, Jr. For more information, use the link.

Pelican State CU wraps up successful fin-lit year

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BATON ROUGE, La. (2/16/10)--Pelican State CU in Baton Rouge, La., conducted more than 60 Financial Literacy Workshops (FLWs) in 2009 to more than 1,000 attendees in 14 parishes (counties). FLWs are free, public presentations on topics such as budgeting, making money grow, using credit cards wisely and tips on improving credit scores. Following each presentation, attendees can receive a free copy of their credit report with the option of reviewing it with a trained credit counselor. Pelican absorbs all associated costs including salaries, materials, credit reports and mileage (eNews Feb. 10). “Pelican does not solicit business at these workshops; the primary objective is to provide financial education to those who need it most,” Jeffrey K. Conrad, Pelican CEO, told the Louisiana Credit Union League. Pelican also offers a Credit Management Program for members who are serious about achieving long-term financial success. Participants routinely meet with full-time credit counselors to evaluate credit reports, create budgets and savings plans and educate members on financial products--all at no cost to the member. “Our frontline staff has been trained to determine which members are in need of financial guidance and they make referrals to our credit counselors,” Conrad said. “Our credit counselors focus on helping one member at a time to ensure that the members take the information to heart and implement the practices daily,” he said. Pelican State CU has $167.1 million in assets.

Editorial For Valentines Day break up with a bank

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MADISON, Wis. (2/16/10)--For Valentine’s Day, consumers should break up with their banks, according to the Madison, Wis.-based Center for Media and Democracy. An editorial in Saturday’s Madison, Wis.-based Capital Times said the center hosts the Bankster USA Project “which is challenging both the abuses of big banks and the bailouts of those institutions by the federal government.” Banks have hamstrung American consumers with $700 billion in credit card debt because of exorbitant interest rates charged by the big four U.S. banks that issue 90% of all credit cards: Bank of America, Chase, Citi and Wells Fargo, the newspaper said. On average, big-bank issued credit cards charge interest rates that are 20% higher than those charged for local bank and credit union cards, the paper added. The paper adds: “This Valentine’s Day is the perfect time to end your abusive relationship with big banks that have a stranglehold on our country,” Bankster said. “They’ve been lying, gambling, cheating and they seem to think they can just keep getting away with it forever. Now’s the time to tell them you want to bank with someone who actually cares about you and whose interest rates don’t exceed their actual interest.” To read the editorial, use the link.

Polish and Slavic FCU establishes midwest presence

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NEW YORK (2/16/10)--The Polish & Slavic FCU (PSFCU) in Brooklyn, N.Y., established its presence in the midwest by moving into the Chicago area. On Jan. 30, it opened its first two branches in the city's suburbs of Mt. Prospect and Norridge. The Chicago expansion is PSFCU’s most recent move in its development program. Of the credit union’s 14 total branches, more than one-third (five) have opened in the past three years (MarketWire Feb. 12). The new branches will serve the nearly 300,000 residents of Polish and Slavic descent living in the North-Central part of the metropolis, and it is expected that many of the 150,000 Polish-Americans from the southern Chicago area also will take advantage of the credit union’s services. “Given the state of concern surrounding many financial institutions today, it is refreshing and reassuring to see the smart and profitable growth of this dynamic credit union,” said Michael Fryzel, board member of the National Credit Union Administration, who was the guest of honor for the dual ribbon-cutting ceremonies. “I am confident that PSFCU will be as successful here as it is on the East Coast.” The $1.233 billion-asset credit union has historically serviced members throughout the metropolitan New York region with 12 branches in New York and New Jersey. Also, the largest U.S. ethnic credit union makes its services available to members nationwide through its online banking operations. “Serving the Polish and Slavic community is what we’re all about,” said Ira Brief, PSFCU interim CEO. “Therefore, it’s only natural that we finally open for business in the great Polish-American cauldron of Chicago.” Members of the PSFCU board of directors, a representative from the Polish Consulate, local politicians, ethnic media and various Polish organizations attended the ribbon-cutting. The actual grand opening ceremony took place in the Mt. Prospect branch, while the ribbon-cutting moment from Norridge was beamed in via a video connection. “It took us more than a decade to cross the Hudson with our first branch in New Jersey, but over the past few years we have shown proof that our model works and that we are highly attractive to would-be members not only in Illinois, but other states as well,” said Krystyna Myssura, the vice chairwoman of the PFSCU board of directors. “What we've accomplished on the East Coast will certainly be replicated here in the heart of the Midwest.”

Wash. biz journal CUs step into lending void

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WASHINGTON (2/16/10)--A banner headline Washington Business Journal article noted that credit unions are working to fill the lending void left by financial institutions that have cut back on loans. The article notes the lending activities of Mid-Atlantic FCU, Germantown, Md.; Apple FCU, Fairfax, Va.; Signal Financial FCU, Kensington, Md.; and Lafayette FCU, also in Kensington (Feb. 12). Apple FCU, for example, made $15 million in business loans in 2009. The credit union is working to double that to $30 million this year and plans to add a fourth employee to its business services department next month, the Journal said. Many bank lenders are “too conservative with SBA lending,” according to Frank Amantia, president of Mid-Atlantic Financial Partners, a credit union service organization affiliated with Mid-Atlantic. “Some lenders say they just won’t lend to any restaurants,” Amantia told the Journal. “Well, some restaurants have been around for 100 years. We take the time to dig down and understand the circumstances.” The newspaper also noted that credit unions are lobbying to increase their business lending cap to 25% of assets from 12.25%. Signal Financial, Mid-Atlantic and Lafayette are close to the cap.

Ohio league creates YouTube channel for CU news

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DUBLIN, Ohio (2/16/10)--The Ohio Credit Union League has created a YouTube channel for television news coverage of credit unions in the state. The YouTube Channel will feature past and upcoming news clips about credit unions, including consumer tips, financial education and credit union growth (eLumination Feb. 10). About 14 clips are currently posted on the site. Viewers can receive alerts about new videos by becoming a “fan” of the page. The league also will notify CEOs and marketers of new videos through its Monthly Media Talking Points.

CU System briefs (02/15/2010)

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* MERRILLVILLE, Ind. (2/16/10)--Members Source CU, Merrillville, Ind., and SMH FCU, Munster, Ind. members voted to approve a merger of the two credit unions Jan. 21 at a special meeting (NWITimes.com Feb. 13). Members Source CU was originally established as NIPSCO Industries FCU in Hammond, Ind. The credit union is now headquartered in Merrillville. The merger will offer members of the credit unions full-service office locations in Merrillville, Munster and Griffith. Limited service locations will be located in Hammond and Dyer. The combined credit union will be known as Members Source CU and have more than 9,000 members ... * POUGHKEEPSIE, N.Y. (2/16/10)--Hudson Valley FCU, Poughkeepsie, N.Y., received the Richard K. Wagner Workplace Inclusiveness Award from the Poughkeepsie Journal (Jan. 17). The award is named after the newspaper’s former publisher and recognizes achievements in producing work forces free of bias regarding race, age and gender. The credit union has 765 employees--24% of them black, Hispanic or Asian. About 550 of the employees are female--including President/CEO Mary Madden. Five staff members are disabled. Minority-focused job search engines and veteran targeted job fairs help secure a well-rounded applicant pool, Diane Allenbaugh, vice president of human resources, told the newspaper. “We should mirror our population,” she said ... * SUITLAND, Md. (2/16/10)--Andrews FCU provided a gift basket to the last baby born at Malcolm Grow Medical Center on Joint Base in Andrews, Md. The Maternal Child Unit at the center permanently closed Jan. 31 and inpatient care was transferred to Southern Maryland Hospital in Clinton, Md. The gift basket had a baby monitor, bouncy seat, sling carrier, clothing, blankets, diapers, wipes and other items. It also contained a letter from Andrews FCU providing an opening deposit for the baby’s first savings account. From left: Lt. Col. Kathryn Tate, 779th Surgical Operations Squadron commander; Col. Rudolph Cachuela, 779th Medical Group commander; and Petty Officer Brandon, his wife Stephanie and baby girl Priseis on Feb. 2 at the medical center. (Photo provided by Andrews FCU) ...

CUSB touts CUs in radio ad campaign

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ST. LOUIS, Mo. (2/16/10)--The Credit Union Shared Branch (CUSB) Network has launched a 12-month radio campaign that will highlight 17 St. Louis, Mo.-area credit unions. The campaign, which began this month, consists of two 30-second radio commercials and a traffic spot that notes St. Louis area credit unions as the sponsors. The ads explain that credit unions can use the CUSB Network to visit branches of other credit unions to conduct business, according to the Missouri Credit Union Association (MCUA). The ads also provide a Web address that listeners can visit for more information (The Missouri difference Feb. 12). “We hope that when a member hears the name of his or her credit union, they may find out for the first time that it participates in Shared Branching,” said Mark Hohenstein, MCUA vice president of CUSB. Credit unions featured on the traffic spots include:
* 1st Financial FCU, Wentzville; * American Eagle CU, St. Louis; * Anheuser-Busch Employees’ CU, St. Louis; * Arsenal CU, Arnold; * Century CU, St. Louis; * CommunityAmerica CU, Kansas City; * County CU, Clayton; * Electro Savings CU, St. Louis; * First Missouri CU, St. Louis; * Gateway Metro FCU, St. Louis; * Gateway Regional CU, St. Louis; * Health Care Family CU, Richmond Heights; * Laclede Family Savings, St. Louis; * St. Louis Community CU; * Neighbors CU, St. Louis; * Southpointe CU, St. Louis; and * West Community CU, O’Fallon.
For more information about CUSB or to listen to the radio ads, use the links.

MBL growth rate slows but still fastest CU loan growth

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WASHINGTON (2/15/10)--The growth rate of member business loans (MBLs)--like all other types of loans--is dropping, but MBLs remain the fastest type of loan growth for credit unions, according to Credit Union National Association (CUNA) Chief Economist Bill Hampel. Looking at just the last four years, MBLs have shown strong growth each year. In the year ending September 2009, the latest figure available from CUNA, MBL growth rate was at 11%. In 2008 the growth rate was 18.1% ; in 2007 it was 17%; in 2006 it was 24.3%; and in 2005 it was a walloping 32.8%, all according to CUNA's Credit Union Profile. "Loan growth in all categories declined in credit unions last year in response to the recession. MBL growth also declined, but it remained the fastest growing component of credit union lending," Hampel told News Now. "And, the continued growth of MBLs at credit unions is in sharp contrast to the decline in business loans at other lenders," he said. "For instance, in the 12 months ending last September, MBLs at credit unions rose by 11% compared to a 15% decline at other depository institutions," Hampel said. "However, the strong pace of credit union business lending cannot be maintained for much longer without an increase in the MBL cap as more and more credit unions are bunching up under the cap," he said. Credit unions currently are required by federal law to limit MBLs to 12.25% of assets. CUNA is supporting a measure before Congress that would raise the MBL lending cap for credit unions to 25% of assets and would increase the minimum business loan subject to the cap to $250,000 from $50,000. The Small Business Lending Enhancement Act would spur small-business growth and create jobs by increasing access to loans from credit unions, says CUNA.

CU System briefs (02/12/2010)

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* RALEIGH, N.C. (2/15/10)--Businessman Walter L. Rogers Sr. has been appointed to the North Carolina Credit Union Commission by Gov. Beverly Perdue, reports the North Carolina Credit Union League (Weekly Update Feb. 12). He will serve a four-year term on the commission, which meets at least twice a year to review, approve or modify any action by the Administrator of Credit Unions. Rogers is chairman of the North Carolina Black Leadership Caucus and chairs the Voter Education and Voter Registration Committee for the state Prince Hall Grand Lodge. He is owner and operator of Rogers Real Estate and Rogers Beauty and Barber Supplies in Laurinburg ... * GREENSBORO, N.C. (2/15/10)--The North Carolina Credit Union League's website will undergo two planned outages this week while its Web host, MaximumASP, moves into a new facility. The site may be down for a few hours between 11 p.m. Tuesday and l 7 a.m. Wednesday and again from 11 p.m. Saturday to 7 a.m. Sunday (Weekly Update Feb. 12) ... * MAPLE GROVE, Minn. (2/15/10)--Twenty employees at TopLine FCU are serving as one-on-one e-mail mentors to 20 students from Osseo (Minn.) Senior High School as part of the credit union's partnership with Minnesota nonprofit BestPrep. BestPrep's program, eMentors, joins business professionals with high school students to offer career advice and a glimpse into post-secondary and real-world experiences. Students correspond weekly with their mentors based on questions on financial literacy and career-related skills. "This has been a great opportunity for our employees to carry on our goal of giving back to our communities," said Harry Carter, president/CEO of TopLine FCU, which is based in the Twin Cities. TopLine has more than $260 million in assets ... * COLONIE, N.Y. (2/15/10)--Jean L. Myers of Colonie, N.Y., died Thursday at the age of 83. Myers served as treasurer and manager of Poughkeepsie, N.Y.-based DOT FCU from 1967 to 1973 and was secretary and treasurer of State Employees FCU from 1979 to 1997. Myers retired in 1986 after 35 years with the Department of Transportation and the Department of Motor Vehicles. Funeral services are today at 10 a.m. at Bowen & Parker Bros., Latham (Times Union Feb.12) ... * GREENSBORO, N.C. (2/15/10)--Kimberly Basler, former employee from 1988 to 1992 of the North Carolina Credit Union League, died Feb. 2 in Chelmsford, Mass., after a battle with breast cancer. She was 48. Basler had worked in the league's Credit Union Service Corp. in business development. She helped launch the Shared Branching credit union service organization, which today includes 58 Shared Branching locations across the state. She is survived by a husband and two children (Weekly Update Feb. 12) ...

CUs efforts continue to shine in media limelight

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MADISON, Wis. (2/15/10)--Credit unions have been basking in the media limelight the past couple of weeks, not only nationally, but at the local level, too. Among the articles:
* "Credit unions grow stronger" in University of South Carolina's DailyGamecock.com reports that banks have been the center of attention "but what hasn't been in the news is an organization that might be a better alternative to a bank: a credit union." The article quotes a student who said, "I didn't even know there was an alternative to banks," and proceeds to outline the differences, with help from Karen Keisler, member service representative with 1st Cooperative FCU, Cayce, S.C. * "This Valentine's Day: Break Up with Wall Street," a column in the Huffington Post (Feb. 11) by Chuck Collins, co-founder of Wealth for the Common Good, notes people are taking their deposits to community banks and credit unions. He quotes Stacy Mitchell from Institute for Local Self-Reliance, who says most community banks and just over half of credit unions offer credit cards. "Unlike big banks, these smaller institutions do not view their credit cards as major profit centers, but rather as a service for customers." * "Would you break up with your bank?" in the Dollar & Sense column of the San Francisco Chronicle's blog offers advice from a grassroots group. A New Way Forward, which provides advice for breaking up with the big bank. The advice "is useful for anyone who's disgruntled by their bank and wants out." It advises moving money into a new account at a local bank or local credit union. "There are some compelling reasons to leave a bank--they've messed up your autopayment for your mortgage and nobody will admit to making a mistake, you're getting charged for the privilege of keeping your money in the bank, you just like the basic philosophy behind credit unions," the article says. * The New York Times article "The Least-Trusted Banks in America," which also notes credit unions' highest ranking among financial institutions, was picked up and featured prominently on Yahoo! It reported on the worst-trusted banks. In it the article noted that "Credit unions ranked much higher than the big banks, as they have in previous years, with 70% of credit union customers saying their financial institution puts their interests first. [Forrester Vice President Bill] Doyle said this is because of credit unions' different operating model-- they are owned by customers -- and because they tend to emphasize customer service." * Chicago Daily Herald ("Do credit unions offer better deals?") was the latest to pick up an Associated Press report on switching to a credit union credit card, which quotes Credit Union National Association statistics and a study by The Pew Charitable Trusts that said interest rates on credit union credit cards are lower than those issued at banks.

ICNNI CUs acknowledged for trust credit cards

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WASHINGTON (2/15/10)--Credit unions were mentioned favorably in two segments Thursday of CNN Newsroom anchored by Tony Harris. The segments were about the most-trusted institutions and about credit cards. Gerri Willis, CNN personal finance editor, reported on the best and worst financial institutions from the consumer's point of view, citing a new study from Forrester Research in which 70% of consumer surveyed said credit unions were most trusted. Willis named the "bottom seven"--the least-trusted institutions, all big banks: Bank of America, Chase, Capital One, TD Bank/Commerce, Fifth Third, Citibank and HSBC. After noting that an insurance company was in the top spot as the most-trusted institution, she said, second on the list were credit unions: "Any credit union. Amazing, the credit union scores, number two." The findings indicate that "people are really winnowing down to smaller institutions, smaller banks," Willis added. She outlined that if consumers want to break up with their bank and switch to a new one, they should look at fees, take care of automatic transfers and bill pay, and ask for help--some institutions have kits to help consumers switch. In the second segment, Willis asked the question, "What's the best card for a first-timer" trying to build a credit history? Greg McBride, Bankrate.com senior financial analyst, answered the question: Stay away from a card with high front-end fees and exorbitant interest rates, look for a secured card, and "remember to check with your credit union to see what they may offer." Willis agreed. "Yes, because they'll give you great terms. It's always a great way to build credit too, to get a credit card." For the transcript, use the link.

Vermont lawmakers receive Valentine treats from CUs

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SOUTH BURLINGTON, Vt. (2/15/10)--Vermont legislators had a sweet Valentine's Day, thanks to the Association of Vermont Credit Unions (AVCU). For the eighth consecutive year, AVCU delivered chocolates to be given to every senator and representative at the Statehouse. On Thursday, AVCU President Joe Bergeron delivered nearly 200 Lake Champlain Milk Chocolate Heart Pops so staff from the Office of the Sergeant at Arms could place one in each Vermont legislator's mailbox early Friday morning. Each pop is wrapped inside a flyer that lists every Vermont credit union and encourages legislators to visit the association's display in the Statehouse during AVCU's "Hike the Hill" event on March 25. The flyer, designed and prepared by AVCU's Jen Pearson, also explains the credit union difference and points out that today, when other sources of consumer credit have tightened, Vermont credit unions continue to make responsible loans to 280,000 members just as they've done for 71 years. "It's good to remind Vermont's lawmakers that credit unions are a sweet deal for consumers," Bergeron said, "and what better way to do it than with chocolate on Valentine's Day."

IHuntsville TimesI More small businesses look to CUs

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HUNTSVILLE, Ala. (2/15/10)--More small businesses nationwide are looking to credit unions to obtain business loans, The Huntsville Times said Friday. “Nationwide, credit unions’ small-business loans are up from less than $10 billion at the end of 2003 to more than $35 billion last September, according to the Credit Union National Association’s chief economist in a recent Washington Post story,” wrote author Marian Accardi in the Times. The article noted the efforts of Redstone FCU in Huntsville, Ala., in working with a young local company to secure a loan backed by the Small Business Administration. The business development support company needed a loan to set up a proposal center in its office and to build software applications to support government contractors, the paper said. The average small-business loan for credit unions is $159,000, Patrick La Pine, president/CEO of the League of Southeastern Credit Unions, which represents 322 credit unions in Alabama and Florida, told the paper. “We're not building strip malls or large development,” he said. Tighter credit has left small businesses “starving for capital,” he added. To read the article, use the link.

Oregon CUs public funds bill moves to House floor

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BEAVERTON, Ore. (2/15/10)--Oregon credit unions received a positive legislative nod when their public funds bill (HB 3700) passed the House Rules Committee Wednesday. The bill would remove the current $250,000 limitation on the amount of public fund deposits a credit union can receive. The bill is expected to be on the house floor as early as today. State and local governmental officials are custodians of funds that public entities have received, and are required to use, for the benefit of their constituents. As custodians of “the people’s money,” public officials are obligated to safeguard it, use it pursuant to lawful requirements, and seek a fair and competitive rate of return on it, said the Credit Union Association of Oregon (CUAO). This obligation is in itself compelling support of credit unions, themselves owned by members of the community, having the authority to accept deposits of public monies, and state officials having the correlating authority to place deposits with credit unions, said CUAO. A choice of depositories and competition for deposits of public funds are in the people’s interest, CUAO added. “Credit unions throughout Oregon regularly receive service requests from public officials in their communities,” said Ron Barrick, CEO of Advantis CU, Milwaukie, Ore., during his testimony at a Feb. 8 hearing to the House Rules Committee. “Among the groups that have approached Oregon credit unions are local public utility districts, rural fire districts, city fire and police departments, school districts and city and county governments.” Also testifying in support of the bill were Pamela Leavitt, CUAO senior vice president, public relations and governmental affairs; Hal Scoggins, attorney at Farleigh Wada Witt; and Hasina Squires, government affairs director at the Special Districts Association of Oregon (SDAO). SDAO has 35 different types of member districts that represent roughly 950 local governments of varying sizes and functions statewide.

Illinois league hosts Project ZIP Code webinar

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NAPERVILLE, Ill. (2/15/10)--The Illinois Credit Union League offered a free webinar about Project ZIP Code (PZC) to its member credit unions. The session, facilitated by Kristen Prather, grassroots manager for the Credit Union National Association (CUNA), incorporated two demonstrations, how to install and upload data, and how the program’s website, www.pzconline, can be used by credit unions and leagues. Membership information is secure with the program and PZC numbers can help the league in candidate interviews. PZC was developed by CUNA to use ZIP code data to count the number of credit union members that live in each local, state and federal legislative district. Using ZIP code data, PZC identifies which district a member lives in. The data can be used as a lobbying tool. Only the number of members in a district is transmitted to the website. For more information, use the link.

Missouri CUs raise 313922 for hospitals

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ST. LOUIS (2/15/10)--Missouri credit unions raised $313,992 for the Children’s Miracle Network in 2009 by taking part in Credit Unions for Kids and sponsoring fundraising activities statewide for children's hospitals. The total is $32,000 more than the credit unions’ 2008 contribution total (The Missouri difference Feb. 12).
Maria Langston, left, of Children’s Miracle Network, accepts a donation from Nina Pilger and Frank Nelson of 1st Financial FCU, Wentzville, Mo. (Photo provided by the Missouri Credit Union Association)
Missouri credit unions and chapters sponsored golf tournaments, dress-down days, bake sales, auctions and more to help raise funds for children in need of medical attention. Donation totals by region are:
* Columbia--$11,263; * Joplin--$18,622; * Kansas City--$125,282; * Springfield--$58,425; and * St. Louis--$100,400.
“The Children’s Miracle Network is the credit union’s charity of choice,” said Lisa Autry, branch manager of Mazuma CU, Kansas City. “We are passionate about being able help those children and their families within our communities. Regardless of how large or small the donation, the ultimate reward is making a difference in their lives.” 1st Financial FCU, Wentzville, presented a contribution to Children’s Miracle Network Feb 11. 1st Financial FCU was the top St. Louis-area contributor, donating $13,800. The credit union’s main fundraising event is an annual baseball game.

