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Altura CU Reports Eighth Quarter Of Net Gains

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RIVERSIDE, Calif. (4/30/13)--Altura CU Friday reported net income of $4.97 million on total assets of $718.14 million for the quarter ended March 30--the credit union's eighth consecutive quarter of net gains. 

Riverside, Calif.-based Altura CU also reported a net worth ratio of 10.13%, up from the same period last year when its net worth ratio was 8.10%.

"Our current levels of financial strength are the highest we have experienced in our nearly 57 years of operation," said Mark Hawkins, Altura CEO. 

"However, although we are clearly seeing economic improvements nationally and regionally, our immediate marketplace continues to face challenges," said Hawkins. "Unemployment still hovers at 10%, which is hampering the area's full recovery. Fortunately, the housing market is showing substantial improvement with fewer foreclosures, stronger sales and rising prices."

Altura's first-quarter financial results for 2013 are down from the same period last year when it reported net income of $7.03 million on assets of $708.2 million.

In early 2011, Altura had to close multiple branches because the local economy in the Inland Empire region was hard hit by the recession, with an unemployment rate of 15% at one point and record home foreclosures (News Now May 9, 2012).

Altura's numbers for the quarter reflect the improvements seen throughout its marketplace, the credit union said. Delinquent loans declined to 1.23%, compared with 2.04% for the first quarter of 2012. Net charge offs declined to 0.81%, "the lowest we've seen since the Great Recession began," and below 2012's rate of 2.26%, Hawkins said.

However, members still worry about job security, which hampers loan growth, Hawkins said. To promote lending, Altura recently launched a monthly series of free breakfast workshops for members and the public on topics such as building a better budget, understanding credit and resume writing tips.

CU System Briefs (04/30/2013)

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  • SPRINGFIELD, Mass. (4/30/13)-Former credit union manager Patricia Piscioneri, 67, of Adams, Mass., has been sentenced to one day in prison and six months of home confinement for embezzling $160,000 from the Adams Municipal Employees FCU.  Piscioneri pleaded guilty in January to a 30-count indictment charging her with false entries and embezzlement of funds by a credit union employee. According to prosecutors, Piscioneri  allegedly created fraudulent loan accounts under the names of credit union members and transferred the loan money into accounts belonging to herself, her husband and family members. Prosecutors said Piscioneri attempted to cover the scheme by forging signatures, creating false entries in the credit union's system, setting up fake loan document, and advancing the payment due dates of fraudulent loans (WWLP.com April 26) ...
  • KYLE, S.D. (4/30/13)--Lakota FCU, the newly chartered credit union on the Pine Ridge Indian Reservation in Kyle, S.D., will have its grand opening on Friday to honor the people of the reservation and their commitment to building brighter financial futures, according to the Credit Union Association of the Dakotas (The Memo April  26). The event will be 11 a.m. to 1 p.m. Credit Union Manager Whitney O'Rourke worked on the credit union's development since 2010 with Lakota Funds, a community development financial institution helping with an economic resurgence of the Oglala Lakota Oyate on the reservation. About 40,000 people live on the reservation, with 35% under the age of 18 (News Now Nov. 27) ...
  • WACO, Texas (4/30/13)--Members Choice FCU of Central Texas has established the West Volunteer Fire Department Fund to support victims of the fertilizer plant explosion in West, Texas, April 17.  "No change is too small, no bill too large. The first responders in West are heroes, and their selfless service to the entire community is inspirational," said credit union President/CEO Dan Cox (LoneStar Leaguer April 29). The fund was created to help the West Volunteer Fire Department rebuild and replace equipment so it can continue to protect and provide for the West community.  Donations from members and the public can be made at any Members Choice of Central Texas FCU branch. "Members Choice, like so many others, has been deeply touched by the bravery of these fine men and women," Cox said ...
  • BEAVERTON, Ore., and FEDERAL WAY, Wash. (4/30/13)--The Northwest Credit Union Association has appointed Shelly Berryman to the new position of vice president, member engagement and advocacy, effective May 28. She is currently vice president of membership development and advocacy at SchoolsFirst FCU, Santa Ana, Calif. (Anthem Recap April 25).  Berryman's work will support NWCUA's legislative and regulatory advocacy teams, and she will oversee compliance services. Before joining SchoolsFirst's staff in 2003, she served as vice president, branch operations at Corporate American Family CU, Elgin, Ill., from 1991 to 2003 ...
  • HARRISBURG, Pa. (4/30/13)--Marilyn Beers is retiring today as CEO of Oil Country FCU, Titusville, Pa., after 36 years with the $17 million asset credit union.  She started her career as the third employee in a small office with then Cyclops-Titusville FCU in August 1977, according to the Pennsylvania Credit Union Association (Life is a Highway April 29). Beers wore many hats as the credit union grew from a single sponsor to serving multi businesses and organizations in the Titusville area. She earned the Certified Credit Union Executive designation in 1992. The credit union has about 3,600 members and 13 employees ...

