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Express CU helps break payday-lending cycle

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SEATTLE (5/28/09)--The Express CU in Seattle is targeting thousands of people not served by any traditional bank to help break the payday lending cycle in the area, according to The Seattle Times (May 24). Roughly 20% of Seattle's adults don't have a bank account, reports a Brookings Institution study. Many of them use check-cashing outlets and payday lenders. Express CU, an $8.8 million asset credit union, is expanding with the help of the area's largest credit union, BECU, and a number of foundations that provide charitable support where needed. The credit union aims to bring back the best of old-fashioned neighborhood banks and services to help people better manage their money. Because getting to the bank is hurdle for many low-incomers, the credit union sends mobile community-service representatives into local communities. They set up shop and maintain regular hours at 16 nonprofiit offices such as Hopelink, Solid Ground, YWCA, Catholic Community Services and Neighborhood House. The representatives help people open accounts, deposit paychecks and apply for small loans, but they don't handle cash. Members go to the main office or use ATMs and BECU branches to get cash. By meeting people where they are and building on trust, Express is doing something no other financial institution has tried, Marilyn Mason-Plunkett, CEO of Hopelink, told the newspaper. Many people don't understand how financial services work, said Brenda Kurz, CEO of Express CU. "The bank models are focused on efficient ways to do business. That's different than monitoring and assisting folks with unique needs." The credit union hopes to expand to 7,500 members in King County in the next five years. It has raised $2.29 million in charitable support from the Medina Foundation, the Bill and Melinda Gates Foundation, Seattle Foundation, Safeco Foundation and Boeing. BECU provides logistical support, such as legal, accounting and information technology services, at no cost for up to five years. Kurz told the Times the credit union hopes to be self-sustaining by its fourth year. The institution is 70 years old but recently expanded and reorganized to focus on helping people break the payday lending cycle. The article outlines how Express is different and interviews members about the services they've received. For the full article, use the link.

Wis. regulator holds quarterly report til law passes

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MILWAUKEE (5/28/09)--The Wisconsin Office of Credit Unions said it held off publishing its quarterly financial report on the state's credit unions until federal legislation passed to replenish the industry's deposit insurance and stabilize the corporate system passed. Eight of the 10 largest credit unions in Wisconsin posted losses--most of them more than $1 million--during first quarter because of the accounting for their contributions to the National Credit Union Share Insurance Fund to replenish the system, said the Milwaukee Journal Sentinel (May 26), which called the losses "stunningly bad." Suzanne Cowan, director of the Office of Credit Unions, told the newspaper the agency held off publishing its quarter report, aware of how the numbers looked but knowing that congressional action was in the works to spread the insurance fund replenishment cost over time. "We were just waiting to make sure that got passed before we put out our numbers because they are so ugly," said Cowan. Because of the new law, the first-quarter results won't stay dismal for long. "Now that Congress has given the chief national regulatory agency the authority to borrow up to $6 billion to help strengthen the industry, individual credit unions like those in Wisconsin will be able to make deposit insurance payments in increments over seven or eight years instead of all at once," said the newspaper. "That means many will be able to restate their earnings and erase the red ink for the first quarter." Wisconsin Credit Union League President/CEO Brett Thompson said spreading out the cost will put many credit unions back in the black. "Instead of absorbing 100%, essentially, of that cost this year, they will have to go back and restate and only absorb approximately 15% of that cost this year," he told the paper. "So many of those that were otherwise negative are going to be positive once they've restated." For the full article, use the link.