CU Service Network appoints three to board

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LAKEWOOD, Colo. (2/15/10)--CU Service Network appointed three leaders to its Board of Managers at a Feb. 5 meeting. The new
managers are Dan Kester, Rhett Bartley Rowe and Gerry Agnes. They were appointed to fill vacancies created by the resignations of Branda Abbott, president/CEO of Colorado United CU, which merged Dec. 31 with Premier Members FCU, Boulder, Colo., and C. Michael Litzau, executive vice president of corporate for Sooper CU, Denver. The board also voted to add one manager seat, bringing the total of seats to nine. Kester is the president/CEO of Sooper CU, and has served in that capacity for 14 years. He is a manager for CUILA Inc. and is on the Credit Union Association of Colorado (CUAC) Governmental Affairs Committee. Rowe is president/CEO of Premier Members FCU. He serves on the same CUAC committee. Agnes is president/CEO of Elevations CU in Boulder. Previously he was president and chief operating officer of Altura CU in Riverside, Calif. The network, based in Lakewood, Colo., provides products and services that connects members to their credit unions.

Accounting adjustment helps Wisconsin CUs

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MILWAUKEE (2/12/10)--Like credit unions throughout the U.S., some Wisconsin credit unions realized big increases in net income for 2009 because of adjustments in funds previously allocated to stabilize the National Credit Union Share Insurance Fund, says an article in the Milwaukee Journal Sentinel (Feb. 9). Suzanne Cowan, director of the Wisconsin Office of Credit Unions, told the publication that the office is still getting aggregate numbers but that the state's credit unions' net income seemed "pretty solid, considering the economy." The article gave two examples of credit unions whose net income increased after changes were made in the way the National Credit Union Administration (NCUA) accounts for their insurance premiums, which rose dramatically after corporate credit unions began struggling in the recession. Instead of a huge premium due all at once, NCUA is allowing credit unions to pace the assessments over seven years. Landmark CU, based in New Berlin, had a net income of $17.5 million and assets of more than $1.4 billion, making it the state's largest credit union, said the article. Landmark spokeswoman Patricia Ransom told the publication that it experienced great mortgage demand but bolstered reserves in 2008. It took a conservative approach, so it was prepared for any rise in delinquencies and charge-offs. An NCUA report shows Landmark recaptured $4.7 million that it had previously allocated toward the NCUSIF stabilization, the newspaper said. It also said Educators CU, Racine added $5.3 million in income in 2009 when it got back part of its 2008 lump sump payment to the stabilization fund, its chief financial officer, Robert Stepien, told the newspaper.

Alabama CUs high ratings noted by IBirmingham NewsI

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BIRMINGHAM, Ala. (2/12/10)--Alabama's credit unions are gaining new members and receiving stellar performance ratings, especially in the Birmingham area, according to The Birmingham News (Feb. 9). The article spotlighted 18 credit unions in the area that received five-star ratings from Bauer Financial, a Florida-based ratings agency. That's nearly half the credit unions with a presence in the area, and much better than local banks did--one only one bank in the area received the five-star rating. Alabama credit unions on average are performing better than banks and credit unions nationally, Greg McBride, senior financial analyst for Bankrate.com, said in the article. And University of Alabama Birmingham finance professor noted that credit unions have been more careful with their lending. Alabama's credit unions are gaining new members as the banking industry struggles, Patrick La Pine, president/CEO of the League of Southeastern Credit Unions, told the publication. The state's 134 credit unions added $1.1 billion in assets combined and 60,000 new members during 2009, the league said. The article attributes credit unions' performance to their local, community focus. Alabama Telco CU, one of the five-star credit unions, just opened its ninth area branch. New members have helped its assets climb by $70 million this year to more than $457 million, CEO Linda Cencula told the newspaper. "We saw people come over to us from banks in record numbers last year," she said. Use the link for the full article.

Texas league poll Perry leads in governors race

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AUSTIN, Texas (2/12/10)--The Texas Credit Union League Poll of Texas Primary Voters, released Thursday, shows incumbent Gov. Rick Perry close to a majority, holding a 22-point lead over Kay Bailey Hutchison in the Republican primary race for governor. And most voters indicate they would back a candidate who is a public supporter of credit unions. Perry leads with 49%, Hutchison holds 27% and Debra Medina rose to 19%, according to the poll of likely primary voters. In the Democratic primary race for governor, Bill White reached 51%, with Farouk Shami holding a distant 19%. Held a little more than a week before the start of early voting, pollsters questioned likely primary voters about top national and state issues, favorability rankings of state-elected officials, and more, all broken out in terms of demographics including area of the state, income, ethnicity and party affiliation. The league has garnered press attention throughout Texas for the polls. Other key findings:
* In a hypothetical run-off between Perry and Hutchison, Perry prevails 58% to 34%; * Of Republican primary voters, 62% say they are “much more” (36%) or “somewhat more” (26%) likely to support a candidate who considers themselves to be a “tea-party” activist; * The poll indicates that incumbents of either party should not take this election for granted if they have an opponent; the lead for incumbents is remarkably low, said the league; * For state legislators, Democratic primary voters prefer the incumbent to a challenger by a 39% to 29% margin (a 10-point spread), with 32% undecided. * Concerning Republican state legislative incumbents, voters prefer the incumbent to a challenger--44% Republican incumbent to 37% Republican challenger (a seven-point spread), with 20% undecided; * About 76% of Democratic primary voters and 65% of Republican voters surveyed say they would be “much more likely” or “somewhat more likely” to support a public supporter of credit unions.
Every two years, the Texas Credit Union League commissions primary- and general- election voter surveys on politics and key issues important to the state’s credit union members. Two surveys were conducted by nationally known Republican and Democrat research firms between Feb. 3 and Feb. 6, and reached 400 likely Republican primary voters and 400 likely Democratic primary voters. Each survey has a margin of error of plus or minus 4.9%.

ICNNMoney.comI says to Take this bank and shove it

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NEW YORK (2/12/10)--Angry consumers' big-bank bashing over bailouts, bonuses, and nickel-and-diming continues in the media, with credit unions singled out as a haven from fees. In "Take this bank and shove it," CNNMoney.com discusses consumers' disenchantment with banks and highlights several people who switched from banks to credit unions. Abel Collins of Rhode Island switched from Bank of America to a local credit union to protest banks that had become "too big to fail" and lack of action in Washington, he told the publication (Feb. 10). CNNMoney.com notes that Americans are more willing to switch to smaller institutions, and cites Forrester Research that found big banks as the least-trusted U.S. financial institutions. (The same research found that 70% of those survey said credit unions are the most-trusted financial institutions.) Tom Q. of Minnesota told the publication he ended his 17-year relationship with Wells Fargo after learning he could open a checking account that earned a 4.10% annual percentage yield at a nearby credit union. "Wells Fargo just laughed and the banker said he would probably do the same," he said. It also noted that businesses are fed up with practices of the big banks. John Anderssen of Portland, Ore., whose photo appears with the article, closed his carpet cleaning business's account at KeyBank and opened an account at Sunset Science Park FCU, a $27 million asset credit union that makes loans that benefit the local community. "I'm very happy," he said. "It is like the banker in the movie 'It's a Wonderful Life.' It really is that way." For the full article, use the link.

Washington state CUs see 10 membership growth

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FEDERAL WAY, Wash. (2/12/10)--Washington state residents are moving their financial accounts to credit unions in a big way, which has led to 10% membership growth in the state’s 119 credit unions, according to the Washington Credit Union League. “Move Your Money”--a national campaign designed by the Huffington Post to get depositors to move their money to credit unions and community banks--seems to be helping Washington credit unions. The campaign is a protest of the government bailing out large banks instead of bolstering smaller financial institutions (Bellingham Business Journal Feb. 1). “Media reports on problematic banks seemingly have made Washingtonians suspicious of profit-driven financial institutions, especially big Wall Street banks,” John Annaloro, league CEO, told the Journal. “Ten percent yearly growth was unheard of prior to this extraordinary migration to credit unions.” Until recently, average growth for credit unions in the state has been about 2% annually, Terry Belcoe, CEO of North Coast CU in Bellingham, Wash., and league board member, told the publication. A key differentiator for credit unions is that they don’t have investors demanding a return on their investment the way traditional banks do, the Journal said. “We don’t have that kind of pressure,” Belcoe told the publication. “We don’t have the incentive to go out and do anything stupid. We get paid to take care of our members’ stuff, not to make them rich.” Whatcom Educational CU, Bellingham, also was interviewed by the Journal.

Wright-Patts video contest spreads CU message

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FAIRBORN, Ohio (2/12/10)--Wright-Patt CU (WPCU), Fairborn, Ohio, began hosting a video contest after members received a collective $4 million special patronage dividend from the credit union on Jan. 4. The credit union is asking members to create a video about the dividend and what it means to belong to WPCU. The entry deadline is Monday. Winners will be determined by online votes. The first place winner will receive $2,009 and the second-place winner $1,000. So far, 28 videos have entered the contest, generating 7,800 votes. “The videos highlight the many reasons our members choose to belong to WPCU,” said Tracy Fors, director of marketing. “One video that was especially compelling was from a member in Wilmington, Ohio, a small community that has been hit hard by the recession after losing its largest employer and 10,000 jobs. He thanked WPCU for giving back to his community instead of to Wall Street executives as banks have.” In addition to attracting new members, the contest aims to:
* Create awareness about the dividend among non-members and emphasize the difference between credit unions and banks; * Build the credit union’s prospective member e-mail database by requiring voters to enter their e-mail on the voting page; and * Use social media to drive traffic to WPCU’s website and increase the number of Facebook friends and Twitter followers. As of Feb. 4, WPCU had gained 193 more Twitter followers and 232 fans on Facebook.
WPCU is sending press releases to politicians, local media and national news outlets about the contest. The credit union will donate $1 for each new Facebook fan or Twitter follower to A Kid Again, a local non profit serving children with life-threatening illnesses. WPCU has $1.7 billion in assets.

Mass. data protection reg takes effect March 1

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BOSTON (2/12/10)--A new Massachusetts data protection regulation that goes into effect March 1 impacts all credit unions doing business in the state, said the Massachusetts Credit Union League. The regulation, 201 CMR 17.00, is designed to ensure the security and integrity of personal information for all Massachusetts residents and to combat the threat of identity theft. It establishes standards for storing and protecting consumer data and employee data ( Feb. 10). The regulation also:
* Defines “personal information”; * Mandates the designation of a data security coordinator; * Requires the development of a written information security plan that outlines administrative, technical and physical safeguards to protect personal information; and * Extends its protections to personal information that is shared with third parties.
Each credit union needs to identify its paper, electronic and other records, computing systems and storage media--including laptops and portable devices--that contain personal information, said the league. It also must develop procedures to include how one retains and destroys personal information data and records and for the ongoing monitoring of this information. Credit unions already comply with many features of this regulation that protect consumer personal financial information through the Gramm-Leach-Bliley Act and the National Credit Union Administration’s Rules and Regulations, Part 748. However, the new data security regulation does pose additional requirements for credit unions and extends data protection to employee and former employee records, said the league. The regulation also requires due diligence to ensure that third parties with access to the personal data of credit union members or employees comply with the new regulation.

CUNA changes Desjardins Awards forms available

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MADISON, Wis. (2/12/10)--Information about the 2010 Desjardins Award for Youth Financial Education--including all necessary forms and instructions--is now available on the Credit Union National Association's (CUNA) website. There are changes in three areas for this year: 1. Asset size categories for credit union entries
* Credit unions with less than $50 million in assets; * Credit unions with less than $50 million in assets; * Credit unions with $50 million to $150 million in assets; * Credit unions with $150 million to $500 million in assets; and * Credit unions with more than $500 million in assets.
2. Membership size categories for league entries
* 75 or fewer affiliated credit unions; * 76 to 150 affiliated credit unions; and * 151 or more affiliated credit unions.
3. Entry fee for state-winning credit union and chapter entries submitted to CUNA for national judging will be $60. As always, there is no charge for league entries. The deadline for league entries and league-determined state-level winning entries is Aug. 27. Credit unions should consult their league for its state-level judging deadline. 2009 Desjardins winning and honorable mention entries will be on display at CUNA’s Governmental Affairs Conference, Feb. 21-25 in Washington, D.C., and award recipients will be feted at an invitation-only reception. 2009 winners include:
* Arapahoe CU, Centennial, Colo.; * Beach Municipal FCU Partnership, Virginia Beach, Va.; * Indianhead CU, Spooner, Wis.; * Maine Credit Union League; * Rogue FCU, Medford, Ore.; and * Unison CU, Kaukauna, Wis.
2009 honorable mentions include:
* American Partners FCU, Reidsville, N.C.; * Credit Union Association of Oregon; * Dakota Plains CU, Edgeley, N.D.; * DuPont Community CU, Waynesboro, Va.; * Greater Minnesota CU, Mora, Minn.; * Ohio University CU, Athens, Ohio; * Sunflower U.P. FCU, Marysville, Kan.; * Virginia Educators CU, Newport News, Va.

FSCC awards CUs for stopping over 1.1M in fraud

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ONTARIO, Calif. (2/12/10)--Financial Service Centers Cooperative (FSCC) announced that it gave awards to 12 credit unions for stopping more than $1.1 million in fraud activity during 2009. The credit unions garnered about 50 Fraud Buster Awards. The awards were presented to credit unions on a quarterly basis during 2009. Award recipients included credit unions that participate in the FSCC Shared Branching Network. The recipients of the Fraud Buster Awards were recognized for protecting their credit unions, their members, and members of other credit unions from fraud. FSCC maintains an Operations Advisory Committee comprising of stockholder credit unions. The committee reviews activity and looks at ways to prevent and detect fraud through rule changes, training, products and services. In the nine years the awards have been presented, credit unions have stopped more than $7.5 million from fraudulent activities. FSCC has presented more than 280 awards. Financial institutions in the U.S. lose about $12 billion a year in check fraud, and the retail industry loses a similar amount resulting in losses of $24 billion as a result of check fraud. The Federal Trade Commission also reports that financial institutions and businesses lose more than $48 billion annually from fraudulent activities, according to statistics FSCC cited from U.S. News and World Report. FSCC is a credit union Shared Branching Network providing about 6,300 full-service deposit-taking locations in the U.S. and abroad.

Bank on Illinois program kicks off in second city

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NAPERVILLE, Ill. (2/12/10)--The Illinois Credit Union League is helping spread the word about Bank on Illinois, a relatively new program for the unbanked initiated by Illinois State Treasurer Alexi Giannoulias. The program recently kicked off in Aurora, the second city to offer the program in the state.
Click to view larger image Bank on Illinois, a relatively new program initiated by Illinois State Treasurer Alexi Giannoulias, recently kicked off in Aurora, the second city in which it is currently operating in the state. After listening to a presentation stating the need for the program, attendees of the meeting hosted by the state treasurer’s office then broke into committees to begin taking the next steps for the program. (Photo provided by the Illinois Credit Union League)
The two participating credit unions in the program include Earthmover CU and Fox Valley CU. Bank on Illinois aims to offer unbanked residents from underserved and minority communities free and/or low-cost accounts with mainstream financial institutions. The first host city for this program was Rockford, which recently wrapped up its first quarter of implementation. Bank on Illinois is modeled after a similar program launched in 2006 by the San Francisco Treasurer’s Office. Illinois is home to roughly 368,600 unbanked households, including 5,300 in Aurora, which means these households rely on alternative financial services, according to the Pew Charitable Trusts. These alternative bank services are costly, Giannoulias said. The average unbanked household in Illinois pays $574 a year just to cash payroll checks, leaving just $22,376 in remaining annual household income. “Too many Aurora residents are ripped off by check cashers and payday lenders, and become trapped in an endless spiral of debt,” Giannoulias said. “Having access to traditional checking and savings accounts will translate into financial independence and empowerment.” Nationally, 65% of unbanked residents are employed full-time and another 24% work part-time, Pew reports. However, more than half of unbanked households say they’ve never had a checking account because of their misperception and distrust of banks. “By participating, credit unions and financial institutions can promote mainstream banking and financial literacy training,” said Laura Page, policy adviser for the Illinois State Treasurer. “Studies show that distrust of financial institutions keeps many qualified individuals from opening accounts and ‘Bank on’ programs are successful because of the engagement of nonprofit organizations that equip clients with the tools to succeed.” Bank on Aurora has a target launch date of April 1 for the public to begin signing up for the program. Partner organizations, which include local not-for-profit agencies and financial institutions including credit unions, aim to sign up 1,200 individuals in the area in the next year. To participate in Bank On Illinois, financial institutions must offer free or low-cost checking and savings accounts, “second chance” accounts for people with negative histories and accept tax identification numbers, matricula consular and other foreign IDs in place of Social Security numbers. To qualify for an account, residents must have a history free of identity theft and fraud, and enroll in financial literacy training courses.

How Louisiana CUs celebrated Super Bowl win

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HARAHAN, La. (2/12/10)--Louisiana credit unions celebrated the New Orleans’ Saints first trip to the Super Bowl by dressing in black and gold, the team’s colors, and by hosting parties, and Super Bowl-themed contests and promotions at their branches.
Layfette (La.) Schools FCU was one of several credit unions that dressed up in black and gold to celebrate the New Orleans Saints’ win at Super Bowl XLIV. (Photo provided by the Louisiana Credit Union League)
The Saints’ win at Super Bowl XLIV over the Indianapolis Colts garnered a record 105.97 million viewers, beating out the historic record previously held by the M*A*S*H TV series finale on Feb. 20, 1983. The game was especially important for New Orleans because it is the first time the Saints have been to the Super Bowl, said the Louisiana Credit Union League (eNews Feb. 10). Also, the city is recovering from Hurricane Katrina, which struck in 2005, and the Saints’ quarterback, Peyton Manning, sought a second super bowl ring. CSE FCU, Lake Charles, celebrated with a “Get Back in the Game” promotion celebrating the products the credit union offers members. Every Friday before the Super Bowl game, the credit union promoted “We Believe in the Saints” by dressing to support the team and offering treats in the lobby. CSE FCU also gave away a 32-inch flat screen TV. Shell New Orleans (La.) FCU shot a 10-second mini-commercial for the Saints, which will air several times on a local radio station. Employees dressed in Saints attire and tailgated during lunch on Friday. The staff also had a poster decorating contest and the winner, Keith Fontcuberta, received a $50 gift card. The posters are displayed in the credit union’s lobby. Heart of Louisiana CU, Pineville, employees wore Saints National Football Conference championship shirts provided by the credit union for the week leading up to the Super Bowl game. The credit union also hosted a party with food the Friday before the game at all of its branches. Lafayette (La.) Schools FCU dressed in black and gold for the week leading up to the game and decorated its lobby. Employees at ASI FCU, Harahan, dressed in black and gold attire. Greater New Orleans FCU decorated in Saints regalia and employees donated $15 to disaster relief for Haiti so they could wear black and gold.

CU System briefs (02/11/2010)

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* SULPHUR, La. (2/12/10)--Access of Louisiana FCU's Sulphur, La. branch was hit twice within 24 hours by thieves, first in a robbery that resulted in a lockdown at a nearby middle school, then by "smash and grab" thieves who failed in their attempt to steal an ATM. The first incident occurred at around 1:46 p.m. Tuesday when a man wearing a hoodie, white mask and sunglasses entered the branch and demanded money. An employee placed an unknown amount and a dye pack in a bag and gave it to the suspect, who fled on foot. Police locked down Maplewood Middle School but lifted the lockdown at 3:25 p.m. Officers remained in the area while children walked home from school. The second incident occurred at 4:30 a.m. Wednesday. Police located the credit union's ATM machine about one block from the branch. Information obtained from a surveillance video led to a stolen vehicle. The money was recovered in both incidents, said police (kplctv.com Feb. 9 and Feb. 10) ... * SAN DIEGO (2/12/10)--San Diego-based Mission FCU has contributed $50,000 to The College of Business Administration at California State University San Marcos, announced the university. The gift is to provide building and program upgrades not supported through state funding. The donation was part of the college's naming opportunity for Markstein Hall. As a result, the hall's classroom 203 has been named after the credit union. Two gift plaques are hung near the entrance of and inside the 23-seat classroom. Mission Fed "was founded by educators nearly 50 years ago, and we continue to be a dedicated community partner who supports the not-for-profit organizations in the areas where our members live and work," said Jeanine Dodman, first vice president, branch network, at the $2 billion asset credit union ... * CHANDLER, Ariz. (2/12/10)--First CU, based in Chandler, Ariz., has
Click to view larger image Click for larger view
raised $50,000 in Credit Unions for Kids fund-raising campaign for the 2009 Children's Miracle Network. The money raised by the $400 million asset credit union's members, employees and vendors was donated to Tucson Medical Center's Pediatric Unit and Phoenix Children's Hospital's "One Darn Cool School," an in-hospital K-12 education program for hospitalized patients. First CU participated in CO-OP Financial Services Miracle Match Program, which matched 150% of the money raised. The photo includes the check presentation to staff and patients at the Phoenix hospital. (Photo provided by First CU) ... * ANCHORAGE, Alaska (2/12/10)--An Anchorage man has been sentenced to 12 years in prison for robbing a branch of Alaska USA CU of $600 in August. Jarell Paul Arnold, 34, who had pleaded guilty to one count of credit union robbery, was sentenced in a U.S. District Court in Anchorage. The Federal Bureau of Investigation said Arnold entered the branch and asked for the balance on his account. The teller asked for his name, account number and ID, which he gave. Arnold then told the teller he had a gun and wanted money. When the robbery occurred, Arnold was on supervised release for a prior robbery conviction (Associated Press Newswires and KTUU.com Feb. 8) ...

