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CUs security approach is holistic layered

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SANTA ROSA, Calif. (3/16/12)--The mass migration toward using mobile devices such as tablets and smartphones to access corporate data, social networking and cloud computing is setting off alarms for security and risk management, and information technology (IT) executives concerned about security. One credit union is among the early adopters of a holistic approach to keeping data secure.

As smartphones and tablets become the new security "battleground," Redwood CU, a nearly $2 billion asset credit union based in Santa Rosa, Calif., is addressing the situation by incorporating end-to-end, or layered, defense so that all key elements of its IT infrastructure are protected against a variety of threats, reports Baseline, a publication for the IT industry (March 13).

For this credit union,  a multilayered defense works. "We have been fortunate to not have had any loss or issues as a result of an attack," Tony  Hildesheim,  senior vice president of IT at Redwood, told Baseline.

Redwood's first layer consists of dual firewalls with multiple DMZs or perimeter networks that segment traffic, coupled with virtual LANs on switches and a segmented internet provider (IP) network, said the publication.

Its second layer includes a set of intrusion detection systems (IDS)and intrusion prevention systems (IPS) that watch all inbound, outbound and cross-network traffic, said Baseline.  Redwood also employs an e-mail scanning and spam filtering tool to further reduce threats, as well as a virus protection on all its PCs and servers.

Redwood has aggressive policies on the network, with network restrictions to almost all files and directories on an "as needed" basis.  For even more protection, it has a set of controls that includes network monitoring as well as regular checks and audits.

There's more: Its security framework includes central software management; patch management; encrypted hard drives; Internet access monitoring and limitations; and segmented, monitored and controlled network storage.

As a result it has stopped attacks such as Trojans and viruses, usually at the IDS/IPS device, before they attack a PC or other device, said Hildesheim.  The credit union tries not to draw attention and, determined not to be an easy target, it aggressively deals with phishing and other attacks.

Redwood also provides security training for employees.  It practices standard password rotation or employees, tests for social engineering, and performs penetration and controls testing. Redwood also educates members with awareness campaigns to help them protect their privacy.

Hildesheim noted the credit union sees about 40 attacks each month but all are averted, largely due to e-mail scanning tools and the local scanning and IDS/IPS that augment the firewall. It also experiences roughly 100 "suspicious hits" and about 20 "validated" hits a month, all averted by firewalls, patching and security procedures.  

Redwood has suffered no financial or member losses because of an intrusion or attack on its systems, said Wade Painter, the credit union's chief financial officer.

Florida banking commissioner resigns

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TALLAHASSEE, Fla. (3/16/12)--For the second time in seven months, the Florida Office of Financial Regulation (OFR) will be getting a new commissioner. Tom Grady told OFR March 6 he has resigned to become interim president of Citizens Property Insurance Corp.

Grady started his new job Monday. Citizens Property insures nearly one in four Floridians. The company saw a 27% surge in consumer complaints in 2011 when it reduced coverage for policyholders and raised rates (South Florida Sun-Sentinel March 6).

"The league has a good working relationship with OFR," Patrick La Pine, president/CEO of the League of Southeastern Credit Unions (LSCU), told News Now. "With Tom Grady just coming on board in August, we had one brief introductory meeting with him. We intend to reach out to [staff at] the governor's office in hopes we can assist them in their search for a new commissioner."

An interim director is expected to be announced Tuesday, LSCU added.

The Florida OFR has three divisions and one bureau. Among its duties, OFR regulates credit unions and banks.

