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CU System Briefs (04/02/2013)

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  • WYOMING, Mich. (4/2/13)--Three Grand Rapids, Mich., area men were arrested and alleged to have obtained overblown auto loans in a scam that defrauded several financial institutions of at least $200,000, area police say. The men, who were unidentified in the report, allegedly approached credit unions and banks for vehicle loans--sometimes securing three loans on the same car. The men are expected to be charged in district court with conducting criminal enterprises, said Stan Lis, supervisor of the Grand Rapids area Combined Auto Theft Unit. Forging titles was the essence of the operation. The suspects, all in their early 20s, allegedly erased lien-holder information on titles and then obtained more loans on the same car, often for five or six times the auto's value--for about $14,000 in some instances. Nine area financial institutions were defrauded of funds in the case, he added. The scam happened during three months, beginning in mid-December (mlive.com March 29) …
  • CANTON, Ohio (4/2/13)--A man was believed kidnapped and forced Friday to rob the Canton School Employees FCU in Canton, Ohio, with $163 million in assets, area police said. A man in line gave a teller a note demanding money and claimed two men , one armed with a gun, were waiting in a car in the parking lot.  Police said they received a report of a robbery in progress. The man "had been kidnapped and forced into the attempted robbery," police reports said. "All suspects" were arrested after police arrived on the scene, the reports indicated (The Repository March 31) ...
  • ENDICOTT, N.Y. (4/2/13)--Frank E. Berrish, who has served as president/CEO of Visions  FCU, in Endicott,  N.Y., for the past 37 years,  has announced his retirement, effective May 1, according to the credit union's website. Under Berrish's leadership, the credit union grew from a three-branch, $25 million asset credit union serving only IBM employees and their families, to a $3.2 billion asset credit union with 31 branches throughout parts of New York, Pennsylvania and New Jersey, serving 158,000 employees. He was a major advocate for credit unions and represented credit unions on the Federal Reserve Board Thrift Institutions' Advisory Council ...

Surcharge Bans Continue to Gain Momentum

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MADISON, Wis. (4/2/13)--The number of states considering bans on imposing a surcharge on credit/debit cards is gaining momentum. At least 18 states are considering such proposals, with one measure reaching a governor's desk. That's in addition to 10 states with laws already on their books.

The Credit Union National Association and state leagues continue to monitor the bills, introduced since a $7.2 billion antitrust lawsuit settlement that merchants negotiated with Visa, MasterCard and banks.  The settlement allows merchants to charge a checkout fee equal to what the merchant pays to accept the card--typically 1.5% to 3% in the U.S. and not to exceed 4%.  The surcharge provision became effective Jan. 27, and does not affect debit cards (News Now Feb. 11).

CUNA's state legislative staff is tracking the state developments, saying that any surcharge on card transactions would have an impact on all financial institutions, including credit unions, as well as their members.

If the state proposals should become law in the states, surcharges would be banned in 28 states. Ten states already had laws on the books when the settlement occurred. Since News Now's Feb. 11 story, seven states introduced or began drafting bills banning merchants from charging "checkout" fees on card transactions.

The newest states are: Arkansas, Indiana, Maryland, Michigan, Nevada, and New Mexico. A seventh state, Mississippi, introduced a limited ban on surcharges on credit cards issued by the state (American Banker March 28). They join proposals in Hawaii, Illinois, Kentucky, Missouri, New Jersey, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont and West Virginia.

Utah Senate Bill 67, sponsored by Sen. Curtis S. Bramble (R-Provo), passed the state legislature on March 22, and is on the desk of Republican Gov. Gary Herbert, according to the state legislature's website.

It would "prohibit sellers from imposing a surcharge on a transaction paid for with a financial transaction card." The bill defines "financial transaction card" as "any card, code or other means of access to a person's account issued to a person that allows the person to obtain, purchase, or receive any of the following:  goods; services; money; or anything else of value." The card includes a credit card, credit plate, bank services card, banking card, a check guarantee card, a debit card, a telephone credit card, and "a device for access."