Truliant pulls ads until case is decided

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WINSTON-SALEM, N.C. (5/28/09)--Truliant FCU has pulled its "Yes You Can" ads and billboards until a trademark infringement case filed by a competing bank is decided in a federal court. As a result, the bank Tuesday withdrew its motion for a preliminary injunction against the credit union's ads. CommunityONE Bank, based in Asheboro, N.C., had requested the preliminary injunction to stop the credit union from using the ads while its lawsuit for trademark infringement proceeded through the court. The bank filed a lawsuit May 13 in the U.S. District Court for the Middle District of North Carolina that claims the credit union uses the bank's registered "Yes you can" service mark on ads and in two billboards. It also claims the credit union's sunburst logo strongly resembles the bank's "Jack" logo, which looks like a jumping jack. According to court documents, during negotiations between the two institutions' attorneys, the credit union told the bank that the credit union had removed two billboards that use a "Yes You Can" phrase. It also removed a photo of the billboard ad from Truliant's Facebook page. The credit union said the representation is not being used on any other billboards or materials, and it has instructed relevant employees not to use the phrase. "Because the primary relief that CommunityONE sought through its motion for preliminary injunction has been realized, CommunityONE moves to withdraw its motion for preliminary injunction," said the court document. The original lawsuit, which seeks damages, has not been dismissed. It alleges federal trademark infringement, federal unfair competition, state unfair and deceptive trade practices and common law trademark infringement and unfair competition. Truliant is a $1.195 billion asset credit union based in Winston-Salem. Its billboard advertisement read, "Yes You Can. Join Truliant!"

SAFE CU to acquire American River HealthPro CU

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NORTH HIGHLANDS, Calif. (5/28/09)--SAFE CU, North Highlands, Calif., will acquire Rancho Cordoba. Calif.-based American River HealthPro CU under a merger agreement announced Tuesday. With the merger, three California branches of American River HealthPro--Carmichael, Roseville and midtown Sacramento--will be shuttered. The credit union’s Rancho Cordoba branch will become a SAFE branch (The Sacramento Bee May 27). Also, American River HealthPro’s 24 ATMs will become SAFE CU ATMs. Nearly half of American River HealthPro’s 70 employees will be laid off, Dave Roughton, SAFE chief operating officer, told the newspaper. The 375-employee SAFE will give some preference to those who lost their jobs when filling new positions, he added. American River HealthPro began considering a merger last year after experiencing loan losses, SAFE CEO Bob Steponovich told the paper. SAFE CU has $1.362 billion in assets. American River HealthPro CU has $222.6 million in assets.

Texas renews state CU Department for 12 years

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AUSTIN, Texas (5/28/09)--Texas’ anticipated extension of the Texas Credit Union Department for 12 years has passed the state legislature and is on its way to Texas Gov. Rick Perry for signing. As one of the few states with a separate credit union regulator for state charters, Texas’ healthy credit union system speaks to the value of both the dual-chartering system and an independent regulator, said the Texas Credit Union League (TCUL). With the Texas Sunset process, the state legislature reviews every department in the state every 12 years to examine whether it should continue to exist. Under the process, each agency must perform for its commission a self-review of its roles and responsibilities, including areas where its duties may overlap those of other agencies and the effect of the agency's abolition on loss of federal funding. About 20 to 30 agencies go through the Sunset process each legislative session. The Sunset bill passed both houses by unanimous votes. It was a marked departure from 12 years previous when opponents argued strongly to place credit unions under the regulation of the state’s banking department, TCUL said. “It was a truly epic battle with the banks back in 1997, and we won an uphill battle and surprised many,” said league Vice President of Governmental Affairs Jeff Huffman. “This time, we vowed to win decisively without ugly fights, and are pleased state charters [credit unions] will continue to have their own independent state regulator until 2021.” Much of the work on the Sunset bill was completed during the interim period--the state legislature meets for five months every two years, and hearings, analysis, and negotiations for the Credit Union Department were intense prior to the session. The league gained several concessions favorable to credit unions in the process, particularly in removing new burdens that were initially in the bill. “Our goal with Sunset was to both renew the department for 12 years, and also to ensure that the bill did not unduly expand regulatory powers and burdens on credit unions,” said Dick Ensweiler, league president/CEO. “During a time of significant turmoil in the financial sector, we take great pride in this victory for Texas credit unions.” TCUL worked to successfully remove a new provision that would allow monetary penalties to be levied on credit unions, and worked to keep statutory language to continue allowing for joint 990 filings. The IRS Form 990 is the annual return required from state-chartered credit unions and other tax-exempt organizations. The league also worked to reasonably limit the scope of Sunset-Agency mandated new disclosures for members, such as making information available to members upon request--as required under federal Form 990 law--but not requiring certain sensitive information such as executive pay disclosure be “pushed” out to members who have not requested it. “Our efforts in the interim were key to our success this session,” Ensweiler said. “As with most things at credit unions, the bulk of the work happens behind the scenes. This review is a clear vote of confidence in the effectiveness of the independent regulator keeping credit unions safe and sound, under the leadership of the Texas Credit Union Commission under Chairman Gary Janacek, CEO of Scott & White CU, and the department under Commissioner Harold Feeney.” “We believe there is compelling evidence here for Congress, too,” said league Chief Advocacy Officer Buddy Gill, “as they begin to consider regulatory restructuring and in that frame work, debate on whether to continue to keep the National Credit Union Administration a separate independent regulator. “The Texas credit union regulatory system--separate from regulation of banks--has worked well in Texas to keep credit unions safe, sound and growing to serve seven million members over the past 12 years, enough so that Texas lawmakers unanimously choose to continue it for another 12 years,” Gill added. “We hope our Texas congressional delegation will take that model to heart as regulatory restructuring is contemplated this year in our nation’s capital.”

