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Pa. banking dept.s new outreach unit meeting with CUs

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HARRISBURG, Pa. (3/12/12)--The Pennsylvania Credit Union Association met Tuesday with two members of the Pennsylvania Department of Banking's new business unit, the Office of Client Financial Services, which aims to provide proactive outreach to the state's financial services companies.

Two members of the unit's Area Executives Team, Donna Riling and Becky MacDicken, visited PCUA's headquarters in Harrisburg and reviewed the new initiative with PCUA President/CEO Jim McCormack and Senior Vice President Mike Wishnow (Life is a Highway April 11).

During the next few weeks, the team of six Area Executives will visit credit unions across the state to gather information on the state of the economy and regulatory issues facing financial institutions. They will call on both state-chartered and federally chartered credit unions to take back detailed information to Banking Secretary Glenn Moyer, PCUA said.

"We welcome this Relationship Manager program and the efforts of the Area Executives team [members], as they collect regulatory feedback from credit unions and other regulated institutions," said McCormack. "Working together, we can help the department develop fair and consistent regulatory policies for all financial institutions," he added.

Riling works in the Western area and MacDicken in Southcentral. Other Area Executives are: Dick Moriarty, Central; Felix Zorrilla, Northcentral; Rosemary Garland, Northeast; and Kevin Pyle, Southeast.

CUs auto lending market share at 17.4

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ONTARIO, Calif. (4/12/12)--After hitting a monthly low of 15.2% in March 2011, credit union auto lending market share has climbed, maintaining above 17% each month since May 2011, according to CUDL's quarterly Auto Lending Trends & Credit Union Analysis.

CUDL, part of Ontario, Calif.-based CU Direct Corp., presented the findings in a webcast March 27 that outlined key metrics on auto financing trends for credit unions and competing financial institutions, provided a fourth-quarter 2011 credit union auto lending market analysis and discussed auto manufacturer and sales trends.

Among the highlights presented by Andrea Salgado, market research analyst for CUDL:

  • Credit unions' auto lending market share year to date (as of the end of January), is at 17.4%.
  • Auto loans represent 29% of the average credit union loan portfolio, as of year-end 2011. In unit volume, however, auto loans make up the largest portion of all loans in the credit union portfolio, at 32%.
  • CUDL credit unions, with more than 990 credit unions nationwide, are the seventh largest lender of auto loans as of the end of January, with more than 44, 255 loans financed on the CUDL Platform, with year-to-date growth at 39.7%.
  • CUDL credit unions increased  unit  loan volume 40% in both January and February.
  • Credit union auto loan delinquency balances shrank by nearly 20% between year-end 2010 and year-end 2011 and credit union charge-off rates for these are still below 1%.
The webcast noted that new- and used-auto sales rose through February, with new-car sales up 14% and used-car sales up 10%. Credit union indirect loans outstanding totaled $71 billion in 2011, less than the $71.7 billion in 2011.

To view a PDF presentation or a video of the webcast, use the resource links.

Two conferred with Annie Vamper awards

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NEW YORK (4/12/12)--The National Federation of Community Development Credit Unions announced the 2012 recipients of the Annie Vamper "Helping Hands" Award, the highest honor given by the federation to community development credit union (CDCU) staff and volunteers.

The awards celebrate the organization's late Associate Director, Annie Wilma Vamper, whose lifelong dedication to the credit union movement, and to small credit unions in particular, served as inspiration to many low- and moderate-income people and communities nationwide.

"It's also a testament to the diversity of the CDCU movement that these two honorees from vastly different credit unions, one with less than a million in assets, and the other quickly approaching the one-hundred million milestone, should be honored in the same year," he added, noting that "credit unions of all sizes can make important and indelible contributions to their communities, and these two honorees demonstrate this reality."

Conner joined the credit union's board more than 25 years ago. Most recently, as chairman of its delinquent loan committee, he has taken the collection of delinquent loans to new heights, managing to reduce the delinquency rate from over 26% at its highest point, to nearly 0% now.

He and his committee work non-stop contacting credit union members directly, sending notices and letters, and occasionally making personal visits to members' homes or place of business to collect payments.

In 1983, Godfrey-Smith became CEO of Shreveport FCU and built the $1.9 million credit union into an $88 million CDCU operating seven branches, with an eighth branch planned. 

Godfrey-Smith has also selflessly shared her knowledge with others, traveling nationwide and worldwide mentoring credit unions. In addition to her work domestically, she has traveled to South Africa, Trinidad and Tobago and other locations outside the U.S., helping credit unions survive and thrive. 