In Arkansas, S.B.291 would prohibit collection of credit card surcharges from a buyer if the card is "used for an extension of credit instead of cash, a check, or other means of payment."

In Michigan, S.B. 240, introduced by Republican Sen. Jim Marleau, and House Bill 4255, introduced by Republican Rep. Jeff Farrington, would prohibit credit card surcharges. The bills have not advanced, according to michiganpolicy.com (March 14).

Ten states that had laws on the books before the antitrust settlement, are California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas (News Now Jan. 29). Maine has a bill that would ease is existing ban on credit card surcharges, according to the Banker.

Seven Selected As Under-40 CU4Kids Advocates

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WASHINGTON (4/2/13)--Seven credit union leaders have been elected to the Young Leaders for Kids (YL4Kids) Board, a group of dynamic under age-40 leaders passionate about Credit Unions for Kids (CU4Kids).

The board, which consists of  young leaders from credit unions, leagues and industry partners, benefits a broad from spectrum of talent, experience, perspective and reach in the credit union movement. Its purpose is the create, grow and inspire CU4Kids enthusiasts among the next generation of credit union leaders.

New YL4Kids Board members, selected from more than 40 applicants, are:

  • Janna Bergstedt, First Community CU, Jamestown, N.D.;
  • Andrew Johnson, Members 1st FCU, Mechanicsburg, Pa.;
  • Jenna Oestman, Liberty First CU, Lincoln, Neb.;
  • Andrea Rusnak, CO-OP Financial Services, Rancho Cucamonga, Calif.;
  • Chris Lederer, FairLease, Dallas, Texas;
  • Noel Sanger, United FCU, St. Joseph, Mich.; and
  • Carol Silva, SchoolsFirst FCU, Santa Ana, Calif.
"The Young Leaders for Kids Board had a huge impact in 2012, focusing on Miracle Jeans Day and helping almost double credit union participation in this fundraiser, which raised over $300,000 for the kids last year," said Felicity Guerin, CU4Kids liaison for the American Association of Credit Union Leagues.

Guerin noted also that the "group is in the early stages of developing a new "kids helping kids" fundraiser targeted at youth members, which will incorporate a financial literacy aspect. " The board will "share more about this in the coming months," she added.

CU4 Kids is the credit union fundraising group for Children's Miracle Network Hospitals.

For more information about Young Leaders for Kids, use the link.

CUNA Shares User Guide To News Now Enhancements

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MADISON, Wis. (4/2/13)--The Credit Union National Association has added enhancements to several popular functions for News Now readers on CUNA's new, improved website at cuna.org. These are in addition to the changes introduced last month when the redesigned website launched with a variety of new features.

Some readers have reported display issues on their computers, and these are an easy fix, said CUNA's Web Services staff. Display issues resulted from two situations, said Integrations Analyst Joseph Harvey: Outdated browsers or a "compatibility mode" setting. To ensure your displays read correctly:

  • Have Internet Explorer (IE) 8 or above as your browser.  If you have IE 7 or below, you will need to update your browser by going to the Microsoft website and following the instructions.
  • If you are still having problems, your IE may have been set for "compatability mode," which does not work as well on newer versions. Check your address bar. If the icon that displays as a piece of paper being ripped in half is lit up, the browser's "compatibility mode" is on, and you should turn it off. Use the link for more information.
Now, when readers click into News Now either from headlines on the home page, the Stay Informed button, or from News Now's daily e-mailed headlines, they will:

  • Have access to the day's full issue in a single click by using the red "Full Issue" button on the menu at the left. Readers also can print the entire issue from this button. They also can continue printing individual stories or sections of stories.
  • Be able to subscribe to News Now's free daily e-mail headlines or to its RSS feed by using the "subscribe" and "RSS" buttons at the top right corner of the page, just under the gray tool bar.
  • See new labels for expanding the view of a story from headline and brief summary to the complete story.  "View Full Section" now provides a full view of each story in the section, while  "Section Story List" offers the list of stories in that section at a glance.
  • See an expanded headline lineup in the News Now's e-mail version, with links to each story as well as a link to the overall headlines page on the site.
  • Read up-to-the-minute tweets on LiveWire, both on the home page, and in the right hand column of each News Now page.
CUNA is also working to improve News Now's Archives Section and issues with some links. Watch for future developments in the Archives section, as well as in other areas of the site. Readers can provide feedback by contacting newsnow@cuna.coop.