Another wave of scams hits several states

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MADISON, Wis. (5/28/09)--Phone scams are targeting credit unions in Wisconsin, Vermont and Maryland, and credit unions are reminding members that the credit union would never contact them for account or credit card information. Forward Financial CU, Niagara, Wis., would never call members asking for personal information because the credit union already has it, said Tammy Young, vice president of operations ( May 26). Forward Financial was one of two institutions recently targeted by scammers who were calling consumers and asking for personal financial information. Members who have provided their information to scammers should contact the credit union immediately. Forward Financial can block members’ debit or credit card from being used, Young said. Cumberland, Md., police have received hundreds of reports about a phone scam in which individuals identifying themselves as Chessie FCU employees asked for account information (WCBC Wire May 26). The scammers have called homes, businesses and cell phones in the area. Williston, Vt., residents have received calls from individuals claiming to represent New England FCU and Heritage Family CU. The callers ask recipients to supply personal account information to reactivate a credit card (WCAX News May 26). Matt Levandowski, Heritage Family CU executive vice president, said some of his credit union’s members had given scammers their account information but their accounts had not been compromised (Rutland Herald May 26).

CU System briefs (05/27/2009)

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* MILAN, Ill. (5/28/09)--Two women have been indicted by a grand jury in a Rock Island, Ill., U.S. District Court for lying about their knowledge of a robbery last summer at a DHCU Community CU branch in Milan, Ill. Rachel R. Pitchford and Laruen E. Talbot were accused of denying what they knew about the June 23 robbery, which was conducted by Evander Allen Jordan Jr., and Christopher Scott Myles. The men pleaded guilty to the robbery. Myles was sentenced to more than seven years in prison and must pay $112,140 in restitution. Jordan will be sentenced June 19. Pitchford is accused of giving Myles specific information about the credit union's maintenance of an ATM, including the time of day it is serviced, the number of employees who service it, and the security present. The indictment did not state whether she was an employee of the credit union. The credit union is based out of Moline, Ill. (Quad-City Times May 22) … * PLEASANT GARDEN, N.C. (5/28/09)--Donna Mae Robinson, 46, of Pleasant Garden, N.C., has been charged with obtaining more than $100,000 in property by defrauding eight financial institutions--including seven credit unions. According to the arrest warrants, Robinson faces charges of obtaining the property under false pretenses, financial card fraud and two counts of felony conspiracy. The documents said she obtained or attempted to obtain auto loans, personal loans and credit cards by using the identities of three women. The offenses, dating back to August 2008, were against: Summit CU; Greensboro Municipal CU; Choice Community CU; Suntrust Bank; Coastal FCU; Truliant FCU; Piedmont Aviation CU; and Carolina Postal CU. Robinson is in Guilord County jail under a $300,000 