WOCCU G-10 members meet on growth reg influence

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MADISON, Wis. (2/12/10)--Worldwide credit union growth and complex changes that may drive smaller institutions to merge to seek strength critical to addressing new regulations topped the agenda for World Council of Credit Unions' (WOCCU) G-10 members at a meeting last month in Florida.
Click to view larger image Attendees at the World Council of Credit Union's (WOCCU) G-10 meeting included, from left: (Front row) Barry Jolette, U.S.; Bill Knight, meeting facilitator; Manfred Dasenbrock, Brazil; and Carilus Ademba, Kenya; (second row) Yvonne Ridguard, Caribbean; Kieron Brennan, Ireland; and Louise Petschler, Australia; (third row) Victor Fierro Robio, Mexico; Ramón Imperial, Mexico; Mark Bailey, Ireland; and David Phillips, Canada; (fourth row) Dave Grace, WOCCU, U.S.; Ralph Wharton, Caribbean; and Pete Crear, WOCCU, U.S. Not pictured: Dan Mica, U.S. (Photo provided by WOCCU)
Credit unions worldwide last year experienced positive growth in savings and membership, indicating the movement's increasing strength, said WOCCU. However, economic and regulatory changes brought complexity that can sometimes drive smaller institutions to merge in hopes of gaining strength critical to addressing new regulations. The WOCCU G-10, comprised of the world's 10 largest member credit union systems, meets each January to discuss issues affecting financial services in general and credit unions in particular. This year's topics fell under the shadow of last year's global economic crisis, from which many systems are still recovering. "None of us have gone untouched by the recession, but some of us were able to better weather the storm than others," said Pete Crear, WOCCU president/CEO. "The G-10 meeting affords a unique opportunity for the largest credit union systems from around the globe to gather and share solutions to such problems." All participants shared a concern that new regulations must be appropriate for credit unions in the countries they serve. The impact of new laws in Kenya and South Africa have yet to be felt, while other countries proactive in regulatory development, often with WOCCU's help, had insights to share about best approaches to offer lawmakers assistance. The extent to which the experiences can be shared with government bodies in the formative stages of drafting legislation may help credit unions better serve members, particularly as financial markets change and institutions continue to grow, WOCCU said. "The U.S. credit union movement can and does learn a great deal from the burgeoning worldwide movement, particularly with regard to building wealth for members," said Dan Mica, president/CEO of the Credit Union National Association, WOCCU's U.S. member and a G-10 organization. "Sharing success stories and even challenges among our respective organizations helps ensure that no ideas are overlooked, and that all challenges may be addressed." In addition to Mica, WOCCU G-10 members in attendance included Manfred Dasenbrock, Confederação Interestadual das Cooperativas Ligadas ao SICREDI, Brazil; Carilus Ademba, Kenya Union of Savings and Credit Co-operatives; Yvonne Ridguard and Ralph Wharton, Caribbean Confederation of Credit Unions; Mark Bailey and Kieron Brennan, Irish League of Credit Unions; Louise Petschler, Abacus Australian Mutuals; Victor Fierro Robio and Ramón Imperial, Caja Popular Mexicana, Mexico; and David Phillips, Credit Union Central of Canada. In addition to Crear, WOCCU officials and executives participating in the meeting included Chair Barry Jolette, U.S.; and Dave Grace, WOCCU vice president of association services. The two-day meeting was moderated by Mark Sievewright, corporate senior vice president, strategic marketing, for Fiserv Inc., and Bill Knight, president of Hebb, Knight and Associates. Representatives from the National Association of Cooperative Savings & Credit Unions, Poland, and the Federación de Cooperativas de Ahorro y Crédito de Costa Rica, the remaining two G-10 nations, were unable to attend this year's meeting. "As a member of the U.S. Congress, where I served on the Foreign Relations Committee, I learned the value of international cooperation and communication," said Mica. "The G-10 gathering reinforces my commitment and belief to both of those values."

Constitution Corporate reports 2009 losses

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WALLINGFORD, Conn. (2/11/10)--Connecticut-based Constitution Corporate FCU announced Wednesday its losses for 2009, subject to audit, at $100.2 million. That compares with $84.3 million net loss in 2008, according to its December financials posted on the corporate's website. Other than temporary impairment (OTTI) of investments totaled $104.3 million, which depletes members' capital shares of $66.8 million to cover the losses above retained earnings as required by the National Credit Union Administration. The OTTI charge includes roughly $24.4 million charged for the fourth quarter, based on an initial analysis by Clayton IPS of the corporate's residential mortgage backed securities. Changes in accounting required under the FAS 115-2, effective Jan. 1, resulted in a $40.6 million increase to the corporate's undivided loss. That provided a retained earnings balance totaling $8.1 million as of Jan. 1, said the corporate's financial statement. Constitution's core earnings--earned before charges for other than temporary impairment and the writedowns of the corporate's capital in U.S.Central during 2008--totaled $4.1 million in 2009, down from $5.1 million in 2008. The decrease is core earnings is due primarily to a $1.6 million decline in net interest income--the result of a narrowing of the LIBOR to Fed Funds spread, which occurred from 2008 to 2009 as the credit market began stabilizing. A wide spread between the two indices benefits Constitution's earnings because many of its assets are indexed to one-month LIBOR, the corporate said. Fees and other income declined by $48,000 while total operating expenses were reduced by $683,000. Constitution ended the year with a prior undivided earnings deficit totaling $25.2 million, which is guaranteed by the National Credit Union Share Insurance Fund.

Mich. league CEO touts Save to Win on IHuff. PostI

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LANSING, Mich. (2/11/10)--Michigan Credit Union League President/CEO Dave Adams is the latest credit union leader to be featured in the Huffington Post's "Move Your Money" campaign, which advocates consumers taking their deposits out of big banks and moving them to local credit unions and community banks. Adams' column in the Post Wednesday suggests consumers move their money, make the switch and invest in America. There is "a rising tide of anger from the American public," but also "a growing tide of sentiment that resonates the theme of self-empowerment. 'I can vote with my feet.' 'I can switch to a local credit union.' And millions are doing just that," Adams writes. "In addition to the great rates, low fees and high service levels provided by neighborhood credit unions, they are also showing the power of cooperative innovation," he says. He cites three Michigan credit union programs as examples of cooperative innovation:
* The Save to Win program, where members receive an entry into a raffle for prizes for each $25 they deposit into their Save to Win certificate. Last year, credit unions awarded more than $39,000 in monthly prizes to more than 500 winners, plus a grand prize of $100,000 at year-end. More than 11,000 consumers saved nearly $9 million in less than one year. * The Invest in America program, incentives for credit union members to buy American cars and help create jobs in the domestic auto industry. More than 230,000 vehicle sales for General Motors and Chrysler were made during 2009 because 2,100 credit unions promoted the discounts. * A new Small Business Financing Alliance, where Michigan credit unions will provide $43 million in capital for small business loans in cooperation with the state.
Adams also mentioned a column in Huffington Post by Credit Union National Association President/CEO Dan Mica, which applauded the Post's "Move Your Money" initiative and advocated moving funds to credit unions.

CUNACFA card survey generates press coverage

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WASHINGTON (2/11/10)--New credit card survey results announced Tuesday by the Consumer Federation of America (CFA) and the Credit Union National Association (CUNA) on consumer awareness of credit card changes and consumer protections coming down the pike this month resulted in widespread press coverage. Tuesday's teleconference with CFA Executive Director Stephen Brobeck and CUNA Chief Economist Bill Hampel noted that 61% of consumers surveyed are aware that there are new credit card protections but 65% don't know they take effect Feb. 22 and don't understand the specific protections Congress approved last year when it passed the Credit Card Accountability, Responsibility and Disclosures (CARD) Act. Hampel noted that 85% of consumers surveyed reporting planning or taking action when aware of a new rate hike, new fee, lower credit limit, fewer rewards or other disadvantageous terms. For a full report of the findings, use the link. In addition to trade press coverage, the information was featured in the Congress Daily, St. Louis Post-Dispatch, the Cleveland Plain Dealer, CreditCards.com, Mainstreet.com, and on New York's "The Nightly News with Chuck Scarborough" aired on NBC's New York Nonstop. The information was also picked up by Financial Market Regulatory Wire, Targeted News Service and States News Service. The information raised concerns about consumers basing their future credit card use on protections that don't exist, said Brobeck. Thirty-six percent of card users surveyed think that the new law caps late fees at $35 while 31% believes it caps interest rates at 20%. The new law does neither.

N.J. league CEO on TV Were the good guys

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NEW YORK and HIGHTSTOWN, N.J. (2/11/10)--New Jersey Credit Union League President Paul Gentile appeared Tuesday night on New York's "The Nightly News with Chuck Scarborough" to discuss new credit card rules going into effect Feb. 22 as a result of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act. The segment highlighted several new provisions related to disclosures, limits on interest rate increases, charges on new purchases and existing balances, and individuals under age 21, who must show ability to pay or a present a co-signer in order to receive a credit card (The Daily Exchange Feb. 10). Asked if credit unions were raising rates like many banks in advance of the Feb. 22 deadline, Gentile said most credit unions are not and were already complying with much of what the new law seeks to protect consumers from. "We're the good guys in this situation," he said. The segment also highlighted the results of the Consumer Federation of America (CFA)/ Credit Union National Association (CUNA) survey announced Tuesday on consumer awareness of the new credit card protections. The survey found that 61% of consumers are aware there are new credit card protections, but 65% don't know they take effect later this month and don't understand the specific protections Congress approved last year. The show aired on NBC's New York Nonstop.

Blizzards shut down leagues CUs

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MADISON, Wis. (2/11/10)--Several credit union leagues and even more credit unions in Mid-Atlantic and Northeast states were closed Wednesday because of a historic snowstorm with blizzard conditions that brought the federal government to a standstill. The Credit Union National Association’s (CUNA) Washington, D.C., headquarters has been closed all week for far, as has the federal government and the National Credit Union Administration. The closings were due to a series of storms that dumped two to three feet of snow last week. About 12 to 18 inches of more snow were predicted to hit states in that area Wednesday, according to USA Today (Feb. 10). The storm, described by the National Weather Services as a “northeaster,” delivered snow to Washington, D.C., Baltimore and Philadelphia--areas that saw snowplows come to a halt because of safety issues. More snow could be on the way Monday (The New York Times Feb. 10). Leagues closed on Wednesday include: The New Jersey Credit Union League, the Pennsylvania Credit Union Association (PCUA), The Credit Union League of Connecticut, The Delware Credit Union League and the Maryland and District of Columbia Credit Union Association. PCUA notified members via a special edition of its daily e-mail newsletter. It noted state offices in the Capitol, as well as Philadelphia, Pittsburgh, Reading and Scranton were closed. “Snow is falling across Pennsylvania ... most business in the mid-state are closed today, and several credit unions already posted closings early (Wednesday),” PCUA said. The Connecticut league let its member credit unions know Tuesday of its intention to close its office in Meriden on Wednesday. League staff worked from home and were available by phone, and in some cases, e-mail, Ed Zagorski, league director of communications, told News Now. The league was scheduled to open its offices today. The league also was able to produce its full edition of Daily Update, an e-newsletter that is sent every business morning to member credit unions and nearly 500 subscribers, Zagorski added. “One unfortunate consequence of the storm and closing of league offices is that we had to postpone the second-day session of the inaugural week of our 2010 Compliance School, which opened on Tuesday with a full day’s session on Truth in Lending,” he said. Wednesday’s session was supposed to cover the Real Estate Settlement Procedures Act (RESPA). The RESPA session will be re-scheduled, he added. The compliance school is a six-month program to inform, instruct and provide workshops in full-day sessions for affiliated credit unions in the Northeast to satisfy regulatory compliance requirements. The Credit Union Association of New York, Albany, was open Wednesday. Albany was expecting three to four inches of snow, Bonnie Sklar, league public relations coordinator, told News Now. The Virginia Credit Union League, based in Lynchburg, also was open. The office is located about three hours from the District of Columbia, and wasn’t experiencing snowy conditions when News Now called. “We dodged a bullet,” said Lewis Wood, league director of public relations and communications. “We haven’t been hammered [by snow] the way D.C. and Northern Virginia have.” The league has heard from several credit unions in Northern Virginia that have closed due to snow, Wood added. He was not sure when they would reopen. “It depends on road conditions,” he said. Washington Gas Light FCU, Springfield, Va., posted information about closings on its website. The credit union closed at 3 p.m. Tuesday and all day Wednesday because of snow. “If the snowfall isn’t as much as predicted, we will make every effort to open for business,” the credit union said. It also reminded members that they still have access to their accounts by phone, online or through ATMs. Belvoir FCU, Woodbridge, Va., also was closed Wednesday. The credit union was scheduled to reopen today at noon except for its two branches on Fort Belvoir, which remain closed, said Jacqueline Connor, vice president of marketing and business development. Many credit unions in Delaware also have been closed as a result of the snow, according to Alice Smith, Delaware league communications director.

IBoston GlobeI notes CUs seeking higher loan limits

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BOSTON (2/11/10)--Credit unions are eager to fill the lending gap for small business owners, a gap created because banks are still reeling from the credit crisis and are under pressure from regulators to be cautious, The Boston Globe said Wednesday. “Credit unions are lobbying Congress to increase their lending limits, arguing that they could help create jobs without the $30 billion President Obama has proposed giving community banks for small business loans,” the newspaper noted. Credit unions such as St. Mary’s Bank in Manchester, N.H, are looking to increase their small-business lending cap to 25% of total assets from the current 12.25% cap level for commercial loans, the paper said. “As we can lend more to the small businesses, it creates more jobs, helps the consumer, and hopefully pulls that sector back up,’’ Ronald H. Covey Jr., chief executive of St. Mary’s, the nation’s oldest credit union, told the paper. Tom Parello, president of Lynnfield, Mass.-based New England Bride Inc., a magazine publisher and bridal show organizer with 10 employees, said his line of credit was called in at a bank last spring. He had been with the bank for several years, so its request to immediately repay a five-figure loan was a surprise, the paper said. His accountant suggested he talk to Metro CU, based in Chelsea, Mass. The credit union provided him with two loans--one to pay off the bank loan and an additional line of credit. Robert M. Cashman, Metro CEO, said Parello is one of many new members the credit union has gained the past year. “We’ve received so many inquiries from small businesses around our branches, this is going to be a vast and growing area,” Cashman told the paper. “If credit unions could lend more, you could stimulate the economy and create more jobs.’’ To read the article, use the link.

New Mexico House passes state funds bill

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ALBUQUERQUE, N.M. (2/11/10)--The New Mexico House of Representatives passed a bill that allows the state to move $2 billion to $5 billion of state funds to credit unions and small banks. The municipal funds bill, House Bill 66, passed 65-0, but still must be passed by the New Mexico Senate. Gov. Bill Richardson said he would sign the bill if it gets to his desk (Capitol Hill Blue and chattahbox.com Feb. 10). State Reps. Brian Egolf (D-Santa Fe) and Timothy Keller (D-Bernalillo) sponsored the bill. Egolf told the Huffington Post in January that the legislation would “direct the New Mexico Department of Finance and Administration to ‘give a preference to a community bank to act as the fiscal agent of the general fund operating cash depository account’” (Huffington Post Feb. 10). The Credit Union Association of New Mexico (CUANM) has been supporting the bill, Sylvia Lyon, CUANM CEO/president, told News Now. Credit unions in the state won’t be able to handle all of the money made available if the bill becomes law, but the legislation still will create some great opportunities for them, Juan Fernandez, CUANM vice president of governmental affairs, told News Now. “The bigger incentive for credit unions is that they’ll be able to get certificates of deposit and investments from the state--not the entire chunk of the $2 billion to $5 billion that’s available from the state--but I imagine it will open up million of dollars of capital to credit unions,” Fernandez said.

Filene Just-in-time fin ed helps 79 of students improve

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MADISON, Wis. (2/11/10)--One of the biggest challenges in financial education is providing the right information at the right time. A new Filene Research Institute report shows how credit unions can deliver just-in-time financial education to young college graduates. The new report, “Delivering Financial Education to Graduating College Students,” details work by Filene Research Fellow Bob Hoel and University of Wisconsin-Madison lecturer Ronald Smith. The report says financial education is effective when:
* It targets a narrowly defined audience. College students about to graduate share interest in an identifiable set of financial decisions that they have not faced before. * It delivers education when the targeted audience needs it. People are more likely to pay attention and change behavior when the information relates to an imminent financial decision. * It offers concrete advice. There are small group forums where students can receive topical advice, and where students can receive one-on-one advice from a financial expert.
“People want to be told what to do,” Hoel said. “Knowing that you need to make good decisions isn’t enough. But getting real numbers, specific advice, and one-on-one time with an expert--that’s what makes a difference.” Filene researchers examined a “Financial Independence Seminar” that can be replicated at colleges and universities nationwide with the help of college alumni associations and credit unions. The basic program was developed and tested at the University of Wisconsin-Madison over the past five years. It is surprisingly simple, Filene said. Graduating students from all majors are invited to participate in a one-day program with two lectures and several breakout sessions. Most participants also sign up for a half-hour of one-on-one counseling during the four weeks after the main session. Students participating reported the seminar helped them take actions that will improve their financial well-being. When surveyed three months after the seminar, 98% said the seminar helped them make real-world financial decisions; 79% took at least one major step to improve their financial well-being; and 55% took more than one step. Some took as many as six steps. Ninety-four percent of graduates who took the seminar three years earlier said the seminar helped them make real-world financial decisions. College alumni associations are the best on-campus sponsors of these programs, according to Hoel and Smith. Credit union professionals can lead some of the breakout sessions and serve as counselors for one-on-one sessions. Credit unions also can be co-sponsors of the seminar. The seminar can be offered for less than $1,000. For more information, use the link.

Survey ID theft at all-time high

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SAN FRANCISCO (2/11/10)--The number of identity fraud victims in the U.S. increased 12% to 11.1 million adults in 2009--the highest increase since 2003, according to a new ID theft study. The total annual fraud amount increased by 12.5% to $54 billion. The high is probably due to the economic downturn, Javelin Strategy and Research said in its study, “The 2010 Identity Fraud Survey Report,” which was co-sponsored by Intersections, a CUNA Strategic Services provider, which specializes in I.D. theft prevention services. “The good news is consumers are getting more aggressive in monitoring, detecting and preventing fraud with the help of technology and partnerships with financial institutions, government agencies and resolution services,” said James Van Dyke, Javelin president. Average fraud resolution time dropped 30% to 21 hours. Nearly half of new victims file police reports, resulting in double the reported arrests, triple the prosecutions and double the percentage of convictions in 2009. Thirty-nine percent of identity fraud victims reported fraudulent new credit card accounts, up from 33% in 2008. New online accounts opened fraudulently more than doubled over 2008, and the number of new e-mail payment accounts increased 12%. Financial services companies continue to excel in detecting fraud and alerting their customers. More than one-third of victims first learned about the fraud from their financial institution, the report said. Other findings:
* Identification most likely to be compromised in a data breach continues to be full name (63%) and physical address (37%). Compromised health insurance information increased 4% over the last year. * About 75% of existing card fraud incidents came from credit cards, an increase of 12% over 2008. Existing debit cards fraud incidents represented 33% of total existing card fraud in 2009 and decreased by 2%. * Eighteen to 24-year-olds are the slowest to detect fraud--they take nearly twice as many days to detect it as other age groups. They were found to be less likely to monitor accounts regularly and the least likely group to take advantage of monitoring programs offered by financial institutions. However, they are the most likely group to take action such as switching primary institutions or switching forms of payment if fraud occurs. * Identity fraud victims in the U.S. grew to 4.8% of the population, with a projected total of $54 billion in crime. * Small business owners suffer fraud at one-and-a-half times the rate of other adults, because small office and home office business owners use personal accounts when making business transactions and make more transactions than typical adults.
“Identity fraud continues on the upswing, and we believe it will continue to rise if consumers fail to take proactive steps to prevent fraudsters from taking advantage of their offline and online transactions and their increasingly exposed personal information on social networks,” said Michael Stanfield, Intersections chairman/CEO. “In addition, consumers need to protect themselves and their computers from sophisticated malware, and well-conceived and executed spam and phishing attacks.” Intersections offered several tips to reduce identity fraud, including the use of direct deposit, installing software to protect against viruses and spyware, turning off Bluetooth or Wi-Fi when not in use, monitoring accounts weekly, and acting quickly when fraud is suspected. For more information, use the links.

Va. Senate committee passes conversion bill

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LYNCHBURG, Va. (2/11/10)--The Virginia Senate's Commerce and Labor Committee Monday evening approved, by 15-0, a bill that would allow state chartered credit unions to convert to mutual savings banks using the same pathway as federally chartered credit unions. The voice vote was on Senate Bill 440, a twin bill to House Bill 482, which was approved last week by the House Commerce and Labor Committee, according to the Virginia Credit Union League. The measure is scheduled to go through three readings on the House floor this week, with a possible vote taking place as early as Friday, said Lewis Wood, director of public relations and communications. Sen. Dick Saslaw (D-35), chairman of the Senate Commerce and Labor Committee and Senate Majority Leader, was the bill's patron in the Senate. Saslaw told the panel that the bill before it was a substitute bill that would give credit union members "ample opportunity" to comment on a conversion plan and to receive notice of the proposal to change their credit union to a mutual savings bank. He noted that after a credit union's board approves conversion, the credit union needs two-thirds of voting members to support conversion. The State Corporation Commission also has to approve the conversion and retains the right to deny the change if safety and soundness issues are present. Unlike the House panel consideration, the Senate proposal sparked questions, mostly centered around the impact of a credit union-to-mutual savings bank conversion. Saslaw noted that conversion to a mutual savings bank charter would allow the former credit union to bid on public deposits, "greatly enhance business lending opportunities," and turn credit unions into "taxpayers that contribute to the state's General Fund." The league provided the language for the substitute bill in both the Senate and House committees. Originally, the Virginia Bankers Association had proposed a bill that would make it easier for stock-owned banks to take over credit unions, a proposal rejected in January by the league's board because it didn't protect members' rights (News Now Feb. 8).

MatriMoney gift registry will help valentines save

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LOS ANGELES (2/11/10)--Valentine’s Day is Sunday--a day that many couples become engaged--and Water and Power Community CU (WPCCU) in Los Angeles is offering couples a MatriMoney wedding registry savings account. Couples can open the interest-bearing savings account to help save cash wedding gifts for honeymoon expenses, furniture or a down payment on a home. WPCCU gives MatriMoney instruction cards for engaged couples to include on their wedding invitations, and gift givers receive cash gift acknowledgement cards to announce their gift to the couple. A minimum of $50 is needed to open the MatriMoney accounts. The couple also must open and maintain a joint savings account in good standing with $25. The credit union also offers free online financial workshops for couples to discuss money and budgeting. WPCCU has $468 million in assets.

