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CU System briefs (04/25/2011)

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* KANSAS CITY, Mo. (4/26/11)--An Armenian residing in Colorado pleaded guilty in a federal court in Kansas City to participating in an auto loan scheme intended to defraud credit unions and other lenders by buying $229,230 worth of expensive automobiles and jet skis at Kansas City-area dealerships, said the U.S. attorney's office for the Western District of Missouri. Artur Galstyan, 33, and co-conspirators allegedly submitted falsified credit applications through the dealerships to finance the vehicles and jet skis from November 2009 to September 2010. Galstyan admitted they had no intention of making payments on the loans. They shipped the vehicles immediately to the Russian Federation, which meant credit unions and other lenders could not recover the loans' collateral. The group leased apartments and office space in Kansas City to create the illusion that they lived and worked in the city. He faces up to 20 years in prison without parole, plus a fine of up to $500,000 (Targeted News Service April 13) … * LAKE COUNTY, Fla. (4/26/11)--Nazreen Mohammed, 47, of Summerfield, Fla., was sentenced to five years in a federal prison for fraud and identity theft while she was an employee of a Lake County branch of Orlando, Fla.-based Fairwinds CU and later at a Lake County branch of the Royal Bank of Canada. She also was sentenced to three years on supervised release and ordered to make full restitution to the credit union and bank. Mohammed pleaded guilty on Nov. 22 to the crimes, which occurred from April to July 2009 at the credit union and from Nov. 5, 2009 to Jan. 7, 2010, at the bank. In both incidents, she used her employee status to access member/customer accounts without authorization. She created loans and withdrew from the accounts of the credit union's members, then transferred the proceeds to accounts of other members before eventually withdrawing them. She also posed as elderly or deceased members when checking on the transfers of the money with the credit union's call center. She tried to get $127,431 from the credit union and $312,581 from the bank ( April 24) … * KENNEWICK, Wash., and PEKIN, Ill. (4/26/11)--Scammers using bogus text messages and phone calls have hit members and non members in Washington and Illinois, according to alerts from credit unions in those states. Credit unions targeted include Gesa CU and HAPO Community CU, both based in Richland, Wash., as well as other area financial institutions and businesses (Tri-City Herald April 24). In Illinois, Bartonville-based Redbrand CU members received text messages saying their ATM/credit cards have been deactivated and to reactivate the card, they must call a number ( April 23). The calls and text are ploys to get consumers to part with their credit card numbers and other sensitive financial information. Credit unions warned that no financial institution will contact them and ask for personal information … * SACRAMENTO, Calif. (4/26/11)--The Golden 1 CU received the "Exceptional Community Support" award at the 2011 People Helping People Awards luncheon April 12. The award, presented by the Community Services Planning Council, recognizes businesses, civic organizations and individuals for exemplary support for community projects and charities. Golden 1 was commended for contributing time, talent and resources to worthy causes. Its employees provided 2,752 hours of volunteer time during 2010. Golden 1's fundraisers for United Way and Children's Miracle Network Hospitals generated tens of thousands of dollars for the organizations and others. It also was recognized for providing free educational workshops that teach financial literacy to people of all ages. In 2010, nearly 9,800 people benefited from those workshops …

Black bear pays visit to N.J. league office

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HIGHTSTOWN, N.J. (4/26/11)--A 300-lb. baby black bear caused quite a commotion on the New Jersey Turnpike and in the New Jersey Credit Union League's parking lot recently, with news helicopters recording the event on video. On April 15, the bear rummaged through garbage cans for food before climbing a tree overlooking the turnpike near Exit 8, said the league (The Daily Exchange April 21). Construction workers discovered the bear in the league parking lot before office hours. No league employees had a close encounter with the critter. State wildlife biologists and firefighters used a tranquilizer and a Fire Department cherry picker to pluck the bear from the tree. To watch an Associated Press video of the action, use the link.

