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CU System briefs (03/23/2012)

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  • PITTSBURGH (3/26/12)--Heinz-Del Monte FCU, a $29 million asset credit union based in Pittsburgh , has reported that information related to six member cardholder accounts was stolen and used for fraudulent Internet purchases, according to the Pennsylvania Credit Union Association (Life is a Highway March 23). The credit union said the inquiry for balance information was conducted within the U.S. Once the fraudsters obtained the account balances, they initiated fraudulent purchases in Istanbul and Spain, said the article.  The credit union blocked the accounts for the Istanbul purchases and is expecting a $1,100 loss from some purchases …
  • PORTLAND, Maine (3/26/12)--Maine CUs announced that Rob Burnell , 19, of Readfield, Maine, is the winner of the Young & Free Maine's Sound Off  Competition. The competition drew 60 entries and 10,621 votes. Burnell was revealed as the competition's winner at Main Street Studios, Bangor, on March 19. He received a $1,000 gift certificate from the studios for a recording session of his choice and the opportunity to perform live at the 2012 KahBang festival Aug. 9-12.  He is featured on, said the Maine Credit Union League (Weekly Update March 23) …
  • JACKSONVILLE, Fla. (3/26/12)--Community First CU, based in Jacksonville, Fla., has committed to a three-year exclusive naming rights sponsorship of the Hale & Hearty 7K, an event produced by the Health Planning Council of Northeast Florida to showcase the benefits of happy, healthy places in the region.  The inaugural Community First CU Hale & Hearty 7K will be held June 2 at Riverside Arts Market. The naming rights benefits include a co-branded event logo, featured placement in all collateral materials, the opportunity to welcome the runners and to have a booth before and during the race, and sponsorship of the run's text messaging campaign, which will send runners coupons at each mile marker from local merchants. The credit union will feature the partnership in its member materials and marketing collateral as well …

Kentucky CUs pitch in with tornado relief

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LOUISVILLE, Ky. (3/26/12)--Several Kentucky credit unions have raised money to help victims of tornadoes that struck the state and several other states during the first weekend in March.

Thirteen tornadoes touched down in Kentucky, killing at least 12 people, according to Eight credit unions in the Midwest and the South sustained some form of damages--mostly minor--during that weekend's tornadoes (News Now March 6).

At least 39 people were killed in five of the states hit by 74 tornadoes. The deaths were in Kentucky, Indiana, Ohio, Alabama and Georgia (USA Today March 5).

The Kentucky Credit Union league and attendees of its Lending Conference earlier this month contributed $5,000 to the American Red Cross to help tornado victims in the state, said the league (By The Way March).

Other Kentucky credit unions that provided financial assistance to state tornado victims include:

  • L&N FCU, Louisville, which held a relief effort among its employees and members, raising more than $10,000. Also, 4,000 pounds of food was donated.
  • Kentucky Telco FCU, Louisville, which contributed $1,000 to the American Red Cross after the credit union sponsored a dress-down week and put in $10 for each participating employee. Credit union members also were encouraged to donate.
  • Autotruck Financial CU, Louisville, donated $500 to the American Red Cross during a local telethon. The credit union also served as a collection point and sponsor for a local technical college's efforts to collect items for those in need in two area counties.
  • Chemco FCU, Louisville, donated $300 and is collecting items for children's Easter baskets.
  • Fort Knox FCU, Radcliff, Ky., offered its members 30-day, 0% annual percentage rate loans to pay for tornado-related expenses.

Rep. Garrett meets with small-biz leaders at CU

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U.S. Rep. Scott Garrett (R-N.J.), left, meets with small-business leaders at a meeting held Friday at Greater Alliance FCU in Paramus, N.J.  (Photo provided by the New Jersey Credit Union League)
PARAMUS, N.J. (3/26/12)--U.S. Rep. Scott Garrett (R-N.J.) met with small-business leaders Friday at Greater Alliance FCU in Paramus, N.J. to learn about issues facing small businesses.

Patrick McGrath, Greater Alliance president/CEO, welcomed Garret. Small-business leaders attending said they are concerned about access to credit and about growing regulatory burdens (The Daily Exchange March 23).

Paul Gentile, president/CEO of the New Jersey Credit Union League, told Garret and the group raising the member business lending cap (MBL) would accentuate the issues small businesses face in getting access to credit.

"Congressman Garrett is well aware that raising the MBL cap would open up $13 billion in capital for small businesses and create more than 100,000 jobs," Gentile said. "New Jersey's credit unions want to help small businesses like those in the room today grow their business. Raising the MBL cap will help do that."