Rates help increase Oregon CUs membership

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BEAVERTON, Ore. (2/11/10)--Oregon credit unions are growing, confirms the most recent data released from the National Credit Union Administration (NCUA), according to the Credit Union Association of Oregon (CUAO). One of the attractions of credit unions, in addition to their member-owned, not-for-profit business model, is that more favorable rates for savings and loan products can often be found at credit unions, CUAO said. In late January, NCUA confirmed that credit unions continue to hold the rate advantage. At year-end 2009, credit unions, on average, posted more favorable rates for consumers than banks did in 21 of the 23 loan and savings categories, according to data released by DATATRAC Inc. Also, credit unions provided significantly lower rates on all consumer loan types and provided higher yields on all savings products. Sample average rates are included in the accompanying chart.
Product All CUs Oregon CUs All Banks Oregon Banks
Interest Checking 0.30 .23 0.22 .16
Regular Savings 0.41 .24 0.28 22
Classic Credit Card 11.65 10.98 12.71 17.16
5 year CD 2.76 2.77 2.38 2.25
The data for Oregon were pulled for Feb. 1, from DATATRAC. For the 12-month period ending in September, Oregon credit unions increased in these categories: assets (7%), savings and deposits (11%), and membership (2%). In comparison, deposit growth at Oregon-chartered banks was 8.9%. Nationally, credit unions grew almost twice as fast as banks, 8.25% vs. 4.3%, CUAO said. To access rate comparisons, use the link. DATATRAC Inc. tracks rates charged and paid by credit unions, banks, and credit unions that converted to or merged with banks.

CU System briefs (02/10/2010)

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* AUSTIN, Texas (2/11/10)--Austin, Texas-based Velocity CU sent members a letter this week announcing it will not switch to private share insurance as originally planned. The credit union had proposed switching to coverage by American Share Insurance Corp.(ASI), a private share insurer based in Ohio, because the National Credit Union Administration (NCUA) began charging fees that equaled 0.15% of insured deposits to shore up the National Credit Union Share Insurance Fund during the corporate credit union crisis. However, the $499.3 million asset credit union learned that ASI will begin charging the same fees. That eliminated the main reason for switching insurance, said the credit union. Members voted in December in favor of the switch before the credit union learned of the ASI fee increase (American-Statesman via statesman.com Feb. 10) ... * MERIDEN, Conn. (2/11/10)--The Credit Union League of Connecticut
Click to view larger image Click for larger view
kicked off its 2010 Compliance School on Truth in Lending with nearly 100 credit union representatives attending. Here, league President/CEO Tony Emerson introduces Martha Howell of M&M Consulting and leader of the first section of the compliance school. "Hang on," she told the audience during her 60-page presentation. "These slides were done a week ago, but in today's wild regulatory environment, who knows what will be here tomorrow." More compliance information will follow in two-day sessions during the next five months. (Photo provided by the Credit Union League of Connecticut) ... * RYE, N.Y. (2/11/10)--The chief financial officer of Affina Brokerage Services, which is owned by USAlliance FCU, Rye, N.Y., was sentenced to three to nine years in state prison for embezzling more than $2.2 million in stocks. John P. Walsh of Yonkers swindled the firm from June 17, 1999 to Jan. 27, 2008 by illegally transferring shares of stock from the $772.9 million asset credit union into accounts he controlled and then sold for cash. He also created phony stocks and used them as collateral for loans, according to police. He was ordered to pay $2.265 million in restitution to the insurance company that covered the loss, but Walsh's attorney said that Walsh is indigent with his house in foreclosure (The Journal News Feb. 10) ... * AMARILLO, Texas (2/11/10)--Shannon Leigh Layton, a former employee of Texas Plains FCU, Amarillo, Texas, was sentenced Tuesday to 30 months in prison and ordered to pay $221,000 in restitution after pleading guilty to stealing $221,000 from the credit union by making false entries. According to court documents, the thefts occurred between 2002 and August 2009. In 2009, she went to the Amarillo Police Department and confessed she had been stealing from the credit union (Targeted News Service Feb. 9) ... * MEMPHIS, Tenn. (2/11/10)--A Shelby County jailer was arrested as the 'stumbling bandit' who mumbled and couldn't make herself understood during attempted robberies at two credit unions in Raleigh Feb. 2. Phtosa Dennis, 42, was charged with bank robbery and using a gun during one of the crimes. The first attempted robbery occurred at before 10 a.m. at Southern Security FCU. When the robber walked up to the teller and verbally demanded money, the teller couldn't understand what she was saying. The robber then produced a holdup note, but fled the building before receiving any money. Later, a robber entered First South CU, stood in line, then brandished a gun and handed over a demand note. However, the teller ran from the counter when she saw the gun. The robber fled but stumbled and dropped her weapon. Dennis was relieved of duty with pay while the investigation continues, said the Shelby County Sheriff's Department (The Commercial Appeal Feb. 9) ...

Crash the GAC is GAC-bound welcomed by CUNA

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MADISON, Wis. (2/10/10)--The Credit Union System is getting a little younger. A group of about 20 credit union professionals from the under-30 set have received special scholarships from the Credit Union National Association (CUNA) to attend its 2010 Governmental Affairs Conference (GAC), long the Credit Union System's largest get-together. The group called itself "Crash the GAC," but had hoped all along to work cooperatively with CUNA to accommodate the interest the younger professionals had in attending major credit union movement meetings such as the GAC. The group was organized by Brent Dixon, a young adult advisor at the Filene Research Institute and a consultant with REAL Solutions. "When Brent first approached us with this concept, we wanted to figure out a way to work with this young and enthusiastic group. Our Center for Professional Development stepped up to offer registration scholarships and other assistance. We are excited about connecting these first timers with their state leagues so they can get the full GAC experience, from league briefings to Capitol Hill visits to networking on-site," said Jill Tomalin, CUNA senior vice president, association services. "We keep talking about getting young people back, but too often they’re not on the ground at places like the GAC where tremendous opportunities to network and make connections occur,” Dixon added. "We appreciate the courtesy and assistance that CUNA extended to us.” To keep the group’s expenses for the event down, its members are paying their own travel costs and will lodge at nearby youth hostels courtesy of Palmetto Cooperative Services. The 20 in Dixon's group received scholarships from CUNA’s Center for Professional Development to attend the entire event. In addition to attending regular GAC sessions, the group has organized sessions of its own, led by influential credit union movement representatives who were drawn to the group’s passion for credit unions and desire to be involved. These and the session leaders include:
* Growth through good, Lois Kitsch, National Credit Union Foundation (NCUF); * Credit union differentiation, George Hofheimer, Filene Research Institute; * International perspectives, Pete Crear, World Council of Credit Unions (WOCCU); * Grassroots activism, Larry Blanchard, CUNA Mutual Group, retired; * Acting on the Crash, Tom Decker, NCUF; * Welcome to the GAC, Tom Gannon, CUNA; and * A Conversation with the Regulators, Gigi Hyland and Gary Kohn, National Credit Union Administration.
Dixon is also talking with CUNA and WOCCU about replicating the same youth program for The 1 Credit Union Conference in Las Vegas, July 11-14.

Haiti funds hit 700000

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MADISON, Wis. (2/10/10)--Funds contributed by the credit union movement for colleagues in earthquake-stricken Haiti have reached another milestone--$700,000, reported the Worldwide Foundation for Credit Unions. Two New York credit unions and the Indiana Credit Union League helped the fund hit that total Tuesday, said the foundation, which is the international charitable arm of the World Council of Credit Unions (WOCCU). "We reached $700,000 today. A $50,000 gift from Melrose CU, Briarwood, N.Y., via CUAid.coop and a $20,000 gift to WOCCU from Municipal CU, also in New York, sure helped," said Valerie Breunig, executive director of the foundation. Also in the total: $100 contributed by the Indiana Credit Union League in the name of the Louisiana Credit Union League. The two leagues, whose states had teams in the Super Bowl Sunday, had engaged in a friendly pre-game wager, with the losing state's league contributing $100 to the Haiti relief fund on behalf of the winning state's league. New Orleans Saints won the contest, 31-17, over the Indianapolis Colts and the Indiana league anteed up Tuesday. Haiti, which has an active credit union movement with 175 credit unions and 404,090 members, also is the site of a WOCCU project. To support Haiti's credit unions and members through the international credit union disaster fund, make payments, via check, credit card or wire to:

Worldwide Foundation for Credit Unions Inc.

5710 Mineral Point Road

Madison, WI 53705, USA

Donations also can be made online with a credit card at www.woccu.org/give. For wire transfer information, contact Valerie Breunig, Worldwide Foundation for Credit Unions at 608-395-2055 or via e-mail vbreunig@woccu.org. Please indicate the donation is designated for the Haiti Disaster Relief Fund. U.S. credit unions also can support WOCCU's relief efforts by donating through the National Credit Union Foundation's CU Aid system at www.CUAid.coop.

African-American coalition member drive ends Feb. 15

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MADISON, Wis. (2/10/10)--The African-American Credit Union Coalition (AACUC) is aiming to increase the strength of the global credit union movement by offering members a Membership Drive Contest that runs through Monday. Prizes are offered to members who bring in the most new members to the organization (LoneStar Leaguer Feb. 9). To be counted in the contest, new members must acknowledge that they were referred to AACUC by an existing member. Also, a referral form must be filled out either online or in the form of the paper application. The grand prize is $100. As part of the AACUC, members:
* Receive professional training and mentoring; * Network with other professionals to share best thoughts and practices; * Receive up-to-date industry news and trends; and * Are offered scholarships for ongoing leadership development.
For more information, use the link.

2009 stats Maine CUs rose in popularity use

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WESTBROOK, Maine (2/10/10)--The Maine Credit Union League’s year-end statistics indicate that the Maine Credit Union System is strong and getting stronger, the league said. Year-end stats show that total assets at Maine credit unions grew 9% during 2009, and combined assets topped $5 billion. Loans grew by more than $106 million, or 3% for the year, while shares increased by 11%, or $450 million--nearly double 2008’s growth, said the league. Membership rose by 5,296 members, or 1%. John Murphy, league president, called the year-end statistics “even more impressive in light of the reports from others in the financial services industry. “Despite a challenging economy and a continued environment of uncertainty in the financial services industry, the performance of Maine’s credit unions validates the high level of satisfaction credit unions have amongst existing members,” Murphy said, adding that credit unions have become the preferred option for many consumers seeking new financial services relationships. “The increased awareness of the value and benefits that Maine’s credit unions offer provide plenty of reasons to be optimistic about the opportunities that exist for Maine’s credit unions in the year ahead,” he added. Credit unions have heard from consumers who are turning to them for quality, local financial services, Murphy added. “Word of the willingness and ability of Maine credit unions to help members who are facing economic challenges has spread in the past year, and it is resonating with consumers,” he said.

Golden 1 ads take banks to task

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SACRAMENTO (2/10/10)--The Golden 1 CU in Sacramento has taken its mega-bank competitors to task through an ad campaign that targets consumers’ frustration with the big banks and the bailout money they received. The campaign began with radio ads last fall and soon evolved into billboards, according to The Sacramento Bee (Feb. 9). One billboard asks: “Chased by high bank fees?” in reference to JP Morgan Chase and Co. Another says: “Bank in debt to America? Come on over.” The words “bank” and “America” are in blue and red, like Bank of America’s logo. Consumers are fed up with the mega-banks that took bailout money, Teresa Halleck, CEO of The Golden 1 CU, told the newspaper. The ads let consumers know they have another option--a credit union, she said. The billboard campaign was launched as the credit union experienced a 30% increase in checking accounts last summer--which the credit union attributes to consumers’ dissatisfaction with banks, the newspaper added. Overall, Sacramento-area credit unions experienced an increase in business last year, according to the California and Nevada Credit Union Leagues. Membership in Sacramento County-headquartered credit unions rose by 2.13% to more than 1 million from Jan. 1 to Sept. 30. Deposits also jumped by 9% to $9.98 billion during the same time period, the newspaper said. Henry Kertman, league public relations director, told the Bee that the growth was probably because consumers are more frugal and because they are frustrated with big banks. The Golden 1 CU has $7 billion in assets.

Russian CUs prepare for new law

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MOSCOW (2/10/10)--A multinational credit union delegation visited with Russian credit unions last week to help the country's budding movement prepare for new regulatory legislation.
Click to view larger image Participants in the World Council of Credit Unions’ (WOCCU) visit to Moscow to help Russia’s nascent credit union movement prepare for new regulatory legislation included (from left): Russian Credit Union League (RCUL) CEO Alexander Solomkin; Irish League of Credit Unions Foundation Executive Director Alan Moore; WOCCU Executive Vice President and Chief Operating Officer Brian Branch; RCUL Chairman Valery Kasatkin; Polish Credit Union Foundation representative Pawel Grzesik; and Louisiana Credit Union League President/CEO Anne Cochran. (Photo provided by World Council of Credit Unions)
The new law, signed by Russian President Dmitry Medvedev in 2009, requires all Russian credit unions to register with the government and meet new federal financial standards by August 2010. World Council of Credit Unions (WOCCU) Executive Vice President and Chief Operating Officer Brian Branch headed the delegation, convened by the Russian Credit Union League (RCUL), a WOCCU member organization. Under the new guidelines, credit unions must meet certain financial standards affecting share capital, capital reserves, loan portfolio concentration limits, deposit concentration limits and investment limits. RCUL is training credit unions to meet criteria for registration, said Valery Kasatkin, RCUL chairman. “Our first priority is to help credit unions prepare for the new law and create the required regulatory structure,” Kasatkin said. The delegation's role was to provide input and offer guidance in support of those training efforts, he added. In addition to WOCCU’s Branch, the multinational delegation included Anne Cochran, president/CEO of the Louisiana Credit Union League; Alan Moore, executive director of the Irish League of Credit Unions Foundation; and Pawel Grzesik, representing the Polish Credit Union Foundation. Last week’s delegation mapped out assistance strategies to support the Russian credit unions’ transition to the rigors of the new regulatory regime. “By working together, we can gain greater leverage and efficiency in supporting the Russian league's preparation for the new regulatory framework,” Branch said. All delegation members have prior experience with RCUL. The Louisiana league, which maintains an ongoing exchange with the Russian association through the WOCCU International Partnerships Program, provided past assistance to RCUL in the form of training programs. The Irish foundation previously supported credit unions and their provincial federations in the St. Petersburg, Karelia and Dubna regions. The Polish foundation assisted Moscow-based RCUL for several years. By August 2011, a year from the new law’s implementation, all Russian credit unions must be affiliated with self-regulatory organizations (SROs)--non-commercial entities that oversee deposit-taking financial institutions. The SROs will monitor member cooperatives to ensure continued compliance with standards required under the legislation. RCUL will prepare an SRO for its member credit unions, while some regional provinces will organize their own SROs. It is likely that up to 10 SROs will exist in Russia by year-end. Each organization will register with and report credit union conditions to the Ministry of Finance, which now serves as Russia's credit union regulator. Legislation prior to 2009 limited credit unions to no more than 2,000 members, severely constraining the institutions’ ability to grow, said WOCCU. Credit unions that exceeded the 2,000-member limit had to convert to civil code organizations, putting them on equal footing with other not-for-profit and commercial entities, or run the risk of regulator intervention. The new law no longer limits the size of membership. Credit unions that serve more that 5,000 members must report to both their SRO and the Ministry of Finance. RCUL has 142 member credit unions serving roughly 250,000 members.

IWash. PostI chronicles CUNA-CU quest for biz loans

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WASHINGTON (2/10/10)--As U.S. credit unions seek to remove the small-business lending cap of 12.25% total assets per credit union and push it up to 25% of assets, they have experienced huge growth in the sector since 2003, a Credit Union National Association (CUNA) economist told the Washington Post Tuesday. Credit unions' small business lending shot up from less than $10 billion at the end of 2003 to more than $35 billion as of the end of September, Bill Hampel, CUNA chief economist, told writer Binyamin Appelbaum. But CUNA warns that the growth isn’t likely to continue, as 180 credit unions already are bumping up against the federal cap. “That limit was largely hypothetical until regulators lifted a number of the limitations on business lending in 2003,” wrote Binyamin Appelbaum in an article titled “Credit unions seek larger share of business loans.” The article also mentioned Mid-Atlantic FCU, a $244 million-asset, Germantown, Md.- based credit union that owns and funds most of Mid-Atlantic Financial Partners--a credit union subsidiary that lent $32 million to small businesses in 2009. It plans to lend $50 million in 2010, according to the newspaper. To read the article, use the link.

Vote for ICU Day theme

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MADISON, Wis. (2/10/10)--Credit unions can select the U.S. credit unions’ entry for this year’s International Credit Union (ICU) Day theme. Participants can vote for one of the five theme semi-finalists by Tuesday at cuna.org/icuday. The top two themes will be passed on to the World Council of Credit Unions’ committee to select a worldwide theme. The U.S. choices are:
* Lend a Helping Hand; * Credit Unions--Switch and Save; * People Helping People--the Better Place to Be; * Local, Loyal, Serving You; * Join Today, Prosper a Lifetime.
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. This year’s celebration will be on Oct. 21. For more information or to vote, use the link.

Three named Unsung Heroes by California league

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RANCHO CUCAMONGA (2/10/10)--Three people--Peggy Holliday, Stan
Click to view larger image At the Unsung Hero Award presentation are, from left, Dalia Bieltz, CEO, Clearpath FCU; Judy Hurst, former CEO of Unocal FCU; Mark Klinkert, California Credit Union League senior vice president of professional development/chief operating officer; Unsung Hero Award recipient Stan Abrams, former CEO of Partners FCU; Linda Walsmley, director of compliance and administration, First Entertainment CU; and Chuck Bruen, CEO, First Entertainment CU.
Click to view larger image Mal Sinclair, former CEO of Famco FCU, receives the California Credit Union League's Unsung Hero Award from Mark Klinkert, league senior vice president of professional development/chief operating officer. (Photos provided by the California Credit Union League)
Abrams and Mal Sinclair--have been named 'Unsung Heroes' by the California Credit Union League. The awards are presented for service "above and beyond" to those who have served the credit union movement more than 20 years. Holliday, CEO of Burbank FCU for more than four decades before her retirement Jan. 29, set up the first student credit union west of the Mississippi. She served on several league committees and also as board member of the league's San Fernando/Antelope Valley Chapter. Abrams, in the movement for 33 years, worked for the league and also served 21 years as CEO of Partners (formerly VISTA) FCU, which serves Walt Disney Co. employees. He was a charter member of the Credit Union Presidents Association and Western CUNA Management School Alumni Association. Mal Sinclair, a native of South Africa, became CEO of Famco (formerly Ameron) FCU in 1977 and retired in 2001. He served as vice president/program chairman of the league's Southwest Chapter and led the group's letter writing campaign in 1970 to support legislation to preserve share draft legislation for credit unions. It was the first chapter to do so and other chapters followed, generating more than 10,000 letters. He also served on the board of Western Corporate FCU.

CU System briefs (02/09/2010)

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* NILES, Mich. (2/10/10)--Three northern Indiana men were sentenced to a combined 32 years for an Oct. 11, 2007, takeover armed robbery at Berrien Teachers CU, Niles, Mich., said the U.S. Attorney's Office for the Western District of Michigan. Travis Lenois Allen, 27, and Antiowan Devon Loftin, 26, each received seven years in prison, and Chester Darnell Higgins, 31, was sentenced to 18 years. After their release, all three will service five years of supervised release and were ordered to pay restitution. Higgins' sentence will be served consecutive to an 18-year sentence in another bank robbery. The robbers brandished handguns, gathered employees in the lobby and forced them to lie on the floor, while they stole more than $207,000. A fourth man involved in the heist, Devarence Kimbrough, 22, was shot to death in a second robbery at the credit union on Jan. 18, 2008. At the second robbery, he and two others were confronted by a security guard, who shot two of them. The other two men were sentenced to a combined 19 1/2 years in prison for that incident (States News Service Feb. 5) ... * HARRISBURG, Pa. (2/10/10)--U$X FCU has issued $585,000 in loyalty rewards to its members for 2009, the eight straight year the credit union has issued the reward (Life is a Highway Feb. 5). Since the rewards' inception, the Cranberry Township, Pa.-based credit union has returned $5.3 million to members. "We believe that when the credit union is successful, it's not only a sound business practice to reward the owners of the credit union and share our surplus, but that this practice clearly demonstrates the credit union difference," said David Ackerman, president. The credit union has more than $161 million in assets ... *MIDDLETOWN, Conn. (2/10/10)--MiddConn FCU has established a fund for the families of the victims in Sunday's gas explosion at Kleen Energy Systems power plant in Middleton, Conn. Five people were killed and at least a dozen injured in the explosion (USA Today Feb. 8). The fund was established through the city's mayor's office and donations can be sent either to the mayor's office or to: Families of Kleen Energy Tragedy, c/o MiddConn FCU, 213 Court St., Middletown, CT 06457 (The Middletown Press Feb. 8) ... * EAST SYRACUSE, N.Y. (2/10/10)--A CORE FCU branch building in East Syracuse sustained significant damages after a car driven by Alec Hanreck, 19, of DeWitt, struck the building early Saturday morning. Officials say alcohol and speed were involved. Hanreck was injured and had to be extracted from the car and taken to the hospital. He was charged with driving while intoxicated, said police. The building sustained damage outside and inside, including cracked walls up to the ceiling. However, code officials deemed the building as secure and the credit union opened for business Monday (The Post-Standard Feb. 6) ... * ROSEVILLE, Minn. (2/10/10)--SPIRE FCU has selected Dan Stoltz as its new president/CEO, the board of directors announced. Stoltz had been serving in the dual role as interim president/CEO and executive vice president since the October resignation of former President/CEO John Gisler. Stoltz served as SPIRE's chief financial officer for more than 10 years and alsoy served as executive vice president the last two years. The also served on city councils of Circle Pines and Lino Lakes for 12 years. The more-than $565 million asset credit union is based in Roseville, Minn. and serves 62,000 members ... * GREENSBORO, N.C. (2/10/10)--Lori Thompson has been named president/CEO of Greensboro, N.C.-based Premier FCU, the $113 million asset credit union announced Monday. Thompson began her career at Premier in 1990 as a loan officer. During the past 19 years, she has worked in all areas of the credit union's operation, most recently as executive vice president. She has held that position since 2001 ...