bond ( May 23) … * LANSING, Mich. (5/28/09)--Two Michigan credit union chapters held legislative breakfasts that attracted a number of credit unions and legislators, reports the Michigan Credit Union League (Michigan Monitor May 26). On May 11, the Metro West Chapter saw 28 credit union people, two state legislators and three legislative assistants at its breakfast/annual meeting at Detroit Edison CU, Plymouth. State lawmakers attending were Sen. Bruce Patterson (R-Canton) and Rep. John Walsh (R-Livonia). Staff also attended from the offices of state lawmakers Sen. Tupac Hunter (D-Detroit), Rep. Bert Johnson (D-Highland Park), and Rep. Marc Corriveau (D-Northville). On May 18, the Mid-Michigan Chapter met in Sagiaw with 48 credit union supporters and seven state legislators: Sen. Roger Kahn (R-Saginaw), and Reps. Jeff Mayes (D-Bay City), Andy Coulouris (D-Sagnaw), Jim Stamas (R-Midland), Tim Moore (R-Farwell), Kenneth Horn (R-Frankenmuth) and Bill Caul (R-Mt. Pleasant) … * COLORADO SPRINGS, Colo (5/28/09)--Ent CU employees and members contributed $27,287 for the 2009 Climb to Conquer Cancer fundraiser benefiting the American Cancer Society of Southern Colorado. As patron sponsor, the credit union helped the event exceed its overall fundraising goal by 150%. The event brought in more than $51,000 for local cancer patient assistance and research into cures and treatments. Nearly 100 employees participated in the climb at Cheyenne Mountain State Park, south of Colorado Springs. Hundreds of others contributed to other Ent fundraising activities such as jeans days, barbeques, bake sales and tickets for breakfast …

CUs raise 9.3M for childrens hospitals in 08

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SALT LAKE CITY (5/28/09)--Credit Unions for Kids, a credit union industry effort to raise money for Children’s Miracle Network, contributed $9,322,827 to children’s hospitals in 2008, making it the third largest fundraising sponsor for the charity. “Credit Unions for Kids increased their fundraising efforts by 16% over 2007, which, in light of the current economy, demonstrates the credit union industry’s resiliency and also their exemplary commitment to philanthropy during these hard times,” said Joe Dearborn, Children’s Miracle Network senior director. Credit Unions for Kids raises money for 170 Children’s Miracle Network hospitals nationwide. The events and amounts raised were:
* The Credit Union Cherry Blossom Ten Mile Run, $1 million; * Tampa Bay Area Credit Unions Golf Tournament, $330,000; * Desert Schools FCU Golf Tournament, $221,000; * Hank & Moose Golf Tournament, $220,000; * Oregon and Southwest Washington Credit Unions for Kids Wine Auction, $205,000; and * California/Nevada Credit Unions for Kids Wine Auction, $190,000.
The CO-OP Financial Services Miracle Match program also saw more than 70 credit unions and their respective hospitals benefit from matching funds. The credit unions raised more than $1 million, with CO-OP matching $520,000 to bring their contribution to more than $1.5 million. The top five markets for raising the most money include: Portland, Ore.; Phoenix; Washington, D.C.; Austin, Texas; and San Antonio. The top 10 states that raised the most money are:
* Texas; * Oregon; * California; * Arizona; * Wisconsin; * Washington, D.C.; * Florida; * Georgia; * Washington; and * Utah.

