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Personal bankruptcies spike in March

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NEW YORK (4/5/10)--Federal courts reported more than 158,000 personal bankruptcies during March--more than any other month since the Bankruptcy Reform Act was tightened in October 2005. Key factors in the spike include a stagnant economy, high unemployment and the housing crisis, according to a report released Friday from Automated Access to Court Electronic Records, a data collection company (The New York Times April 1). The filings for March are 19% more than the filings in March 2009. March generally has more filings because people in financial distress use their tax refunds to pay for attorneys fees to file a bankruptcy, said analysts. The company said that a bankruptcy surge typically follows an economic contraction by six to 18 months. Chapter 7 filings, which are simpler and less expensive, are increasing faster than Chapter 13 filings, which involve reorganization of assets and repaying part of the debt in order to keep one's home. This suggests fewer people are trying to save their homes, said analysts. The U.S. Trustees Program statistics indicate that Chapter 7 filings as a percentage of all bankruptcies increased to about 73% last year, compared with 62% in 2006-2007. The U. S. Trustees Program is a Justice Department program that oversees bankruptcy cases. Seventy-five percent of the March filings were Chapter 7s. The high unemployment rate is contributing to the boost of Chapter 7s over Chapter 13 filings because unemployed people don't have income to pay into a Chapter 13 plan, said analysts. In other developments, commercial bankruptcies for 2009 totaled 117,659 up from 77,638 in 2008, reported Equifax Inc. "The numbers reflect a very strong and consistent increase from the all-time low of 32,293 filings in 2006," said Equifax in a press release. However, viewing the data on a quarterly or month-over-month basis indicates that while the total numbers remain very high, the rate of the increase is slowing. For example, fourth quarter 2009 filings totaling 28,352 were not that much ahead of fourth quarter 2008 filings totaling 25,140. And the 9,001 filings in December were up slightly from 8,732 filings in December 2008.

CU System briefs (04/02/2010)

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* SEATTLE (4/5/10)--Three teenagers and a 40-year old man have been charged with four counts of first-degree robbery related to a string of heists at banks and a credit union between Jan. 11 and Feb. 24. The incidents included a robbery of a branch of Alaska USA FCU in North Seattle on Feb. 24. Charged are Shennell Kennebrew, 16, who was dubbed the "F-bomb bandit" for presenting profanity laced notes demanding cash; Jade Beers, 17, allegedly the getaway driver; Kennebrew's boyfriend, Dasha Taylor, 17; and Keith Sims, 40, a convicted felon. Court papers said Sims and Taylor persuaded the girls to rob the banks while they stood on lookout (Seattle Times April 1) ... * LANSING, Mich. (4/5/10)--Lake Trust CU, formed by the merger of Plymouth-based Detroit Edison CU and Lansing-based NuUnion CU, marked its first day of operations Thursday with member receptions at each of its 22 branches. Promotions included special giveaways, refreshments, and the kick-off of a special auto loan promotion for April. Lake Trust CU is now Michigan's fourth-largest credit union, with $1.5 billion in assets ... * FORT WAYNE, Ind. (4/5/10)--Three Rivers FCU and other financial institutions in the Fort Wayne, Ind., area are receiving hundreds of calls from local residents saying they had received automated telephone calls about a frozen account or debit card (TimesBulletin.com March 31). The calls are a scam. Three Rivers FCU is the primary institution mentioned in the calls, the credit union told local media, but other banks reported customers receiving similar calls. The automated voice asks to verify the account and asks the recipient to press a phone key to give the information. When the key is pressed, the voice asks for the number of a Visa check card or ATM card and its personal identification number (PIN). The credit union advised consumers to hang up and not give out information, and to notify the financial institution. Those who give out their information are urged to cancel their card ...