CU System briefs (03/15/2012)

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  • SOMERSET, N.J. (3/16/12)--Credit Union of New Jersey, XCEL FCU and Affinity FCU are on the NJBIZ Magazine list of Best Places to Work in New Jersey in 2012. Credit Union of New Jersey, Ewing, $298 million in assets, and XCEL FCU, Secaucus, $134 million in assets, made the list in the small/medium company category, while $2.1 billion asset Affinity FCU, Basking Ridge, was included in the large company category. Both EXCEL and Affinity were also on the 2011 list. The program selects companies based on dedication to employees' growth and quality of life (The Daily Exchange March 14) …
  • LATHRUP VILLAGE, Mich. (3/16/12)--Michigan First CU is seeking its second "spokester" for the Young & Free Michigan program that aims to appeal to young adults. The winner of the annual search contest held by the $600 million asset credit union receives a $30,000 salary, an Apple MacBook pro, an HD video camera and a smartphone. In addition, the winner gains the use of the Young and Free Michigan car for a year, including gas and insurance. Entrants must be between ages 18 and 25 and submit an entertaining blog post on a financial topic by noon on April 16. The "spokester" uses social media, videos and participation in special events to engage young adults in becoming financially fit  …
  • WICHITA, Kansas (3/16/12)--A 900-square-foot café that offers free wireless Internet and a separate drive-up window will help create a fresh experience for members who use Mid American CU's  new 4,000-square-foot branch. The $168 million asset credit union plans to have employees greet branch visitors at the door and then walk them to stand-alone "dialogue" stations, which take the place of standard teller stations for transactions and cash (The Wichita Eagle March 13). Scheduled to open in November, the new building will be the credit union's only branch on Wichita's east side  …
  • PEABODY, Mass. (3/16/12)--Luso American CU will distribute 25% of its 2011 net income, or $93,815, as bonus dividends to members. In a news release, the $71.3 million asset credit union described the dividend as a way to thank members for a successful year. Individual payment amounts are based on member dividends earned on regular share accounts through year-end 2011 …

Pocahy Family CU to merge with Mountain America

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SALT LAKE CITY (3/16/12)--Pocahy Family CU in Pocatello, Idaho, will merge with Mountain America CU, West Jordan, Utah, on April 1.

Pocahy Family CU, which has $15.3 million in assets, approached $3 billion asset Mountain America about the merger in late 2011. Members, employees and the board approved the merger in a recent vote.

Pocahy's 2,250 members can convert to Mountain America accounts before the merger is finalized by visiting Mountain America's Idaho branches in Chubbuck or Idaho Falls, the credit unions said.

A Mountain America release cited opportunities to grow in eastern Idaho and additional services for Pocahy Family CU members as merger benefits.

ICBS MoneywatchI Turn to CUs for student loans

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NEW YORK (3/16/12)--The No. 1 consumer tip for college students seeking additional financial assistance is to "turn to a credit union," says the CBS MoneyWatch website Thursday in an article that lists seven things consumers need to know about private students loans.

"Credit unions, which are newer players in the private student loan world, almost always provide better interest rates," the article said. "Ironically most people stick with the well-known lenders even though their rates are typically higher. You can look for college loans at credit unions through cuStudentLoans."

cuStudentLoans is powered by CUNA Strategic Services provider Fynanz, which connects students in need of a private student loan with a network of credit unions. Use the link.

CBS MoneyWatch also urges consumers to check for colleges and universities that have their own credit union, and then lists some that do.

To read the article, use the link.

Three execs honored for marketing biz development

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MADISON, Wis. (3/16/12)--Kim Wall, Anne Legg and John Godwin were honored for their credit union marketing and business development achievements during a ceremony at the CUNA Marketing and Business Development Council (CMNDC) Conference, March 7-10 in New Orleans.

Honored by the CUNA Marketing and Business Development Council at its conference in New Orleans for their achievements, were, from left: Anne Legg, vice president marketing, Cabrillo CU, San Diego; John Godwin, vice president business development/strategic alliance, MECU of Baltimore, Inc; and Kim Wall, community development director, Georgia United CU, Duluth, Ga. (Photo provided by CUNA)
Wall, community development director for Georgia United CU in Duluth, Ga., was named the 2012 Hall of Fame inductee. She has worked at Georgia United CU, formerly Georgia FCU, for 29 years. There she directs and oversees the credit union's public relations, community development, and media and government relations.