Survey: 88% of ATM Owners Not Ready For Global Standards

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SIOUX FALLS, S.D. (4/30/13)--Survey results confirm that ATM owners' concerns about the ATM liability shift that went into effect a week ago are justified, the ATM Industry Association (ATMIA) announced Monday.

"We are off to the worst possible start for EMV [Europay, MasterCard and Visa] migration in the U.S.--there is uncertainty, unpreparedness and an unknown field of possible outcomes thanks to this completely premature deadline forced on the industry," said Mike Lee, ATMIA CEO.

The survey shows that few have access to the solutions necessary to deploy EMV-capable ATMs, and even fewer have been able to meet the liability deadline. Eighty-eight percent of respondents indicated that they would be unable to deploy even one ATM capable of accepting EMV transactions by the April 19 liability shift date. About 9% have access to all of the solutions they need to get that job done, the survey indicated.

EMV is a global standard for inter-operation of integrated circuit cards (IC cards or "chip cards") and IC card capable point-of-sale (POS) terminals and ATMs, for authenticating credit and debit card transactions.

This liability shift for ATM operators only will have unpredictable results and unintended consequences, ATMIA said. MasterCard is forcing one-off solutions upon individual operators that will have to be re-certified once the industry has resolved the challenges associated with interchange requirements and other debit-system prerequisites, ATMIA said. MasterCard has already denied several requests by ATMIA to postpone the shift and align with retail POS or Visa ATM deadlines, ATMIA said.

Survey results indicate 6% of respondents are "very confident" that MasterCard's fraud detection tools will "protect [them] from fraud resulting from counterfeit EMV cards used on non-EMV compliant ATMs." However, 58% are not sure whether they will experience fraud losses.

What remains less clear is how ATM operators will respond, ATMIA said. Of respondents, 12% said they are considering taking some ATMs out of service--either temporarily or permanently. However, another 34% aren't sure.

Complete survey results are posted on the ATMIA website. Use the link.

New Wis Regulator To Monitor Technology, Consolidation

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MADISON, Wis. (4/30/13)--Wisconsin's soon-to-be state credit union regulator says she will monitor two key developments in credit unions--evolving technology and the trend for smaller credit unions to consolidate.

Kim Santos will become director of Wisconsin's Office of Credit Unions in June, when Ginger Larson retires after 17 years with the office, nine of them as director.

By evolving technology, Santos said she means the types of technologies credit unions offer their members--such as online banking, apps, bill payment and more--not the tools that credit unions themselves use, she told the  Milwaukee Journal Sentinel  (April 27). Examiners must keep up with these developments as they evaluate a credit union's safety and soundness.

Santos also noted the nationwide trend toward consolidating, especially among smaller credit unions.   Fewer credit unions exist in Wisconsin--last year 15 credit unions were absorbed in mergers. However, their membership grew 1.7% to 2.26 million members in 2012 from 2.225 million members in 2011, she said.

Some smaller credit unions are struggling financially, some have succession issues and have a harder time offering technology. Not all of last year's mergers were due to profitability issues. Some merged because a CEO retired and the board decided it couldn't offer the services members wanted without merging, she told the publication.

Consolidations will continue, she said, added she expects another dozen mergers in Wisconsin y June. Even as the number of credit unions decrease, Santos expects membership and assets to continue rising. On the whole, Wisconsin credit unions are "very strong," she said.

Santos has served as deputy director and chief examiner at the Office of Credit Unions. For the full article, use the link.

NJ Assembly Bill To Expand CU Advisory Council

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TRENTON, N.J. (4/30/13)--A companion bill to New Jersey legislation that would expand the state's Credit Union Advisory Council (CUAC) to seven members and provide for representation of a minimum of two federally chartered credit unions has been introduced in the State Assembly, said the New Jersey Credit Union League.

