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TCUF starts Financial Literacy Month celebration early

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FARMERS BRANCH, Texas (3/31/08)--April is National Financial Literacy Month but the Texas Credit Union Foundation (TCUF) got a head start in observing the event with its Celebration of Financial Literacy dinner Thursday. The event, sponsored by Texas Jump$tart Coalition and TDECU, Lake Jackson, attracted 150 guests from across the state. Guest speaker was Jason Garrett, Dallas Cowboys assistant head coach and offensive coordinator, who addressed the importance of financial literacy, and motivating and inspiring young people. TCUF highlighted several programs, all involving credit unions in the state: the National Endowment for Financial Education (NEFE) High School Financial Planning Program (HSFPP; Junior Achievement; Bizkid$, a financial literacy PBS series airing throughout the nation; and a new program with GECU and the University of Texas at El Paso to develop a DVD aimed at college students. "TCUF has become the leading resource for financial education in our state, thanks to the support we receive from credit unions, our business and community partners and sponsors," said TCUF Executive Director Jill Pharr. "This is an accomplishment we can all be very proud of." Special guests included Steve Delfin, executive director of the National Credit Union Foundation, and recipients of the 2008 FOCUS Awards:
* Larry Heitzman, generations CU (formerly San Antonio City Employees CU); * Philip Crocker, Resource One FCU, Dallas; * Fort Worth Chapter of Credit Unions; and * A+ FCU, Austin.
Other organizations dedicated to financial education attending included: Junior Achievement, Texas Cooperative Extension Service, Texas Council on Economic Education, Office of Consumer Credit Commissioner; RAISE Texas, the Federal Reserve Bank of Dallas, Texas Saves, Financial Planning Association of Dallas, JROTC, and Texas Jump$tart Coalition. Texas Gov. Rick Perry issued a proclamation declaring April as Financial Literacy Month in Texas, and Dallas Mayor Tom Leppert proclaimed Thursday as TCUF Financial Literacy Day.

Damage at CU may be linked to Virginia I-64 shootings

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WAYNESBORO, Va. (3/31/08)--Virginia law enforcement officials are investigating whether gunshots fired into a credit union while it was closed early Thursday morning are linked to a series of sniper shots that injured two people and closed Interstate 64 between Waynesboro and Charlottesville, Va., for six hours. One man has been arrested in the incidents. DuPont Community CU (DCCU), Waynesboro, reported the vandalism at its Lucy Lane office Thursday morning. "During the night, while the office was closed, random shots were fired at the building and a vehicle on the premises," said Jackie L. Cason, vice president of human resources. The incident was discovered in the morning when the credit union opened for business. Because it occurred overnight and not during business hours, DCCU conducted "business as usual" on Thursday. "No credit union employees or members were involved or affected by this event," Cason said. She said at least four bullets struck the building, a sign and an unoccupied van in the parking lot. One went through an exterior window into an office, she told News Now. One man, Slade A. Woodson, 19, of Afton, Va., has been arrested, announced Virginia State Police Friday in a press release. He was charged with shooting at a residence in Waynesboro and at the credit union. At the time of the arrest, police were confronted by another man with a handgun. That man was shot and flown to a Charlottesville hospital for treatment. Woodson is considered a suspect in the string of shootings along the mountain highway that resulted in two injuries, neither of them serious. Police had sought at least two people suspected in the highway shootings, which hit two cars, a van, a tractor-trailer, another vehicle and an unoccupied state dump truck on I-64. A surveillance tape of the credit union's parking lot helped pinpoint a suspect vehicle, an AMC Gremlin. Woodson owns an orange 1974 Gremlin.

CU System brief (03/28/2008)

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* WAYCROSS, Ga. (3/31/08)--The holding company for Atlantic Coast Bank--formerly Atlantic Coast FCU--declared a quarterly cash dividend on common stock of 15 cents per share, to be paid on April 28 to all stockholders of record as of April 11. Atlantic Coast Federal MHC holds more than 8.7 million shares or 64% of the Atlantic Coast Federal Corp.'s stock and will waive receipt of the dividend on its shares, the board announced Friday (Business Wire March 28) …

