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Mass. governor awards Workers CU training grant

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FITCHBURG, Mass. (4/25/08)--Massachusetts Gov. Deval Patrick announced that the Workers' CU will receive $76,665 in Workforce Training Grant funding to train 151 employees. He made the announcement last week at a press conference at Fitchburg's City Hall. The grant is part of the administration's strategy to make investments that create a culture of opportunity focused on restrained spending and long- and short-term investment, while preparing for the effects of a softening economy, he said. Training will be in a range of areas. The state in the next 90 days will expedite the release of more than $18 million in grants to 200 companies throughout Massachusetts to train more than 16,000 workers in every region of the state. "The funds from the grant will be used to improve the skills and knowledge of our employees through programs such as innovation and team building, financial management, business lending and sales, advanced computer software and continuous quality improvement," said Workers' CU President/CEO Frederick D. Healey in a press release. "Our goal in training is to maximize the value of our internal human resources so that we can better serve our members and local businesses. The grant will go a long way in helping us reach this goal," Healey added. Workers CU has $550 million in assets and serves more than 63,000 members.

CU System briefs (04/24/2008)

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* GREELEY, Colo. (4/25/08)--An accomplice in the slaying of an employee of a credit union in Greeley has been sentenced to nine years in prison. Michelle Moore, a former deputy sheriff, pleaded guilty to being an accessory to attempted first-degree murder for aiding Shawna Nelson in the execution-style murder Jan. 23, 2007, of Heather Garraus, an employee of Credit Union of Colorado (formerly Colorado State Employees CU). Nelson was convicted and sentenced to life in prison earlier this year (Fort Collins Coloradoan April 22) … * SUITLAND, Md. (/25/08)--Andrews FCU has selected Chris McDonald as president/CEO of the $810 million asset credit union, effective May 12. Board Chairperson Ruby B. DeMesme, made the announcement Thursday. McDonald has served as president/CEO of MobilOil FCU, Beaumont, Texas, for the past eight years. He has been in the financial industry since 1984 … * LEOMINSTER, Mass. (4/25/08)--James G. DiConza, former CEO/treasurer of People's Community CU (now Workers' CU) died Tuesday at the age of 62. DiConza served in the banking industry for 40 years. He was CEO/treasurer of the Leominster-based credit union until its 2006 merger with the Fitchburg, Mass.-based Workers' CU. He is survived by his wife, a daughter, two brothers and a sister (Worcester Telegram & Gazette April 23)) …

Strategic Planning Institute to precede ACUC

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MADISON, Wis. (4/25/08)--Credit union professionals can attend a strategic planning institute before the America’s Credit Union Conference and Expo (ACUC&E), hosted by Credit Union National Association. in New York City. The institute, June 27-29, in New York City, is designed to help attendees develop and execute effective research-based strategies to meet the challenges of member expectations. Attendees will learn about today’s business environment and how to identify their credit union’s position to better direct its course. They also will discuss ways to capitalize on trends and future opportunities to help their credit unions capture a stronger position in the market. The ACUC&E, June 29 to July 2, will feature topics to educate executives, board members and key leaders in the credit union industry. HGTV co-founder Susan Packard will speak about “Now What? Innovating Ideas into Icons.” Author Dan Heath will speak on “Made to Stick: Why Some Ideas Survive and Others Die.” Other June learning opportunities from CUNA:
* CUNA Marketing Management School: Part I, June 8-13, Seattle. It teaches the fundamentals of a well-rounded credit union marketing campaign; * CUNA Marketing Management School: Part II, June 8-13, Seattle. It explores how to get the credit union’s message out through multi-channel promotions using strategies targeted to different generations; * CUNA Marketing Management School: Part III, June 8-13, Seattle. It takes a look at credit union financials and marketing compliance; and * Financial Counseling eSchool, June 12-Aug. 7. It studies the financial counselor’s role in budget counseling.
For more information, use the links.