Disbanded CU chapter returns after eight years

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HARRISBURG, Pa. (4/26/11)--Credit unions in Pennsylvania's Endless Mountains Chapter reorganized last week after disbanding eight years ago, said the Pennsylvania Credit Union Association (PCUA). The chapter is making a commitment to conduct scheduled meetings and networking opportunities, said PCUA (Life is a Highway April 21). Former Chapter President Eric Chase, CEO of Guthrie FCU, welcomed 17 attendees and John Kilduff, PCUA vice president, Credit Union Services. Newly elected chapter officers are:
* President, Michael Viselli, CEO of Ingersoll-Rand FCU, Athens; * Vice president, Joe Beckwith, board member of Craftmaster FCU, Towanda; * Treasurer, Danielle VanNoy, CEO of Troy Area School Employees CU, Troy; * Secretary, Dena Miller, CEO, Craftmaster FCU; and * Legislative liaison, Chase.

Three trends lead to surge in community investing

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NEW YORK (4/26/11)--Community investing is poised for more visibility in 2011 as a result of three trends that could boost related investments from individuals and institutions, said the Social Investment Forum (SIF), Green America and the National Federation of Community Development Credit Unions in an April 13 news conference. Community investment involves capital from investors and lenders that is directed, often through community development financial institutions (CDFI) and other community investing institutions to underserved communities and individuals. Assets in community investing institutions rose more than 60% to $41.7 billion in 2010 from $25 billion in 2007, said the 2010 SIF report, the most recent data available. That reflects healthy growth in all categories of community investing institutions: community development banks, credit unions, loan funds and venture capital funds, said SIF. The three major trends include:
* Consumers breaking up with mega-banks due to high fees and other abusive practices. Community development credit unions (CDCUs) and community development banks have benefited from increased membership, assets and deposits in recent years, helped in part by dissatisfied consumers angered at mainstream banks' raising their fees and cutting back on credit throughout the recent recession, and by media campaigns to encourage consumers to dump abusive mega banks. * Rising institutional interest in community investing. Institutions in several categories are doing more community investing, in part due to SIF's education and outreach efforts with financial advisors, investment managers and religious institutions. Colleges and universities are now among the leaders in moving assets to community investments, providing market pressure for mutual funds and money managers to provide more socially responsible investment options. * Growing consumer awareness of community investing success stories. Most CDFI banks, formed after 1994 as small institutions, have grown at a greater rate than conventional banks of the same size by meeting pent-up demand. As community investing institutions meet local demands, they attract additional assets from individuals and institutions wanting to be part of such positive change and help local institutions to flourish.
CDCUs and other CDFIs "have played a crucial role throughout the recession by providing credit to borrowers who have been shut out of the conventional capital markets," said Clifford N. Rosenthal, federation president/CEO and a member of SIF's board. "A major challenge that remains is that many of our institutions have been disproportionately affected due to the economic distress of the communities they serve, so the growth in socially responsible investments has been indispensable in allowing many of our member CDCUs to expand their services at a time where other lenders have tightened their underwriting guidelines." For CDCUs nationwide, this increased investment will be crucial, given law-makers' slashing of government spending in their attempts to rein in the deficit. "While the Treasury Department's CDFI Fund has thus far been spared from major budget cuts, we really don't know how it will fare in the future," Rosenthal said. "Most legislators acknowledge the benefit of investing in CDFIs through the CDFI Fund, where each federal dollar is leveraged approximately 27 times by non-federal sources, but given some legislators' bottom line-only approach, which has slashed a host of social programs, no initiative is safe from cuts, which is why we are especially pleased to see a general shift towards greater community investment by the mainstream capital markets," he said. He noted that "we have many member CDCUs that operate as the only regulated financial institution in some of America's poorest communities. If they go, only the predatory check cashers, payday lenders, and pawn shops will remain to fill the void, and for those of us in the CDFI community, this is simply not acceptable."