In late 2009, she convinced her board to merge a troubled credit union in the impoverished Mississippi Delta region, the First Delta FCU, a historic CDCU founded during the Civil Rights movement. The merger maintained crucial services in a community with few regulated financial institutions. Since taking in that credit union, Shreveport FCU has expanded its service to other parts of the Delta and operates three branches in Marks, Miss.; Clarksdale, Miss.; and Batesville, Miss. Under her management, the Mississippi credit unions have doubled in both assets and loans.

In 2010, Godfrey-Smith partnered with the City of Shreveport to open a Community Empowerment Center to deliver affordable financial services while offering training, counseling, job readiness and business development to low- and moderate-income residents. A second center is scheduled to open in Shreveport later this year, with a third being planned in Mississippi.

Conner and Godfrey-Smith will receive their awards at a special ceremony June 15, during the federation's 38th Annual Conference on Serving the Underserved in Atlanta. For more information about the event, use the link.

Similar CU names prompt lawsuit

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AKRON, Ohio (4/12/12)--A name change for a Pennsylvania-based credit union serving members in Ohio and Pennsylvania has prompted a lawsuit by an Akron, Ohio-based credit union with a similar name, alleging the change violates federal trademark infringement and other unfair competition laws.

FirstEnergy Family CU, a $38 million asset credit union in Akron, Ohio, filed the suit Tuesday in the U.S. District Court  for the Northern District of Ohio, Eastern Division, against Greensburg, Pa.-based, $56 million asset FirstEnergy FCU, which  changed its name Jan. 1 from Allegheny Energy FCU.

The Akron credit union 's complaint said it has used its service mark FirstEnergy Family CU since at least May 22, 1998, and it has invested "significant resources" into using the name in its products and services offerings and its advertising and marketing. It also has referred to itself as FirstEnergy FCU, and/or FEFCU.

The Pennsylvania credit union does business in Northern Ohio, was aware of the other's use of FFCU when the name change occurred and did not obtain authorization from FFCU to use the FFCU service marks, the suit alleged. The suit alleges damages, but did not specify an amount.

"The actions of Allegheny …are likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection or association of Allegheny with FFCU, or as to the origin, sponsorship, or approval of Allegheny's goods, service or commercial activity," said the court document.

The Ohio credit union is seeking temporary and permanent injunctions against the use of "FirstEnergy Family CU," "FirstEnergy FCU," "FEFCU," and any other similar marks that may cause confusion . It also is seeking destruction of all materials bearing the new name, removal of all Web pages with the name, and a written report on how the credit union is complying.

FirstEnergy Family also asked for damages to be trebled and for any profits the other credit union had made as a result.

The Pennsylvania credit union, on its website (April 11), noted that a recent expanded membership charter allows it to offer services and membership to all FirstEnergy Corp. employees and their families, since Allegheny Energy Inc. was acquired by FirstEnergy Corp. 

In it FAQ section about its new name, it said it "will also go by the abbreviated name FirstEnergy FCU." It advised members not to make checks out to the credit union as FEFCU, but they could write them to FirstEnergy FCU.

CU System briefs (04/11/2012)

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  • DARIEN, Conn. (4/12/12)--A Turkish man living in New York pleaded guilty Monday to one count of conspiracy to commit bank fraud and one count of aggravated identity theft by using ATM skimming devices. Ahmet Cilek, 42, a citizen of Turkey who last resided in Levittown, N.Y., was charged for his role in ATM skimming across southern New England (Darien Times April 9). The skimming devices were installed between February and July 2011 on ATMs at 11 banks and one credit union in Connecticut, Massachusetts and Rhode Island. Cilek and co-conspirators allegedly also placed devices on ATMs that contained hidden pinhole cameras that recorded personal identification numbers that members and customers used to access their accounts. More than 250 bank accounts were victimized, and financial institutions lost more than $336,057, according to court documents.  Cilek, who was one of several who have been charged with the skimming schemes, faces up to 30 years in prison and up to $1 million in fines.  His sentencing has been set for July 2  in New Haven …
  • RIVERSIDE, Calif. (4/12/12)--Volunteers from Altura CU helped students at Lisa J. Mails Elementary School
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    in Murrieta, Calif., attempt to achieve a new Guinness World Record for Largest Art Lesson in a Single Venue.  In March, more than 1,000 crayon-toting students gathered with teachers, parents, grandparents and volunteers, including volunteers from Altura, The official count: 1,103 participants, surpassing the record set by 879 participants last September by a school in London. Altura, whose history is linked with school employees, tries to assist local educators and schools when possible with donations of time, supplies and money. Four Altura volunteers monitored a class of students as part of the documentation process required by Guinness, said Trisha Rudd, Altura business development officer, who volunteered.  They watched students once the lesson began and made sure they participated throughout the lesson. They then wrote and signed a statement of their observations, which is submitted to Guinness as part of the school's application for the record. (Photo provided by Altura CU) …
  • VIRGINIA BEACH, Va. (4/12/12)--Following the excitement of the recent mega millions jackpot, Chartway
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    FCU's We Promise Foundation hosted a special sweepstakes to support local children facing life-threatening illnesses.  The contest, in which entrants had a one in 1,500 chance to win free groceries for a year, raised $29,800.  Joining the We Promise Foundation to pull the winning ticket were six local children whose dream of visiting Disney World came true, thanks to the local charity and the support of Toby's Dream Foundation. They received a worry-free, week-long escape to Disney World and joined in presenting a grant totaling $101,600 to Toby's Dream Foundation to change the lives of 20 young fighters.  Pictured are We Promise Children Erick, Delvery and Dakari helping We Promise award the $101,600 grant to Joan Steele, executive director of Toby's Dream Foundation. In the background are Rick Lieberman, Chartway vice president of lending; and parents of We Promise children Jessica Renda, Jamie Hooks, Briston Tutwiler and Kristen Germroth.  Use the link  for a video of the event.  (Photo provided by Chartway FCU and We Promise Foundation) …