Mexican CU expands remote branch network

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ZONGOLICA, Mexico (2/10/10)--Rural Mexican credit union Caja Zongolica celebrated the grand opening of two expanded rural branches Monday, an effort expected to double membership in one branch and increase financial services access among Mexico’s rural poor.
Click to view larger image Pablo Gonzalez, right, a furniture maker, applies for membership at Caja Zongolica’s Xoxocotla branch in Mexico. His membership enables him to apply for a loan to invest in tools, materials and transportation to bring his goods to market
The new branches will improve capacity of the credit union, which operates as part of World Council of Credit Unions’ (WOCCU) Mexico program, to grow and diversify its membership in the sparsely populated regions it serves. “Caja Zongolica’s expansion of these branches is exemplary of its tiered strategy to extend access to high-quality, affordable financial services to people living in marginalized rural areas,” said Brian Branch, WOCCU executive vice president and chief operating officer. “By mapping its service territory by population density, the credit union knows whether to establish brick-and-mortar branches, reach out to members through personal digital assistants or place point-of-sale technology with retail agents.” The expanded branches are located in Atlahuilco and Xoxocotla, high in the mountains where coffee production and hand-made wooden furniture are the principal industries. In Mexico, an estimated 15% to 25% of the urban population and as little as 6% of the rural population have access to financial services, according to recent studies. There is considerable demand for affordable savings and credit products from rural merchants, workers and small business owners, services sometimes difficult to deliver without a branch in the area, WOCCU said. WOCCU’s development program in Mexico is funded by the Mexican Ministry of Agriculture, Livestock, Rural Development, Fishing and Food through its Proyecto de Asistencia Técnica al Microfinanciamiento Rural project. It works closely with Caja Zongolica and more than 50 other credit unions to extend financial services to marginalized rural areas. Branch expansions like Caja Zongolica’s facilitate the extension of these services, WOCCU said.
Click to view larger image From left, Tomasa Castro, Altahuilco, Mexico, branch manager explains the branch’s expansion plan to Brian Branch, World Council of Credit Unions executive vice president and chief operating officer, and Dolores Rivera Ramirez, Caja Zongolica CEO. (Photos provided by the World Council of Credit Unions)
“Most important, we will be able to improve member service by hiring more personnel, providing a more comfortable environment, increasing service distribution and shortening members’ waiting time,” said Tomasa Castro, manager of Caja Zongolica’s Atlahuilco branch. “We were often confused with the government’s municipal office because we had been located in the same building. Now we will be seen as a completely independent institution.” The Atlahuilco branch has expanded from a single room with one teller window, a member service desk and a outdoor waiting area, to a full-size branch with three teller windows, separate desks for credit officers, an indoor waiting area and an upstairs board room that will help expand the youth financial education program at other branches. It serves 1,500 members and plans serve up to 3,000 members by year-end. Caja Zongolica’s expansion also will involve connecting all of its branches through a proprietary satellite network that operates in the absence of local Internet access or consistent cellular phone coverage in some villages. The credit union uses radios to communicate among branches, and daily financial reports are delivered on disks to credit union headquarters each night. In Xoxocotla, another one-room Caja Zongolica branch also opened its new, full-service office Monday. The town is home to nearly 3,000 inhabitants, but the Xoxocotla branch also serves the greater region populated by around 20,000 people, making the expansion key to improving member service and drawing in new business. The credit union’s only competition, microfinance bank Compartamos, operates but does not have a physical office in the region, and is known for prohibitively high interest rates. “It is very striking how strong Caja Zongolica’s community development efforts are,” Branch said. “All credit unions invest in the development of their members and their members’ families, but Caja Zongolica has a strong commitment to support the economic base of the communities it serves, and their continued rural expansion is a reflection of that commitment.”

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.

More distressed consumers are ignoring debts says NFCC

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SILVER SPRINGS, Md. (2/8/10)--More U.S. consumers experiencing financial difficulties are ignoring their debts, according to a national poll. The National Foundation for Credit Counseling’s (NFCC) January online poll, which received more than 11,000 responses, revealed that 10% of respondents selected “ignoring their debt” as the first action they would take if in financial distress. This number closely mirrors the current unemployment rate of 9.7% and credit card charge-off rates, NFCC said. “At first glance, the response makes perfect sense,” said Gail Cunningham, NFCC spokesperson. “After all, if you are out of work, you’re worried about keeping a roof over your head and food on the table. However, simply ignoring the situation is possibly the worst possible decision a consumer can make. Not only does it not resolve the problem, it exacerbates it.” The results from the survey, called the Financial Literacy Opinion Index (FLOI), indicated that the largest number of respondents, 38%, said their first action would be to seek help from a legitimate credit counseling agency if they were in financial distress. This shows that consumers are aware that substantive help is available to them, and that they understand reaching out for help sooner rather than later is the first step to take, NFCC said. Since credit counseling and debt settlement are two different options, the survey also tested consumer responses related to debt settlement. Thirty-three percent knew that talking directly to their creditors to arrange a settlement was the right thing to do. However, 14% said that reaching out to a debt settlement company would be their first step--a troubling number, NFCC said. Many state attorneys general, as well as the Federal Trade Commission, have launched investigations into the debt settlement industry, often finding that consumers receive little, if any, assistance from such firms, said the foundation. Personal bankruptcy filings nationally are trending upward. However, only 5% of consumers said bankruptcy would be their first choice if in financial distress. Bankruptcy can be the right answer for some, but other options should be thoroughly considered before opting to file, and consumers appear to understand this, said NFCC. “It can be argued that proper choices are never more critical than when in financial distress. Although it is encouraging that more than two-thirds of respondents knew to seek legitimate credit counseling or reach out to their creditor as their first step, those who chose other options are on a slippery slope, one which could lead to a full-blown financial disaster,” Cunningham said. When asked what their first action would be if they couldn’t manage their debt, consumers answered:
* Ignore the debt(10%); * Seek help from a legitimate credit counseling agency (38%); * Consider debt settlement through a debt settlement company (14%); * Talk directly to the creditor(s) about debt settlement (33%); and * File for bankruptcy (5%).
The Silver Springs, Md.-based organization said more than 200 lenders--many of them credit unions--had signed up with its network to assist consumers in need of financial counseling and education (News Now Jan. 29). For more information, use the link.

First hearing held on Ohios public deposits bill

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COLUMBUS, Ohio (2/8/10)--The first hearing on state legislation to allow Ohio credit unions to accept public funds was held Wednesday in the Ohio Statehouse, according to the Ohio Credit Union League.
Click to view larger image The first hearing on state legislation to allow Ohio credit unions to accept public funds was held Wednesday in the Ohio Statehouse, said the Ohio Credit Union League. Pictured are credit union people who attended the hearing and the two sponsors of House Bill 317 on Public Funds, Ohio State Reps. Peter Ujvagi (D-47)--front row, right, and Tracy Maxwell Heard (D-26)--front row, second from right. (Photo provided by the Ohio Credit Union League)
Ohio House Bill 317 would authorize credit unions to be eligible public depositories, make credit union loans eligible for certain economic assistance programs, and permit certain public investments to be made through credit unions. The bill was sponsored by Ohio State Reps. Tracy Maxwell Heard (D-26) and Peter Ujvagi (D-47), and presented before the House Committee on Financial Institutions, Real Estate & Securities. While this was the first hearing, there will be more with numerous witnesses both in favor of and in opposition to the bill. The league said it anticipates the hearings will be held on Wednesdays. Heard said the legislation would remove “unnecessary restrictive language” that currently prevents the use of credit unions as public depositories under Ohio's Uniform Depository Act. She reported that credit unions, under their respective credit union acts, are empowered to accept the funds and do accept public funds from federal public units. However, state public units are not permitted to deposit funds due to state banking restrictions. “As the numbers of traditional depositories continue to decrease, there is less choice by the public entities as to where they can deposit their funds, thereby making it increasingly difficult for local officials to find locally based entities with whom to do business,” Heard said. “This results in less competition, less choice, lower interest paid on deposits and higher rates on loans.” Ujvagi said Ohio credit unions have performed a critical financial role for decades in all communities and stepped up when redlining and disinvestments were widespread in certain communities. With the refusal of traditional banks to extend credit, credit unions again provided reasonable loans when “predatory lending and loan flipping attacked our communities from another direction,” he added. “Enabling local governmental institutions to utilize credit unions as eligible depositories simply recognizes the critical and appropriate role credit unions play in our communities, particularly at a time of increasing mergers and globalization of our banks and lending institutions,” Ujvagi said. Ujvagi told committee members those who oppose public depository choice for Ohio’s communities would raise the issue of banks and credit unions not having the same tax structure. Traditional banks have and will claim the differing tax structures somehow provide credit unions with an unfair advantage in the market, he added. If true, he questioned why then do credit unions have only .81% the total assets when compared to state-chartered financial institutions and hold only about a 6.7% share of total deposits in the state? Also, Ujvagi noted that--unlike banks--credit unions face certain operational restrictions, such as having the ability to raise outside capital.

Va. House committee passes leagues sub for merger bill

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LYNCHBURG, Va. (2/8/10)--Virginia's House Commerce and Labor Committee Thursday unanimously voted in favor of substitute language for a bank/credit union merger bill, transforming it from a merger and acquisition bill into a charter choice bill for state-chartered credit unions. The substitute House Bill 482 was drafted by the Virginia Credit Union League in response to the original bill offered by state bankers. It gives state-chartered credit unions considering conversion to a mutual savings bank the same guidelines that federal credit unions must follow in similar conversion processes. The new substitute bill now heads to the full House for consideration, perhaps as early as today. The league said it expected the Senate version of the bill--SB440--would be heard today by the Senate Commerce and Labor Committee. "I think this is a positive result for what was a desperately flawed bill," said league President Rick Pillow. "The original language in this bill would have been disastrous for credit union member-owners in Virginia, because it failed to protect member rights in cases of a conversion or acquisition to or by a for-profit bank," Pillow said. "Now the bill offers state-chartered credit unions a clear path for conversion to a mutual savings bank charter, if that is the will of the members, while providing the same member safeguards currently in place at the federal level for such conversions." He made two points:
* "This wasn't our bill originally, but we think the substitute we brought to the table is a vast improvement over the language originally offered," he said. * Parity between the state and federal charters has long been a commitment of the Virginia league. We believe that credit unions and their member-owners should have charter options."
He noted that as originally drafted, the legislation "was nothing more than a merger and acquisition bill, allowing stockholder-owned, for-profit banks to merge with or acquire member-owned, not-for-profit credit unions. The bill is now a credit union conversion bill, offering state-chartered credit unions the same charter conversion opportunities afforded federally chartered credit unions." "Charter options are an unfortunate necessity due to an always uncertain economic and regulatory environment," Pillow said. "The substitute bill allows choice while protecting member interests through full disclosure and notice, which was always our priority in negotiating with lawmakers and bankers." Pillow thanked Virginia's credit unions "for their grassroots work this past month in educating lawmakers about the potential impact of" the original bill. "I don't think there's any question that the visits, phone calls and e-mails from credit union supporters strengthened our hand at the negotiating table. I think lawmakers saw clearly that their credit union constituents could not abide the original language of this legislation," he said.

CU System briefs (02/05/2010)

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* PORTLAND, Ore. (2/8/10)--A woman was sentenced to more than 10 years for her role in an identity theft ring that operated in the Portland, Ore., area from 2004 through early 2007. Carol Crane, 47, the sixth person to plead guilty in the case, was sentenced to 124 months in prison and ordered to pay nearly $200,000 in restitution to a credit union, banks and individuals, said the Federal Bureau of Investigation's Portland field office. Crane and the accomplices obtained money by stealing identification and documents from unsuspecting victims and using them to obtain money from banks and Portland Teachers CU (now OnPoint Community CU) (Targeted News Service Feb. 3) ... * BEAVERTON, Ore. (2/8/10)--More than 45 credit union staff and
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advocates met with Oregon Rep. Earl Blumenauer (D-3) last month at Advantis CU in Milwaukie, Ore. Credit union advocates used the opportunity to discuss member business lending, interchange fees and mortgage modification (Oregon Outlook February). Blumenauer said he intends to sign H.R. 3380, the “Promoting Lending to America’s Small Business Act,” which would raise the member business lending cap to 25% of assets from 12.25%. In the photo, Ron Barrick, left, president/CEO of Advantis CU, is shown welcoming Blumenauer to the Town Hall meeting. (Photo provided by the Credit Union Association of Oregon) ... * BEAVERTON, Ore. (2/8/10)--Oregon Rep. Greg Walden (R-2) visited
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John Day, Ore., for the Oregon State Snowmobile Convention (Oregon Outlook February). Old West FCU board member John Bastian is involved with the sport, and Walden’s visit to the convention provided the credit union with an opportunity to discuss credit union issues such as interchange fees and overdrafts. From left are Old West FCU President Ken Olson, Walden, John Bastian and Lindy Bastian. Old West FCU is based in John Day, (Photo provided by the Credit Union Association of Oregon) ... * WESTBROOK, Maine (2/8/10)--Maine's credit unions raised more than
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$375,923--a record--in their Campaign for Ending Hunger, the Maine Credit Union League announced Thursday during its Thaw to End Hunger Celebration Event. This year’s total was an increase of nearly $700 over last year’s record. Holding the ceremonial check presented at the event are, from left, Luke Labbe, president/CEO of PeoplesChoice CU, Biddeford, and chair of the league’s Social Responsibility Committee; Maine’s first lady, Karen Baldacci; and John Murphy, league president (Photo provided by the Maine Credit Union League) ... * NEW BRUNSWICK, N.J. (2/8/10)--New Jersey credit unions, sponsor of
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Rutgers University athletics, showed their support Wednesday at the men’s basketball game against St. John’s. From left, Kevin Mac Connell, Rutgers’ deputy athletic director, met with Paul Gentile, president/CEO of the New Jersey Credit Union League, before the game. Mac Connell presented Gentile a signed basketball as a token of appreciation of the league’s support. Rutgers, the largest university or college in the state, is located in New Brunswick, N.J. Credit union representatives manned a table in the sponsor's section offering information on how to join a New Jersey credit union. (Photo provided by the New Jersey Credit Union League) ... * LAWRENCEVILLE, Ga. (2/8/10)--Gwinnett FCU will fund $63,500 in educational scholarships this year. They include: nine $2,500 student scholarships to high school seniors who will attend college to pursue an education degree and plan to return to Georgia to teach; 13 $2,000 scholarships for career advancement to eligible members enrolled in an accredited study program at a college, university or technical institute; three $2,500 lifetime achievement scholarships; and two new scholarships. The new ones include a $2,500 scholarship in memory of Janet Pomeroy, founding member of Clarke Community FCU, and a $5,000 annual scholarship at Georgia Gwinnett College for students majoring in early childhood education, special education or another major leading to teacher certification ... * KALAMAZOO, Mich. (2/8/10)--Educational Community CU, Kalamazoo, will offer 21 scholarships, totaling $23,000, this year. They include 19 $1,000 scholarships and two $2,000 scholarships. The $2,000 scholarships are in honor of Donna vanWestrienen and Robert E. Treloar, both board members at the $330 million asset credit union for more than 20 years ...

HFOT registration brings crowd kudos for CUs

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COLUMBIA, Mo. (2/8/10)--Credit unions and the Missouri Credit Union Association (MCUA) helped more than 100 community members in Columbia, Mo., register their services to help build Army Staff Sergeant Robert Canine a specially adapted home in a Home for Our Troops project.
Click to view larger image From left, Dave Tate and Dan Vogler, both of Anheuser-Busch Employees CU, St. Louis, review blueprints for a new home from Homes For Our Troops for Staff Sergeant Robert Canine, a wounded veteran, with a local contractor.
Click to view larger image Posing with an illustration of the home being built for SSG Robert Canine as a Homes For Our Troops project are, from left, Jim Schepers, Missouri CU, Columbia; Tammy Parks, Missouri Credit Union Association; Doreen Lewis, HFOT; Sen. Kurt Schaefer (R-19), and radio host Uncle Scotty.
Click to view larger image From left, a local contractor registers for a Homes for Our Troops project with help from Adam Fox and Ben Blunt of River Region CU, Jefferson City, Mo. (Photos provided by the Missouri Credit Union Association)
Credit union representatives worked shifts throughout the 14-hour day to inform the public about Canine at the event, held at a Lowe's, said MCUA (The Missouri difference Jan. 29). Canine lost both legs during his second stint in Iraq when an explosion hit his vehicle. "The community support and volunteerism from Missouri credit unions was phenomenal," said Doreen Lewis, HFOT project facilitator. "Everyone back at HFOT is very proud of the group working in Missouri." Registration Day brought in electricians, general contractors, subcontractors, painters, brick layers, landscapers and plumbers, among others. During the day, HFOT announced it had closed on a lot for the project in Thorn Brook subdivision. "I was happy to learn that most people had already heard about Homes for Our Troops from our radio ads," said Margaret McDermott, senior vice president of Columbia-based Missouri CU. "Even those who only took a brochure often read it in the store and came back to sign up." Sen. Kurt Schaefer (R-19) and Rep. Chris Kelly (D-24) stopped by the event to support Missouri credit unions. "This is a great project, and it's exciting that the first home in the state is being built in Columbia," Schaefer said. "I'm proud that Missouri credit unions have stepped up and put this together." The project has received attention from Missouri's state legislature, said MCUA. Twenty state lawmakers signed on to be legislative honorary Build Brigade members after MCUA visited legislative offices to explain the effort and solicit support. They will be invited to participate in the three-day build brigade to construct Canine's home. Credit unions have similar projects in other states. Credit unions' involvement with HFOT began in 2008 when the Credit Union National Association and state leagues in Colorado and Minnesota teamed up with HFOT and the Democratic and GOP presidential convention committees to build two specially adapted homes for veterans injured during the Iraq war in Denver and St. Paul, where the presidential conventions were held. Since then, credit unions have joined HFOT efforts in their own states, with leagues acting as title sponsors. The Massachusetts and New Hampshire Credit Union Leagues and the Credit Union Association of Rhode Island have teamed up to build a specially adapted home for Army SSG Michael Downing and his family in Middleboro, Mass. Downing lost his legs during combat in Afghanistan in 2008. Credit unions braved freezing temperatures in December's "Build Brigade" and volunteers are working on the home this winter. Downing and his family plan to move in this spring. HFOT has built 50 homes for severely injured veterans since 2004 and has nearly 30 more projects in progress.

Technology helps rural Mexico CUs double-digit growth

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CORDOBA, Mexico (2/8/10)--Caja Yanga, a credit union located in rural Mexico, is realizing double-digit monthly membership growth rates after installing new technologies last year. Membership grew 15% per month last year and the credit union reached members in remote areas. It has 40,000 members.
Click to view larger image Brian Branch, (right) World Council of Credit Unions executive vice president and chief operating officer, meets with Francisco Perez Armas, Caja Yanga’s director of marketing development, and other credit union managers prior to the January launch of the credit union’s first ATMs.
Click to view larger image A Caja Yanga member (left) from the remote village of Miahuatlan deposits money into her savings account with the help of a credit union field officer, who uses a personal digital assistant to access her account and process the transaction. (Photos provided by the World Council of Credit Unions)
In December, the credit union installed four IBM blade servers and moved its principal data center from its headquarters in Yanga to a branch office in Cordoba. The move improved data transfer efficiency and is providing the capacity to support projected membership growth during the next five years. “With the previous system, data transfer was relatively slow, but the new system makes it much faster,” said Alejandro Rodriguez Penuela, Caja Yanga information systems assistant. “We now have the switches in place that will provide for better data administration as we grow.” The credit union also began using handheld transaction devices such as personal digital assistants (PDAs). It is one of 53 credit unions in Mexico that is implementing new technology into its outreach strategy. Caja Yanga works closely with the World Council of Credit Unions’ (WOCCU) development program in Mexico. That program is funded by the Mexican Ministry of Agriculture, Livestock, Rural Development, Fishing and Food through its Proyecto de Asistencia Tecnica al Microfinanciamiento Rural project to expand financial services to marginalized areas. Caja Yanga implemented the WOCCU-developed Semilla Cooperativa (Cooperative Seed) outreach model to reach rural members. As part of the model, credit union field officers bring savings-focused financial services to groups of 10-30 members in communities within 19 miles of existing branch offices. Twenty-eight field officers from Caja Yanga’s 13 branches visit 317 communities on foot or motorcycle and use PDAs to conduct transactions and transmit data. During 2009, field officers performed 80,960 PDA-based financial transactions for remote members, a capacity that's increasing along with Caja Yanga's member growth. “Caja Yanga demonstrates the commitment not only to reach the very poor and marginalized of the economy, but also the commitment to provide these people with the best quality and transparency of financial services through applications of technology,” said Brian Branch, WOCCU executive vice president and chief operating officer. One of the challenges that Caja Yanga has faced is members’ lack of confidence in financial institutions, a fear often fueled by predatory lending practices and pyramid-type schemes that have characterized financial transactions in rural Mexico and other developing economies. Implementing these technologies in the field has helped increase confidence by providing access to real-time data amd proof of financial transactions with mobile printers, and creating a professional and innovative image, according to Caja Yanga field officers. Caja Yanga also is WOCCU's partner credit union in implementing the MatchSavings.org program, an online donor match program that helps Mexico's rural poor learn to save by matching small member deposits made for objectives such as housing, healthcare, education and microbusiness development needs.

WesCorp announces losses for December

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SAN DIMAS, Calif. (2/5/10)--Western Corporate FCU (WesCorp) reported a $335.3 million write down for other than temporary impairment (OTTI) charges during December, bringing its total OTTI losses for 2009 to $1.2 billion. That in turn brings the California-based corporate's total OTTI charges for both 2008 and 2009 to $6.8 billion. Of the December 2009 OTTI charges, $106 million were in not-previously impaired securities, while $320 million were securities that had been previously impaired. Because the corporate can no longer rely on bond insurance for troubled mortgage-backed securities, it is forced by Clayton Holdings to realize new losses, said Joe DeMichele, chief investment officer, during a Webcast on the corporate's financials. Unrealized losses have improved from $5.2 billion in June to $3.157 billion in December, largely due to the marketplace, which has seen more influx of liquidity from the government and better performance in higher yield markets. WesCorp's net interest income for December was $9.9 million, with a year-to-date total to nearly $85.4 million, said Jim Hayes, chief financial officer. Several corporates are reporting losses for 2009: Southeast Corporate FCU told members its losses totaled $45.8 million; Southwest Corporate FCU reported a $226 million loss; and Corporate One FCU, a $43.3 million loss.

97 of Visa issuers opt in on Heartland settlement

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PRINCETON, N.J., and SAN FRANCISCO (2/5/10)--Financial institutions representing more than 97% of eligible Visa-branded debit and credit cards that incurred losses in the Heartland Payment System data breach have accepted a $60 million settlement Visa Inc. made with Heartland and its sponsoring acquirers regarding losses in the breach. Visa and Heartland needed issuers of 80% of eligible cards to meet the settlement requirement. The settlement provides these card issuers with a recovery from Heartland on the losses they incurred related to the breach. They can expect their recovery amounts from the settlement by Feb. 25, according to the agreement. Each accepting issuer will irrevocably waive Heartland, its sponsor banks and Visa from further claims related to and arising from the breach. Those institutions that did not opt in to accept the settlement offer and who are eligible due to losses from the breach will have a second chance at recovery. Visa, Heartland and Heartland's sponsoring acquirers have agreed to renew the Alternative Recovery Officer to the non-accepting issuers. The renewed offer will remain open until 5 p.m. PST on Monday. The settlement provides recovery for U.S. card issuers who chose to participate in the program and international issuers of accounts Visa considered to have been placed at risk of compromise. Once all the remaining conditions of the settlement have been met, Visa will notify the participating issuers with details about the payment process. For additional information, issuers can contact their Visa account executive or Visa's E-Support Team at eSupport@visa.com or call 888-847-2488. Heartland has entered into two other settlement agreements--a $3.6 million agreement with American Express and an agreement for up to $2.4 million in a consumer cardholder class action lawsuit (News Now Dec. 21 and 29). No settlement has been announced in a similar dispute with MasterCard over the breach. Breaches at Heartland and Hannaford Bros. grocery chain were the largest in history, affecting 130 million cardholders. Credit unions were among the financial institutions re-issuing cards that were compromised by the intrusions and some saw fraudulent transactions on the compromised cards. Fraudsters are still testing and successfully accessing credit and debit card numbers that were not blocked or canceled in the Heartland breach, CUNA Mutual Group said in January (News Now Jan. 12).

