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CU System Briefs (04/11/2013)

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  • NEW ORLEANS (4/11/13)--Shell New Orleans FCU changed its name to Xplore FCU, effective last Monday. The management team and officials said the name change is the best way to reach out to all people eligible for membership. Although it has had a community charter since 2007, a common misconception remains--that membership is still exclusive to Shell Oil employees. The new name, Xplore Federal CU, pays tribute to the founders--the employees of Shell who continue to make the community a great place to live and work, said the credit union. A few of the expanded services the credit union will offer in 2013 are remote deposit capture, institution-to-institution transfers, and an iPad app, to allow members to access home banking  ...
  • STRATFORD, Conn. (4/11/13)--Sikorsky Financial CU in Stratford, Conn., has named Vincent Ciambriello as the new president/CEO of the $682 million asset credit union (Stratford Star April 6). The appointment by Sikorsky's board is effective immediately. Ciambriello most recently was Sikorsky's executive vice president and chief operations officer. During the past year, he served as acting president after Thomas J. Williams retired, following 45 years of service to the credit union …
  • PHILADELPHIA ( 4/11/13)--Tom Swierzy, president/CEO of Sb1 FCU, Philadelphia, has announced he will retire in mid-July, after more than 31 years serving the credit union, according to the Pennsylvania Credit Union Association (Life is a Highway April 9).  Under his leadership, the credit union has grown to more than 31,000 members and $600 million in assets and offers full services, including checking, savings, consumer lending, home loans and electronic banking. Sb1 FCU's board has created a search committee and retained D. Hilton Associates Inc. to assist with assessing candidates …
  • RICHMOND, Va. ( 4/11/13)-- Susan J. Adams, CEO Of Entrust Financial CU, Richmond, Va., died April 8 after battling cancer. She was 59 (Richmond Times-Dispatch April 9).  Adams served as CEO of the $70 million asset Entrust Financial for 24 years and had worked with the credit union industry for 36 years.  She served as board secretary at PSCU Financial Services and was on the boards of the Richmond Chapter of Credit Unions, Virginia Credit Union League, and Virginia Corporate FCU. Adams also served as a Virginia national delegate to the Credit Union National Association.  "Susan's influence will be felt for years to come, both at Entrust Financial CU and throughout the industry," said Entrust Financial Board Chairman Cheri Spence.  Lisa Lambrecht, vice president of accounting and risk management, will continue as interim CEO

Judge Dismisses Part Of NCUA's Suit Vs Credit Suisse

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KANSAS CITY, Kan. (4/11/13)--Some of the National Credit Union Administration's claims in its $590 million lawsuit against Credit Suisse over residential mortgage backed securities sold to three corporate credit unions were dismissed Monday by a federal judge in Kansas City, Kan.

U.S. District Judge John W. Lungstrum dismissed NCUA's claims on 12 of the 20 certificates sold to U.S. Central FCU, Western Corporate FCU, and Southwest Corporate FCU. However, he denied Credit Suisse's motion to dismiss on the other eight certificates. Credit Suisse Securities was the underwriter or seller of the certificates.

The claims centered on whether NCUA filed the lawsuit in time according to an extender statute, which extends the time a party has to file its lawsuit, and whether the extension applied to the parties' tolling agreement that expired on Sept. 12, 2012.

"Plaintiff did not file this suit within three years after its appointment as conservator for WesCorp and U.S. Central on March 20, 2009. Accordingly, plaintiff's claims on behalf of those credit unions are timely only if the extender statute's three-year limitations period was tolled in some manner."  The court agreed the extender statute's limitations period is not subject to tolling by agreement on 12 certificates.

The judge denied the motion to dismiss the federal claims regarding a tolling agreement in eight certificates, citing split decisions among other courts on the tolling issue. "In light of these splits of authority, the court cannot say as a matter of law, on the present record, that plaintiff may not avail itself of American Pipe tolling with respect to these eight certificates." 

NCUA's claims were filed on 12 certificates bought by WesCorp from Oct. 27, 2005 to June 4, 2007; seven bought by U.S. Central from Sept. 22, 2006 to March 8, 2007; and one certificate bought by Southwest Corporate on June 14, 2006.