The Credit Union National Association (CUNA) and credit unions are asking Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

Berkley Middle-incomers best served by CUs

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WASHINGTON (3/26/12)--No one does more for middle-income Americans than credit unions, U.S. Rep. Shelley Berkley (D-Nev.) told members of the Global Women's Leadership Network, a World Council of Credit Unions initiative devoted to connecting women credit union leaders worldwide.

U.S. Rep. Shelley Berkley (D-Nev.) addresses members and supporters during the 2012 Global Women's Leadership Network breakfast Wednesday during the Credit Union National Association's Governmental Affairs Conference last week in Washington, D.C.
Berkley addressed the network as part of the group's annual breakfast meeting, sponsored by CU*Answers and held at the National Museum of Women in the Arts on Wednesday during the Credit Union National Association's (CUNA) Governmental Affairs Conference last week in Washington, D.C.

The breakfast was attended by more than 100 members and supporters. The three breakfast speakers represent leaders from inside and outside the industry and all share a mutual dedication to the global credit union movement.

Berkley, who has been involved with credit unions since the 1970s and has supported credit union legislation throughout her career, thanked credit unions for providing critical services in her home district and across the country in neighborhoods and communities ignored by other financial service providers. Berkley specifically cited credit union loans to small and women-owned businesses and college loans as vital contributions to economic growth.

"Credit unions are making it possible for thousands and thousands of students to go to college," said Berkley, who urged  attendees to continue blazing a trail of increased member service around the country.

U.S. Ambassador to Kenya Elkanah Odembo discusses what is currently happening in Kenya's credit unions Wednesday during the Credit Union National Association's Governmental Affairs Conference last week in Washington, D.C.  (Photos provided by the World Council of Credit Unions)
Elkanah Odembo, U.S. ambassador to Kenya, also addressed the network and provided insight into changes current among Kenya's credit unions. Kenya's Savings and Credit Cooperatives (SACCOs), as credit unions are called there, are a young, male-dominated movement with less than 40 years of development experience. Because of recent legislative changes, one-third of the management and governance positions in Kenya's SACCOs will be filled by women in the upcoming months.

"Women are the backbone of our development," Odembo explained, "Over the next five years, the role of women will be very significant in transforming our economy."

Roxy Ostrem, board chair of Ventura (Calif.) County CU, also spoke to the network about how her credit union is reaching out to agricultural workers in Ventura County. To reach this group, credit union staff visit employees at their workplaces to conduct credit union business, a step Ostrem said is critical for the credit union to take.

"Many of these workers are of modest means and they have to pay for a ride to work, to get home and to the grocery store to cash their paycheck, which the grocery store then charges $35 to do," Ostrem said. "By going out in the fields, we're saving these members money and we are teaching financial literacy."

The Global Women's Leadership Network is planning an engagement program in May to Ostrem's credit union so other credit unions can learn how to start similar programs. "Get involved if you can," Ostrem said. "We can help the people in our neighborhood, state and across the country."

The network connects credit union women with fellow leaders in other credit union movements all over the world and engages them in professional and personal development through social media and educational forums. It also offers international perspectives on common worldwide challenges--such as growth strategies, alternative capital and operational efficiencies.

For more information, use the links.

Catalyst Loan growth will rise--slowly--with jobs

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PLANO, Texas (3/26/12)--Credit unions likely won't see any immediate impact soon on loan demand, even though the Labor Department reports new claims for unemployment benefits totaled 348,000 for the week ending March 17, says Brian Turner of Catalyst Strategic Solutions.

Downward trends in unemployment and benefit claims are positive signs for alleviating what is putting a damper on consumer spending and economic growth, noted Turner in the Texas Credit Union League newsletter, LoneStar Leaguer  (March 23).  Catalyst is an arm of Catalyst Corporate FCU.

Upward trends lately have helped increase consumer confidence, but that is not enough to entice most people to open their wallets, Turner said. Consumer spending continues to be on a 1.4% annualized pace, far from the 2.6% pace at the same time a year ago. Retail sales are at a 6/5% pace, down from 7.5% annual pace this time last year.

If the nation can continue to experience stability in benefit applications, credit unions could potentially see loan demand turn around sooner than most anticipate, Turner said. Until that time, however, "we can expect a few more vehicle loan applications to come in and certainly a steady flow of mortgage refi applications," he concluded.

Tolling affects timing in RBS suit says NCUA

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LOS ANGELES (3/26/12)--In one of two filings Wednesday in a federal court in Los Angeles on separate court cases involving the National Credit Union Administration's (NCUA)  attempt to recoup losses from mortgage backed securities sold to corporate credit unions, NCUA argued that a particular court case preserves NCUA's federal securities claim in the case.