No vote taken on Vermont credit card bill

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MONTPELIER, Vt. (4/5/10)--The Vermont Senate took no action Friday on Senate Bill 138, the state's credit card bill that is opposed by credit unions, banks and payment processors, according to the Association of Vermont Credit Unions (AVCU). "Nothing happened today," AVCU President/CEO Joe Bergeron told News Now Friday. He said that the expected vote did not occur because the Senate was bogged down on other measures. "This means that the next time the bill could come up [for a final reading and vote] would be Tuesday morning." If passed by the Senate, the bill would cross over to the House for consideration. The amended bill would:
* Allow merchants to set minimum and maximum amounts for acceptance of debit and credit cards. * Forbid electronic payments system network processors from imposing penalties or requirements on the way merchants advertise, thus allowing merchants to add a surcharge for customers using a credit or debit card. * Require a state regulatory study, due Dec. 15, 2011, to determine the economic impact on banks, credit unions and consumers of prohibiting electronic networks from inhibiting merchants as to whose cards they can not accept.
Although the bill removed a controversial provision that would have let merchants decline certain cards, including credit union-branded cards, "we still have grave concerns about the remaining provisions," Bergeron said in the association's Newslines Express newsletter Friday. AVCU and credit unions will get a critical opportunity to lobby their case with lawmakers on from 4 to 5:30 p.m. ET Thursday during credit unions' Legislator Appreciation Reception at the State House, he said. (News Now April 2). "We always schedule the legislators' appreciation reception for the latter half of the [legislative] session. It stands out during the hectic pace of rushing through bills and provides an opportunity for everyone to take a break," he said. AVCU expects about 180 legislators to stop by. Earlier credit union representatives will meet for briefings and private meetings with key legislators.

Man who held CU employee hostage convicted

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CENTRALIA, Wash. (4/5/10)--A man wounded while holding a credit union teller hostage in January was convicted Wednesday by a Lewis County (Wash.) Superior Court jury of attempted robbery, kidnapping and burglary. Michael Anthony Lar, 57, faces a life term as a three-strikes offender, said the Associated Press (The Seattle Times April 1). Lar broke into the Twin Star CU in Centralia, Wash., before the credit union opened on Jan. 25 and took an employee hostage at gunpoint when she arrived for work. Another employee, who had been talking on the phone with the employee when she was taken hostage, called the police (News Now Feb. 2). A police officer responded and went to the door, where the teller mouthed to him that the robber had a gun. The officer pulled her out of the door and fired two shots at Lar, wounding him. Lar escaped out a window and hid in bushes. He was captured later the same day. Sentencing is scheduled for this week in Chehalis, Wash.

Alaska USA CEO resigns from CUNA Mutual Board

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MADISON, Wis. (4/5/10)--William B. Eckhardt, a member of the CUNA Mutual Board of Directors since 2005, has resigned from his board position. His resignation was effective March 31. He decided to resign as a result of anticipated competing business obligations at Alaska USA FCU, Anchorage, where he is president/CEO, said CUNA Mutual Group. Eckhardt has been president/CEO since 1979. Alaska USA FCU has $4 billion in assets.

Rhode Island CUs help members post-flooding

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WARWICK, R.I. (4/5/10)--Credit unions in Rhode Island are providing their members with flood damage assistance after heavy rainstorms on the East Coast caused flooding in the state and nearby areas. About 5,500 were without power in Rhode Island Thursday--with about half in Westerly, where waters submerged a substation. On Thursday, work crews in Rhode Island pumped roads clear of water, inspected bridges and began restoring power to affected neighborhoods, USA Today reported Friday. The National Credit Union Administration activated its disaster relief policy to help credit unions and their members affected by the flooding. (SEE RELATED STORY: “NCUA invokes disaster response for flood states.”) President Barack Obama declared an emergency in Delaware, New Hampshire, Massachusetts, Rhode Island and West Virginia. “While the flooding has caused a great deal of damage to many homes and businesses in Rhode Island as well as causing major traffic disruptions, no credit unions have reported any damage or closings to the league,” said Rob Kimmett, senior vice president of marketing for the New Hampshire, Massachusetts and Rhode Island Credit Union Association. Rhode Island CU, which has a branch in Cranston--the hardest hit area--did not experience any damages from floods. “We were one of the lucky ones,” said Gina DePalo, vice president of branch administration and marketing. “We managed to dodge it.” Flooding began Tuesday evening into Wednesday. Traffic problems occurred on the interstate as a result, and some employees were unable to get to work Wednesday because of traffic, she told News Now. DePalo said members are still likely assessing the damages they sustained from flooding, and that there will likely be a great deal of hardship. The credit union will address the needs of members as they arise, she added. People’s CU posted on its website that the Kingstown, R.I. branch would be closed throughout the weekend with plans to reopen today. Websites of Westerly (R.I.) Community CU and Wave FCU, Warwick, posted information for members affected by the flooding and about damage-assistance resources. Flooding also affected southeastern Massachusetts, Kimmett noted. The Day reported Thursday that water had seeped into the basement of Connecticut Community CU, Pawcatuck, Conn.

