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Uzbekistan urged to end CUs tax disadvantage

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UZBEKISTAN (4/3/08)--The president of Uzbekistan urged reform of his country's Tax Code to remove disparities that put credit unions to a disadvantage. Under the current Tax Code, the interest earnings received by individuals who have deposits in credit unions are taxed, while the earnings of those with deposits in commercial banks are not, reported (April 2). President Islam Karimov, in his report to the Cabinet of Ministers on the results of the country's socio-economic development in 2007 and the top priorities for economic reforms for 2008, noted that simplifying and unifying the tax systems would be a main task on the way to liberalizing the economy. As of Jan. 1, credit unions accounted for 3.5% of the nation's individual deposits. Karimov noted that taxing earnings from credit union deposits while not taxing earnings from commercial bank deposits seemed unfair and contradicted the principles of fair taxation outlined in the code. The situation leads to the competitive disadvantage of deposit products of credit unions, since 98% of the resource base for credit unions is personal deposits, he said. He noted credit unions' main mission is to raise the welfare of their members and that they provide services to relatively more vulnerable groups. Taxation forces the credit unions to raise the interest rates to stay competitive, which in turn makes the financial resources more expensive for the consumer. Because the government aims to further develop the system of credit unions and micro-credit organizations, Karimov's report suggested agencies should work to amend the tax code for more unified treatment.

More real time data thefts reported

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LUDLOW, Vt. (4/3/08)--A ski resort in Vermont announced its computer system was hacked and customers' card data stolen in a "real time" heist similar to that of the Hannaford Bros. data breach last month. Okemo Mountain Resort, based in Ludlow, Vt., announced Monday the data were stolen while in transit as customers swiped their credit card. A press release on its website noted that the intruder gained potential access to cardholder names, account numbers and expiration dates during a 16-day period between Feb. 7 and Feb. 22. Up to 28,168 credit card transactions were involved, said Okemo. Also, thieves may have accessed data to 18,401 individual credit cards used at Okemo from January through March 2006. Although the data heist isn't as widespread as one announced last month by Maine grocery store chain Hannaford Bros., it is similar in that the theft was conducted in "real time." Most data thefts in the past have been stolen from databases stored in a company or processor's computers--not while the data is in transit. Bonnie MacPherson, Okemo's spokeswoman, told Computerworld (April 2) that the information was taken as the cards were being swiped. The type of theft may be wider spread than the initial Hannaford Bros. case. Law enforcement authorities investigating the Okemo case told the resort they are investigating about 50 reported incidents of the same type of breach in the Northeast alone. Okemo's security alert said the break-in did not involve credit cards customers used at two other resorts the company owns: Mount Sunapee in New Hampshire or Crested Butte in Colorado.

CU System briefs (04/02/2008)

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* NEW BERLIN, Wis. (4/3/08)--State lawmakers cited Landmark CU's contribution to the well-being of its members, its community support and its financial education efforts in a special resolution commemorating the credit union's 75th anniversary. The resolution was presented at the grand opening of the $1.1 billion asset credit union's Germantown/Menomonee Falls branch by Wisconsin State Sen. Alberta Darling and State Assembly Rep. Sue Jeskewitz. Pictured are, from left: Jeff Knaub, branch manager; Mike Maxwell, director; Sen. Darling; Sharon Mather, senior vice president; Rep. Jeskewitz; Bob Bruemmer, executive vice president; Carol Miller, scholarship fund representative; Paul Reinbold, director; and Ron Kase, president.(Photo provided by Landmark CU) … * CARSON CITY, Nev. (4/3/08)--Greater Nevada CU is developing its services to the Latino market by hiring Jose H. Moreno as its new vice president of Latino services. Moreno, formerly market development manager at Bank of America in Southern California, will develop financial solutions tailored to Northern Nevada's Latinos. Among his responsibilities will be enhancing and developing financial literacy classes with key community partners. Greater Nevada has more than $500 million in assets … * MARLBOROUGH, Mass. (4/3/08)--Massachusetts Lt. Gov. Tim Murray is scheduled to speak at the Massachusetts Credit Union League's Annual Governmental Affairs Day on April 30 in Boston. The theme for the meeting is "Massachusetts Credit Unions: Serving and Protecting Consumers." Other speakers scheduled include Commissioner of Banks Steven L. Antonakes, State Sen. Susan Tucker, State Rep. Karyn Polito and Elizabeth Whitehead, National Credit Union Administration associate regional director of programs (Values & Visions April) … * NEWPORT NEWS, Va. (4/3/08)--Langley FCU President/CEO Jean M. Yokum has received the 2008 Humanitarian Award from the Virginia Center for Inclusive Communities, says the Virginia Credit Union League's website. The award is presented to individuals demonstrating personal commitment to promoting respect and understanding among people of diverse backgrounds. Yokum, who began serving the $1.224 billion asset credit union as a teller in 1953, has been president/CEO since 1979. She works to improve financial education of young people and created a Member Education Center at the credit union to provide financial literacy seminars … * WINNIPEG (4/3/08)--Twenty Manitoba credit unions presented a check for a combined $316,453 to the Canadian Museum for Human Rights Wednesday at Manitoba's Credit Unions 2008 Convention in Winnipeg. "The dual social and economic character of credit unions is driven by a series of cooperative principles that we take very seriously," said Garth Manness, CEO of Credit Union Central of Manitoba. Credit unions' "vision of social justice, which extends to our members and the larger community, aligns exceptionally well with the vision of the museum's founders," he added (ENP Newswire April 1) …