CMG risk manager CUs among targets from breach

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MADISON, Wis. (4/12/12)--The number of credit unions affected by the Global Payments data breaches could number into the hundreds, though the exact number or amount of fraudulent transactions is not yet known, said a CUNA Mutual Group security expert.

"One credit union has more than $100,000 in fraud, and some have zero," said Ann Davidson, CUNA Mutual Group risk manager. "It's in that window."

The University of Iowa Community CU has recalled 200 cards from account holders as a result of the Global Payments breach (Daily Iowan April 11).

Visa and MasterCard continue to expand the window during which the data breach occurred. As of Wednesday, Visa reported that the breach occurred between Dec. 12 and Feb. 25. MasterCard has said it could have begun as early as Dec. 3.

"I don't think anyone really knows how far back this is going to go until the investigation has been completed," Davidson told News Now.

Credit union fraud prevention practices such as system monitoring and daily limits are among the best in the financial services industry, but the level of trust members have for their credit unions can make them easy victims of social engineering scams, Davidson said.

"Members have to be ever so cautious and never give out any personal financial information," she added. "That can't be emphasized enough."

U.S. financial institutions are among the last in the world to adopt the more secure chip technology for debit and credit cards. Magnetic stripe technology is much more vulnerable to fraud, Davidson said.

On Wednesday, CUNA Mutual issued a risk alert to its bondholders advising them to move forward with chip technology.

"Implementing chip technology (point-of-sale and ATM terminals) will significantly reduce magnetic stripe counterfeit fraud and improve the overall security of the U.S. payment infrastructure," the CUNA Mutual risk alert said. "Chip security provides a number of benefits, including authentication of cardholders and transaction authorizations based on issuer defined rules."

WOCCU welcomes new members from Colombia Moldova

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MADISON, Wis. (4/12/12)--World Council of Credit Unions (WOCCU) last week welcomed Colombia and Moldova as new members.

Click to view larger image The World Council of Credit Unions (WOCCU) last week welcomed Colombia and Moldova as new members. WOCCU Chair Manuel Rabines, CEO of the National Federation of Credit Unions of Peru, left, welcomes Cooperativa Médica del Valle and Jose Luis Blanco Saenz, its corporate manager for strategic planning and marketing, as a WOCCU associate member.
The WOCCU board approved Cooperativa Médica del Valle (COOMEVA), a cooperative financial holding company from Colombia, as an associate member.

The board also approved Central Association of Savings and Credit Associations (CASCA), Moldova's credit union trade association, as a direct member.

Applications from both organizations were approved during WOCCU's first-quarter 2012 board meeting in New York.

"The global credit union movement continues to grow thanks to the good work of organizations like COOMEVA and CASCA," said Brian Branch, WOCCU president/CEO.

COOMEVA, based in Cali, Colombia, provides health services, mutual insurance, investment, savings and lending services to 250,000 members. COOMEVA heads a group of 16 companies with $2.8 billion assets. The organization is one of a growing number of World Council associate members.

Click to view larger image Ion Gangura, standing, chairman of Central Association of Savings and Credit Associations, Moldova's credit union trade association, moves to apply for World Council of Credit Unions membership at the organization's annual general meeting as Efim Lupanciuc, CASCAs chief executive officer (far right), looks on. (Photos provided by World Council of Credit Unions)
CASCA was formed in 2009 by Moldova's 49 largest credit unions. Its affiliates control 42%, or $12.7 million, of Moldova's credit union assets and account for 32%, or 40,735, of the country's credit union members. CASCA, provides representation, training and liquidity management services for its members.