Two Connecticut CUs merge

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NORTH HAVEN and NEW HAVEN, Conn. (4/5/10)--Two Connecticut credit unions have been granted approval to merge, according to the Connecticut Department of Banking. Connex CU, a $386 million asset credit union based in North Haven, and St. Boniface Parish FCU, based in New Haven, received approval on March 3, according to a bulleting on the state regulator's website. The surviving credit union will be called Connex CU. Connex CU President/CEO John Edwards, in a statement to local media, said the merger will help grow Connex's membership base and will offer St. Boniface Parish members more products and services (The New Haven Register April 2). St. Boniface Parish CU has more than 100 members and was operated from the home of its CEO, Susan Smith. Smith told the publication the parish had closed. The credit union sought a partner and Connex had a local presence in New Haven, she added. Connex CU is the state's fifth-largest credit union, with about 40,000 members and seven branches.

Free up CUs boost economy Florida op-ed on MBLs

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TALLAHASSEE, Fla. (4/5/10)--Congress can free up credit unions and boost the economy by lifting the cap on member business loans (MBL), an op-ed from the CEO of Florida Commerce CU in the Tallahassee Democrat suggested Friday. In the article, Cecilia Homison, CEO of the Tallahassee-based credit union, noted government programs for banks that have the word "bailout" attached. "However, there is another way to infuse capital into the marketplace, and it wouldn't cost taxpayers a penny," Homison wrote. "Credit unions are asking Congress to lift the statutory limit on small-business lending from the current 12.25% of an assets cap to 25%," she wrote. If the cap were increased, credit unions could infuse an additional $10 billion to assist struggling small businesses in the first year alone, Homison wrote. "Plus, this would not impact credit unions' ability to make much-needed consumer loans," she said, citing estimates from the Credit Union National Association that the additional capital could create 108,000 jobs by helping small businesses grow. Credit unions' share of the market would double, to 10% nationally but banks would still control 90% of the commercial loan market, Homison explained. "It's OK to use an active word with our financial situation. I think the word 'grow' would be perfect. With credit unions' help, small businesses will continue to 'grow' and the economy will begin to 'grow' out of this downturn. All it will take is active thinking from Congress to raise the credit union member business lending cap," she concluded. For the full article, use the link.

Texas foundation honors CUs fin lit commitment

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FARMERS BRANCH, Texas (4/5/10)--The Texas Credit Union Foundation will present its annual FOCUS awards during its annual meeting and expo Wednesday, according to the Texas Credit Union League. The awards honor individuals and organizations who have demonstrated their commitment to providing financial literacy (LoneStar Leaguer April 2). They include:
* Lee Stafford, financial educator/marketing specialist, Education CU, Amarillo; * Mandy Clayton, financial education specialist, FivePoint CU, Nederland; * Randolph-Brooks FCU, Universal City; * The Austin Chapter of Credit Unions; and * El Paso CU Affordable Housing LLC CUSO.
This year’s winners diversified their creativity and delivery:
* Stafford launched Education CU’s financial literacy program in January 2009 and presented the merits of financial education to 4,663 individuals; * Mandy Clayton, through a partnership with Junior Achievement of the Golden Triangle and the National Endowment for Financial Education High School Financial Planning Program (HSFPP), increased her credit union’s financial education recipients total from 600 individuals in 2008 to more than 3,000 in 2009; * Randolph-Brooks FCU’s Jr. Duel in Ol’ San Antonio engaged 10 area high schools in a competitive program revolving around money-managing principles found in the NEFE HSFPP curriculum; * The Austin Chapter of Credit Unions’ second annual Youth Financial Literacy Fair welcomed more than 200 individuals to booths operated by staffers from various Austin credit unions, foundation volunteers and the Office of the Comptroller; and * The El Paso CU Affordable Housing CUSO taught financial and homeowner classes, free to local communities. In 2009, it presented 73 classes in English and Spanish for 1,125 participants.