Centrix Chapter 11 re-org approved by court

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DENVER (4/25/08)--The U.S. Bankruptcy Court for the District of Colorado Monday approved the Chapter 11 reorganization of Centrix Financial, a subprime auto lender whose clients included credit unions. Michael Richman, an attorney with the New York-based law firm of Foley & Lardner, confirmed to News Now that Judge Elizabeth E. Brown approved the reorganization and liquidation plans, and overruled objections to the reorganization during an oral ruling Monday. Richman represents the Official Committee of Unsecured Creditors, which includes credit unions, in the case. "It's a tremendous success for the creditors in the case," Richman said. "They're pleased the judge has confirmed the Chapter 11 plans. The reorganization plan is the best opportunity for creditors to secure any money that might be handed out" through the liquidation process. The next step, he said, is to have the judge's confirmation order signed and entered into the court docket, and the plan consummated. He noted a liquidating trust has been formed to handle any potential claims being pursued. The trust will retain attorneys to carry on the litigation for recovering funds. Credit unions and other entities have claimed millions against the company's assets. Last year, Centrix's assets were sold to Falcon Investment Advisers, who traded more than $30 million in secured debt for control of Centrix's portfolio, which had $1.9 billion in subprime auto loans--most of them from credit unions--at the time (News Now Jan. 12, 2007).

Eleven plead guilty in auto loan fraud ring

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CLARKSVILLE, Tenn. (4/25/08)--Eleven people pleaded guilty to fraudulently obtaining almost $84,000 in car loans from Fort Campbell FCU’s first-time car buyer program. Attorneys with the U.S. Justice Department, Middle Tennessee District, announced the guilty pleas Tuesday (TheLeafChronicle.com April 23). The program at the $253 million asset, Clarksville, Tenn.-based credit union is designed to finance cars for soldiers and their families (NashvilleCityPaper.com April 23). Robert L. Manigo, Clarksville, and James K. Elliott, Linden, N.C., each pleaded guilty to one count of financial institution fraud in federal court. The other nine defendants each pleaded guilty to conspiracy to commit financial institution fraud. Manigo, a former employee of Mathews Nissan Inc,, Clarksville, paid $100 to Elliott for each customer he brought to the dealership for the first-time buyers program to finance loans up to $10,000, according to court records. To be eligible for the program through the credit union, participants had to qualify for membership. The credit union’s field of membership includes military personnel and their families, along with select employee groups. Employing fake identification and Social Security numbers, the defendants obtained membership to the credit union. They also are accused of making false statements on loan applications and reporting incorrect amounts of down payments to the auto dealership. Sentencing will take place in about 90 days, prosecutors said. The credit union’s management was not available for comment at press time.

