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New NCUF chairman supports DE expansion

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WASHINGTON (3/7/08)--Allan Kemp McMorris, the new National Credit Union Foundation (NCUF) chairman, has pledged more financial and human resources to expand the Credit Union Development Education (DE) program in the U.S. and worldwide.
New National Credit Union Foundation Chairman Allan Kemp McMorris was cheered on by more than 75 Credit Union Development Educators at the Credit Union National Association’s Governmental Affairs Conference in Washington, D.C., this week. (Photo provided by the National Credit Union Foundation)
“Credit union philosophy is our most important asset,” McMorris said in his first address to Credit Union Development Educators (CUDEs) during the Credit Union National Association’s Governmental Affairs Conference in Washington, D.C. “I not only pledge the foundation’s support, I pledge my personal support. I promise you I will become a CUDE before the end of my term as foundation chair,” he added. DE Program Director Tom Decker highlighted several new initiatives planned for this year:
* 2008 DE Workshop. All DE training alumni are invited to a new learning event to be held May 21-24 in Seattle. The workshop will feature tours of the Biz Kid$ set while an episode is being filmed for PBS; tours of IslandWood, where a sustainable environmental is the classroom; and a course on micro-finance from international facilitator Carol Schillios; * International DE Council. DE program leaders from Australia, Canada, the Philippines, the United Kingdom and the U.S. plan to facilitate curriculum enhancements and training exchanges; and * International Development Certification. NCUF and the World Council of Credit Unions (WOCCU) are exploring ideas to recognize leaders who graduate both from DE training and from international programs offered by WOCCU.

Company makes takeover bid on Canadian CU

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EDMONTON, Alberta (3/7/08)--An insurance company based in High River, Alberta, has made a surprise takeover bid for Community Savings and CU, an Edmonton-based credit union whose members will meet March 18 to vote on a merger with two other Alberta credit unions. Western Financial Group President/CEO Scott Tannas said the company asked that the offer be included on the agenda at the credit union's membership meeting (Canada.com and Edmonton Journal March 6). The company is offering an unspecified "cash windfall" for members, job security for employees and maintenance of the products, prices, service levels and branches that exist today, Tannas said. The credit union had proposed merging with Servus Credit and Common Wealth CUs. The three--among the four largest credit unions in Alberta--announced Feb. 8 they were considering a merger because they faced competition from British Columbia-based credit union, Vancouver City Savings, Canada's largest credit union. Tannas said the credit union and his organization--which provides insurance, financial services and banking services to more than 80 communities in Western Canada--have similarities. "We are in many of the same towns and cities, we have the same community-based values and culture, and we estimate that 20% of Community Savings members are already insurance customers of Western Financial Group," he said.

Massachusetts CU assets rise 4.1

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MARLBOROUGH, Mass. (3/7/08)--Total assets for credit unions headquartered in Massachusetts tallied $24.6 billion during 2007, up 4.1% over year-end 2006. Credit union assets in the state constitute 9.4% of all financial institution assets in the state, the Massachusetts Credit Union League reported on its website. Credit union deposits increased by 1.87%, closing 2007 at $20.1 billion. Credit unions hold a 10% share of the market for insured deposits in Massachusetts. Loans rose 4.84%, finishing the year at $18.2 billion. There were 228 credit unions headquartered in Massachusetts at the end of 2007, with 58% holding federal charters and 42% state charters. Credit unions serve roughly 2.44 million citizens of Massachusetts or 38.2% of the population--a 1.67% increase over year-end 2006.

CU System briefs (03/06/2008)

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* KNOXVILLE, Tenn. (3/7/08)--A Knoxville man was charged with second-degree murder in the death of his wife, who was run over with a car Wednesday at an ATM outside the East Knoxville branch of ORNL FCU. Carlos Radal Cornwell, 35, was charged after Leoned Boulanger Cornwell, 42, was found dead in the credit union's parking lot. Police said the couple were in a car at the ATM and argued. Leoned Cornwell exited the car, and the car allegedly backed over her (The Knoxville News Sentinel March 6) … * HARRISBURG, Pa. (3/7/08)--Two staffers of Franklin Mint FCU, Broomall, Pa., were guests last week on Philadelphia's NBC 10 program, "All That and More," according to the Pennsylvania Credit Union Association (Life is a Highway March 5). Rick Durante, vice president of education, and Kelly Lynn, district manager of the credit union answered money management questions from fourth- and fifth-grade students. The program focused on youth financial education during Philly Saves Week … * PROVO, Utah (3/7/08)--Two men face charges of armed robbery after their arrest Tuesday 90 minutes after a robbery was reported by Utah First CU. Christopher Mollner and Ira Wakefield are being held on robbery charges. Police said Mollner allegedly entered the credit union with a pistol, handed a teller a note demanding money, and fled with cash in a white van. Ninety minutes later Utah Highway Patrol trooper pulled over the van, where he found the men, cash covered in red dye and a BB gun. Mollner's 11-month daughter, who was in the van, was taken into protective custody (Daily Herald ksl.com and kutv.com March 5) … * WASHINGTON (3/7/08)--Norman Mann, former CEO of Department of Commerce FCU, Washington, D.C., died Feb. 26, after suffering a stroke the day before, said the Maryland and District of Columbia Credit Union Association (FOCUS Newsletter March 3). He served the credit union for several decades. Funeral services took place March 1 in Bowie, Md. Contributions may be made to the American Heart Association, Memorials and Tributes Processing Center, P.O. Box 5216, Glen Allen, Va. 23058-5216 … * HOUSTON (3/7/08)--Carol J. Letz, chairman of Houston Highway CU, died Monday after an extended illness, according to the Texas Credit Union League (LoneStar Leaguer March 6). Letz served the credit union in several capacities for more than 35 years, the past six years as chairman. She also was a member of the State Employees CU Association since 1973 and served as president for several years. Funeral services will be at 1 p.m. today at Southpark Funeral Home …