NCUA argued that the three-year extender statute limitations ran from the dates of its appointment as conservator and liquidating agent for the credit unions, which were March 20, 2009 and Oct. 1, 2010 for WesCorp and U.S. Central, and Sept. 24, 2010 and Oct. 30, 2010 for Southwest.

Judge Lungstrum noted his agreement with the a July 25, 2012,  ruling by U.S. District Judge Richard D. Rogers in Topeka, Kan., in NCUA v. RBS Securities, a consolidation of two cases that also make the extender statute and tolling agreement arguments.

Monday's decision rejected Credit Suisse's venue arguments, noting Credit Suisse conducted numerous transactions worth hundreds of millions of dollars with U.S. Central, based in nearby Lenexa, Kan., and rejected its arguments about the extent of facts needed to plead in the case, as well as some interpretations of the extender statute.

Massachusetts, Dakota CUs Receive Homebuyer Grants

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MADISON, Wis. (4/11/13)--Credit unions in Massachusetts and South Dakota received Federal Home Loan Bank (FHLB) grants to assist with redevelopment projects in their local communities.

For the second consecutive year, Leominster (Mass.) CU received a $150,000 grant through the FHLB's Equity Builder Program, said the Massachusetts Credit Union League (Values and Visions March 29).

To qualify, buyers must meet Equity Builder Program qualifications criteria, which include income limits.

"For many first time buyers, this assistance means the difference between whether or not they can fulfill their dream of becoming homeowners," said Brenda Bujnevicie, Leominster CU vice president of real estate operation. "This year, the additional funds and the increase from $10,000 to $15,000 maximum per applicant, means we can help even more first time homebuyers than we did last year."

Sentinel FCU, Box Elder, S.D., received a $120,000 grant that will partially fund the NeighborWorks Dakota Home Resources owner-occupied rehab project in the western part of the state.  

NeighborWorks Dakota Home Resources has seen a cut in funding during the past year, but an increase in client needs--especially those living in manufactured housing. The grant will help fill a gap in funding.

The grant was a portion of the $2 million in new funding the FHLB Des Moines granted through its affordable housing program.

April Mergers Progress Across US

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MADISON, Wis. (4/11/13)--Credit unions in more than a dozen states recently announced mergers or their intent to merge.

The consolidations occur for a variety of reasons. The most common reason is smaller credit unions seeking to collaborate and pool their resources to ensure a greater variety of services for members ,while other credit unions seek a larger membership footprint or growth in a specific community.

News Now will track the mergers and report them in a series of articles.  Among the mergers:

  • Great Lakes CU, North Chicago, Ill., and  Hawthorne  CU, Naperville and Bolingbrook, will merge to share a larger economies of scale.  As a result, GLCU will have assets of $630 million and serve more than 52,000 members in Lake, McHenry, DuPage, Kane, Kendall, Will, and parts of Cook Counties in Illinois and Kenosha County in Wisconsin.
  • Two Indianapolis-based credit unions--Horizon One FCU with $63 million in assets and Finance Center FCU with $430.8 million assets--merged as of April 1. Finance Center FCU will have more than 57,000 members (SNL Bank and Thrift Daily March 26).
  • Williamstown, Mass.-based, $1.6 million asset Williams College Employee FCU has merged with $1.13 billion asset Greylock FCU, Pittsfield, Mass., effective April 1.  WCEFCU's Williamstown branch was closed March 29, and its members will be served by Greylock's Williamstown branch.  WCEFCU said  that in the current financial environment, it was challenging to achieve the growth necessary to provide products and services members want (The Transcript April 6).
  • The  $112 million asset ArrowPointe FCU, headquartered in Catawba, S.C., has merged with  $29.1 million asset 1st Patriots FCU in Rock Hill.  The combined credit union, operating under ArrowPointe's name, has $142 million in assets and more than 15,000 members served with seven branches and 12 ATMs.  1st Patriots' members now have access to these previously unavailable services: scholarships, student loans, land loans, extended operating hours, loyalty discounts, more ATMs, an option to change a PIN at an ATM, lower credit card rates and a credit card rewards program.
  • Pathways Financial CU, Columbus, Ohio, completed its merger with Burgess & Niple Employees CU April 1. Pathways Financial, with $188 million in assets and 25,000 members, was formed on Aug. 1, 2012, as the result of an unprecedented three-way merger by Members First, Powerco and Western credit unions, which continue to use their trade names.  Burgess & Niple Employees CU has 280 members and $2.5 million in assets.
  • Bethlehem (Pa.) Teachers FCU has merged with Bethlehem Municipal Employees FCU, effective April 1.  Bethlehem Teachers FCU has nearly 4,000 members and $40 million in assets, while Bethlehem Municipal Employees FCU has 1,418 members and more than $6 million in assets.