Puerto Rican CU now associate member of NY league

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LATHAM, N.Y. (4/25/08)--A meeting among Puerto Rican cooperativas, the New York State Credit Union League and the World Council of Credit Unions (WOCCU) turned into a historic event when Luis Lopez, president of Abraham Rosa Cooperativa, announced that his credit union will become the first from Puerto Rico to become an associate member of the league.
New York State Credit Union League Senior Vice President Michael Lanotte helps representatives of 23 credit unions from Puerto Rico, St. Thomas and St. Croix navigate through the league’s website at a recent gathering in Puerto Rico. (Photo provided by the New York State Credit Union League)
An initiative for advancing the partnership, which was first announced August 2005, was on the table for all who participated in a recent gathering in Puerto Rico. “I look forward to this next step in our partnership with the New York league,” said Lopez. “I am confident that the league and our credit union will both benefit from this enhanced relationship.” It is the first partnership to experience league membership as an outcome. The new approach to associate membership was the result of the partnership program that brought the league and the credit unions of Puerto Rico together. “It is very rewarding seeing Puerto Rico and New York credit union systems cooperating,” said Victor Miguel Corro, WOCCU international partnerships manager. “In the end, it’s the members who we worry about and they are the focus of this partnership." “We couldn’t be happier with the growth and expansion that has occurred as a result of this unique partnership,” said Michael Lanotte, league senior vice president. “It becomes more evident as the partnership develops that both partners are learning from one another. “The league provides a level of specific credit union operational and technical support, while the credit unions, based on the manner in which they approach serving their members and working with others, provide a blueprint on how the credit union philosophy can be lived on a daily basis,” he continued. The meeting also marked another milestone--the expansion of the partnership to include credit unions in the U.S. Virgin Islands. Thirty-two individuals representing 23 credit unions from Puerto Rico, St. Thomas and St. Croix participated in the meeting. The league, represented by Lanotte, provided education sessions on current compliance topics, such as ID theft, business continuity planning and third-party vendor due diligence. Marc Inger, chief operating officer of UsNet, presented an introduction to shared branching. Dirck Van Deusen, senior vice president of Corporate Relations for Members United Corporate FCU, Warrenville, Ill., provided an overview of the roles of corporate credit unions. WOCCU currently has 28 international partnerships between credit union movements in developing countries and leagues in the U.S. and Canada.

CUNA Mutual union ratify contract agreement

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MADISON, Wis. (4/25/08)--CUNA Mutual Group has signed a four-year contract agreement with the Office of Professional Employees International Union (OPEIU) Local 39. “We set our priorities early,” said Kathryn Bartlett-Mulvihill, chief steward for CUNA Mutual’s represented staff. “They included job security, quality improvement, improved customer relationships, an improved relationship between the company and community, and wages and benefits. The new contract addressed all of our priorities in some aspect and we look forward to a new beginning.” Key components of the contract include:
* A commitment to build a better working relationship between the company and the union; * A commitment to work jointly on continuous quality improvement; * Across-the-board pay increases for represented employees of 2% in 2008 and 3% in each of the final three years of the contract; * An increase in health-care premium cost-sharing; * Benefits including pension, 401(k); health retirement account; dental and vision coverage; vacation; sick leave and personal days; and short- and long-term disability coverage; and * A buyout program for longer-service employees.
The agreement also provides wage increases and a 12-month moratorium on reductions in the work force as a result of outsourcing, subcontracting or transfer of work involving represented staff.

SECUs tax program saved consumers 8 million in credits

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RALEIGH, N.C. (4/25/08)--State Employees’ Credit Union (SECU) staff helped 15,000 qualifying individuals claim more than $8 million in tax credits over a three-month span.
Mark Coburn (right), a State Employees’ Credit Union employee, helps a North Carolina consumer with income tax preparation through the credit union’s participation in the Volunteer Income Tax Assistance program. (Photo provided by State Employees’ Credit Union)
Through participation in the Internal Revenue Service’s (IRS) Volunteer Tax Assistance Program (VITA), the credits included earned income tax credits of $4.7 million and child tax credits of over $2.3 million, with a total of $14 million in tax refunds. Since VITA services are free, those who were helped by the program also saved more than $2.2 million in tax preparation fees. All 217 SECU branches served as VITA sites this year--the first year the credit union had participated, with two trained SECU employees serving as VITA representatives in each branch. SECU partnered with Local Government FCU, Raleigh, and the IRS to offer the VITA service, which assists low- to moderate-income taxpayers in claiming eligible tax credits and avoiding tax return preparation fees. “The VITA program is just one more way SECU has made a difference for North Carolinians and reaffirmed our mission,” said Shirley Bell, SECU board of directors chairman. “Keeping money in the pockets of our members is key to helping ensure their financial success, and the VITA service was instrumental in allowing SECU to assist North Carolinians in claiming their tax credits and refunds, placing millions of dollars into North Carolina’s economy,” she said.