Hackers Charge $10K In Grocery Chain Breach

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ST. LOUIS (4/2/13)--Schnucks Markets, a privately held chain of more than 90 supermarkets in St. Louis and the Midwest, is looking into a widespread credit card security breach in which one customer was hit with $10,000 in fraudulent charges.

Credit unions and banks say they are ready to help members and customers correct their account balances after the breach (KTVI March 27 and fox2now.com March 29).

Reports from financial institutions indicate new claims by cardholders who used their cards at Schnucks are filed every day, said KTVI. Costs to financial institutions range from $10,000 to $60,000--and that figure could rise, KTVI added.

Last week, consumers throughout the St. Louis metropolitan area reported their credit cards and debit cards were used to buy expensive items in other U.S. cities and Canada. It is assumed that Schnucks is the common element in the breaches, KTVI said. However, one police source said the department has other breach cases, too.

The store is searching for the hacker by working with a forensics expert, KTVI said.

Oregon Parity Bill Committee Vote Set For Friday

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SALEM, Ore. (4/2/13)--A parity bill to update the Oregon Credit Union Act, sponsored by the Northwest Credit Union Association (NWCUA), is scheduled for a vote Friday in the State Senate General Government, Consumer, and Small Business Protection Committee.

The bill was heard March 20 in committee (NWCUA's The Memo March 29). After gathering input from regulators at the Division of Finance and Corporate Securities, the proposed changes in Senate Bill 520 would:

  • Broaden Oregon's parity authority to allow the state's credit unions to invoke parity with out-of-state credit unions and streamline the process for invoking parity with federally chartered credit unions;
  • Clarify the role of the supervisory committee in governance-related matters;
  • Extend additional liability protection to credit union directors and officers;
  • Remove the wording in Oregon law that requires the board to "perform other duties as the members of the credit union from time to time, direct and perform or authorize any action not inconsistent with this chapter and not specifically reserved by the bylaws for the members";
  • Remove any duplicative and unnecessary language in Oregon law that permits a credit union to employ a chief operating officer/president and a security officer;
  • Make the declaring of dividends a power capable of being delegated under Oregon law; and
  • Increase the limit of loans to one borrower, to the larger of $100,000 or 15% of a credit union's equity.

Stepping Stones Community Marks First Anniversary

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NEW CASTLE, Del. (4/2/13)--Stepping Stones Community FCU, Wilmington, Del., the first credit union chartered in Delaware since 1984, celebrated the one-year anniversary of its grand opening March 16.

Alice Smith, Delaware Credit Union League communications director, interviewed Rashmi Rangan, executive director of the Delaware Community Reinvestment Action Council Inc. (DRAC); Jacqueline McDonald, Stepping Stones Community FCU volunteer manager; Theresa Hasson, Stepping Stones Community FCU board chair; and Blanche Jackson, volunteer and mentor (DELCU News Spring/Summer 2013).

With 148 members and $1.3 million in assets as of Jan. 31, Stepping Stones Community FCU is "only a few miles into a thousand-mile journey," Rangan told the league. Nearly 90 of the members are of modest means and about 50 have never held a bank account, Rangan said.

Rangan expressed her gratitude for the support of Delaware State Police FCU. She called Jackson, who serves as executive vice president of $119 million Georgetown, Del. credit union, Stepping Stone Community's "emergency hotline." Delaware State Police FCU also helped Stepping Stone Community FCU with its business plan and security needs, Rangan said.