CU limits directors to four terms

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PORTLAND, Ore. (4/26/11)--Unitus Community CU has implemented board term limits in an effort to increase member engagement. In its first meeting after the rule change, the credit union welcomed two new members to its board. Jim Lewis and Scott Thompson were elected to the board as board members Pete Reinecker and Barbara Leonard stepped down. Unitus Community CU board members are limited to four, three-year terms, or 12 consecutive years on the board. The decision to implement term limits--a controversial topic for many credit union boards--was part of a long process, according Unitus Community CU Pat Smith Northwest Credit Union Association Anthem April 14). The process began about four years ago when the board created a succession planning chart to document each director’s future plans, she said. “After a couple of years, we realized that we had no hard plans and that dates continued to be either ambiguous or were being updated to a new date each year,” Smith said. The topic of board limits was floated by the board’s chair, Gordon Akeson, who was among the board members considering retirement. The governance committee followed up by researching the pros and cons and the different elements associated with limits for board members. After 18 months of research, review, and discussion, the committee presented the various options and selected those that fit best with Unitus Community CU. The major benefit is the possibility of engaging more members in the governance process, said Smith, who points out that engagement is one of the foundational differences between banks and credit unions. Also, the board has reduced the ambiguity of its succession planning efforts and created a mechanism for new ideas. At the same time, term limits create some concerns, according to the Northwest Credit Union Association. Many long-time board members bring expertise, stability and continuity to the governance process. Learning the cooperative financial model takes time, and too much turnover can create a knowledge gap. With the current pace of regulatory change, educating a new board member is a challenge, observers say. However Laurie Kresl, vice president of planning and business development at Unitus Community CU, said Smith and Akeson, who has since retired, worked to educate the board throughout the process and ensure that a “pipeline” was developed to attract and develop new board members. Kresl said part of the term limits discussion was developing a more formal board application process that identifies candidates and competencies and board development with existing volunteers. “The board understood our needs,” Kresl said. “I think they understood if they loved they loved the credit union it was right thing to do. They owed it to the credit union to put someone in place to lead us into the future.”

Henke appointed to Kansas CU council

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TOPEKA, Kan. (4/26/11)--Kansas Gov. Sam Brownback appointed Sue Henke, a publications writer for the Kansas Department of Labor, to the Kansas Credit Union Council. The council advises the administrator of the Kansas Department of Credit Unions on issues and needs of credit unions ( April 21). Appointees serve a three-year term. Henke, of Topeka, has more than 35 years combined experience in public information/communications. This is her second appointment to the commission.

Missouri tornado levee break damage CUs

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ST. LOUIS, Mo. (4/26/11)--Two credit unions in Missouri were directly affected by Friday's massive 166-mph tornado in St. Louis County, while others had near-misses. And on Monday, a levee break in the southeastern part of the state left one credit union with water in its basement, reported the Missouri Credit Union Association (MCUA). April has already seen a record number of tornadoes--292 confirmed so far, passing the previous record of 267 during the month in 1974. The number of twisters is almost twice the average 163 for April (USA Today April 25). May is usually a worse month for tornados, said The Weather Channel. More than 2,000 homes and the Lambert-St. Louis International Airport were damaged in the county by Friday's Class 4 tornado, which means it had winds of between 166 mph and 200 mph. The worse damages were in Maryland Heights, Bridgeton, St. Ann, Edmundson, Berkeley and Ferguson, as well as in Madison County near Granite City, said the National Underwriters Online News Service (April 25). At the airport, the office of American Airlines FCU Branch Manager Lindsay Beasley was damaged, although the actual credit union was not. Beasley's office is located over the C Concourse, said Amy McLard, MCUA vice president of public and legislative affairs. McLard said MCUA received reports from field representatives about the damages, which included upended furniture and broken windows. Another credit union with a branch across from the airport, Community America CU, reported no damage. It was closed on Saturday because the airport was shut down but reopened Monday, said MCUA. Vantage CU, whose headquarters is in hard-hit Bridgeton, reported "minimal" damage. It was closed on Monday because it had no electricity and was surrounded by debris, its website said. "Vantage is in the midst of the all the damage. It's amazing it had only minimal damage," McLard told News Now. She noted the league office is about 10 minutes from the tornado's path. "We're fine," she said. Another Missouri credit union was damaged by flooding when a levee in Southeast Missouri broke Monday, McLard said. Cape Regional CU, based in Cape Girardeau, reported water in its basement, according to MCUA. It is too soon to tell how many credit union members and employees are affected. Once that is known, Missouri's credit unions will rally to raise funds and determine how to best address their communities', McLard said.