Alabama league presents awards at symposium

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BIRMINGHAM, Ala. (4/25/08)--The Alabama Credit Union League presented its awards during its 75th Annual Membership Meeting and Education Symposium in Birmingham last week. Presented Merit Awards in their asset category were:
* TVH FCU, Tuskegee; * Alabama River Employees CU, Perdue Hill; * Riverdale CU, Selma; * Tuscaloosa Teachers CU, Tuscaloosa; * First Educators CU, Birmingham; and * Family Security CU, Decatur.
Dorothy "Dot" Martin, supervisory committee chairman of Alabama CU, accepts the Alabama Credit Union League's Volunteer of the Year award from league Chairman Steve Swofford, president of Alabama CU. (Photo provided by the Alabama Credit Union League)
The 2007 Chapter Excellence Award went to Tuscaloosa Chapter of Credit Unions for its impact on its community and the state, and for exemplifying leadership and community involvement. Alabama Credit Union Legislative Action Council (ACULAC) presented two awards: Family Security CU was named 2007 ACULAC Credit Union of the Year, and America's First FCU, Birmingham, was awarded the Deduct-a-Buck Credit Union of the Year Award. The Brother's Keeper Award, which recognizes credit unions that donate time, staff and resources to help other credit unions, went to two credit unions: Mutual Savings CU, Birmingham, and Alabama River Employees CU. Dorothy "Dot" Martin, supervisory committee chairman for Alabama CU, Tuscaloosa, was named the 2008 Volunteer of the Year. Martin has served as a credit union volunteer for 28 years.

Maine legislature adjourns without municipal deposits bill

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AUGUSTA, Maine (4/25/08)--An amendment to a Maine bill that would have allowed state and municipal agencies to deposit funds in credit unions--already allowed in banks and thrifts--died Friday with the adjournment of the state legislature from its current session. “We let it die. It wasn’t our bill to begin with, and in fact was an amendment to the bill,” said Jon Paradise, manager of government/public affairs for the Maine Credit Union League. The bill, Legislative Document 2226, titled “An Act to Amend the Laws Governing the State’s Cash Investment Policies,” was introduced originally by a state senator. The amendment was made by the state treasurer, Paradise told News Now. It was basically a policy issue with the state treasurer and would have put some restrictions on the treasurer’s office, Paradise explained. “We let the bill die because it wasn’t worth placing our credit union friends on both sides of the aisle [in the state legislature] in an uncomfortable position of trying to help credit unions, but also being against other provisions of the bill,” Paradise said. Bankers opposed the bill because they didn’t want credit unions to obtain the enhanced deposit capabilities, Paradise said. If there is enough interest from credit unions, the league intends to introduce a stand-alone bill in the next state legislative session in January that would give credit unions the deposit capability without involving other policy issues, Paradise said.

How-to-Book includes section on How to Choose a CU

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ALLENTOWN, Pa. (4/25/08)--The Allentown Morning Call has outlined how a potential member might choose a credit union in its “How-To-Book.” It devotes a “chapter” to credit unions. Those who are looking to join a credit union should contact the Credit Union National Association through its website, www.cuna.org, or at 800-358-5710, the book recommended. Pennsylvania residents can look for a credit union using the Pennsylvania Credit Union Association’s website, www.iBelong.org. The book describes the difference between banks and credit unions, noting that credit unions are non profit, adhere to the pledge of “people helping people,” and work to serve their members. “Whether it’s providing a loan to help a member cover unexpected medical bills or simply offering a better deal on a used-car loan, credit unions make a difference for their members and the communities they serve,” the book said. They also offer better rates and terms than banks, the book noted. Jeff Albert, senior vice president and chief operating officer with Allentown-based People First FCU, which is a community-chartered credit union serving members in several counties, also is quoted. “We recognized that the local financial market was changing, as large banks entered the area, leaving no local financial service provider,” Albert told The Morning Call. “We wanted to be able to provide local credit union services to anyone in Lehigh Valley and requested a change to our field of membership. “A community charter was provided and now anyone who lives, works, worships or attends school in Lehigh or Northampton counties can join and take advantage of the low or no-cost financial services available at People First,” he said.