A-4030, a companion to legislation (S-2660) introduced last month by Senate President Stephen Sweeney (D-3), was introduced by Assemblyman Troy Singleton (D-7) (The Daily Exchange April 29).

The legislation recognizes that federally chartered credit unions--though primarily regulated by the federal government--also are subject to many state laws and regulations and should also have a voice, the league said.

CUAC was established with legislation enacted in 1984 so state-chartered credit unions can advise state government on credit union-related matters. Members are nominated by the governor and must be confirmed by the state Senate.

In October, Singleton agreed to amend his bill (A-2941)--at the league's request--to consolidate several Department of Banking and Insurance (DOBI) advisory boards and councils. The bill was introduced in response to a DOBI recommendation under a governor's executive order, which directed all departments to scrutinize the duties and spending of independent state boards, commissions, authorities and agencies.

DOBI determined that consolidating of the CUAC and two other boards into one Consumer Finance Advisory Board "would best serve the needs of the citizens of this state."

The new board would have consisted of nine statutorily defined representatives with only two seats designated for credit unions. Under the amended language, the bill would consolidate two boards while preserving a separate, dedicated CUAC, the league said. 

Pa. Foundation Approves Grants To Boost Haiti CUs, More

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HARRISBURG, Pa. (4/30/13)--The Pennsylvania Credit Union Foundation board of directors approved a restricted grant for a project in Haiti and 20 unrestricted grants last week.

Click to view larger image The Pennsylvania Credit Union Foundation board of directors approved more than $98,000 in grants at its meeting last week. (Photo provided by Pennsylvania Credit Union Association)
A $20,000 multi-year restricted grant was approved for the Haiti Project during the next two years at $10,000 per year, the Pennsylvania Credit Union Association (PCUA) said (Life is a Highway April 29).

The grant supplements an anticipated $66,100 in contributions from PCUA, 22 state credit unions and the World Council of Credit Unions over the same period, bringing total project investment to $86,100. Funds will be used to equip, train and evaluate three to five Haitian credit unions and their staff members.

The board approved 20 unrestricted projects, valued at $78,717.

The board also viewed a film of the Westmoreland County Reality Fair. The film was produced by Thomas Gaffron of Alive Digital Media LLC, and coordinated by Susan Lawson of Norwin Teachers FCU, North Huntington, Pa. It highlighted the work of Westmoreland County credit unions during a fair held in October.

The film also will be shown at the annual Foundation Breakfast next month, and distributed to the National Credit Union Foundation and Pennsylvania credit unions.

FBI Warns About Marathon-Bombing Charity Frauds

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WASHINGTON (4/30/13)--The Federal Bureau of Investigation is warning that individuals may be using the Boston Marathon bombing to generate fraud through e-mails and social networking sites or to gain access to computers through malicious software.

The FBI's Internet Crime Complaint Center says a spam e-mail with the subject line "Boston Marathon Explosion" and similar messages attempt to lure potential victims to malicious software or websites that trick the victim into taking actions that put their computer at risk for infection. Some links go to compromised websites and pop-up messages that prompt users to download software to view pictures, videos or other files.

Criminals also have taken to social media to solicit donations. One account on a popular social media service used the Boston Marathon name and official logo created after the April 15 explosions and said it would donate $1 to victims for every communication sent to the account. The account was suspended, but others may crop up, said the FBI.

The FBI also pointed out a number of "questionable domains" were registered within hours of the explosions.  Their intent is unknown, but the agency said unknown domains  for fraudulent purposes typically emerge after disasters to gain victims' personal identification information.

Here's what credit unions can tell their members:

  • Do not agree to download software to view content.  They can infect the computer with malware.
  • Do not follow a link received via e-mail to go to a website.  Links appearing as legitimate site, such as fbi.gov, could be hyperlinked to direct victims elsewhere when clicked. The sites may infect a computer or solicit personal information.
  • Verify the existence and legitimacy of organizations by researching and visiting the official websites. Be skeptical of charity names similar to but not the same as reputable charities.
  • Do not allow others to make donations on your behalf. Donation-themed messages may contain links to websites designed to solicit personal information that can be routed to a cybercriminal.
  • Make donations securely--use a debit/credit card or write a check made out to the specific charity.  Be wary of donating through money transfer services. Legitimate charities normally do not solicit donations via money transfers.