In NCUA's lawsuit against  RBS Securities Inc. before the U.S. District Court of the Central District of California, Western Division, NCUA filed a proposed order arguing that another court case, American Pipe Construction Co. v. Utah, impacts the statute of repose considerations on 29 certificates at issue in the suit.  NCUA said American Pipe tolling preserves certain federal claims from the three-year statute of repose.

U.S. District Judge George WU, in a previous ruling that partly dismissed NCUA's case, had granted NCUA the leave to amend, or the ability to provide more information. His ruling had indicated that unless tolled by the virtue of American Pipe, all of NCUA's federal claims would be dismissed with prejudice because they are barred by a three-year federal statute of repose. An extender statute did not apply to the federal claims, he said.  The ruling did not affect NCUA's state securities law claims.

Because the court has not yet ruled on the extent of the American Pipe tolling and its impact on certain certificates, NCUA is proposing an order that would direct the parties to meet and confer after the court's ruling and to file a joint list of any timely claims.

NCUA Goldman Sachs refuses to honor tolling contract

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LOS ANGELES (3/21/12)--The National Credit Union Administration (NCUA) has told a federal court in Los Angeles that Goldman, Sachs & Co.--which the agency has sued for losses related to the sale of residential mortgage backed securities involved in the collapse of several corporate credit unions--is refusing to honor a tolling agreement it made with NCUA.

The tolling agreement was to forestall litigation and prevent the statute of limitations or statute of repose from running out while the parties in the lawsuit negotiated, said NCUA in a supplemental memorandum filed Wednesday in the U.S. District Court for the Central District of California, Western Division.

"It is undisputed that Goldman willingly entered the agreement in order to forestall ligitation," said NCUA's memorandum . "In doing so, Goldman expressly promised not to assert any statutes of repose or limitation in defense. This court should reject Goldman's refusal to honor its express contractual promise. Even looking past Goldman's misconduct, the law plainly permits tolling agreements to apply to statutes of repose," the document said.

NCUA said the agreement was made on Aug. 30, 2010 and broadly covered "[a]ny statute of limitations, statute of repose, or other time-related defense." The agency noted in the court document that Kansas law provides a statute of limitations of two years and a statute of repose of five years and that NCUA and Goldman entered the tolling agreement before the statute of repose expired. (Kansas is where U.S. Central FCU, one of the corporates that collapsed, was domiciled).

Goldman Sachs and NCUA met on March 20 to confer. They filed a stipulation that would have extended the time for NCUA to file until this past Friday and would have provided for Goldman to file simultaneously. The tolling agreement, plus three extensions of that agreement provided a tolling period of more than nine months--beginning Aug. 19, 2010, and ending May 31, 2011, the memorandum said.

NCUA filed its MBS complaint on Aug. 9, 2011, about five years and five months after its March 3, 2006 purchase of one of the certificates at issue, a First Franklin certificate, making that claim timely after excluding the nine months tolled under the tolling agreement, the memorandum said.

"Almost immediately after this litigation commenced, Goldman reneged on its express, voluntary agreement by asserting that '[s]tatutes of repose cannot be tolled by a private tolling agreement.'"

Goldman and other banks are seeking dismissal of NCUA's claims by arguing that the statute of limitations and statute of repose have expired for many of the certificates at issue.

Mortgage originations at CUs exceed 6.5 says ACUMA

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LAS VEGAS (3/26/12)--Mortgage originations at U.S. credit unions have exceeded 6.5%, slowly but steadily gaining market share, according to the American Credit Union Mortgage Assocation (ACUMA).

"Our current percentage is the highest level since we began tracking this data dating to the early 1990s," said ACUMA Board Chairman Bob McKay, chief operating officer at Baxter CU, Vernon Hills, Ill. The percentage is based on dollar volume.

Among the reasons credit unions are gaining share now are, said ACUMA:

  • CUs have consistent underwriting standards and maintain a high level of trust with their member/owners.
  • Members are finally realizing their credit union offers mortgage products and are a better alternative than banks.
  • Consumers are more aware of credit unions through more media coverage.  "Interest in credit union home loan lending has been on the rise for the last several years," said McKay. "Recent media attention and social media events like Bank Transfer Day brought even further attention to the great story taking place day for American families with credit unions," he added.
Most credit unions truly care about their communities, and consumers know the people they are dealing with through both good times and bad, said ACUMA. "This simple concept had been overlooked in the minds of many homeowners during the crazy lending markets of a decade ago, but making a strong comeback today as homeowners, particularly younger borrowers, are more sensible and do more homework prior to selecting a lender," said the organization.