North Dakota Senate Flunks Financial Education Bill

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BISMARCK, N.D. (4/11/13)--As credit unions celebrate financial literacy month throughout April, it is disappointing that North Dakota House Bill 1217--a bill related to providing instruction in personal finance in middle schools--was defeated in the State Senate this week on a 45-2 vote, according to the Credit Union Association of the Dakotas.

The defeat was due in part to the Senate Education committee unanimously reporting back the bill as "Do not Pass." That is in contrast to the North Dakota House where it received overwhelming support on a 90-2 vote, said Jeff Olson, CUAD vice president of advocacy and awareness (The Memo April 9).

"CUAD testified in support of it," Olson told News Now. "Basically the same bill was passed two years ago for grades 10, 11 and 12. It's mind-boggling that it got opposition in the Senate after the manner that it got passed in the House."

The bill is now dead, he added. The Senate said financial education already is being taught in schools and there is no need for the new mandated legislation, he said. Also, since so many other curricula issues--such as bullying, nutrition, sex education, drugs and alcohol, AIDs and suicide--are already mandated, the Senate did not want to continue adding more mandated curricula, a Senate Education Committee member told Olson.  

The bill mandated inclusion of concepts of personal finance in the curriculum of grades seven and eight, calling on each school district to "develop a curriculum for personal finance in consultation with the department of career and technical education." 

The curriculum was to include:

  • Checkbook mechanics--including writing checks, balancing and statement reconciliation;
  • Saving for larger purchases;
  • Credit--including credit card use, interest and fees;
  • Earning power--including jobs for teenagers;
  • Taxation and paycheck withholdings;
  • Making a budget and living within it; and
  • Consumer rights and responsibilities.
The instruction would have been provided by a regular classroom teacher.

Exams Discussed At NCUA Region V Meeting With CUs

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TEMPE, Ariz. (4/11/13)--The Northwest Credit Union Association and league presidents from across Region V joined other credit union leaders at the National Credit Union Administration regional office in Tempe, Ariz., Tuesday to discuss mutual concerns and advocate for changes. The meeting was part of a broad plan to modify the examination process for all credit unions, according to NWCUA.

Regional Director Liz Whitehead said exam examiners will be given guidance on how to use documents of resolution (DORs), examiner findings, and supplementary facts, and how to offer informal discussion items and general recommendations (Anthem Recap April 5).

Whitehead told advocates that DORs will be used only for issues that have the potential to cause the failure of the credit union. That clarification should significantly reduce how often they are used, said NWCUA Director of Regulatory Advocacy John Trull. The initiative will begin soon, and by year's end, credit unions can expect to see a more consistent approach, he added.

The region's credit unions also reported a combined 21% drop in the number of CAMEL 3, 4, and 5 credit unions for the year ending Dec. 31. Management is a leading indicator of how a credit union will do in challenging economic times, said Associate Regional Director Cherie Freed.

Gayle Gustafson, lending leader at Rivermark Community CU in Beaverton, Ore., and chair of the NWCUA's Regulatory Advisory Committee, asked what the regional office was doing to encourage innovation and risk-taking among credit unions. Region V senior management responded that examiners want to see that the credit union has done its due diligence and that it understands the risks associated with any new program.

