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IHuffington PostI columnist got loan at CU

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WASHINGTON (4/10/09)--A columnist advocating action to get banks lending again noted in The Huffington Post Thursday that people are still managing to get loans. His example: His wife's loan at Arlington Virginia FCU. "If one could reduce the point of all the massive government planning and intervention and bailouts down to a single pressing need, it's this: We must take action in order to get the banks lending again," wrote Jason Linkins. However, "people are still managing to get loans," he said. Earlier this year, his wife needed a loan to pay for her spring semester tuition. "We went to the Arlington Virgina FCU to get the needed monies. We knew that the terms were good because we'd used them as a lender before, " Linkins wrote. "We knew that they would give us a loan despite the economy, as well. How'd we know that? AVFCU said so, in a television advertisement. It was the first ad I had ever seen for our credit union." Linkins noted that the ad said the same thing that CEO Brenda Turner told members on the credit union's website. "AVFCU remains well capitalized as defined by federal regulations," she wrote, adding there has been no need for a taxpayer bailout. "We have never engaged in subprime mortgage lending or high-risk investments. Because we have no pressure to earn large profits to satisfy greedy shareholders, we have never lost sight of our core purpose--prudently serving the financial needs of our member owners," she wrote. Linkins' column asks a series of questions, including "Were you turned down by a bigger bank before getting a loan with your credit union?" and asks readers to tell about it in 150 words or less.

Michigan fraudster pretending to be CU is closed

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LANSING, Mich. (4/10/09)—The Michigan Office of Financial and Insurance Regulation (OFIR) has slapped a cease-and-desist order on an entity claiming to be a Pennsylvania-based credit union, but which the regulator believes to be a bad actor stealing both money and identities. OFIR alleges that “Firststar CU” is a fraudulent financial institution, which advertised in Michigan newspapers and encouraged customers to apply for loans by providing upfront payments and personal information. It also advertised via a website, which was shut down after OFIR contacted the Web host. The state regulator urged consumers to have personal contact with a financial institution before entering into a business contract. It also recommended that consumers with questions could verify the identity of credit unions, banks and thrifts, through state or federal regulators. The Firststar case represents the second time in less than a month that Michigan's credit union regulator has issued a cease-and-desist order against a fake online credit union. In March, OFIR discovered a bogus credit union called Communal CU of Dearborn after consumers complained about its website. OFIR said that scam artists were promoting the fake credit union on the Internet to consumers looking for a break on a loan or wanting to refinance their mortgage. Consumers told OFIR they were asked to provide two pay stubs, Social Security numbers and bank account numbers, information that could be used for identity theft and unauthorized access to financial and card accounts.

Wharton Digital FCU launch custom international student loans

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PHILADELPHIA (4/10/09)--The Wharton School of the University of Pennsylvania and Digital FCU, Marlborough, Mass., announced a custom loan program to help international students receive funds for school. The loans will cover tuition and living costs at Wharton and will be available to first-year international students for their second year of study. The loans carry no origination fees. Digital FCU developed the program for Wharton’s international MBA students with Credit Union Student Choice, a credit-union owned organization that offers school-certified private student lending solutions to credit unions nationwide. The credit union has a “unique business model that makes it suited to meet the private loan needs of international students,” said James Regan, DCU president/CEO. About 40% of Wharton’s MBA students are international, and the school has 84,000 alumni in 139 countries. The global economic crisis has hurt many financial institutions who traditionally offered private student loans, according to Anjani Jain, vice dean of Wharton’s Graduate Division. News Now reported Jan. 26 that CitiAssist and Sallie Mae international student loan programs had been pulled because of the economic crisis. The article noted that MIT FCU, Cambridge, Mass., started a loan program with Credit Union Student Choice to help students pay for school. Digital FCU has $4 billion in assets.

Central States assigned receiver drops suit

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MILWAUKEE, Wis. (4/10/09)--A Milwaukee judge Tuesday appointed Milwaukee attorney Michael Polsky as receiver to oversee the liquidation of Central States Mortgage Co., and Central States' parent company dropped its $15 million lawsuit against the company's founder. The Wauwatosa, Wis.-based mortgage company, which was 70% owned by credit unions, closed on March 9 and filed for receivership March 27 in Milwaukee County Circuit Court. Its parent company, CSMC Ind., had asked the court to appoint another Milwaukee attorney, Philip Ostroski, as receiver (Milwaukee Journal Sentinel April 7). CSMC filed a notice Tuesday it was dropping its racketeering lawsuit against founder and former CEO Richard Jungen and four other former executives. The company's attorney, David Meany, said Wednesday the action was dropped for now to enable the receivership to proceed. The lawsuit had alleged that Jungen and others used another business called Interim Funding to funnel bad mortgages to Central States, causing a $15 million loss. The dismissal motion was filed "without prejudice," which means CSMC could revive the matter during the receivership case (The Business Journal of Milwaukee April 8). A receivership is a state court proceeding that allows the liquidation of a company in a manner similar to a federal bankruptcy.