Malware was secretly installed on all stores servers

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SCARBOROUGH, Maine (3/31/08)--A data breach that compromised the credit and debit cards of more than 4.2 million grocery shoppers was caused by software that was secretly installed on servers of every grocery store in the chain, says Hannaford Bros. The "malware" intercepted card data at nearly 300 grocery stores as customers swiped their card at the checkout counter. It then sent the data overseas, said Hannaford General Counsel Emily D. Dickinson in a letter to Massachusetts Attorney General Martha Coakley and Gov. Devel Patrick's Office of Consumer Affairs and Business Regulation (The Boston Globe and Washington Post March 28). The letter said the malware was installed on the servers of each store the company operates and that uses the company's payment systems. The stores were in Maine, Vermont, New Hampshire, Massachusetts and New York, plus the Sweetbay chain in Florida. The malware intercepted "track 2" data stored on the cards' magnetic stripe. The data include the card's number and expiration date but not the name of the customer. The data were stolen while in transit for authorization from the point of sale, meaning that as it went from cash register to one of the institutions Hannaford uses to process transactions. These include the major card networks and a major card processor, First Data Corp. The malware on the store servers collected records of the purchases in batches, then transmitted them to an offshore Internet service provider. Malware can be installed remotely if the hacker can breach a company's firewall; if servers aren't running the latest security patches; or if they are running out-of-date antivirus programs. Hannaford has replaced the hardware on which the malware was installed, the company said.

Gartner Will be hard to get grocer to pay breach costs

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FRAMINGHAM, Mass. (3/31/08)--Credit unions and banks will have a difficult time getting Hannaford Bros. to pay their breach-related costs if the grocery chain was compliant with the Payment Card Industry (PCI) Data Security Standard when the breach occurred. If that's the case, Hannaford has a safe harbor under PCI and will not be required to reimburse banks and credit unions for the costs they incur in replacing cards, notifying member/customers, and for fraud, Avivah Litan, an analyst for research firm Gartner Inc., told Computerworld (March 27). Hannaford says it was recertified as compliant with PCI in February and had been similarly certified last year. PCI refers to 12 security controls that merchants accepting payment-card transactions must follow. If they don't they are fined by Visa, MasterCard, and other major card companies. Litan said that under the rules, if a company is noncompliant and suffers a breach, it faces both potential fines and reimbursements to credit unions and banks of their breach-related costs, including actual fraud losses. The fines and reimbursement costs are not collected directly from the merchant but through that merchant's acquiring bank, which authorizes the merchant, such as Hannaford or TJX Cos., to accept the transactions. It is these banks that are directly responsible for ensuring that merchants are PCI-compliant, Litan said. Under PCI rules, the acquiring bank can't take the reimbursement problem back to the retailer. Computerworld noted that reimbursement is a sticky point for credit unions and banks. It mentioned that several credit union leagues lobbied state governments to pass laws that would make retailers responsible for the costs of a breach, and that only Minnesota has passed such a law. Although credit unions and banks--and consumers--may not have recourse under PCI rules, they still can file lawsuits, the article said. The Hannaford breach, which compromised 4.2 million cards in New England, New York and Florida, was discovered Feb. 27 and made public March 17. It affects transactions at grocery stores from Dec. 7 to March 10. So far about 2,000 actual incidents of fraud have been reported, said Hannaford.

Illinois league kicks off REAL Solutions

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NAPERVILLE, Ill. (3/31/08)--The Illinois Credit Union League (ICUL) kicked off its participation in the REAL Solutions program with two meetings March 11-12.
Mark Lynch, REAL Solutions field coach, leads an introductory meeting about the program at the Illinois Credit Union League’s Naperville, Ill., offices earlier this month. (Photo provided by the Illinois Credit Union League)
Nearly 60 people representing more than 40 credit unions attended. Lois Kitsch, REAL Solutions program director, and Mark Lynch, field coach, facilitated the sessions. “The Illinois league is excited to be a partner in REAL Solutions,” said Dan Plauda, ICUL president/CEO. “Through this progressive program, we look forward to making a difference in people’s lives.” REAL Solutions is a signature program of the National Credit Union Foundation. "REAL" stands for "Relevant, Effective, Asset-building, Loyalty-producing" solutions. Through the program, credit unions can choose up to 20 products or services in education, transaction services, savings, credit, and home ownership to offer people of modest means, working families, and “low-wealth" households. Participation fees have been funded by ICUL and the Illinois Credit Union Foundation (ICU Foundation). Twenty-nine Illinois credit unions have signed a memo of understanding to participate in the program. Lynch is conducting diagnostics meetings with each participating credit union to determine the credit union’s interests and to pick the top three products of the program. The diagnostics will be completed in the next few weeks. ICUL also will conduct a series of partners meetings. Credit unions plan to roll out their REAL Solutions initiatives in about nine months.