Mich. gov. announces CUs efforts in business lending

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LANSING, Mich. (2/5/10)--Michigan Gov. Jennifer M. Granholm Thursday announced a partnership to connect small businesses and entrepreneurs to financing from Michigan credit unions, said the Michigan Credit Union League. In cooperation with the Michigan Economic Development Corporation (MEDC) and the Michigan Small Business and Technology Development Centers, more than 30 Michigan credit unions have committed an initial $43 million for small business loans. “In this time when small businesses are struggling to get access to capital, Michigan's local credit unions have stepped forward to make over $40 million available to these startups in a joint effort with our MEDC,” Granholm said. “Some 2,100 new businesses are expected to benefit from these credit union loans.” She announced the program during her State of the State address. The program is still being developed with an anticipated rollout in 90 days, the league said. “Credit unions, as not-for-profit cooperatives, have demonstrated their desire and capacity to lend during these difficult economic times,” said MCUL President/CEO David Adams. “We are fueling loan growth for the auto industry through our ‘Invest in America’ program, and now we see great opportunities to expand small business lending. It is what our state badly needs.” The announcement continues Michigan credit unions’ streak of widespread, positive media coverage, the league said. The partnership was mentioned in most State of the State recaps, including the Detroit News, Detroit Free Press, Crains Detroit Business, the Holland Sentinel, MLive, and an Associated Press story that was picked up by many outlets nationwide.

CU System briefs (02/04/2010)

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* RANCHO CUCAMONGA, Calif. (2/5/10)--Tom Dorety, president/CEO of Suncoast
Schools FCU, Tampa, Fla., and John Radebaugh, president/CEO of the North Carolina Credit Union League, have been appointed to the Board of Directors of CO-OP Financial Services to fill unexpired terms of retiring members. Dorety fills the position of Bucky Sebastian and will stand for election in 2011, while Radebaugh replaces Gary Wolter and will stand for eleetion at CO-OP's Annual Meeting in April. At its Jan. 26 meeting, the board also created a new board seat, currently vacant. It brings the board's total to 11 members. A candidate for the new seat is expected to be elected at CO-OP's annual meeting in April ... * MEMPHIS, Tenn. (2/5/10)--Police are looking for a clumsy, mumbling woman who bungled two attempted robberies of separate credit unions Tuesday in Memphis, Tenn., after she couldn't make herself understood. At Southern Security FCU, just before 10 a.m., the teller couldn't understand the woman's mumbling demands. The woman produced a hold up note, which she flung at the teller before fleeing the building empty-handed. Later, at about 1:40 p.m., a woman arrived at First South CU, fumbled with her purse, then approached the counter after a teller asked several times if she needed help. The woman handed the teller a note, then pulled out a gun, but the teller retreated. Again the wannabe robber fled. She tumbled to the sidewalk after dropping her weapon (The Commercial Appeal and Associated Press Newswires Feb. 4) ... * WASHINGTON (2/5/10)--The Maryland and District of Columbia Credit Union Association's (MDDCCUA) DC chapter will conduct its inaugural Dollars & Sense Expo to benefit consumers in the area on March 6 at Friendship Collegiate Academy. The event was inspired by the success of Baltimore Money Day, which attracted more than 1,500 consumers in its fifth year. The expo will include free tax preparation, free credit reports, educational sessions, and access to exhibitors that will include credit unions, and governmental and non-profit agencies. Credit unions in Washington, D.C., suburban Maryland and Northern Virginia will participate as exhibitors and provide volunteers ... * BATON ROUGE, La. (2/5/10)--Pelican State CU, a $167.1 million asset, Baton Rouge, La.-based credit union, has merged with Pinekraft FCU, a $2 million asset, Pineville, La.-based credit union. Pinekraft served the more-than 300 employees of Pinekraft Paper Mill, which closed before Christmas. Pelican has retained all Pinekraft employees and members and will provide products and services not previously available to Pinekraft members. Pelican has more than 30,000 members (LCUL eNews Feb. 3) … * NEW ORLEANS (2/5/10)--ASI FCU in Harahan, La., garnered national attention from an international nonprofit network for its outreach and services to the area’s Latino community. Louisiana Appleseed, a nonprofit network of 16 international public-interest law centers designed to uncover and correct injustices and barriers to opportunity, honored ASI on Jan. 21 at its Good Apple Gala. ASI was the only financial institution honored. It is estimated that the Latino population in New Orleans rose by 40,000 to 50,000 in the aftermath of Hurricane Katrina. Unbanked Latinos in New Orleans are a $750 million market, which has generally been overlooked by local financial institutions, said the Louisiana Credit Union League. ASI has $299 million in assets (LCUL eNews Feb. 3) … * HARAHAN, La. (2/5/10)--Charles “Chuck” Johnson, a board member of the Louisiana Credit Union League and Barksdale CU, Bossier City, La., died Monday of melanoma, a form of skin cancer. He served on the league board for nearly 15 years. Johnson provided essential input and support for the Initiative Program for small credit unions in Louisiana during its inception, the league said (LCUL eNews Feb. 3) …

CUs top new Forrester most-trusted list

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NEW YORK (2/5/10)--Forrester Research’s annual Customer Advocacy rankings placed credit unions well ahead of banks after about 70% of credit union members surveyed told Forrester that their financial institution puts their interests first. The closest institution was a financial services company with 64%. Credit unions were ranked higher than banks because they have a different operating model--they are owned by their members--and they emphasize customer service, said Bill Doyle, Forrester vice president (The New York Times Feb. 3). The bottom seven institutions in this year’s rankings were all big banks--Bank of America, Chase, Capital One, TD/Commerce, Fifth Third, Citibank and HSBC. The Forrester survey was featured in a money blog, “The Least-Trusted Banks in America,” on The New York Times website. Forrester’s rankings are based on a survey of 4,500 consumers, who were asked if they agree with the statement: “My financial provider does what’s best for me, not just its own bottom line.” The rankings come just one week after consumers placed credit unions ahead of banks in the Chicago Booth/Kellogg School Financial Trust Index. Credit unions had a 58% approval rating, compared with 31% for national banks and 53% for local banks. That study was based on data collected in December by the University of Chicago and Northwestern University in Evanston, Ill. (News Now Jan. 28).

86-year-old wins first 100000 Save to Win prize

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LANSING, Mich. (2/5/10)--Billie Smith, 86, a resident of Lake, Mich., has won a $100,000 grand prize from NuUnion CU in Lansing. She is the first grand prize winner of the Save to Win program, which was offered by eight Michigan credit unions in 2009. Smith is one of 11,666 members at the credit unions who saved $8.56 million in the first year of the Save to Win savings raffle. Members were entered into drawings for monthly prizes and a grand prize each time they deposited $25 into a special savings account. The Michigan Credit Union League, which is sponsoring Save to Win with the credit unions, said it is expanding the program this year to help thousands more members save. Nineteen Michigan credit unions have signed up to participate. “It helps make saving fun, at a time where our country simply needs to save more and borrow more responsibly,” said David Adams, Michigan league president. The program aims to help families save their money who would otherwise spend their money on lottery tickets. A survey found that 59% of participants in 2009 had spent money on the lottery in the previous six months. Less than half saved money regularly before opening Save to Win accounts. Save to Win has been featured in The Wall Street Journal, The New York Times and Fox Business. The program was developed by Peter Tufano, Harvard Business School professor, and is managed by the Doorways to Dreams (D2D) Fund. Along with D2D, the Filene Research Institute selected Michigan and CUcorp, a league affiliate, for the 2009 pilot program. The eight Michigan credit unions that participated in 2009 are:
* Central Macomb CU, Clinton Township; * Christian Financial CU, Roseville; * Communicating Arts CU, Detroit; * E&A CU, Port Huron; * ELGA CU, Flint; * Frankenmuth (Mich.) CU; * NuUnion CU; and * Option 1 CU, Grand Rapids.

Dominican Republic CUs visit Wisconsin CUs

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JANESVILLE, Wis. (2/5/10)--As part of a week-long program sponsored by World Council of Credit Unions (WOCCU), 25 staff and volunteers of credit unions from the Dominican Republic visited Blackhawk Community Credit Union (BHCCU) in Janesville, Wis., Jan. 29.
Click to view larger image Click for larger view
Click to view larger image As part of a week-long program sponsored by World Council of Credit Unions, 25 staff and volunteers of credit unions from the Dominican Republic visited Viking Student CU at Parker High School (top) and Cougar CU at Craig High School (bottom), both in Janesville, Wis., to learn how financial institutions in the U.S. are teaching students about financial responsibility and preparing them for the real world. (Photos provided by Blackhawk Community CU)
Most of the participants in the program are volunteers at a credit union, while some are managers and two are CEOs. The program’s goal is for the participants to return to the Dominican Republic with ideas on how to serve their members better while being safer and sounder financial institutions. After visiting BHCCU for a short orientation and branch tour, the group went to Viking Student CU (Parker High School) and Cougar CU (Craig High School), both in Janesville, to learn how financial institutions in the U.S. are teaching students about financial responsibility and preparing them for the real world. The group asked questions about what the student tellers do, programs they are running, and operations in general. Prior to the Janesville visit, the participants spent time at credit unions in Madison and Milwaukee learning about other best practices in credit union operations. Two staff members representing the WOCCU International Partnerships program accompanied the group on the visits and translated for the group. The visitors toured the student-run credit unions and participated with the students in Financial Fact Friday. Games that ask specific financial questions were played and correct answers garnered prizes such as pens, water bottles, or gift cards at the co-op store. Also, Parker and Craig teachers who run the school co-op program showcased the business department programs and answered questions. The program was a great opportunity for some Spanish students who are interested in international business, BHCCU said.

Southeast Corporate financials show 45.8M loss

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TALLAHASSE, Fla. (2/5/10)--Southeast Corporate FCU’s losses totaled $45.8 million in December, according to financials the corporate released Thursday. The losses compare to a $111 million gain in December 2008, the unaudited report said. Total revenue was down 41% to $19.2 million in December 2009, compared with $31.3 million in December 2008. Total assets were at $3.3 billion, a 22% increase compared with the same time period one year earlier. The statement reflects a 100% write-down of Southeast Corporate’s member capital at U.S. Central. Member paid-in capital was reported at zero for December 2009, compared with $20.1 million in December 2008.

PCUA business community press for timely state budget

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HARRISBURG, Pa. (2/4/10)--The Pennsylvania Credit Union Association (PCUA) joined more than 30 business organizations assembled in the state Capitol Rotunda Tuesday to press for a timely state budget. The Groundhog Day assembly, representing nearly five million private sector jobs, gathered to say, "We don't want to wake up morning after morning to the same news in 2010," said PCUA (Life is a Highway Feb. 3). In 2009, the state experienced a protracted budget process that went 101 days beyond deadline. The gap between spending and expected revenues filled with new and additional taxes will cost the Pennsylvania business community about $2 billion for the next five years before tax reforms really take effect, said PCUA. The event was sponsored by the Pennsylvania Business Council, of which PCUA is a member. One of the biggest priorities for the group, and for PCUA, is to ensure that there are no new taxes or an increase to the existing tax base, said the association.

INY TimesI notes CUs reaction to small biz plan

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NEW YORK (2/4/10)--The objections of the Credit Union National Association (CUNA) to the Obama administration's plan to pump $30 billion into community banks for business lending while snubbing credit unions' efforts to assist with the recovery were noted in Wednesday's issue of The New York Times. The president's proposal would use $30 billion of repaid bailout loans to help community banks increase lending to small businesses as part of a broader effort to boost creation of jobs. It doesn't mention credit unions. The Times reported that the community bankers praised the plan. "But the Credit Union National Association declared itself 'outraged and baffled,' asserting the government could do more without cost ot taxpayers by allowing more business lending by credit unions," the report said. Indeed CUNA has spoken out on behalf of credit unions on the initiative (News Now Feb. 3). CUNA President/CEO Dan Mica said the proposal is entirely focused on small and community banks, and includes nothing for credit unions, ignoring the potential contribution that credit unions could make toward the national economic recovery.

Movement mobilizes to assist damaged CUs in Haiti

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PORT-AU-PRINCE, Haiti (2/4/10)--World Council of Credit Unions (WOCCU) and its program partners in Haiti, with assistance from the Dominican Republic's credit union movement, have mobilized to collect and deliver emergency supplies to Haiti's damaged and destroyed credit unions, known as caisse populaires.
Click to view larger image Credit union workers retrieve forms from the crumbled remains of KOTELAM's Magoire Ambrose branch office. (Photo by Christian Kober).
Click to view larger image The office of CLEF credit union in Leogane was completely destroyed by the Jan. 12 earthquake in Haiti. (Photo by Christian Kober. Photos provided by the World Council of Credit Unions).
Credit unions left standing have used their existing network to help displaced members of damaged institutions access their accounts with biometric identification cards and receive much-needed remittances. Federation Le Levier, a US$52 million asset network of 16 credit unions serving 300,000 Haitians nationwide, is helping frontline institutions that serve poor and low-income populations push crucial resources out to their members. Le Levier credit unions lost five staff members in the earthquake, and eight of the member institutions were damaged. Three of the credit unions--KOTELAM, CLEF and CPSA--lost key offices from which they serve an aggregate 50,000 members. KOTELAM, the largest credit union in Port-au-Prince, suffered severe damage to its headquarters, credit office and a branch office. In nearby Leogane, CLEF collapsed entirely, and looters took safes and equipment from both CLEF and Port-au-Prince-based CPSA. Le Levier and its member credit unions are key partners of the Haiti Integrated Finance for Value Chains and Enterprises (HIFIVE) program, which began in June. The program--designed to encourage a dynamic Haitian economy by increasing the availability of financial products and services--is now working to rapidly mobilize initiatives to support economic recovery following the earthquake. HIFIVE is implemented by WOCCU under the U.S. Agency for International Development's (USAID) FIELD-Support Leader with Associates (LWA) cooperative agreement managed by the Academy for Educational Development (AED) and funded by USAID. Haiti's credit unions also are being assisted by the Asociación de Instituciones Rurales de Ahorro y Crédito (AIRAC), which is the Dominican Republic's credit union association and a WOCCU member. AIRAC is securing tents and food supplies for Pétionville-based Le Levier staff members--some without homes--who are working around the clock with a damaged office building to rebuild the federation's network systems. Supported by USAID/Haiti, Le Levier's investment last year in biometric ID cards and inter-institutional connectivity among its members is helping facilitate recovery. At the time of the earthquake, members already had mobilized total savings of $35 million and had a credit portfolio of $30 million. The ID cards permit members from each of the 16 affiliated credit unions access to their accounts at any other member institution. Credit unions in the same geographic zone are also sharing facilities to accommodate member institutions that no longer have buildings. Though destroyed in the earthquake, KOTELAM is creating a special office to aid members who have lost their records and identification. Rural credit unions that were structurally unaffected are providing teller space and responding to the high demand for liquidity. WOCCU this week is coordinating a meeting with its microfinance partners, including Le Levier and other financial service providers in Haiti, to share information, review damage assessments, coordinate financial and technical assistance, discuss financial sector priorities for providing relief and rebuilding and consider longer term priorities in view of Haiti's situation. The coordination of these institutions through both formal and informal networks will be crucial for restoring much-needed financial services to the people of Haiti, WOCCU said. To support WOCCU's relief efforts on behalf of Haiti's credit unions and their members, make payments via check, credit card or wire to:

Worldwide Foundation for Credit Unions Inc.

5710 Mineral Point Road

Madison, WI 53705 USA

Donations may be made online with a credit card at www.woccu.org/give. For wire transfer information, contact: Valerie Breunig, Worldwide Foundation for Credit Unions, 608-395-2055 or vbreunig@woccu.org. Please indicate that the donation is for the Haiti Disaster Relief Fund. U.S. credit unions can also support WOCCU's relief efforts by donating through the National Credit Union Foundation's CUAid system at www.CUAid.coop.

Five CUs offer National Guard no-fee ATM access

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RALEIGH, N.C. (2/4/10)--Four credit unions with military ties have signed bilateral agreements with State Employees’ Credit Union (SECU), Raleigh, N.C., to help ensure North Carolina National Guard personnel have access to no-surcharge Automated Teller Machines (ATMs) worldwide. SECU signed agreements with Fort Bragg FCU, Fayetteville, N.C.; Marine FCU, Jacksonville, N.C; Navy FCU, Vienna, Va.; and Pentagon FCU, Alexandria, Va., that will allow guardsmen to use more than 1,600 no-surcharge ATMs. Whether serving in Guam, Japan, or stateside in locations such as Quantico, Va., or Fort Bragg, N.C., guardsmen will save as much as $3 per ATM transaction. The move is part of SECU’s effort to assist military personnel and thank them for their continuous efforts to serve the country. Military members at all five credit unions also will have surcharge-free access to all of SECU’s Cash Points ATM network, with more than 1,000 ATM locations in North Carolina. “It’s an excellent opportunity for the members of both credit unions to have increased access to surcharge-free ATMs in the state of North Carolina,” said David G. Elliott, president/CEO of Fort Bragg FCU. “This is a perfect example of the cooperative spirit of credit unions in North Carolina.” “Our credit union has always been impressed with the military-focused U.S. credit unions and the benefits they offer to their members,” said Jim Blaine, SECU president. “These partnerships expand what SECU can do as a credit union to also enhance the benefits afforded to the 12,000 North Carolina National Guard soldiers and airmen in North Carolina.”

Wis. CUs encourage direct deposit free filing

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PEWAUKEE, Wis. (2/4/10)--Wisconsin credit unions are encouraging direct deposit and free-filing options this tax season to steer consumers from costly “refund anticipation loans,” (RALS). RALS drain millions from state refunds--particularly the refunds of people with low and moderate-incomes, said the Wisconsin Credit Union League. Short-term, high-interest loans, RALS, are heavily marketed by paid tax preparation firms during tax time and can deplete hundreds of dollars from a typical refund. These loans cost Wisconsin tax filers $22.4 million in 2006--the most recent year for data--in exchange for the promise of a fast refund. Alternatively, when paired with state and federal electronic filing options, direct deposit can deliver tax refunds within days and at no cost. “People use products like RALs for the promise of quick cash, but are essentially paying to borrow their own money,” said Brett Thompson, league president/CEO. “But by using an existing savings account or opening one, anyone in Wisconsin can use direct deposit to get a speedy tax refund without hurting their wallet, and just as quickly as if they had used a RAL by using free electronic filing options.” Data also show that RAL usage increases considerably among Wisconsin taxpayers eligible for the Earned Income Tax Credit (EITC)--a tax credit for low to moderate-income filers. Eighteen percent of EITC filers in the state use RALs to receive their refunds, compared with 3% of all state tax filers. EITC-qualifying tax filers using RALs lost $14.4 million in 2006. Thompson noted that free help is available through volunteer tax preparation sites in Wisconsin to persons of low and moderate-income and others who qualify. Credit unions are assisting in the operation of these sites, which are coordinated with the Internal Revenue Service, Department of Revenue and AARP. In addition to free tax preparation, the sites promote tax education and asset-building strategies. Credit unions’ tax assistance efforts are part of their ongoing REAL Solutions initiative, which strives to help families improve their financial position by encouraging saving and investing, improved creditworthiness and long-term wealth building, the league said. The Wisconsin league said it is encouraging all credit unions to tell their members about free filing options by linking to www.freetaxrefund.org. Use the link for more information.

MAFCU leads 32M in biz loans first year

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BETHESDA, Md. (2/4/10)--Mid-Atlantic FCU (MAFCU) loaned $32 million to local businesses in 2009--its first year in an expanded business lending program. This year, the credit union is expecting to loan $45 million to 75 small businesses. MAFCU provided a loan to Hossain Mohebbi, a franchise operator for the Denny’s restaurant chain. He wanted to open another location, but could not find an institution with capital to lend until he visited MAFCU. Mohebbi’s story illustrates how MAFCU is positioning itself to be a small business lender and a top lender of Small Business Administration (SBA) loans, according to Steven Smits, MAFCU vice president of operations. One reason large national banks are no longer lending is they cannot rapidly churn out business loans. Offering the loans is only a sustainable business practice if the lending institution intimately understands the business it is lending to, or if the business has an ongoing relationship with the lender, MAFCU said. Credit unions like MAFCU can lend to small businesses because they have a substantial amount of market deposits and they don’t compete with each other for geographic turf. They often partner with each other to share investment risk, MAFCU added. “The SBA is trying to change the makeup of who its uses--and to make it more local,” Smits said. “Prior to 2009, in its entire history, MAFCU made only a handful of SBA loans. We’ve already had five SBA loans approved this year--and we’re only a month into 2010.” MAFCU has $243 million in assets.