WesCorp subs annual meeting forums with town halls

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SAN DIMAS, Calif. (4/10/09)--Western Corporate FCU (WesCorp) announced it had canceled its Future Forum and CFO Forum conferences and will replace its annual meeting with a member "town hall" meeting in another city. The corporate, which federal regulators recently placed into conversatorship, scheduled the member town hall meeting for May 18 at Sheraton Fairplex Hotel, Pomona, Calif. "This year will be a challenging one for credit unions financially, and we have been told by members that their travel budgets have been reduced," said WesCorp in a release on its website. WesCorp will conduct subsequent town hall meetings in the following weeks in various Western states, with details announced as they become available. The corporate told its members the meetings were a chance to meet new CEO Phil Perkins and learn about overall performance from other WesCorp leaders. They also will discuss the economic environment, the likelihood of a recovery in 2009 and WesCorp's position.

IWSJI Banks card fee hike prompts move to CU

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NEW YORK (4/10/09)--Tamara Smith of Burlington, Vt., told The Wall Street Journal Thursday she is opening a new credit card account with a credit union instead of a bank to protect herself from banks’ pursuit of higher interest income. Smith reacted to a Bank of America notice that her 7.9% interest rate would increase to nearly 13% by calling the bank to opt out of the change. That allows her to retain the 7.9% rate, but prevents her from using the card for new purchases, which would trigger the higher rate on her full balance of approximately $2,000. Bank of America recently announced plans to raise interest rates to double-digit levels for credit-card customers who carry a balance every month instead of paying off the card in full. The bank attributed the move to higher costs for offering credit,. Citigroup Inc., J.P. Morgan Chase & Co. and American Express Co. already have implemented similar policies, which typically allow cardholders to opt out of higher rates by ceasing to use the card or closing the account. Financial educators encourage consumers who face increases to pay down balances, but warn against closing accounts because it can negatively impact credit scores, said The Journal. Banks are increasing rates now to avoid new regulatory limits on credit-card increases that take effect in July 2010. Congress is pondering bills containing stronger restrictions with a shorter timeline. Banks have protested those proposals, claiming tighter rules would force them to restrict access to credit and promotional rates.

PCUA REAL Solutions may complement Better Choice program

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HARRISBURG, Pa. (4/10/09)--Leaders from the Pennsylvania Credit Union Association (PCUA) and the state’s Treasury Department recently discussed how the national REAL Solutions program can complement Pennsylvania’s Credit Union Better Choice Program. The REAL Solutions program offered by the National Credit Union Foundation (NCUF) works with state leagues to help credit unions serve people of modest means with products such as alternatives to payday lending, volunteer income tax assistance and home loan payment relief.
Sharing information about AmeriChoice FCU’s student branch at Central Penn College were, from left, Mike Wishnow, Pennsylvania Credit Union Association senior vice president, communications and marketing; Keith Welks, the state’s deputy treasurer; Kim Bindl, AmeriChoice financial literacy manager; Jim Williamson, the state treasury’s director of policy; and Carol Fastrich, AmeriChoice vice president of marketing. (Photo provided by the Pennsylvania Credit Union Association)
The Better Choice program, which grew out of a collaborative effort between PCUA and the Pennsylvania Treasury Department, offers short-term loans that help people make the transition away from high-cost payday loans to fairly priced credit union services. Deputy Treasurer Keith Welks and Director of Policy for Treasury Jim Williamson discussed the complementary programs at a meeting hosted by PCUA (Life is a Highway April 9). Earlier, Treasurer Rob McCord met with members of Pittsburgh FCU in Mount Oliver to learn how Better Choice payday lending alternatives helped them save money. McCord noted that Better Choice loans save borrowers an average of 80 cents in fees and costs per dollar borrowed. A payday loan for $500 typically costs consumers $15 for every $100 borrowed for a two-week term, which adds up to $450 over 90 days. In comparison, a $500 Better Choice loan costs consumers $42.50 for 90 days and leaves them with 10% of the loan, or $50, in a savings account at the end of that term. The list of the 79 credit union participants is on PCUA's website. To date, participating credit unions have made nearly 15,000 loans worth a combined $6.8 million. The Treasury Department’s Welks and Williamson also visited in-school branches operated by Members 1st FCU at Mechanicsburg High School and by AmeriChoice FCU at Central Penn College.