Super Glue Latest ATM Skimmers' Weapon

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SPOKANE VALLEY, Wash. (4/30/13)--Super glue is the latest weapon of choice among ATM skimmers--thieves who put devices on ATMs to skim personal identification numbers when cards used at ATMs, according to  Numerica CU.

An ATM at the Spokane Valley, Wash.-based credit union's Wandermere's location was tampered with when someone super glued the machine's "Clear" and "Cancel" buttons, said Numerica's website Friday.

When users attempt to cancel a transaction, nothing happens and the card is not released immediately. The users leave discouraged, assuming the ATM kept the card.  However, the machine automatically kicks the card back out after several minutes of inactivity, and the thief then absconds with the card.

A Bank of America machine at Wandermere also received the super-glue treatment.

The $1.2 billion asset Numerica checks its ATMs daily and looks for signs of tampering. It also told members its ATMs are anti-skimming.

If members have trouble completing a transaction, they should notify the branch immediately, Numerica said.  If it is after business hours, members should wait a full five minutes at the machine before leaving it with the ATM card still inside.  The ATM will take about five minutes before ejecting the card or keeping it locked inside.

Meanwhile, Numerica is increasing the number of ATM checks to ensure they work properly, said the notice.

Twenty CUs Piloting Filene's Leeflet Program

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MADISON, Wis. (4/30/13)--Twenty credit unions are piloting Filene Research Institute's Leeflet electronic brochure pilot program, which aims to improve operating efficiency, increase marketing effectiveness and enhance member experience. The pilot runs from May1 through Sept. 30.

"As credit unions are challenged to shrink operating expenses, they're searching for cost-reduction opportunities that don't negatively impact members," said Jason Milesko, Filene chief impact officer. "Paper brochures are largely ineffective and lack the mechanisms necessary to track campaigns. This pilot will help credit unions meet these challenges with electronic brochures as an alternative."        

The average credit union can spend $50,000 per year on paper brochures. Powered by DigitalMailer, Leeflet helps credit unions eliminate those expenses while tracking use and communicating with members with electronically targeted brochures, Filene said.

During the pilot, credit unions digitizing brochures and other materials using Leeflet will reduce brochure expenses by 75%.

Leeflet originated in Filene's i3 program and stems from research suggesting that operating efficiently, with low-member impact, is necessary for credit unions in ensuring long-term sustainability and building stronger use and member loyalty.  In initial testing, Smart Financial, Financial Center FCU in Houston and Fort Knox FCU in Radcliff, Ky., saw brochure open rates of more than 70% and click-through rates of more than 25%.

For more information, use the link.

NW Regulators Issue Final Cease Order, Fine Vs Lender

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BEAVERTON, Ore., and FEDERAL Way, Wash. (4/30/13)--Regulators from Oregon have issued a final cease-and-desist order against a South Dakota-based lender, and Washington state regulators are preparing to do the same, according to the Northwest Credit Union Association.

They join a growing list of states taking legal action against Western Sky Financial LLC, based in Timber Lake, S.D.  The lender has also been named in actions by Massachusetts Division of Banks (Boston Herald April 29) and in legal actions in West Virginia, Colorado, Maryland, Missouri and Florida. The Federal Trade Commission also has accused the companies' owner, Martin Webb, as engaging in illegal collection practices (Puget Sound Business Journal Oct. 31). 

The Oregon Department of Consumer and Business Services (DCBS) issued the final cease-and-desist order against Western Sky Financial and fined the company $17,500  for making loans in the state without a proper license. Western Sky was charging interest rates in violation of Oregon law, the regulator said (Anthem Recap April 25).  DCBS said the lender promoted loans through TV and radio advertising campaign in many states and made loans to seven Oregon residents charging annual interest rates between 89% and 342%.

State law prohibits consumer finance lenders from charging more than 12% or 5% more than the Federal Reserve discount rate, which is currently less than 1%--whichever is higher. The state defines a consumer finance loan as $50,000 or less, with loan terms of more than 60 days and periodic payments, and is used for personal or household use.

Western Sky Financial also must stop all collection of interest, fees or charges on loans to Oregon residents.

In Washington, the State Department of Financial Institutions is seeking restitution and a prohibition order against the lender. "Credit unions should continue to work with their members and offer alternatives to costly payday lending," said David Curtis, director of compliance services at NWCUA.

The Puget Sound Business Journal said that thousands of Washington state residents received loans at interest rates that far exceed that state's legal limit of 12% for that type of loan.