CUs position to improve as labor housing stabilize

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MADISON, Wis. (2/4/10)--As labor and housing markets stabilize, credit unions’ financial position should improve, according to a Credit Union National Association (CUNA) economist’s analysis of CUNA’s monthly sample of credit unions. “Periods of great economic stress create significant dynamics for financial institutions,” Steve Rick, CUNA senior economist, told News Now. “The ‘great recession’ of 2009 led to significantly higher credit union loan delinquency rates, lower credit union loan-to-share ratios and a plummet in credit union loan growth. As the labor and housing markets stabilize in 2010, so too should credit union, loan growth, asset quality and liquidity position.” Credit union loans outstanding decreased 0.1% during December, but increased 1% during 2009. That’s down from a 6.9% increase during 2008. In December, credit card loans increased 2.5%, followed by unsecured personal loans (0.8%) and home equity loans (0.6%). Used-auto loans remained constant, while adjustable-rate mortgages declined 0.1% and other mortgages fell 1%. Fixed-rate mortgages dropped 1.5% and new-auto loans decreased 2.0%.
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Credit union loan balances rose less than 1% in 2009, the slowest pace since 1943 and down from the 6.7% growth rate reported in 2008, Rick said. “Job creation in the first half of the year should lead to self-sustaining economic recovery this year,” he added. “This will reduce the extraordinarily high level of household economic uncertainty and therefore lead to increased borrowing and spending. We expect credit union loan balances to rise 3% to 5% in 2010, lower than the 8% to 10% loan growth we usually see after a recession year. “The change is due to the fact that the ‘great recession’ was a balance sheet recession and not your typical inventory-correction recession,” Rick said. “Consumers will be focusing their financial efforts on saving more and reducing debt levels in an attempt to repair their battered balance sheets.” Credit union savings balances increased 0.6% in December, and rose 10.6% during 2009. During December, share drafts led savings growth, increasing 3.8%. They are followed by individual retirement accounts (2%), and money market accounts (1.1%). Meanwhile, regular shares and one-year certificates decreased 0.3% and 1.5%, respectively.
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Credit union 60-plus-day delinquencies remained at 1.8% in December 2009. “Credit union loan delinquency rates rose by a record amount in 2009,” Rick said. “Overall credit union loan delinquency rates finished the year at 1.84%, up 47 basis points in one year. Delinquency rates were at their nadir--0.6%--in the summer of 2006, right when home prices were peaking and the unemployment rate was 4.5%, less than half the current 10%. “With the unemployment rate expected to reach its apex in the second half of this year, credit unions should budget for rising loan charge-offs through the first half of the year and then leveling off by year-end,” Rick added. The loan-to-savings ratio decreased slightly to 76% in December from 76.9% in November. The liquidity ratio---the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 19%. The movement’s overall capital-to-asset ratio stayed steady at 10% in November 2009. The total dollar amount of capital for credit unions is $89 billion.

Filene Members loyal but growth challenges persist

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MADISON, Wis. (2/4/10)--Credit unions need to capitalize on consumer angst, update delivery channels and sharpen their value proposition for non-members, especially young members, according to a new report from the Filene Research Institute. The report is titled, “Customer Experience and Credit Union Opportunities: A Collaboration with McKinsey and Company.” Filene collaborated with McKinsey research to conduct qualitative interviews with 31 credit unions about why credit unions command stellar member loyalty and how they can leverage that loyalty. Making existing credit union members more satisfied is very difficult, and probably the wrong goal, says the McKinsey surveys. Consumers consistently identify credit unions as trusted financial providers, loyalty doesn’t translate automatically into increased wallet share or membership growth, Filene said. The report identifies several challenges credit unions face:
* While consumer perceptions of credit unions are demonstrably better than those of community and national banks, credit union loan market share is flat or has declined over the past five years; * Consumers age 18- to 34-years old trust banks more than credit unions; * Between 40% and 60% of employees in the banking sector are ill-suited for directly serving customers or members; and * Branch managers are the most important link in good or bad customer experience.
Filene also identifies themes for credit unions frustrated by high member satisfaction but low membership growth:
* Credit unions should invest in functional value, such as Web tools and convenient delivery, while building a friendly but assertive sales culture; * In addition to economizing, healthy credit unions should look to attract high-performing sales and management staff at a discount while the employment market is depressed; and * Credit unions will earn the biggest satisfaction gains by focusing on members during “moments of truth” fraught moments such account opening and problem resolution when perceptions are most likely to change.
The customer experience survey, on which most of the report is based, draws on 3,900 respondents who offered their views on retail banking. The survey measured satisfaction, asked what matters most for driving satisfaction, and sought to validate the relationship between satisfaction and value creation. For more information, use the link.

Super Bowl Haiti on CUs radars

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METAIRIE, La. (2/4/10)--Credit unions are using Super Bowl XLIV as a way to generate donations for Haiti earthquake victims. The New Orleans Saints will play the Indianapolis Colts on Sunday in Miami, Fla., in Super Bowl XLIV.
Employees at GNO FCU, Metairie, La., can donate $15 to help Haiti earthquake victims in return for the opportunity to wear black and gold clothing to work through Friday. Black and gold are the colors of the New Orleans Saints, which is GNO FCU’s home football team. The Saints will play in Sunday’s Super Bowl XLIV. (Photo provided by GNO FCU)
In a wager between the Indiana Credit Union League and the Louisiana Credit Union League, the state league whose team comes out on the short end of the scoreboard will make a donation in the other league’s name to the World Council of Credit Unions' (WOCCU) disaster relief fund. “We are keyed up for the big game and pulling for our Colts to bring home the Super Bowl title for the second time in four years,” said Indiana League President John McKenzie. “But, regardless of the outcome, it is nice to know that credit unions and their members in Haiti will benefit. We are proud to report that the fund has already received thousands of dollars from Indiana’s credit unions and state organizations.” Anne Cochran, Louisiana Credit Union League President, added: “We are thrilled to see our Saints make their first Super Bowl appearance in franchise history. This is an exciting time for us here in Louisiana, but we are still conscious of those who still need our help.” To date, the two credit union systems combined have contributed more than $16,000 to the fund. Credit unions worldwide have raised more than $530,308 for the Haiti disaster relief fund, according to WOCCU’s Worldwide Foundation for Credit Unions. Of that total, U.S. credit unions and organizations have raised $221,656 through the National Credit Union Foundation’s CUAid.coop (News Now Feb. 3). GNO FCU, Metairie, La., employees also devised a way to celebrate Super Bowl XLIV and help Haiti earthquake victims. Employees who donate $15 or more to the disaster relief fund can wear black and gold attire to work through Friday. Black and gold are the colors of the New Orleans Saints, which is the employees’ home football team. The credit union also has decorated its lobbies with Saints pendants, gold stars and balloons. GNO will be closed Monday morning after Super Bowl Sunday, and will re-open for business at 12:30 p.m. GNO FCU has $97 million in assets.

Rep. Michaud CUs should make business loans

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BANGOR, Maine (2/4/10)--Legislation that would enable credit unions to help the economy rebuild by offering member business loans received support in statements made by Rep. Mike Michaud (D-Maine) in an article in the Bangor Daily News. In Tuesday's article about the government's $154 billion stimulus bill, Michaud said it is unlikely the House stimulus bill will be accepted by the Senate and that it's important that the House and Senate work on a compromise that not only keeps safety net programs, but also helps further "jump-start" the economy. He noted that government should be looking at other steps to take to help the economy while not costing the Treasury. Legislation is under consideration that would allow greater business loans from credit unions, Michaud said. The banking lobby is opposing the legislation, even though they are not providing the credit needed by companies. Its passage would help the economy rebuild, he said. "If the banks are not going to give them access to capital, and the credit unions have that capital available to loan businesses, then they should be able to make those loans," Michaud told the publication. The legislation, supported by the Credit Union National Association, would increase credit unions' member business lending cap to 25% of assets from 12.25% and raise the minimum threshold for a loan to be considered a member business loan to $250,000 (News Now Dec. 22). For the full article, use the link.

CU System briefs (02/03/2010)

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* CENTRALIA, Wash. (2/4/10)--Police are investigating whether a man charged with the Jan. 25 attempted robbery, burglary and kidnapping at the Centralia branch of TwinStar CU is the same man who robbed another branch of the credit union in Ocean Shores a week earlier. In the Centralia branch, the robber held an employee at gunpoint until a police officer arrived, pulled the employee to safety and fired two shots at the robber. The robber escaped during a standoff with police. In the Ocean Shores robbery, the robber herded employees together, ordered them to open the vault and forced them out of the building as he fled (Associated Press via seattlepi.com Feb. 2). Michael Anthony Lar, who is recovering from two gunshot wounds, has been charged in the Centralia robbery and is scheduled to be arraigned today (The Daily News Jan. 30) ... * MADISON, Wis. (2/4/10)--UW CU based in Madison, Wis., has launched a Facebook page so it can "connect with the communities we serve," it announced Wednesday. "Online social networking services have become the norm to connect with colleagues, customers and friends," the $1 billion asset credit union said. It will use the new platform to post news and information about local events, educational articles related to personal finance, and urgent alerts ... * SUITLAND, Md. (2/4/10)--A delegation of Jordanian officials met
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with Andrews FCU executive management, Defense Credit Union Council President Arty Arteaga, and Dennis Savage, comptroller of the Joint Staff, at the credit union's headquarters in Suitland, Md. The delegation visited to learn more about the operation of American credit unions and how the credit union serves its military members at home and abroad. They toured Andrews' Member Care Center and its newly renovated Allentown Road branch. (Photo provided by Andrews FCU) ...

CU System briefs (02/02/2010)

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* LENEXA, Kan. (2/3/10)--CommunityAmerica CU announced it paid Owner Participation Dividends totaling $500,000 to its members Monday. The 2010 payout brings the total dividends paid to its members for the past 10 years to more than $13 million, said the $1.734 billion asset credit union. Individual payments are based on the number of products and services each member uses (cjonline.com Feb. 1) ... * HARRISBURG, Pa. (2/3/10)--The Pennsylvania Credit Union Association (PCUA) announced the election results for PCUA board seats for Districts 3, 7, and 8. Newly elected were: Cookie Yoder, president/CEO of Pittsburgh FCU, and Bill Lavage, president/CEO of Service 1st FCU, Danville. Re-elected was Diana Roberts, president/CEO of Hershey (Pa.) FCU. They were elected to three-year terms that begin at the conclusion of the association's convention in May (Life is a Highway Feb. 2) ...

White paper Gen Y turn to parents for financial info

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ST. PETERSBURG, Fla. (2/3/10)--While members of Generation Y spend a third of their life logged on, they still turn to their parents for financial information and advice, according to a new white paper. That means credit unions have a unique resource in their current members who are parents of the young adults. Gen Yers, defined as people aged 18-30, total 90 million, says "Y: A Generation of Opportunity." The white paper was written by PSCU Financial Services, a St. Petersburg, Fla.-based credit union service organization (CUSO), and is available free online. (Use the resource link and click on "white papers.") The CUSO said the paper is the first of three white papers on Gen Y. It quotes several research studies and reports that marketing to Gen Y must involve social networking sites and offering a personalized approach when possible. Gen Y-ers are time-sensitive, so gaining their attention requires messages that emphasize 24/7 support, electronic banking and money management tools, the report says. "Credit unions have a unique appeal to this audience because young adults are skeptical of large, profit-hungry companies and favor cooperative institutions that can meet their needs while simultaneously giving back to the local community," said David J. Serlo, president, PSCU Financial Services. Attracting Gen Y is worth the effort, said the CUSO. Less than 40% of Gen Yers are satisified with their financial services provider, according to a 2009 Javelin Research study, and that discontent creates a tremendous opportunity for progressive credit unions, said PSCU Financial Services. A second paper in the Gen Y series will discuss developing a strong package of "youth-centric" solutions and financial education materials designed to build long-term relationships with young adults. PSCU Financial Services provides service to more than 1,300 financial institutions.

Irish league calls for separate CU regulator

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DUBLIN (2/3/10)--The president of the Irish League of Credit Unions called for the government to form an independent credit union regulator, saying the country's credit unions had serious concerns about new regulatory structures being proposed to deal with the banking crisis. Mark Bailey, president of the league, made the comments while speaking to the Joint Oireachtas Committee on Economic Regulatory Affairs (RTE Business Feb. 2). Bailey said credit unions are concerned the government will take a one-size-fits-all approach that could result in regulation of credit unions that would be excessive and disproportionate. He noted the current system of regulating credit unions has worked effectively so far. The Registry of Credit Unions operates within the Financial Regulator.

Va. league still at the table on bankCU merger bills

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LYNCHBURG, Va. (2/3/10)--The Virginia Credit Union League is still at the table with state lawmakers and bankers, working on an agreement that would resolve the battle over bills in state legislature that would allow state banks to merge or consolidate with state-chartered credit unions. The two identical bills--House Bill 482 and Senate Bill 440--also would allow a federal credit union on state-chartered credit union to merge or consolidate with a state bank. However, the league considers them to be a one-way street and opposes them as written. The league is focusing on two areas, according to Lewis Wood, director of public relations and communications:
* Providing state-chartered credit unions with the same charter conversion options currently available to federally chartered credit unions. The league hopes to "provide a clear path for state-chartered credit unions to convert to a mutual savings bank," Wood said. * Ensuring adequate member safeguards are in place to govern such a conversion. "We're suggesting that a state-chartered credit union looking at such a conversion should be required to adhere to the same member safeguards currently in place at the federal level," Wood told News Now.
"Basically, we're trying to transform the legislation from a merger/acquisition bill to a credit union charter choice bill," Wood said. Earlier League President Rick Pillow had told News Now that the bills, as written, give no protections of members, their rights or their equity in the credit union in a merger situation. The bills are scheduled to be heard Thursday before the House Commerce and Labor Committee, Wood said. Until then, the exact language of the bill is still fluid. The bills were introduced in January by Del. Mark Sickles (D-43) and Senate Commerce and Labor Committee Chairman Richard Saslaw (D-35) (News Now Jan. 22).

School board considering Summit CU in-school branch

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MADISON, Wis. (2/3/10)--The Madison, Wis., School Board is considering a proposal that would place a Summit CU branch in LaFollette High School to serve students and staff. The $1.36 billion-asset Summit would operate the branch with two teller lines staffed by student interns, and feature a check-writing area and a safe-equipped office for the branch manager, according to a front-page article in the Wisconsin State Journal (Feb. 1). Wisconsin has 86 school-based credit unions statewide--second in the U.S. behind Michigan with 341, according to the Wisconsin Credit Union League. Savings in Wisconsin youth credit unions total $1.6 million, the league added. The school board could vote Monday on whether to allow the credit union to proceed, the newspaper said. The proposal stipulates that $100,000 in construction costs would be paid by Summit; $100,000 would be financed with a no-interest, 10-year loan; and the high school would raise the remainder of the necessary funds--roughly $12,000, the paper said.

Its dead of winter but CUs thinking green

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MADISON, Wis. (2/3/10)--From tree plantings to paperless promotions, credit unions are embracing green practices that are not only saving them money--but also helping the environment. Last April, People’s Trust FCU in Houston placed its six-page member newsletter online, saving $35,000 by year-end. To encourage readership of its online newsletter, People’s Trust placed three multiple-choice reading comprehension questions on the last page. Readers were invited to answer the questions and enter a contest to win $500. About 600 readers entered the contest, said Patsy Jalomo, business development and marketing manager. The $420 million asset credit union received no complaints when the newsletter went online, but is considering sending paper copies to 4,500 members who have been with the credit union for 20 years or more. One reason for this is because the credit union recently gave members copies of annual reports on USB jump drives, and some older members were not familiar with the technology. “When I think about the older members I feel they might be separated,” Jalomo told News Now. “[The online newsletter] is a great tool for younger members, but we don’t want to leave out the older members.” People’s Trust had sent paper newsletters to its members of 20 years or more in April, but stopped because it had not heard any feedback. Jalomo urged credit unions to assess their membership’s needs when undergoing environmental initiatives. She also emphasized that many individuals want to do business with companies that preserve the environment. Through a tree-planting promotion, OSU FCU, Corvallis, Ore., has encouraged its members to choose e-statements instead of monthly printed statements. For each member who converted to e-statements,
Click to view larger image OSU FCU branch managers (left) Ranelle Crosby, Peter Walker, Jenipher Miller, Nathan Wuerch and Patti Ferry and District silviculturist Evelyn Hukari of the Oregon Department of Forestry planted tree samplings in a 38-acre parcel near Hoskins, Ore. The credit union donated 11,000-trees for the reforestation based on member participation in moving from monthly paper statements to e-statements. (Photo provided by OSU FCU)
the credit union donated $1 toward a reforestation effort by the Oregon Department of Forestry. Members also were entered into a drawing for a Kindle, said Mike Corwin, assistant vice president of public relations and business development. The promotion ran Oct. 8 through Dec. 31 and 3,424 members signed up for e-statements. The $3,424 generated by the signups helped plant 11,000 trees. OSU FCU branch managers helped plant about 60 of the trees at a 38-acre site. “It was a rainy, soggy day, but they had fun,” Corwin told News Now. The forestry department will plant the rest. Members’ response to the credit union’s efforts was positive and has helped further spike e-statement conversion even after the promotion ended. The promotion was “relatively simple,” Corwin said. “This is the thing to do,” he said. “It has benefited us in a huge way.” A team of Redwood CU (RCU) employees joined 100 community volunteers for the first annual Laguna de Santa Rose Tree-A-Thon, a local tree planting effort to help preserve Laguna’s oak woodland ecosystem, restore lost animal habitats and provide food for the area’s native wildlife. Volunteers planted more than 750 trees on a five-acre parcel of land.
Click to view larger image Redwood CU employees recently joined community volunteers to participate in the first annual Laguna de Santa Rose Tree-a-Thon, where volunteers planted 750 trees. The credit union is based in Santa Rosa, Calif. (Photo provided by Redwood CU)
“It was just amazing that we were able to plant so many trees,” said Kate Kelly, assistant vice president of marketing and public relations. Kelly grew up in the Laguna area, so she said she was extremely passionate about the project, which was organized by a fellow credit union employee. RCU--which embraced environmentally friendly practices “before they were in fashion,” according to Kelly--offers several sustainability programs including recycling, paper-free online banking, bill pay and e-statements, loan discounts on qualified hybrid vehicles, and an online green center where members can find tips on energy efficiency and reducing waste. The credit union also has a sustainability committee that meets regularly to consider sustainability practices and how to use less paper and produce less waste. “We are committed to being a leader [in green efforts],” Kelly said. When RCU began offering online statements instead of paper statements, it sent its members e-mails and direct mailings about the benefits--including security, and saving paper and emissions. The credit union targeted members who used online banking but had not signed up for e-statements. “There were great response rates,” Kelly said. To excite employees about green efforts, Kelly suggested creating a culture that values volunteerism. “Employees at RCU are so passionate about their community,” Kelly said. “If you create a culture that values volunteerism, you’ll find that staff is on board [with your initiatives].” RCU, with $1.7 billion in assets, is based in Santa Rosa, Calif.

Fundraising for Haiti quake victims continues

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MADISON, Wis., and WASHINGTON (2/3/10)--It's been 23 days since the 7.0 magnitude earthquake turned the capital city of Haiti into rubble, and it will take at least 10 years to rebuild. Credit unions are contributing funds to assist colleagues and their members survive during the recovery. The magnitude of what will be needed for Haiti to recover is daunting. Haitian Prime Minister Jean-Max Bellerive has said that in 30 seconds, Haiti lost 60% of its gross domestic product. The country estimates it will need $3 billion to rebuild the country (USA Today Feb. 2).
Click to view larger image Members of the H.U.G.S. (Help Us Give to OtherS) Team at Evergreen CU, Neenah, Wis., enlisted members, volunteers, family and friends for a bake sale that raised more than $300 to benefit Haiti earthquake victims. "When we saw the absolute devastation in Haiti, we all felt we had to do something to help these people," said Debbie Bruley, vice president. (Photo provided by Evergreen CU)
Credit unions from all around the world have raised more than $530,308 for the credit union disaster relief fund, according to the Worldwide Foundation of Credit Unions, affiliated with World Council of Credit Unions (WOCCU). Of that total, U.S. credit unions and organizations have raised $221,656 through the National Credit Union Foundation's CUAid.coop. Haiti, which has an active credit union movement with 175 credit unions and 4040,090 members, also is the site of a WOCCU project. The Michigan Credit Union League, CUcorp and the Michigan Credit Union Foundation contributed $12,500 to the relief fund. "With the death toll estimates rising in Haiti, and given the incredible destruction in that country, our credit union community should do its part to step up with financial support," said MCUL President/CEO David Adams. The third-year and second-year classes of Western CUNA Management School (WCMS) pooled their resources and funds to contribute $1,000 to the relief effort. Each class donated $500. "When the Theta presidency first discussed making a donation to help those devastated by the earthquake in Haiti, we focused on the three words that are the philosophy of our entire industry--'People Helping People,'" said Robert York, president of the Theta Class (third-year students) and vice president of marketing and business development at California Bear CU, Los Angeles. "We chose the WOCCU Relief Fund because making our donation to a credit union organization would embrace the spirit and support the international development of the credit union movement," York said. Daniel Penrod, president of the Iota Class (second-year students) and senior industry analyst with the California and Nevada Credit Union Leagues, noted that, "Our hope is that our modest donation, coupled with those already given by others will combine to have a profound impact." To support Haiti's credit unions and members through the international credit union disaster fund, make payments, via check, credit card or wire to: Worldwide Foundation for Credit Unions Inc., 5710 Mineral Point Road, Madison, WI 53705, USA. Donations also can be made online with a credit card at www.woccu.org/give. For wire transfer information, contact Valerie Breunig, Worldwide Foundation for Credit Unions at 608-395-2055 or via e-mail vbreunig@woccu.org. Please indicate the donation is designated for the Haiti Disaster Relief Fund. U.S. credit unions also can support WOCCU's relief efforts by donating through the NCUF's CU Aid at www.CUAid.coop. In addition to their efforts for their credit unions colleagues and members, credit unions have other efforts underway for broader relief organizations. Some are organizing fundraising for the American Red Cross International Response Fund.

N.Y. league Banks want to limit access to CUs

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ALBANY, N.Y. (2/3/10)--Attacks on credit unions by New York state bankers in their testimony before state legislators Monday has drawn a written rebuttal statement from William J. Mellin, president/CEO of the Credit Union Association of New York. New York bankers have been vocal in trying to derail a state bill that would allow credit unions an expanded role in accepting municipal deposits. “At a time of severe economic crisis caused in no small part by banker excesses, it is disappointing that one of the top priorities of the bankers is to limit access to credit unions,” Mellin wrote. “This agenda was evident in recent budget hearing testimony, and it will no doubt continue during the New York Bankers Association’s (NYBA) designated lobby day." The bankers lobby day was Monday. “I encourage lawmakers and the public to ask themselves why, in the midst of economic crisis, banks are using lawmakers’ valuable time to lobby against not-for-profit credit unions instead of looking for ways to work with the legislature in helping New York's working families save money, find affordable credit and create jobs,” he continued. “The NYBA’s platform is based on denying municipalities critical choices for their financial services and maintaining ineffective monopolies--at the expense of local governments and the citizens they serve,” Mellin added. “Doesn’t this approach simply perpetuate the bad behavior that led us to today’s economic problems?” Mellin testified on behalf of the municipal deposits bill before the New York state legislature last week. He concluded that legislators “realize that now is not the time to further monopolies to drive up earnings; instead, it is the time to employ common sense and let local government--not the commercial banks--decide the best depositories for their tax dollars.”