How CUs celebrated youth week

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MADISON, Wis. (4/26/11)--Credit unions nationwide held many events to celebrate National Credit Union Youth Week last week and also offered other financial education-related activities.
Click for slide show To celebrate Financial Literacy Month (April), Credit Union Youth Week (April 17-23) and the Week of the Young Child (April 11-15), Health Services CU, Dubuque, Iowa, and Mercy Child Development Center, both in Dubuque, collaborated on a fun, interactive activity teaching preschoolers the importance of savings. The activities occurred April 14 and April 15. (Photo provided by Health Services CU)
Youth week always is the third week of April and is sponsored by the Credit Union National Association. “Money Rocks at my Credit union” was the theme of the week. Some examples are:
* During “Money Rocks at my Credit Union,” Fremont (Ohio) FCU invited children and teens last week to stop by one of its offices to see how their money can rock at the credit union by making deposits to their Dollar Dog Kids Club or Cha-Ching Teen Club accounts (News Herald April 19). Attendees were invited to sign up for special prizes and to receive free giveaways all week. Each of the credit union’s four offices also gave away two $25 Visa gift cards at the end of the week. * North Carolina Gov. Beverly Perdue proclaimed the week of April 17-23 as North Carolina Youth Savings Week (Weekly Update April 15). Perdue issued the proclamation to highlight the value of saving money and teaching young people money management skills. “Maintaining a savings account is an investment in the future for youth,” Perdue wrote, “and helps young people learn financial literacy and work towards goals.” The proclamation came through the coordination of the governmental affairs team of the North Carolina Credit Union League (NCCUL). Lauren Whaley, NCCUL’s director of legislative and regulatory affairs, worked with the governor’s office to develop the proclamation and said the league was motivated by the combined efforts of credit unions. * Wisconsin Gov. Scott Walker recognized Central City CU, Marshfield, Wis., as part of a group of credit union representatives that received a proclamation from him last week during National Credit Union Youth Week (Marshfield News-Herald via April 12). Paul Kurth, Central City marketing manager, accepted the governor’s proclamation on behalf of Wisconsin credit unions. Central City was invited by the Wisconsin Credit Union League in honor of its youth financial education efforts, which earned the credit union a first-place state-level Desjardins Award. Central City operates three youth-run branches in Marshfield and Stevens Point, Wis., area high schools, and Nasonville Elementary. Central City also partners with teachers to bring financial lessons into the classroom on topics that include budgeting, credit scores and interest rates. * Kellogg Community FCU (KCFCU), Battle Creek, Mich., encouraged children and teens during youth week to learn the value of saving money (Michigan Monitor April 18). Events included contests, drawings, a financial quiz, informative handouts and financial literacy classroom visits at local schools. “National Credit Union Youth Week provides KCFCU with a great opportunity to educate youth about the importance of finances in a fun and exciting way,” said Kellogg Community CEO Tracy Miller. “Engaging students with fun activities like Credit Union Youth Week is one way we can help them develop responsible money habits at an early age, which will benefit them for a lifetime. KCFCU is committed to financial literacy for youths and adults, as well as encouraging positive money management skills which help our members achieve their financial goals.” * Credit Union ONE, Ferndale, Mich., recently used its Oakland University Facebook page to allow the Rochester, Mich.-based Oakland University campus clubs to compete for cash. Two campus organizations won a popularity contest that garnered each group $250. The contest began March 7 with one challenge: Generate the most fans at through April 7 and win cash. The 16 participating organizations generated 352 votes. “Credit Union ONE only recently launched the campus Facebook page,” said Gary Moody, Credit Union ONE president/CEO. “The contest is among the ways that we hope to generate interest and participation in the page. If students have other ideas of increasing our fan base, we want to hear it.” * Belvoir FCU, Woodbridge, Va., attended the Army Community Service (ACS) Teen Employment Workshop on Fort Belvoir Military installation, Wednesday. Belvoir shared information with the more than 20 students about financial planning and budgeting when looking for a job, what to look for when applying for a job, and summer employment opportunities available at their local Belvoir FCU. Belvoir Financial Coach Kelli Jo Anthon’s presentation focused on the importance of setting smart goals to achieve success in one’s personal finances and chosen career. Anthon’s presentation also provided students an understanding of the difference between gross pay and net pay, saving at least 10% per paycheck, and managing income. * Beacon FCU, LaPorte, Texas, announced it will give teens a “reality check” with a Financial Reality Fair May 4 that will teach lessons lesson in money management. Financial Reality Fairs, part of the REAL Solutions initiative, gives youth the opportunity to participate in a hands-on event that guides them through the personal financial management process--which includes budgeting, saving and investing in a simulated real world environment. Some 100 youth are expected to attend. Participants will meet with representatives of auto dealerships, realtors, lenders, utility providers and retailers to help them understand the expenses they will encounter in adulthood and the choices they’ll need to make to avoid debt. * OUR CU, Royal Oak, Mich., said it is taking financial responsibility to a new level by partnering with FamilyMint, an award-winning, hands-on budgeting and educational application designed for kids ages 5 through 16. FamilyMint provides parents with an interactive and simple resource to help raise money-smart kids and is provided at no cost to OUR CU members. With FamilyMint, kids learn by managing their own money in a safe, virtual environment, and parents act as the banker and custodian of the money. Children take control of their money, allocate savings, set goals and make transactions. Parents can automate allowance, encourage savings with motivating interest rates, and reward deposits for worthwhile goals. * Credit unions in Northwest Ohio partnered with Terra Community College, Fremont, to help set young people on the right financial path with a life-sized interactive game full of life lessons through “Finances 101: Walk the Walk, Talk the Talk.” More than 300 high school students from seven Northwest Ohio schools (11 classes) participated in the event April 12, at Terra Community College. The students “life” experience included: salary-based jobs, the opportunity to have children, purchase a home and car, acquire insurance and pay utilities. Students learned about issues, including how earnings affect buying decisions, what it costs to run a household, and how to prevent spending beyond their means.