CU sponsors bus tours of foreclosed homes

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MARLBOROUGH, Mass. (3/31/08)--In a sign of the times, foreclosed properties are the highlights of a series of Foreclosure Bus Tours offered by Marlborough, Mass.-based Digital FCU's real estate firm, DCU Realty. According to the credit union's website, the tours run on Saturdays through May 17, last three hours and hit different areas of the state each week. For example, it hit the Marlborough area on March 15, the Westboro area on March 22, and Nashua, N.H., this past Saturday. Next week, it'll be Waltham. The bus tour is open to anyone, but Digital members get a discount. "Tourists" can bring along a copy of their pre-approved letter from a lender in case they see a deal too good to pass up. They also are told to bring a camera, a flashlight and shoes they can slip off when entering a nice property. Some homes are in move-in condition while others have no electricity, heat or running water. Peter Bohush, the broker with the firm, told a local newspaper that the tour is an easy way for prospective buyers to see a lot of properties in a short time. The tourists include anyone from first-time homebuyers to investors looking for fixer uppers (The MetroWest Daily News March 27). He noted the firm isn't trying to cash in on the foreclosure problem but views the tours as the solution to the housing market crisis. The tours look at properties in several price ranges. The properties are posted on the credit union's website each Thursday. A real estate attorney accompanies the tour to answer questions and explain how to purchase a foreclosed property. Refreshments are provided at the start and conclusion of the tour.

Kansas FOM bill is on its way to governor

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TOPEKA, Kan. (3/31/08)--The Kansas House of Representatives passed a substitute bill for banker-backed Senate Bill 535 by a vote of 115 to 8 Friday morning, and the bill is on its way to the governor's office. The bill would limit the geographic area served by credit unions and create new standards for branching, mergers and field of membership (FOM) changes. It was not amended by either the House or the Senate, said the Kansas Credit Union Association (KCUA). KCUA anticipates that Gov. Kathleen Sebelius will sign the legislation into law. “With this legislative battle put behind us, Kansas credit unions can get back to doing what they do best--serving their members and Kansas consumers," said Marla Marsha, president/CEO of KCUA. "Our industry can now wholly focus on their mission of 'people helping people,' a mission that is more important than ever as the economy continues to struggle,” she added. The legislation removes any further legislative or legal threats to credit unions and will provide a long-term standard for interpreting the Kansas FOM statute, the league said earlier last week. The league worked to amend the original bill, which was backed by the Kansas Bankers Association, with the substitute's language. The substitute bill would:
* Grandfather all existing credit union members and their immediate family members, all existing occupational and associational groups, current geographic fields of membership up to one million in population, and all current branch counties; * Outline geographic FOM limitations of up to 500,000 in population using multiple contiguous political jurisdictions for credit unions not headquartered in a metropolitan statistical area (MSA); * Limit credit unions headquartered in an MSA to that MSA plus the counties that share an immediate border until they hit one million in population; * Provide an escalator formula to allow for population growth in MSA areas; and * Continue to allow for multiple common bonds, given that the occupational and associational groups are located within the geographic field of membership.
After it is signed, the bill would affect nine state-chartered credit unions, which must immediately restrict their current geographic fields of membership because they currently extend beyond the one million in population limit. If signed, the portions of the legislation addressing future FOM changes would go into effect July 1. The grandfathering portion of the legislation would go into effect on Jan. 1, 2009, to give Kansas state-chartered credit unions and the Kansas Department of Credit Unions time to comply with the changes.

Gov. Lynch praises New Hampshire CU for flood help

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PORTSMOUTH, N.H. (3/31/08)--New Hampshire Gov. John Lynch praised Service CU Thursday for making significant contributions to help state families affected by flooding during the past three years. He made his remarks at the 51st annual meeting of the Portsmouth-based credit union, which is the largest credit union in the state. Lynch had proclaimed March 26 as New Hampshire Credit Union Day. The governor noted that credit unions in the state have provided valuable financial service to residents for 100 years. And Service CU, with $1.2 billion in assets and more than 110,000 members, “continues to adhere to the values established by our founding members/owners,” he said in a press release. “I have enormous respect and appreciation for Service CU, what they’ve done and what they continue to do in New Hampshire,’ he said. The governor said the credit union “sets the standard for all other organizations” in the state because it has woven itself into the fabric of the community. “The reason New Hampshire is such a great state is because of organizations like Service CU,” Lynch said.