During her tenure, Wall helped craft the credit union's brand image from a small teacher's credit union to a recognized leader among credit unions in the Southeast.  In addition to being a co-founder and executive committee member of the CUNA Marketing and Business Development Council, she has won several industry awards.

Legg, vice president marketing for Cabrillo CU in San Diego, Calif., won the Marketing Professional of the Year Award. She has worked in the credit union industry for 17 years, the last 12 at Cabrillo CU. While at Cabrillo, Legg has participated in two mergers, developed a new credit union brand, implemented quality programs, created a nearly virtual auto dealership, and has consistently grown loans year after year.

Legg also has been active in the credit union industry, serving on the board for the Marketing Association of Credit Unions; as a member of the California and Nevada Credit Union League Public Advocacy Committee; and on the CUNA Marketing and Business Development Council Executive Committee for eight years.

Godwin, vice president business development/strategic alliances for MECU of Baltimore Inc., was presented with the Business Development Professional of the Year Award. He has worked in the credit union industry for 16 years, with the last 11 being at MECU of Baltimore Inc. There he develops and implements strategies for new select employee group acquisition and activity, compiles strategic and business plans and strategic initiatives for the credit union, identifies merger candidates and oversees the merger process.

An article on the winners and their achievements will be in the May 2012 issue of Credit Union Magazine.

For more information, use the links.

Mass. CUs explore the cooperative advantage

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MARLBOROUGH, Mass. (3/16/12)--Massachusetts credit unions attending a joint Marketers Network and Business Development Network meeting March 6 in Marlborough, Mass., explored the cooperative advantage, according to the Massachusetts Credit Union League.

John Reske, vice president of marketing at the UMassFive College FCU, a $351 million asset credit union in Hadley, Mass., and Erbin Crowell, executive director of the Neighboring Food Co-op Association, told about their activities in the cooperative business community in Western Massachusetts and nationally (E-Weekly March 14).

One reason the United Nations has designated 2012 as International Year of the Cooperative is because cooperative businesses weathered the recent economic collapse far better than stock-owned companies, said Crowell. Cooperative ownership helped preserve billions of dollars in wealth during a period when money was disappearing from stock companies, said Crowell.

Reske told attendees how UMassFive has embraced its identity as a cooperative financial institution and how that move has benefited the credit union.  Benefits included bringing new, loyal members into the credit union through partnerships with cooperatives, successful product enhancements built around cooperative principles, and increased message and product penetration among existing members because of the credit union's cooperative "brand."

Consumers are now more than ready to hear about a financial institution that is cooperatively owned and operated for the benefit of the consumer, Reske said.

The group discussed opportunities and most participants indicated they would immediately look into identifying cooperative businesses in their area and see if they would offer credit union membership to their members, said the league.

Texas CUs close 2011 in strong form

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FARMERS BRANCH, Texas (3/16/12)--Texas credit unions closed out 2011 in strong form, reported the Texas Credit Union League in its fourth quarter 2011 Texas Profile.

Membership in Texas credit unions jumped to more than 7.7 million from 7.5 million.  "Grassroots movements like Bank Transfer Day and International Year of Cooperatives have undoubtedly influenced consumers to take a second look at credit unions," the league said in its newsletter, LoneStar Leaguer  (March 14).

Texas credit unions also saw increases in assets, loans and savings during 2011, and the percentage of credit unions to see positive returns on assets rose to 80% in 2011 from 57.8% the year before.  Nationally, the percentage is at 76.3%, said the league.

The percentage of the state's credit unions reporting a 7% or better capital ratio also rose,  to 95.3% from 94.5%. Delinquencies, charge-offs and member bankruptcies remained low for Texas credit unions, said the league.

Federation study tracks CDCUs CDFI industry

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NEW YORK (3/16/12)--As part of its working papers series, the Federal Reserve Bank of San Francisco has released a new study by the National Federation of Community Development Credit Unions that explores the role played by community development financial institutions (CDFI) and the community development credit unions (CDCU).