Funeral service scheduled for Sterner

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ARVADA, Colo. (4/3/08)--A funeral service honoring Bill Sterner, president/CEO of Elevations CU, based in Boulder, Colo., has been set for 3 p.m. Saturday in Boulder. A visitation will be held at 2 p.m., followed by a funeral service at 3 p.m. at Crist Mortuary, 3395 Penrose Place, Boulder, Colo. 80301. Sterner, chairman of the Credit Union Association of Colorado (CUAC) and its service corporation, Credit Union Strategic Partners, died Monday after suffering a heart attack on March 28 while attending CUAC's annual Legislative Forum at the State Capitol. In lieu of flowers, contributions may be made in his name to: Community Trust at the Community Foundation Serving Boulder County, 1123 Spruce St., Boulder, CO 80302

CUs turn to media to help spread fin-literacy

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MADISON, Wis. (4/3/08)--April is Financial Literacy Month, and a number of credit unions and credit union leagues are spreading the message about the importance of consumers becoming financially savvy. Michigan Credit Union League President/CEO David Adams was interviewed by State Sen. Michelle McManus (R) on her monthly cable television show, “In Touch with Northern Michigan,” about credit unions and the need for financial literacy. Adams told the senator about the commitment Michigan credit unions have to financial literacy. They sponsor sessions in the community where people can learn basic financial skills, he said. Credit unions also are active in schools with student run branches. Credit unions in Michigan lead the nation in the number of classroom presentations given by volunteers in schools about finances, Adams added. To review a video of the interview, click on the photo. Other financial literacy activities that are underway:
* The Ohio Credit Union League sent financial education curricula and marketing materials to 385 Ohio credit unions as part of the MoneyAndStuff initiative. The kits provide instructions on how to implement financial education in schools; * Pennsylvania Gov. Ed Rendell declared April Financial Education Month and acknowledged National Credit Union Youth Week April 20-26 (Life is a Highway April 1). The state’s Office of Financial Education also will create a new curriculum for use in libraries and other community settings to teach personal financial literacy; * The Washington State Department of Financial Institutions (DFI) and its financial literacy partners planned events throughout the month. DFI, Bellevue Community College, the Washington Society of CPAs and the Jump$tart Washington Coalition will offer college students financial education, using the National Endowment for Financial Education booklet, “Right on the Money,” and basic saving and investing principles. The group also will publish financial literacy inserts each week in the Seattle Times; * The Ohio Credit Union Foundation will fund a financial seminar for 300 high school students. Students from 12 school districts were invited to participate in the April 18 event. Local lawmakers, Junior Achievement, and Kent State University are involved in the event; and * SECU CU, Linthicum, Md., launched a Generation Y Advisory Board for young adults (Focus Newsletter March 31). The group will comprise youth trained in financial literacy to educate their peers and execute a community outreach product. The participants will provide advice to SECU on financial services for Gen Y and will help enhance the credit union’s young adult website, “The Buck Starts Here.”