Teaching its members money management and saving skills are the primary goals of Stepping Stone Community FCU, McDonald told the league. Through assistance from DRAC, the credit union offers credit, tax and housing clinics.

The credit union offers two loan types. One is secured by a share account for up to $2,000. The second is an unsecured product for $500.

The credit union also used the National Credit Union Administration's Office of Small Credit Union Initiatives to facilitate its strategic planning sessions, Hasson said.  As part of the this process, Stepping Stone Community FCU is exploring participation in NCUA grant programs and the Community Development Revolving Loan Fund.

Fin Lit Survey: Lack Of Savings Tops Financial Concerns

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WASHINGTON (4/2/13)--More than half of Americans worry about how little they have in savings, according to results of the 2013 Financial Literacy Survey by the National Foundation for Credit Counseling (NFCC) and the Network Branded Prepaid Card Association (NBPCA).

The survey results provide credit unions with an opportunity to build trust through financial outreach programs during April, which is Financial Literacy Month.

In its seventh year, the survey annually provides data and trending around Americans' attitudes and behaviors related to personal finance.

"While consumers moving out of recession mode and becoming more comfortable with spending is positive for the nation's economy, they need to be mindful of the fact that increasing spending without a safety net in the form of savings could have a negative impact on their personal economy," said Susan C. Keating, NFCC president/CEO.   

Respondents were asked which areas of personal finance currently worry them the most and were allowed to select multiple responses. Top areas of concern included:

  • Savings. Overall, 57% indicated they are worried over a lack of savings, including 43% who worry they do not having enough "rainy day" savings for an emergency, and 38% concerned about retiring without having enough money set aside. 
  • Financial obligations. Twenty-six percent were worried about servicing their debt commitments, including paying credit card debt (13%), repaying student loan debt (8%), making monthly vehicle payments (7%), and paying off existing medical debt (6%).
  • Health insurance. One in four U.S. adults (25%) worry about health insurance--either not being able to afford it (19%) and/or not having any (17%).
  • Credit. While 19% were worried about their credit score and/or lack of access of credit overall, 16% were anxious about their score, with 9% concerned over their lack of credit access.
  • Job loss. About 18% indicated fear of job loss as a major concern.
  • Foreclosure. Four percent of Americans are worried over losing their homes to foreclosure. The small percentage is a positive signal for the housing industry and the economy as a whole, said NFCC.
The good news is that 20% of U.S. adults indicated they do not have any financial worries, a strong sign of consumer confidence, NFCC said.

One-fourth Of Consumers With Checking Accounts Have Overdrafts

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LAKE BLUFF, Ill. (4/2/13)--Consumers' use of overdrafts is increasing. More than one-fourth of people with a consumer checking account--about 38 million people--are frequent overdrafts users, said a new report.

Credit unions provide overdraft services as a service to their members and they charge less for the service than banks.  The survey, by Lake Bluff, Ill.,-based Moebs Services, a financial research firm, found that fees for services were lower at credit unions than at banks.

The average charge for an overdrawn account of $40 was $30 at banks, but $27 at credit unions. When depository size is taken into account, "the difference can be significant," said Michael Moebs, author of the study.

Overdraft revenue at banks, credit unions and thrift institutions totaled $32 billion last year, up $400 million or 1.3% from 2011, said the study.  Still, it was less than in 2008, when revenue from overdrafts totaled $35.4 billion, or in 2009, when it was $37.1 billion. Overdraft revenue during the first quarter of last year fell to an 11-year low.

Frequent overdraft users are divided into about 20 million consumers who use payday lenders and 18 million who use credit unions and banks. Payday lenders have dropped their overdraft fees, due to competition, said Moebs.

The increase in overdrafts will continue. At the rate of growth for the past nine months, overdraft revenue could be at an all-time high by the end of 2016, Moebs said.  "It's clear that overdrafts are going to be with us for a long, long time."