Study Economic downturn pressuring card issuers

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NEEDHAM, Mass. (4/25/08)--The combination of higher credit card losses and lower consumer spending in today's economy will cause credit card return on assets (ROA) for 2008 to drop at least 15% below last year's levels, according to a recent study. The 2007 levels already were lower than 2006 ROA levels, said TowerGroup, a financial services research and consulting firm based in Needham, Mass. Banks have long relied on strong ROA performance from credit cards to boost their profits.
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However, TowerGroup also found that credit card issuers can still tap revenue opportunities by focusing their business strategies on member/customer retention and expansion, rather than acquisition. The subprime mortgage crisis and a spillover of charge-offs into other areas of consumer lending forced consumers to rely more heavily on credit cards as an alternative to secured lending, said TowerGroup's report. That has sharply increased card delinquencies, which means the credit card issuers' prospects for getting new cardholder accounts is "increasingly risky," it said. Card issuers, including credit unions, can take lessons from the past economic downturns such as the 1990 recession and focus efforts on their current member/customers. "To succeed in today's economy, issuers must implement more customer-centric business models--approaches that identify ways to reward existing customers and encourage continued loyalty and card use," TowerGroup said. Such approaches will allow issuers to closely monitor macro-level portfolio metrics--such as outstanding balances, delinquency, bankruptcy and charge-off rates--which can impact earnings negatively. The study's report, "Credit Crisis: What Card Issuers Can Learn from Previous Economic Downturns," by Dennis Moroney, senior analyst of TowerGroup's bank cards research service, explains strategies for card issuers.

Virginia league Estonian co-ops sign as partners

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LYNCHBURG, Va. (4/25/08)--The Virginia Credit Union League (VCUL) signed a partnership agreement with the Estonian Union of Credit Cooperatives (EUCC) April 11 to provide support and expertise to the Baltic country’s growing cooperative movement.
The Virginia Credit Union League has entered into an international partnership with credit cooperatives in Estonia. Seated, from left are: league president Rick Pillow, World Council of Credit Unions International Partnerships manager Victor Corro, and Estonian Union of Credit Cooperatives executive director Andrus Ristkok; and standing, Northwest FCU Senior Vice President of External Affairs Juri Valdov, who will help coordinate the partnership efforts of Virginia's credit unions. (Photo provided by the World Council of Credit Unions)
“Our hope is that we can have a lasting impact on the Estonian movement by helping its cooperatives better prepare for both the challenges and opportunities before them,” said Rick Pillow, VCUL president. The Estonian credit union movement is small and is faced with a market dominated by Scandinavian banks. The EUCC--Estonia’s version of a credit union league--consists of 11 credit unions and 2,693 members. The credit unions have a 0% delinquency because they operate like savings clubs and in some cases, make only 100% share-secured loans. They account for less than 1% of the country’s financial services market, but want to play a larger role, said Victor Miguel Corro, World Council of Credit Unions’ (WOCCU) International Partnerships manager. Virginia credit unions already have experience with the Estonian credit union movement because Juri Valdov, former president and now senior vice president of external affairs for Northwest FCU, Herndon, Va., visited Estonia in August 2007. The Estonian credit union movement has tremendous growth opportunities, Valdov said. The nation’s free-market economy is being rebuilt, and the vast majority of its citizens have increasing economic opportunities and higher standards of living. “Financial cooperatives are not new to Estonia,” Valdov said. “They existed years before the Soviet occupation and now are attempting a comeback. “I view our effort as an attempt to revitalize credit cooperatives in a nation that has a proud cooperative history,” he added. The partnership brings the total number of WOCCU international partnerships between U.S. credit union leagues or Canadian credit union centrals with credit union movements in development countries to 28.