CUs in debt challenge program saved consumers 20M

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WASHINGTON (2/3/10)--Credit unions participating in the American Debt Relief Challenge have saved consumers an estimated $20 million that they would have spent on interest to keep their credit card balance at a large bank, the program estimated. The goal is to save American families $300 million overall, wrote Jamie Chase in an article posted on Monday’s Huffington Post titled “Measuring the Move: $20 Million and Counting.” The “move” refers to the Post’s campaign to get consumers to move their money to community banks and credit unions. “It's no surprise that searches to find local credit unions have tripled since the launch of Move Your Money,” Chase wrote. “It’s pointing the way to help make life just a little better for American families. The credit union movement soared in the Great Depression. People relied on their neighbors and friends to get through tough times. “It’s natural that people strapped with credit card debt, those facing foreclosure and small business owners with good credit that can't get a loan from the bank, are all looking to credit unions again now,” she added. Participating credit unions nationwide are sending in “consumer miracle stories,” Chase wrote. She told a story about credit union member Michael Wingate, who was overwhelmed when his Citibank credit card interest rate leapt to 40.99% from 4.99%. Wingate had a stable job, a good credit score and was making payments on time to Citibank. That interest rate was the highest she’s ever seen, Marylin Ball-Brown, CEO of Generations CU, Olympia, Wash., told the Post. “Wingate's increased [annual percentage rate] was the result of a predatory banking practice already addressed by the Obama administration's Credit Card Accountability, Responsibility and Disclosure Act of 2009,” Chase wrote. “While it curbs future abuses, the legislation unfortunately could not return Wingate's interest to a traditional rate. The credit union [Generations CU] saved the family $33,000 over the life of the credit card by transferring the $10,400 CitiBank card balance to an unsecured loan with a traditional rate of 12.2%.” To read the article, use the link.

Va. CU-bank battle on merger bill in the news

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RICHMOND, Va. (2/2/10)--The battle between credit unions and banks over a bill in Virginia's state legislature that would allow banks to merge with credit unions--and vice versa--is attracting media attention in the state. Sunday's Richmond Times-Dispatch included a column, "Bank bill triggers quiet war," by writer Jeff E. Schapiro, who wrote that "banks plotting--maybe plodding--for post-recession profits have a new target: credit unions." At issue are identical companion bills, House Bill 482 and Senate Bill 440, which were introduced in January by Del. Mark Sickles (D-43) and Senate Commerce and Labor Committee Chairman Richard Saslaw (D-35) (News Now Jan. 22). The Virginia Credit Union League opposes the bills, as written. "We view it as a one-way street, an effort by banks to make it easier to consolidate with credit unions," league President/CEO Rick Pillow had told News Now last month. In his column, Schapiro wrote that credit unions see the bill as a "dead-end bill," allowing banks to consume credit unions, while not too many banks become credit unions. Schapiro wrote that though the state's banks and credit unions have a common interest--managing and investing in billions of dollars--they function within entirely different templates. Banks, particularly smaller banks, he wrote, "covet the loyal customer base of credit unions." "The credit unions have a bigger worry: Could the banks, navigating the rubble of a deep recession, only be hunting for capital, attempting to hoover up the few dollars available in the credit market?" Schapiro asked. To do so will require tweaking the law and eliminating a technicality that stopped a state-chartered bank in Northern Virginia from merging with a credit union, he said. Banks already have balked at the credit unions' proposal that a merged bank and credit union operate as a mutual savings bank, with depositors as shareholders, he wrote. To read the article, use the resource link.

Arizona league CEO to appear on local PBS tonight

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PHOENIX (2/2/10)--Arizona Credit Union League President/CEO Scott Earl is scheduled as a guest tonight on Arizona's local PBS program, "Horizon," hosted by Ted Simons. Earl will discuss business lending as it relates to credit unions and member business lending, and job creation. Horizon is a widely watched and respected program covering issues that affect the community, said the league. Interviews typically discuss politics, the economy, arts and culture. The episode will air at 7 p.m. MT today on PBS local channel 8. The episode also will be available on demand online.

WOCCU coordinating CU comments for Basel committee

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MADISON, Wis. (2/2/10)--The World Council of Credit Unions (WOCCU) is making sure the global credit union movement's voice is heard by the Basel Committee on Banking Supervision, which is considering adjusting its capital adequacy and liquidity requirements of financial institutions worldwide as part of its revisions to the Basel II Accord. The Basel Committee released the revised documents for public comment in December. The new guidelines, adapted with guidance from the Group of 20 (G-20) nations in response to last year's global economic meltdown, recognize for the first time differences between large for-profit financial corporations and non-joint stock companies, which include mutuals, cooperatives and credit unions. Credit union response to these differences and other factors that favorably affect financial cooperatives is critical to ensure that those standards appear in the final guidelines, according to Dave Grace, WOCCU vice president of association services. "This is the first time the Basel Committee has recognized that financial cooperatives are different," said Grace. "We want to make sure these and other standards that enable credit unions to better serve their members appear in the final version. WOCCU in the past has submitted its ideas and suggestions for consideration by the Basel Committee. On April 5, Grace and WOCCU President/CEO Pete Crear traveled to Amsterdam to meet with committee Chairman Nout Wellink, president of The Netherlands Bank, to make the case that credit unions should not be penalized by tougher capital requirements than those faced by larger, riskier institutions that present systemic risk to the global financial system. "We didn't want credit unions and financial cooperatives to pay an unfair price as part of the solution to a crisis they had no hand in making," Crear said. "Chairman Wellink was very receptive to our comments and assured us that he would bring our concerns forth to his fellow committee members." Partly as a result of that visit and WOCCU's work with the committee during the past decade, the current amendments to the Basel II Accord reflect a greater understanding of the different structure and nature of financial cooperatives, said WOCCU. The reform package covers two key areas of interest to credit unions:
* Raising the quality, consistency and transparency of the capital base. The new guidelines seek to ensure that financial institutions move to a higher capital standard that promotes long-term stability and sustainable growth, enabling the banking system to better absorb losses on existing banks and banks that have gone out of business. As for capital quality, the committee proposes that Tier 1 capital be defined as common shares and retained earnings and tailored accordingly for credit unions' structure. Innovative hybrid capital instruments will be phased out. Tier 2 capital instruments must be better aligned and Tier 3 capital instruments should be eliminated. The committee also proposes to enhance capital base transparency by requiring institutions to disclose capital elements in reported accounts. * Reducing procyclicality and promoting countercyclical buffers. A countercyclical capital framework will contribute to a more stable banking system than a procyclical one, which will help dampen rather than amplify economic and financial shocks. To this end, adequate capital buffers at individual institutions should be established. The committee also is promoting more forward-looking provisioning based on expected losses that captures actual losses more transparently and is less procyclical than the current incurred-loss provisioning model.
WOCCU has asked its member organizations worldwide for input on the current revisions to the Basel II Accord as outlined in two consultative documents. (To access these, use the resource link.) WOCCU will aggregate responses to present to the Basel Committee. Comments should be submitted by April 2 to Grace at dgrace@woccu.org. WOCCU will work with the Basel Committee throughout the year as it completes impact assessments and finalizes the standard by year end. [Editor's note: U.S. credit unions work under the Generally Accepted Accounting Principles (GAAP), and it would take a change in the Federal Credit Union Act to fall under the Basel requirements.]

Southwest Corporates December losses total 103M

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DALLAS (2/2/10)--Southwest Corporate FCU reported Friday an additional $103 million of investment impairment losses in its unaudited December financial statements. The additional amount brings the corporate's total net loss for 2009 to nearly $226.5 million. The $226.5 million figure is made up of net losses on investments of $260 million partially offset by operating earnings prior to investment losses of $34 million. That compares with a net loss of $691.9 million in 2008. The December $103 million figure is comprised of a $19 million impairment of Southwest Corporate's remaining membership capital shares investment in U.S. Central FCU, and $84 million of impairments of Southwest Corporate's mortgage-backed securities. The amounts reflect continued increases in loss projections over the second half of 2009. Southwest had reported to its members that it will deplete $134.6 million of members' capital accounts in January to cover the retained deficit as of Dec. 31. This will result in a cumulative 72.68% depletion of the original members' capital account. "Southwest Corporate has and will continue to reduce expenses to conserve capital and to support revisions already made to its business model," said a letter from Melissa Wardell, senior vice president/chief financial officer, accompanying the financials. "While actively seeking to lower operating expenses, Southwest Corporate is also mindful to balance any future operating expense reductions with the need to maintain high service quality levels for our members," she wrote.

Bill prompts tax debate in Massachusetts

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WORCESTER, Mass. (2/2/10)--Pending federal legislation in Washington, D.C., that would relax restrictions on credit union member business lending--to 25% of assets from 12.5%--is prompting debate in Massachusetts between credit unions and banks about lending and credit unions’ tax-exempt status. However, Dan Egan, CEO of the Massachusetts Credit Union league, told the Worcester Business Journal (Feb. 1) that “Banks contend that [credit unions] were set up for people of limited means, but that was never the case. They were set up for all consumers.” Since Massachusetts chartered credit unions in 1909, the institutions have acted as a check and balance for the banking industry, he added. Small businesses are turning to credit unions in greater numbers now because they’re finding they can’t get the loans they need from banks, or can’t meet banks’ new, stricter credit requirements, Egan told the publication. “The only ones who don’t want this are the banks,” Egan added. The tax-exempt structure is designed to help credit unions serve the underserved, Michael Lussier, president/CEO of Webster First FCU, Worcester, told the Journal. “We’re helping those people in the community, those blue-collar workers that are sick of being taken advantage of by high fees and lower interest payments,” he added. To read the article, use the link.

CU System briefs (02/01/2010)

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* WASHINGTON (2/2/10)--A former supervisory employee at Department of the Interior FCU (DOI FCU) pleaded guilty to taking property in the care, custody and control of a credit union. The charges are related to a $25,110 theft of member deposits in 25 incidents from 2006 to 2008, said the U.S. Attorney's office for the District of Columbia. Monica Michals, 36, Oxon Hill, Md., entered her plea in a U.S. District Court and will be sentenced on May 21. She faces up to 10 years' imprisonment. As part of her plea agreement, Michals has agreed to pay full restitution. The funds were taken from the accounts of at least three members, two of whom were elderly (Targeted News Service Jan. 11) ... * DULUTH, Minn. (2/2/10)--Stephanie Richards, right, poses with a $1,000 check she
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received from Tammy Heikkinen, president/CEO, and Ralph Hamann, vice president finance/chief financial officer, of Members Cooperative CU, Duluth. Richards was randomly selected to receive the check as a result of a project MCCU launched last fall to encourage account holders to save in an Emergency Fund Account by building their savings each month through automatic transfers. In 2009, MCCU awarded monthly $250 winners and a $1,000 winner at the end of the year. "This is perfect timing to receive this money," said Richards, who does not have health insurance coverage and opened an account to start building a savings cushion. She recently had emergency medical bills and plans to use the money to cover those expenses. "It's really cool that my credit unions started this program," Richards said. (Photo provided by Members Cooperative CU) ... * ONTARIO, Calif. (2/2/10)--Bonnie Kramer, executive vice president/ chief operating officer of Financial Service Centers Cooperative Inc. (FSCC) has been selected as VIP Woman of Year by the board at the National Association of Professional Women (NAPW). The board selects a handful of women each year to honor for their involvement in their communities, professional achievements and contributions in their field. Kramer has been active in the credit union movement for nearly 42 years. She began working at FSCC in 1993 as its CEO, then transitioned to her current position to focus on the shared branching network's operations. As a pioneer of the first Shared Branching locations in the U.S., Kramer helped transform the network, creating locations that served as outlet-owned access points operated by credit unions. She also was honored for her philanthropic work with Credit Unions for Kids through Children's Miracle Network, World Council of Credit Unions supporting women around the world, and Tender Mercies ministries supporting children in Uganda ... * FARMERS BRANCH, Texas (2/2/10)--Jim Vest, former Texas Credit Union League employee died Thursday, according to the league (LoneStar Leaguer Feb. 1). His credit union career began in 1950 when he managed the Postal Transportation Service FCU, Fort Worth. In 1952 he became a league field representative, and in 1954 he returned to managing the Fort Worth Quartermasters FCU. He joined the league again in 1956, where he held a number of positions, including assistant managing director. In 1972, the league launched the Technical Assistance Division, which West led. Today that service has been expanded as Financial and Technology Resources with the league affiliate, Credit Union Resources Inc. Funeral services were held Monday ... * HEATH, Ohio (2/2/10)--Clarence L. Love, 80, died Thursday in Heath, Ohio. Love, who worked 40 years at Owens-Corning Fiberglas and then as superintendent at Mid-Ohio Warehouse, served many years as president of Fiberglas FCU, based in Newark, Ohio. Survivors include his wife, four children, 17 grandchildren and six great-grandchildren (The Advocate Jan. 30) ...

INPRsI Weekend Edition features student CU

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WASHINGTON (2/2/10)--National Public Radio’s Weekend Edition Saturday featured a story about a student credit union and also cited Credit Union National Association (CUNA) statistics about student credit union branches in schools. The story, “Cafeteria Credit Unions Teach Students Money Skills,” focused on Allegacy FCU’s student branch at R.B. Glenn High School in the Winston-Salem, N.C., area. NPR interviewed one of the branch’s tellers, Austin Dodd, 17, who said he’s learning to save his money instead of spending it. Dodd is taking a class that goes along with his teller responsibilities. He said he is learning about credit scores, the stock market and mortgages. About 700 student credit union branches are located in schools and youth clubs in 34 states, according to CUNA. Since 2007, the numbers have increased by one-third. Allegacy FCU, based in Winston-Salem, N.C., has $1 billion in assets. To read the article or listen to the audio version, use the link.

NACUSO conference keynoters announced

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NEWPORT BEACH, Calif. (2/2/10)--The National Association of Credit Union Service Organizations (NACUSO) has confirmed the keynote speakers scheduled to address credit unions and credit union service organization (CUSO) executives attending the 2010 NACUSO annual conference April 25-28 in Las Vegas. New this year will be “Hot Food/Hot Topics” to address specific credit union subjects. The luncheon sessions will reveal ideas on how to grow credit unions and CUSOs, operate them in new ways, leverage shared resources and create scalable platforms. “Thought Leaderships Sessions” will be presented in the afternoons, highlighting experts to speak about the latest issues and opportunities. Topics and speakers at NACUSO’s general sessions will be:
* “USAA: Innovative Collaboration and Lessons Learned”--Jack M. Antonini, former vice chairman, president/CEO, USAA Federal Savings Bank; * “Discover, Unlock, and Unleash Innovation”--Joe Batista, director and chief creatologist, Hewlett-Packard Company; * “Collaboration: How Panthers, Lions, and Tigers All Share the Same Cage at the Zoo” --Michael Taylor, cofounder/CEO, SchellingPoint; * “Principles of Collaboration: Creating the Networked Organization”-- Gary L. Mangiofico, practitioner faculty member of Organizational Theory and Management, Pepperdine University; * “Using Innovative Social Media and Networks to Drive Your Business Model”-- George Pohle, founder/CEO, Suasoria, and former vice president/senior partner, IBM’s Global Business Services Group; * “Is the Legislative and Regulatory World Spinning In Sync (and how Do CUSOs Fit onto Today’s Axis as it Spins)?--Dennis Dollar, principal partner, Dollar Associates LLC; * “Credit Union Differentiation”--George Hofheimer, chief research officer, Filene Research Institute; * “CUSO 2.0--The next generation of CUSOs--Guy Messick, NACUSO general counsel, and attorney, Messick & Weber PC; and * “Who Are Those Guys? How Do They Do That? How Can I Use That?”--Thomas C. Davis, NACUSO CEO, business strategist, and industrial psychologist.
For more information, use the link.

Minnesota league promotes jobs through MBL

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ST. PAUL, Minn. (2/2/10)--Minnesota Credit Union Network (MnCUN) President/CEO Mark D. Cummins, who is a regular columnist for Finance & Commerce newspaper, wrote on the benefits of credit union member business lending in his latest commentary. His article, titled “Community involvement fundamental for credit unions,” was published in the publication’s “Association Update” section Friday. The article outlined the credit union philosophy and called community involvement an “intrinsic” part of credit unions since they were founded in the U.S. more than 100 years ago. He acknowledged credit unions as “central contributors” to the overall economy because of their work with local businesses. “One way that credit unions support ‘Main Street Minnesota’ is through small business lending, which is especially important in a time where many businesses owners are finding it increasingly difficult to access credit and obtain financing for their operations,” Cummins wrote. Credit unions can be a solution to this challenge, he told readers. Cummins said credit unions have been taking part in member business lending since the early 1900s. He explained the 12.25% arbitrary cap currently restricting credit unions’ member business lending and promoted congressional proposals that would raise the cap to 25% and help create jobs. Cummins said Minnesota credit unions could lend more than $176 million to small businesses this year alone, thus helping to create nearly 2,000 new jobs “without costing the taxpayer a dime.” The estimates were from the Credit Union National Association. To read the column, use the link.

Bail set at 1 million in TwinStar CU hostage-robbery case

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CENTRALIA, Wash. (2/2/10)--Bail for a suspect in the TwinStar CU hostage-robbery case has been set at $1 million, according to local media reports. Michael Anthony Lar, who is suspected of attempted robbery at the Centralia, Wash., branch of TwinStar CU, appeared in court Friday to face charges of burglary, kidnapping and attempted robbery (The Daily News Jan. 30). He arrived at the hearing in a wheelchair because of two bullet wounds he suffered in the elbow and buttocks when a police officer shot him during the incident. Lar’s arraignment is scheduled for Thursday. According to The Seattle Times archives, Lar admitted to six bank robberies in Arizona and Washington in 1996 after being captured in Las Vegas. He also pleaded guilty to a heist at a community bank in Tumwater and two other robberies in Puget Sound. On Jan. 25, a man entered TwinStar CU through a window as employees were arriving to work. He grabbed a female employee and held a gun to her head. When police responded, an officer walked up to the employee entrance where the gunman and employee were standing and pulled the woman to safety. The officer also fired two shots (News Now Jan. 26). After the shots were fired, police engaged in a standoff with the gunman holed inside the credit union. However, when police entered the credit union several hours later, they found nobody inside. Later that day, police arrested Lar after receiving reports of a suspicious man who appeared to be wounded. He was booked into the county jail Thursday after his release from the hospital.

N. M. CUs host town hall meetings with lawmakers

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ALBUQUERQUE, N.M. (2/2/10)--New Mexico's credit unions had a chance to share their concerns and issues with state lawmakers at town hall meetings hosted by the Credit Union Association of New Mexico (CUANM) before the current legislative session began.
Click to view larger image New Mexico Rep. Brian Egolf, left, discusses issues facing the 2010 New Mexico Legislature during a town hall meeting hosted by the Credit Union Association of New Mexico.
Click to view larger image At a town hall meeting in Albuquerque, N.M., state Sen. Cisco McSorley talks with First Financial CU CEO Ben Heyward about credit unions and other issues. (Photos provided by the Credit Union Association of New Mexico)
The events attracted 16 representatives and seven senators. They indicated that the legislative session would focus on the state budget. Most agreed they are facing the worst fiscal situation they have ever dealt with, said CUANM. Ideas they are considering include cutting state employees' salaries, raising taxes including taxes on alcohol and cigarettes and cutting state jobs (CUANM Network January). Because of widespread dissatisfaction among constituents and legislatures over mega-banks nationwide that received taxpayer money while cutting credit and raising fees, one bill being introduced would pave the way for transferring state money from megabanks. Many of the credit unions told lawmakers at the town hall meetings that credit unions are actively working to help their members weather the difficult financial climate. CUANM President Sylvia Lyon noted that credit unions have come through the toughest times without taking any taxpayer money and remained committed to their members' financial needs. CUANM is working to ensure parity with local community banks in the deposits legislation and to find ways for credit unions to insure multimillion dollar deposits and to handle a large infusion of capital. CUANM is also monitoring legislation that would set usury limits and set new unemployment insurance taxes as well as proposals to enhance revenues.

Top 10 INews NowI stories for January

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MADISON, Wis. (2/2/10)--A compliance story focusing on a Truth in Savings disclosure requirement for overdraft services led January’s list of the top 10 stories in News Now. The second most-read article spanned the top 10 events that changed credit unions the most in the past decade. Two stories about financial guru Suze Orman touting credit unions in various media outlets also made the list. Orman appeared on Larry King Live and CNN this month, where she further discussed the benefits of being a credit union member. Here are January’s top stories: 10. Bankruptcies up, CUs in ‘maintenance phase’: CUNA MADISON, Wis. (1/6/10)--Personal bankruptcy filings hit 1.41 million last year--an increase of 32% over 2008. And credit unions can expect more chargeoffs during the post-recession, say Credit Union National Association (CUNA) economists. 9. Info on variable rate rules coming, Fed tells CUNA WASHINGTON (1/26/10)--A Federal Reserve representative informed the Credit Union National Association (CUNA) that the Fed is formulating its thoughts on recently introduced variable rate credit restrictions, and expects to provide CUNA with further guidance by the end of this week. 8. Craig's List ad targeting CUs is pulled HARRISBURG, Pa. (1/7/10)--Craig's List has pulled an advertisement that sought to recruit current credit union members to solicit others to join the credit union through them. 7. Suze Orman to Larry King: CUs have great rates WASHINGTON (1/14/09)--Credit unions offer better rates on credit cards, personal finance guru Suze Orman told Larry King on Larry King Live Thursday. 6. ABC features: Switch to CUs NEW YORK (1/12/10)--The media kudos for credit unions continues this time with ABC’s Diane Sawyer Friday noting on ABC’s World News Tonight that many consumers are trading their financial institutions on Wall Street to the ones on Main Street. 5. NCUA session features frank talk on corporate plan WASHINGTON (1/25/10)--At its first town-hall style meeting of the new year, the National Credit Union Administration shared some frank thoughts about its plans to revamp the corporate credit union system. 4. CBS Moneywatch, Suze Orman: Time to join a CU NEW YORK (1/13/10)--It's time to say goodbye to banks and join a credit union, according to CBS Moneywatch.com, which touted credit union's lower fees, better rates and the Credit Union National Association's credit union locator. Also this week on CNN, financial guru Suze Orman encouraged consumers to obtain credit cards from credit unions. 3. Fed issues final CARD Act rules WASHINGTON (1/13/10)--The Federal Reserve Board on Tuesday approved amendments to Regulation Z, Truth in Lending, which implement provisions of the Credit Card Accountability, Responsibility and Disclosure Act of 2009. The rules go into effect Feb. 22. 2. Ten events that changed CUs in the past decade MADISON, Wis., and WASHINGTON (1/5/10)--A decade has ended and in the tradition of newshounds everywhere, the Credit Union National Association's News Now staff took time out to mull the impact the first decade of the 21st century presented credit unions. Staff sniffed out 10 events of the decade that changed the way credit unions operated and their strategies. 1. Compliance: All CUs must report NSF fees monthly WASHINGTON (1/7/10)--Credit unions have inquired whether a new Truth in Savings disclosure requirement for overdraft services applies to institutions that do not offer overdraft protection services to their members but do charge returned-item fees.