NCUF receives 100000 from Premier Club supporter

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WASHINGTON (4/10/09)--The National Credit Union Foundation (NCUF) has received $100,000 from Fidelity National Information Services, Visa and Card Services for Credit Unions. The group jointly made the donation, and joins four other NCUF 2009 Premier Club supporters. Others include the Credit Union National Association, CUNA Mutual Group, The Corporate Credit Union Network, and jointly: Harland Clarke, CO-Op Financial Services, and Western Corporate FCU. "We've been able to count on CSCU, Visa and Fidelity National each year for their support which is vital during these uncertain economic times," said Steve Delfin, NCUF executive director. "We appreciate their commitment, thank them for their sustaining support, and urge others to follow their example."

CUs can offer better rates than banks on auto loans savings

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DALLAS (4/10/09)--Credit unions can offer their members better rates on savings accounts and auto loans than commercial banks, according to a DFW news story in Dallas. The NBC affiliate compared credit unions with banks to see which is a better deal for consumers. On average, credit unions offer 5.38% interest on four-year auto loans, compared with 6.68% with banks. Credit unions also offer an average of 0.54% return on savings, compared with 0.36% at banks. “The differences may seem small, but can add up,” the news outlet said. DFW advised consumers to get to know someone at their financial institutions so that they can have someone to turn to when they need help. To see the video of the news story, use the link.

CU System briefs (04/09/2009)

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* ALBANY, N.Y. (4/10/09)--Diane LaVigna-Wixted, executive director of the New York Credit Union Foundation, has been appointed to serve on the National Credit Union Foundation's (NCUF) grant committee by NCUF Chairman Allan Kemp McMorris. The committee approves or recommends for approval grant requests and oversees the grants process as well as develops and approves the annual grants portfolio. As part of her duties with the New York foundation, LaVigna-Wixted works with credit unions, schools and community organizations to improve financial literacy. The state foundation also offers financial support to credit unions through four grant-making programs: professional development grants, financial fitness grants, smart money grants and organizational grants. In 2008, it awarded 109 grants totaling $136,102. LaVigna-Wixted is also a volunteer member of the executive committee of the State Credit Union Foundation Network … * HARAHAN, La. (4/10/09)--ASI FCU celebrated the grand opening of its newest branch in Mid-City at an open house March 23. The branch provides full services to the Spanish-speaking residents of New Orleans and to ASI's overall membership (eNews April 8). The Mid-City branch offers both a full-service bilingual branch and Spanish-English materials to the community. City Councilmember Shelley Midura and State Rep. Austin Badon Jr. addressed the crowd. The branch also was welcomed by Darlene Kattan of the Hispanic Chamber of Commerce and Martin Gutierrez of the Catholic Charities and the Hispanic Apostolate of the Archdiocese of New Orleans. (Photo provided by the Louisiana Credit Union League) … * SARASOTA, Fla. (4/10/09)--Sarasota (Fla.) Coastal CU and MidFlorida FCU, Lakeland, announced that they are merging. The new credit union will be called MidFlorida FCU. All Sarasota Coastal employees will be offered jobs with MidFlorida (Herald-Tribune.com April 8). Sarasota Coastal’s branches will be remodeled and staff will be increased at each office. The merger is slated to close June 30. Sarasota Coastal has $224.5 million in assets. MidFlorida has $1.28 billion in assets ... * ODESSA, Texas (4/10/09)--Southwest 66 CU has presented two members with loan forgiveness awards. James Magness of Odessa and Miranda Castilleja won the awards. Magness won $4,988.07 for a loan he’d taken out for home improvement, and Castilleja, a single mother, received $19,687.05 to pay off her auto loan (Odessa American April 8). Southwest 66 has $50 million in assets ... * ATLANTA (4/10/09)--A man who robbed CDC FCU in Atlanta Aug. 23 wearing a Dracula mask and possessing a semi automatic weapon has been sentenced to more than 20 years in prison. Nathaniel Little Jr. of Decatur, Ga., also must pay restitution of $14,669. Little pleaded guilty Nov. 12 to the robbery (AJC.com April 9). Little is accused of robbing the $185 million asset credit union twice--once in August, and once in September ...

Kansas governor signs membership act

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TOPEKA, Kan. (4/10/09)--Kansas Gov. Kathleen Sebelius Wednesday signed into law S.B. 72, which clarifies state credit union membership eligibility components. The bill clarifies that eligibility components--such as family members and volunteers--are protected. These components were only referenced in the grandfathered portion of the statute, and until the act was enacted, it wasn’t clear whether they were allowed. The Kansas Credit Union Association (KCUA) sought the changes to eliminate confusion about Kansas credit unions’ ability to continue serving groups that credit unions have served in the past and to protect their interests. The clarification is important for credit unions’ planning efforts and regulatory purposes, according to Haley DaVee, KCUA director of state legislative and public affairs. “KCUA wanted to make sure there are no misinterpretations of the law and how it should be applied,” she said.