TCUF sponsors April summit on asset building

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FARMERS BRANCH, Texas (4/3/08)--The Texas Credit Union Foundation (TCUF) is sponsoring an asset-building summit in Houston April 29-30 for those in the financial services industry. The event is being hosted by the Alliance for Economic Inclusion, RAISE Texas, and the Federal Reserve Bank of Dallas (LoneStar Leaguer April 1). The summit will launch a series of initiatives--products, programs, legislation--to increase financial prosperity for low-income families in Texas. It is designed for credit union professionals, community organization leaders, government professionals, policymakers and others in financial services. “With REAL Solutions launching in Texas, it was natural that TCUF would sponsor an event such as this,” noted Jill Pharr, TCUF executive director. “Certainly, credit unions are at the forefront in reaching out to low-income individuals.” (See story, “Texas league adopts REAL Solutions” in News Now’s System section). Four action campaigns will be discussed at the summit, including matched savings accounts, community tax centers, alternative small-dollar consumer loan products, and home mortgage foreclosure prevention. When registering, attendees will be able to choose one action campaign to work on. The event will include plenary sessions, breakout sessions to discuss the campaigns, and invited speakers. For more information, use the link.

February loan-to-savings ratio drops to 80.7

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MADISON, Wis. (4/3/08)--With savings growth overpowering loan growth, credit unions’ overall loan-to-savings ratio decreased over two percentage points, to 80.7% in February from 83.2% in January, according to the Credit Union National Association (CUNA) monthly sample of credit unions for February 2008. “The drop in the loan-to-savings ratio was due to the month ending on a Friday payday, which boosted share draft accounts by 12.3%,” said Steve Rick, CUNA senior economist. “Most of these funds will be used by members for monthly living expenses and therefore leave the credit union.”
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The liquidity ratio--the ratio of surplus funds maturing in less than one year of borrowing, plus other liabilities--rose to 21% from 19% in January. Credit union savings balances grew 3.3% in February, the strongest growth since March 2001. The increase is a reflection of three paydays during February and the last payday landing on the last day of the month. Share draft accounts led savings growth, increasing 12.3%, followed by regular shares (3.7%), money market accounts (3.3%), certificates (1.1%), and individual retirement accounts (0.7%). Credit union loans outstanding increased 0.2% in February, and 0.4% for the first two months of 2008. “Other mortgage loans” led loan growth, increasing 1.3% for the month and rising 16.3% the past 12 months. “Year-over-year loan growth picked up slightly in February to 7%, from 6.7% in January, as many banks tightened their underwriting standards,” Rick explained. “Credit unions are seeing strong growth opportunities in first and second mortgages and credit card lending. With U.S. new-auto sales down 12% over the last year, credit union auto loan balances fell 3.6% over the last 12 months.”
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Adjustable-rate first mortgages, fixed-rate first mortgages, home equity, and other loans followed, increasing 1%, 0.9%, 0.7%, and 0.2%, respectively. “Home equity loan balances increased 2.2% year-to-date, as falling interest rates offset falling home prices to stimulate members' demand for this loan category,” Rick said. Declining during February were unsecured personal loans (1.5%), credit card loans (1.2%), and new-auto loans (1.1%). Regarding asset quality, credit union 60-plus day delinquencies increased to 0.98% in February from 0.97% in January. “One good news story is that delinquency rates barely changed from January to February, indicating the subprime mortgage crisis has not yet contaminated credit union loan portfolios,” Rick said. With the increase in assets, the credit union movement’s overall capital-to-asset ratio decreased slightly to 11.1% in February from 11.4% in January. The total dollar amount of capital ended the year at $89.4 billion, an increase of 0.4% from last month.

Tellers condition stable after robbery shooting

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CHARLOTTE, N.C.(4/3/08)--A State Employees’ CU (SECU) teller who was shot at a Charlotte, N.C., branch during a robbery Tuesday is in stable condition. “She is doing much better today,” James Blaine, SECU CEO told News Now. The teller was shot in the abdomen and will likely remain in the hospital for about a week, he said. The teller is a 20-year-old single mother of three. SECU plans to do everything it can to help her, including paying her rent and caring for her children while she is recovering. “We’re sure going to look after our employees,” Blaine said. The teller was shot while standing next to a credit union employee who was giving the robbers the money they demanded. While the transaction was being processed, one of the robbers decided to shoot. “It was very uncalled for,” Blaine said. “It was a pure case of meanness.” SECU staff members are instructed to comply with robbers. “We handled it properly,” he said. “We have plenty of security.” However, the credit union can’t plan for “uncivilized” people, who randomly hurt others, he noted. Blaine said he was outraged that someone would randomly shoot another without reason. Usually, robbers enter the credit union, request money from an employee and leave, Blaine said. The credit union experiences about 10 robberies per year. Blaine said he expects the number to increase. “It’s a sure sign of a recession,” he said. Tuesday’s shooting was the first time someone had been injured during a robbery at a SECU branch, Blaine said. SECU is headquartered in Raleigh, N.C. with $15 billion in assets.