SECU invests 200000 in courthouse renovation

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RALEIGH, N.C. (5/28/09)--State Employees' CU (SECU) members, via the SECU Foundation, have provided a $200,000 investment to the Mitchell County Courthouse Foundation for renovations to the historic courthouse.
The Mitchell County Courthouse will house State Employees CU's (SECU) Virtual Learning and Communication Center.
The funds will make way for the SECU Virtual Learning and Communication Center, which will house telecommunications and a public access computer system so area residents can access educational, cultural and economic development opportunities that currently aren't possible. The courthouse, located in Bakersville, N.C., is listed on the National Register of Historic Place by the U.S. Department of the Interior. The renovation will transform the existing property into a place to serve area citizens while preserving the historic significance of the building.
From left: Janet Cook and Shirley Hise, members of the Spruce Pine SECU Advisory Board; Dr. Daniel Barron, Mitchell County Courthouse Foundation chairman; Kim Gouge, State Employees' CU vice president of Spruce Pine; and Chris Smith and Robert Gault, advisory board members. (Photos provided by SECU Foundation)
SECU Foundation's investment toward the courthouse "has enabled this small rural community to access education and opportunities it would not have been able to otherwise," said Dr. Daniel Barron, chairman of the Mitchell County Courthouse Foundation. "The receipt of this funding was the most critical part of our campaign, and without it this project could have been held back for well over the next year or possibly longer." Shirley Hise, chairman of SECU's Spruce Pine Advisory Project, noted that the courthouse "is a landmark in our area, and the Mitchell County Courthouse Foundation has worked very hard to make the redevelopment one which will benefit all the citizens in this county."

USDA awards WOCCU funds for Ethiopian project

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MADISON, Wis. (5/28/09)--The U.S. Department of Agriculture (USDA) awarded the World Council of Credit Unions (WOCCU) roughly $7.9 million through the Food for Progress Program to help finance credit union development aimed at providing agricultural extension services and financial access to farmers in Ethiopia. The four-year initiative is WOCCU’s first long-term technical assistance program in the country.
Click to view larger image A credit union member visits her rural savings and credit cooperative in rural Ethiopia to perform a transaction. (Photo provided by the World Council of Credit Unions)
WOCCU’s “Enhancing Food Security and Rural Livelihoods in Ethiopia” program will assist rural savings and credit cooperatives--RUSACCOs, or credit unions--to finance agricultural production and investment, mobilize savings and provide non-financial services such as providing market information and training to their members. The program also will support small infrastructure investments to improve farmers’ access to markets. WOCCU’s program will target the regions of Tigray, Amhara and Oromia, which have a high concentration of farming households and existing RUSACCOs. WOCCU program activities in Ethiopia will begin in November. The program will continue through November 2013. “WOCCU has provided training in our methodology and tools to a range of rural and urban SACCOs over the past few years,” said Brian Branch, WOCCU executive vice president and chief operating officer. “In early 2007, we began looking for opportunities to increase our efforts in Ethiopia.” The RUSACCOs will work with WOCCU to improve their ability to extend new agricultural financial products and services for small farmers and other rural entrepreneurs. The program will target farmers who rely on agriculture as their primary source of income, and who struggle to produce sufficient food for their families. It is designed to increase the farmers’ productivity, connect them to markets and formalize farmer cooperatives for group training and support. “Many of the RUSACCOs are new, as are the entities that support them,” Branch added. “But they are well-positioned to alleviate rural poverty and increase food security if given the opportunity to develop the kinds of financial products and services the country's farmers need.” About 85% of Ethiopia's population relies on agriculture as the primary source of income, according to the U.S. State Department. However, the region suffers from frequent drought, unsustainable agricultural practices and poor transport infrastructure. Compounded with steadily rising prices for food and agricultural inputs, the densely populated country struggles to keep up with demand. The Ethiopia program will support self-help activities to build or improve infrastructure related to agriculture, including developing of storage facilities, irrigation systems, access roads, bridges and basic sanitation facilities.