Written by federation President/CEO Cliff Rosenthal, "Credit Unions, Community Development Finance and the Great Recession" offers a detailed history of the role of CDCUs within the CDFI movement; shows how federal investments helped preserve and expand CDCU services during the Great Recession; and recommends ways to strengthen CDFI depository institutions through best-practice models and collaborations.

The paper outlined both significant developments and challenges for CDFIs, including:

  • The CDFI movement has grown rapidly. By the end of 1997, the recently established CDFI Fund counted 190 certified institutions; by the end of fiscal year 2000, that number had more than doubled to 415.3. By August 2011, the CDFI Fund counted 962 certified institutions. Along with the numerical expansion of the field, many individual CDFIs have grown and matured, adding significant capacity and a new sense of possibility to the field.
  • A new generation of CDFIs and CDFI leaders is emerging. Many new CDFIs have little connection to the historic roots of the CDFI movement. They represent a new source of energy and ideas, but a number of veteran practitioners have begun to debate whether the CDFI brand has been diluted by rapid expansion.
  • CDFIs are the focus of federal initiatives beyond those of the CDFI Fund. CDFIs were part of the Community Development Capital Initiative (CDCI) and the $30-billion Small Business Lending Fund, created by the Small Business Jobs Act of 2010, which carved out a window for CDFIs and established the unprecedented CDFI Bond guarantee program now under development.
  • CDFI certification has become a valued brand beyond the federal CDFI fund. The fund's confirmation now is required for a growing number of federal and state programs, such as those of the Small Business Administration, the Federal Home Loan Bank System and the Empire State Development Corp.'s CDFI Program in New York.
  • The CDFI movement has--so far--survived a "stress test." The recent recession has put great strains on the balance sheets of many CDFIs. There have been some losses, but the movement has survived, demonstrating resilience, the paper said.
The paper also makes several recommendations, including:

  • Increase investment in CDFI depositories. CDFI credit unions and banks offer leverage, sustainability and impact in ways that loan funds cannot, according to the paper. It calls for a re-examination of fund application forms, scoring, review procedures, and allocation formulas to take into account the characteristics of each category of applicant to the CDFI Fund.
  • Improve and expedite certification procedures. CDFI certification is the most important credential in the community development field and a prerequisite for accessing various funding sources. More CDFIs will bring the CDFI Fund increased visibility and support in a time of federal budget cutbacks, the paper said.
  • Invest strategically to build the CDFI field, through new structures and new platforms. The fund should explore supporting hybrid or complex institutions that combine the strengths of CDFI loan funds and CDFI depositories, the paper said.
Rosenthal announced earlier this month that after 32 years with the federation he will leave May 4 to take a job with the federal government. On Thursday, the federation confirmed Rosenthal would move to the Consumer Financial Protection Bureau to become the bureau's assistant director of its Office of Financial Empowerment.

To download the paper, use the link.

Presidents FCU in management agreement with Emery

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CINCINNATI and CLEVES, Ohio (3/16/12)--A small Ohio credit union that had difficulty attracting a new CEO has entered a management agreement with the credit union service organization of another, larger credit union in the state.

Presidents FCU, an $11 million asset credit union based in Cleves, near Cincinnati, entered the agreement with Emery Financial Services, a wholly owned subsidiary of $140.9 million asset, Cincinnati-based Emery FCU. The CUSO has assumed all managerial responsibilities for Presidents FCU, said the two credit unions.

"We had great difficulty finding a new CEO after the position was vacated in August of 2011," said John Neyer, Presidents' board chairman. "The right candidate eluded us, so our options were either to merge with another credit union or enter into a management agreement." He called the agreement "an ideal solution to our issue, as the company now serves as our CEO while we continue to exist and function as Presidents FCU."

The two credit unions have been in a shared-branching agreement for more than five years.

Under the contract, Presidents' four employees will remain in their current positions with Emery Financial Services providing all additional staffing, information technology and back office support. The two already have worked together on Presidents' financial reporting, compliance requirements, data processing and lending services.