WCMS to honor 50th graduating class

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CLAREMONT, Calif. (4/26/11)--Western CUNA Management School (WCMS) will celebrate its 50th anniversary--and its 3,500 graduates during five decades--with a special graduation celebration and conference July 20-21. Credit Union National Association President/CEO Bill Cheney will serve as the 50th graduating class commencement speaker, and Google Vice President of People Operations Laszlo Bock will be featured as the conference keynote speaker. Other conference speakers will include long-time WCMS faculty members Martha Andresen, Harry Eggleton, Joe Melchione and David Tansey. Since first opening its doors on the UCLA campus in 1960 with 42 students, WCMS has helped prepare thousands of credit union management staff to become regional and national leaders for the credit union movement. “For the past five decades, WCMS has helped produce new generations of leaders deeply committed to credit union principles and the continued success of our movement,” said Bill Cheney. “By helping prepare tomorrow’s credit union leaders to carry on the mission, philosophy and ideals of the credit union movement, WCMS is playing a vital role in improving the lives of millions of credit union members.” “Every year graduating students report that WCMS profoundly changed their lives,” said WCMS President and Dean James Likens. “Some say they found a voice they had never before been able to express. Some say they realized for the first time that they are competent. Others say they feel a new connection to themselves, to others and to our movement.” Located at Pomona College in Claremont, Calif., WCMS serves credit union employees from the participating credit union leagues of Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming. WCMS said its culture embraces high academic standards while emphasizing credit union philosophy. It stresses “head and heart”--understanding the best strategy and tactics while bringing passion and commitment to the service of credit unions and their allied institutions. WCMS shares a vision and purpose with its sister regional CUNA Management schools located at University of Wisconsin, University of Georgia, and Texas Christian University. WCMS’ program is held over three years, with two-week terms during consecutive summers. Students also complete two projects that analyze their credit unions. During the WCMS experience students organize class activities. Each class plans a fundraising social event for the entire school. The classes contribute the funds raised to WCMS for scholarships and enhancements.