Washington State announces Top 10 investment scams

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OLYMPIA, Wash. (3/7/08)--Credit unions can help alert members to the top investment scams circulating in several states. The Washington State Department of Financial Institutions (DFI) Securities Division last week announced the Top 10 investment scams in that state. Most are perennial favorites of scam artists who dress them up with the latest investment angle or news, said DFI, the state credit union regulator. Credit unions can tell their members to understand what they are investing in. "Investors can protect themselves, and their financial futures, by investing a little more time before investing their money," said DFI Director Scott Jarvis, who noted that "if it sounds too good to be true, it probably is." The top scams in Washington State were:
* Ponzi schemes. A business supposedly earns money to pay high returns to investors. However, it actually earns little or no funds; instead, it relies on new investors to pay the early depositors' "profits." The scheme collapses when new investor money runs dry. * Fraud against seniors. Older investors with money are targeted by complex investment scams involving unregistered securities, promissory notes, charitable gift annuities, viatical settlements and Ponzi schemes promising inflated returns. * Promissory notes. Short-term debt instruments are issued by little-known or nonexistent companies promising high returns (such as 15% monthly) with little or no risk. When interest rates are low, these notes lure investors hoping for higher, fixed returns--which never arrive. * Unscrupulous brokers. While stockbrokers' assistance is often helpful for many investors, investors should educate themselves so they can detect any problems that signal an unscrupulous operation. * Affinity fraud. This fraud preys on human nature, where people trust people like themselves. Scammers use religious or ethnic identity to gain the victim's trust, and no group is immune from this type of fraud. * Unlicensed securities sellers. High-risk investments--such as promissory notes, oil and gas deals, gold or mining stock and viatical settlements--may be sold by unlicensed individuals. Scam artists entice independent sales agents into selling investments about which they know little. * Prime bank schemes. Con artists promise investors triple-digit returns through access to portfolios of elite or "prime" banks. Today, they it is common to avoid the term "prime bank" and underplay the banks' role by referring to "risk free guaranteed high yield instruments" or something similar. They often reference "treasury securities," "letters of credit," or similar methods. Scammers also push "tax free" money by using "offshore accounts" to entice investors. * Internet fraud. Spam e-mails, chat rooms and online investment "newsletters" often promote stocks with hype and false information, offering a "quick profit" to lure investors who buy and drive up the price of the stock, which the promoter then sells. Investors should ignore e-mail offers, especially those from individuals needing "help" to deposit large sums. * Free lunches and dinners. A yearlong study of free-meal investment seminars by state securities regulators across the nation found abusive tactics at "educational" free lunch and dinner seminars. All were actually sales presentations, and 13% were fraudulent. * Telemarketing fraud. Boiler rooms and high-pressure telephone sales operations peddle illegal or fraudulent investment products nationwide.
Each year, Washington residents alone lose between $50 million and $100 million in such scams. The amounts reported may be only a small fraction of actual losses, DFI said.

NCUA is offering Cal State 9 for bidding

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CONCORD, Calif. (3/7/08)--The National Credit Union Administration (NCUA), the conservator for Cal State 9 CU, is offering the credit union up for bid to be combined with another credit union. The $339 million asset, Concord, Calif.-based credit union was placed under the management of the NCUA in conservatorship in November 2007. “This week, NCUA representatives came to a decision to pursue the combination of Cal State 9 with another credit union,” wrote Melinda Love, NCUA Region V director, in a Feb. 29 letter to Cal State 9 members. “This transaction, known as a ‘purchase and assumption,’ represents the most financially sound decision and is in the best interest of Cal State 9’s membership. It will ensure that you continue to have high-quality financial services into the future without interruption,” she added. All prospective purchase-and-assumption credit unions have sound financial management and are federally insured by the National Credit Union Share Insurance Fund (NCUSIF), Love noted. She reminded members that all their deposits are safe and secure--insured by NCUSIF. The process is expected to be finalized in early summer 2008, Love wrote. Cal Sate 9 was unavailable for comment. Almost 98% of delinquent loans that prompted regulators to put Cal State 9 CU into conservatorship were real estate loans that were in arrears (News Now Nov. 6). In June, Cal State 9 reported delinquent real estate loans totaling $25.8 million, more than five times the $4.6 million it reported the year before (The Oakland Tribune Nov. 3). In first-quarter 2007, Cal State 9 earned $1.6 million; at the end of second quarter--about the time the subprime mortgage market began to realize it was in a crisis--the credit union had lost $9.1 million, said the newspaper, which examined the credit union's public filings with NCUA. Cal State 9 CU lost $45.9 million during the first nine months of 2007 with the majority of the losses occurring in mortgage loans, many with adjustable rates (News Now Nov. 9).