A credit union should have policies and procedures in place that limit exposure and be able to answer examiners' questions related to risk. If an examiner expresses concerns, credit unions are encouraged to push back and ask for an explanation of the examiner's concerns, said Region V senior management.

"I remember a couple of years back when problems with troubled debt restructuring were the only topic of conversation," said Troy Stang, NWCUA president/CEO. "Now it has been addressed, and didn't even come up at the Region V meeting. These dialogues have led to beneficial changes. Next year, the overused Documents of Resolution will be a thing of the past." 

CO-OP Fin Services Dividend Up 73%

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RANCHO CUCAMONGA, Calif. (4/11/13)--CO-OP Financial Services will return $25.9 million in patronage dividends to its shareholder credit unions for fiscal year 2012, a 73% increase in patronage over the $15 million it returned to shareholders in 2011.

With this year's dividend, CO-OP has returned $254.2 million to shareholders since becoming a credit union-owned cooperative in 1996.

"The substantial increase in patronage for 2012 compared to the previous year is partly attributable to the success of the series of mergers, acquisitions and partnerships we entered at the end of 2011," said Stan Hollen, CO-OP Financial Services president/CEO. "Throughout 2012, we have been dedicated to making sure those investments contribute to a bright future for our movement."

CO-OP combined shared branching operations with Financial Service Centers Cooperative Inc. (FSCC) of Ontario, Calif.; purchased the online and mobile bill pay services of Corporate Network eCom LLC of Lenexa, Kan.; and partnered with The Members Group (TMG) of Des Moines, Iowa, on credit processing and other payment products.

The closing of the FSCC merger and eCom acquisition, and the completion of CO-OP's strategic investment in TMG, took place within 61 days--from Dec. 31, 2011, to Feb. 29, 2012.

SacTown Race Raises $182,160 For Hospitals

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SACRAMENTO, Calif. (4/11/13)--The second annual Credit Union SacTown Ten-Mile Run--held Sunday in downtown Sacramento, Calif.--raised $182,160 for Children's Miracle Network hospitals in California and Nevada. The event was sponsored by CU Miracle Day Inc. along with 59 credit unions and credit union businesses, including the California and Nevada Credit Union Leagues.

Sunday's 2013 SacTown Ten-Mile Run kicked off with a news conference Friday at UC-Davis Children's Hospital in Sacramento, Calif. California and Nevada Credit Union Leagues President/CEO Diana Dykstra and SacTown 10 Committee Chairman John Pamer, CEO of Concord, Calif.-based Diablo Valley FCU, presented Children's Miracle Network with a check for the $483,000 raised nationwide for children's hospitals. The run raised more than $180,000 for Children's Miracle Network hospitals. (Photo provided by the California and Nevada Credit Union Leagues)
"We are quickly building momentum in only our second year," said SacTown 10 Committee Chairman John Pamer, CEO of Concord, Calif.-based Diablo Valley FCU. "We saw a significant increase in runners, credit union volunteers, legislative participation, and donations to Children's Miracle Network hospitals." He noted that "the difference those who participated helped make for the kids will last long after the banners come down."

The run, also designed to increase national awareness of credit unions, took place the same day as the 41st Annual Credit Union Cherry Blossom Ten-Mile Run in Washington D.C., followed by Credit Union Freedom Runs for troops overseas. The "Family of Races" raised $483,000 for Children's Miracle Network hospitals nationwide.

Nearly 1,700 runners--including more than 700 credit union employees and members--participated in the Sacramento race, which started and finished in front of the State Capitol, with a $15,000-prize purse awarded. More than 200 credit union staff and members worked the event as volunteers.

Of the 161 congressional honorary race chairs from 39 states who registered to compete in the family of races, 19 were from California and Nevada, including Senate Majority Leader Harry Reid (D-Nevada).

The event began with a craft day and news conference Friday at UC Davis Children's Hospital in Sacramento. There, California and Nevada Credit Union Leagues President/CEO Diana Dykstra and Pamer presented Children's Miracle Network with a check representing the $483,000 raised for children's hospitals.