"We see the continued growth of our organization as a sign of confidence not only in the work we do, but also in the global credit union movement," said WOCCU Chair Manuel Rabines, CEO of the National Federation of Credit Unions of Peru. "Such support signals a brighter future for us all."

Representatives from CASCA and COOMEVA will be formally recognized at the WOCCU 2012 annual general meeting, which will be held in conjunction with the organization's World Credit Union Conference, July 15-18 in Gdańsk, Poland.

SECU ATMs save 8M for unemployed child support recipients

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RALEIGH, N.C. (4/12/12)--With nearly 1,100 no-surcharge ATMs located throughout North Carolina, State Employees' CU's CashPoints ATM network is saving the state's unemployment and child support beneficiaries more than $8.4 million in ATM transaction fees annually, with nearly three million transactions each year.

As North Carolina's unemployment rate continues to hover around 10%, recipients of unemployment benefits rank top among non-member use of CashPoints services. In the past year these recipients, who receive their claims payments via an Employment Security Commission debit card, performed more than 1.8 million transactions at SECU machines. The no-surcharge SECU CashPoints network saved this user group more than $5.4 million.

Also, child support recipients performed more than one million transactions on the CashPoints network during 2011. And military personnel performed nearly one million additional transactions at CashPoints machines in the past year.

SECU in 2010 signed bi-lateral agreements with four military-based credit unions. Under this agreement, SECU military members also have no-surcharge access at ATMs owned by several defenses credit unions in the state, providing a worldwide benefit for these members.

"A goal of our not-for-profit cooperative is to help keep money in the pockets of members, while also providing an overall economic benefit to all citizens of our state," said Leanne Phelps, SECU senior vice president of card services. "A no-surcharge benefit of $8.4 million to these groups in great need of support is doing just that."

Based in Raleigh, N.C., SECU has more than $23 billion in assets.

Interra member turn 80 together

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GOSHEN, Ind. (4/12/12)--Interra CU, Goshen. Ind., celebrates its 80th anniversary in 2012. One Interra CU member can say she's been with the credit union for every one of its--and her--80 years.

Interra CU will celebrate its 80th anniversary this year. Harriet Bainter, who will celebrate her 80th birthday this year, has been a member of the credit union since its inception. Pictured are Jack Sheets, Interra CU president, and Bainter at the credit union's 75th anniversary in 2007. (Photo provided by Interra CU)
Harriet Bainter was born in 1932, the same year six men and one woman deposited $19.50 to charter Elkhart County Farm Bureau CU. Bainter's uncle, Burnette Burkey, was one of the founding members.

As a gift to his niece, Berkey opened a savings account for her. The board report of March 1932 shows that her account had a balance of 75 cents.

In 1970, Bainter became the credit union's third full-time employee, and worked in that capacity until 1985. After that she spent her winter months in Arizona, and worked at the credit union part time. She retired in 1995.

Jack Sheets began working at the credit union in 1976 and has served as its president since 1987. When Sheets was a young member, Bainter helped him obtain a motorcycle loan.

Elkhart County Farm Bureau CU, changed its name to Interra CU in 2008. It now has $577 million in assets.

Bainter recalls that her two favorite departments to work in were member services and lending.

"That's where I got to know people and help them," she said. "Some are friends to this day."

Diversification aids CUNA Mutuals bottom line

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MADISON, Wis. (4/12/12)--CUNA Mutual Group posted stronger-than-expected results in 2011, positioning itself to withstand continuing economic pressures in 2012. The company said its bottom line was bolstered by the performance of its credit union businesses and diversification.

Cuna Mutual Group said its 2011 bottom line was bolstered by the performance of its credit union businesses and diversification.
The company's diversification strategy has begun to pay dividends. In 2010, when its credit union business didn't perform as well, ProAg, CUNA Mutual Group's crop insurance affiliate, helped improve the company's financial results. In 2011, when natural disasters stymied crop insurance results, CUNA Mutual Group's credit union businesses withstood the year's economic challenges.

"Our credit union and Wealth Accumulation businesses performed well in 2011, which offset the large amount we paid out in crop claims due to natural disasters," said Jeff Post, CUNA Mutual president/CEO. "We enter 2012 confidently, focusing on a three-pronged approach to growing our business--continuing expansion in the credit union market, crop insurance and through acquisitions via our recent mutual holding company restructuring."

Total operating revenue grew 5.4% to $2.5 billion from $2.4 billion in 2010, with more than half of that growth coming from crop insurance. Credit union consumer products--Auto & Home and Life & Health--and Wealth Accumulation offset lending-related revenue due to poor economic conditions.

Net income was slightly up--at $88 million from $87 million in 2010--due to strong operating performance and lower investment impairments.

Assets increased to $16.5 billion from $15.4 billion in 2010.

To see the CUNA Mutual annual report, use the link.