Members can design own creditcheck cards at Wescom

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PASADENA, Calif. (4/3/08)--Wescom Central CU announced it is adding a new “personalized image” feature to its check cards and credit cards. With the IMAGINE THAT! Picture Card Program, Wescom members can upload their own photo images of family, friends or pets to be reprinted on their cards (BusinessWire April 1). In the first 10 days of the program, the credit union received more than 1,000 photo submissions, according to Kathy Warner, Wescom director of card services. Members of the $3.787 billion asset, Pasadena, Calif.-based Wescom can design their cards by uploading a photo through eBranch, the credit union’s online banking platform. Members also can choose from a gallery of images. Once the photo is approved, the card is mailed to the member in seven to 10 days.

Texas league adopts REAL Solutions

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FARMERS BRANCH, Texas (4/3/08)--The Texas Credit Union League, through a grant from the Texas Credit Union Foundation, has adopted REAL Solutions, the National Credit Union Foundation program that helps modest-income households and the underserved build their assets. The goal of REAL (Relevant, Effective, Asset-building and Loyalty-producing) Solutions is to migrate low-wealth households and other underserved demographics toward economic empowerment. During the next three years, REAL Solutions is projected to help more than 2,000 credit unions in 33 states offer new products and services aimed at attracting more than 250,000 potential members from these markets. The Texas REAL Solutions initiative involves at least two phases, said the league (LoneStar Leaguer April 2). The first phase, with 24 Texas credit unions signing up to participate, is already underway. "This initiative is an important step as Texas credit unions seek additional ways to serve those members of modest means," said Bob Gallman, TCUL chief operating officer. Nancy Pierce, president of Tipton Research Group, Kansas City, Mo., will serve as field coach for REAL Solutions in Texas. Pierce has invested 25 years in the credit union industry, having served as past president of Mazuma CU, Kansas City, and as chairwoman of the Missouri Credit Union Association and the Credit Union National Association. She will work with the league to assist credit unions in developing or enhancing their service offerings.

Texas organization applies for CDCU for Hispanics

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HOUSTON, Texas (4/3/08)--Neighborhood Centers Inc., a community economic development organization in Houston, has applied with the Texas Credit Union Department to charter a credit union in a predominantly Hispanic area in Southwest Houston. The field of membership will include the Neighborhood Centers association and three zip codes in the southwestern Houston area, James Deese, deputy commissioner of the Texas Credit Union Department, told News Now. “We received a letter from the Texas Credit Union Department that said our application is complete,” said Randy Martinez, director of credit union development with Neighborhood Centers Inc. He added his organization has committed a $500,000 equity grant to the project. “We now are working on a secondary capital plan that the National Credit Union Administration wants,” he said. “That is our last step in the process to get the charter started.” The purpose of the credit union will be to help residents looking for low-income depository services that they cannot obtain at traditional banks or credit unions, Martinez explained. The three-zip-code field of membership in Houston is about 50% Hispanic and constitutes people of 70 nationalities, Martinez said. The National Federation of Community Development Credit Unions sent a letter of commitment to Neighborhood Centers, pledging $100,000 in non-member deposits to the project, Martinez said. Neighborhood Centers is meeting with Capital Bank of Dallas to try to secure a similar commitment, he added.

N.Y. Assembly passes Excelsior Linked Deposit Program

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LATHAM, N.Y. (4/3/08)--The New York Assembly has passed legislation that would allow New York state and federal credit unions to participate in the Excelsior Linked Deposit Program. According to the New York State Credit Union League, Assembly Bill 3205/Senate Bill 4629 passed the assembly March 26 by 139 to 0. It was part of a 16-bill package announced to coincide with Small Business Day in the state and passed to help small businesses become more productive and profitable, said the league. The Excelsior Linked Deposit Program was created in 1993 to address a need to make more capital available and affordable to small businesses by leveraging state resources so eligible businesses can receive loans with rates two to three percentage points lower than the prevailing rate. Credit unions currently are excluded from the program. "We couldn’t be happier that this bill passed through the Assembly," said William J. Mellin, league president/CEO. The Senate Bill 4629, identical to the assembly bill, is in the Senate Finance Committee for consideration. The league will continue to focus its efforts on educating Senate members about the merits of the bill. "We're hopeful that the Senate will recognize that small businesses need greater access to capital through a wider range of lenders, especially in light of today's troubled economic times," Mellin said. "If credit unions are allowed to join the program, they will be able to funnel much needed help to the state's small- and medium-sized businesses."