HarborLight Option 1 asks members to help save free checking

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LANSING, Mich. (4/26/11)--Two credit unions in Michigan are enlisting their memberships in a campaign to stop the interchange rule and save free checking for consumers (Michigan Credit Union League Michigan Monitor April 18).
Harborlight CU, Whitehall, Mich., is among the Michigan credit unions educating its membership on the possible effects of the interchange proposal. Here, HarborLight CU staff member Cheryl Brown, left, explains to member Kelley Patino how to send a message to her legislators the debit interchange law.
Harborlight CU displays a poster in its lobby urging its members to take a proactive stance in preserving free checking.
Harborlight CU, Whitehall, Mich., designed “Save My Free Checking” cards and is handing them out to all members. HarborLight CEO Linda Wood said the efforts began by educating frontline staff about how the interchange rule will impact both credit unions and consumers. Member service representatives urge members to contact their local congressional members. The credit union is also displaying a poster in its lobby. CEO Linda Wood said members have asked questions about the rule. “I think they will respond,” Wood said. Option 1 CU, Grand Rapids, has designed a brochure explaining to members what the interchange proposal means and what they can do to help. The brochure cover page is headlined “Congress and the Federal Reserve want to force you to pay more to use your debit card. Learn how you can help.” Inside, the brochure outlines the interchange issue, explains what members can do to repeal the amendment and provides talking points for correspondence with congressional representatives. Jerri Schmidt, Option 1 vice president of marketing, said credit union employees at all levels are urging members to contact their legislators about repealing the proposal. “Wherever we come in contact with members, we try to educate them on the issue,” Schmidt told News Now. “It’s become more and more of a priority for us.” Schmidt said Option 1 has considered doing an e-mail blast to its entire membership about the interchange proposal. The Michigan Credit Union League, like other state credit union assocations, is encouraging state credit unions to join the cause and help fight the interchange rule, which is scheduled to go into effect on July 21. Interested credit unions can visit for ideas on how to help. The Credit Union National Association (CUNA) opposes a proposal in Congress capping interchange fees and has told federal lawmakers that such action would harm consumers by driving up costs of debit cards, limiting consumer options, and harming competition and technological innovation. Interchange fees allow business costs, including the risk of consumer nonpayment, to be shared by the payments participants, CUNA said.

MSUFCU members save a million and beat deadline

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EAST LANSING, Mich. (4/26/11)--Members of Michigan State University FCU (MSUFCU) beat the deadline for saving $1 million in loan interest by a week in the credit union's One Million Dollar Challenge promotion.
MSUFCU Marketing Manager Julie Rosenthal, left, presents a $500 check to members Robert and Dorothy Hardman after they took part in the credit union’s One Million Dollar Challenge. (Photo provided by the Michigan Credit Union League)
In the promotion, which lasted from Jan. 5 to March 31, the credit union challenged members to save by refinancing their loan and credit card balances from other financial institutions with MSUFCU, the credit union reported to the Michigan Credit Union League. Members exceeded the goal and saved nearly $1.1 million on about $7 million worth of loans (Michigan Monitor April 25). Three members who refinanced loans with the credit unions also won a $500 prize. "The One Million Dollar Challenge presented the perfect opportunity for MSUFCU members to establish new, low-rate loans with the credit union without taking on additional debt," said April Clobes, executive vice president of the East Lansing-based credit union. "When we initially set the goal of saving members $1 million in interest in only 72 business days, I was a little hesitant that it could be done. However, we received a great response from our staff, members and the local community, and we're thrilled we were able to surpass our goal and save members so much money," Clobes told the league.