Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

CU System Archive

CU System

Wis. court denies suit vs. Ambac-banks settlement

 Permanent link
DARLINGTON, Wis. (5/28/10)--A Wisconsin judge Tuesday denied motions that sought to prevent the monoline insurer Ambac Financial Group Inc. from settling with 17 banks holding the company's securities in a restructuring plan unveiled in March by the Wisconsin Office of the Insurance Commissioner. The ruling by Lafayette County Circuit Judge William Johnston in Darlington, Wis., was a victory for Wisconsin Insurance Commissioner Sean Dilweg's plan to restructure up to $67 billion in claims against Ambac. The plan aims to save the company and protect policyholders from further losses (The Wisconsin State Journal May 27). Ambac is one of the monoline insurers whose troubles have contributed to several corporate credit unions' other-than-temporary-impairment charges (OTTIs) on their financial statements. In the settlement proposal, the banks agreed to accept less money on their policy claims against Ambac. Instead of receiving up to $12.9 billion, the banks will accept $2.6 billion in cash and $2 billion in promissory notes with interest over a number of years (The Wisconsin State Journal and The Wall Street Journal May 27). In late March, Dilweg oved to take control of the troubled insurance policies issued by Ambac's insurance unit, Ambac Assurance Corp. The $67 billion in claims include roughly $40 billion of liabilities tied to subprime mortgages that failed, said the State Journal. The insurance commissioner and Ambac maintained that claims from the toxic policies threatened Ambac's core business, which includes about $300 billion in much safer policies insuring municipal and corporate bonds, such as those held by corporate credit unions. Dilweg separated the funds--putting the $300 billion in traditional bond policies into a general account that the company continues to control and segregating the $67 billion in riskier policies. Under the plan, claims made by holders of the defaulted policies would be paid at 25 cents for every dollar of coverage, plus a promissory note for the balance with interest over time. Two groups of investors filed the motions to block the settlement, arguing it was unfair and would hurt their claims. Those seeking to block the bank deal include Freddie Mac and hedge funds Aurelius Capital Management and Fir Tree Partners, which all hold Ambac-guaranteed residential mortgage-backed securities, and Eaton Vance Corp., which holds Ambac-insured Las Vegas Monorail Co. municipal bonds, said Bloomberg Businessweek (May 27). Ambac had been losing millions of dollars a month from the toxic structured securities it guaranteed. It had a total net loss in fourth quarter 2009 of $385.4 million. Failure to settle with the banks would have increased the amount of claims by more than $8 billion, the insurance commissioner told The Wall Street Journal. The plan will be presented for court approval somewhere around September, said an attorney for the insurance commission (Wisconsin State Journal.

Man who held CU employee hostage gets life in prison

 Permanent link
CENTRALIA, Wash. (5/28/10)--A man who held a credit union employee hostage during a robbery attempt and who was shot by police responding to the emergency call was sentenced Wednesday to life in prison without the possibility of parole. Michael Anthony Lar, 57, was convicted in April of first-degree burglary, first-degree kidnapping and first-degree attempted robbery in the incident, which occurred Jan. 25 at TwinStar CU, Centralia, Wash. (The Olympian May 26). He entered the credit union through a window as employees were arriving for work. He grabbed a female employee who was talking on the phone with another employee, and held a gun to her head. The caller notified police. An officer arrived and walked to the employee entrance, where the gunman held the employee (News Now Jan. 26). She mouthed to the officer "He's got a gun." The officer pulled her to safety and fired two shots at the intruder. Later, believing Lar was still holed up in the credit union, police surrounded the credit union. However, after several hours, police entered the building and did not find the suspect. He was later arrested when a taxi driver noticed he was bleeding and called police. He suffered two bullet wounds. Lar also is facing charges from a January 2009 robbery of the same credit union. On May 20, Lar pleaded not guilty to unlawful imprisonment, robbery and burglary in that incident (The Olympian via News Tribune May 20)

CUNA closed Monday no INews NowI

 Permanent link
WASHINGTON and MADISON, Wis. (5/28/10)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association (CUNA) will be closed Monday in observance of the Memorial Day holiday. News Now will not post a Monday issue but will resume regular publication Tuesday.

Regulators OK Summit State Central merger

 Permanent link
MADISON, Wis. (5/28/10)--State and federal regulators have approved the merger of Summit CU in Madison, Wis., and State Central CU, West Allis, Wis., effective June 30. The two credit unions said Wednesday the merger was approved by the Wisconsin Department of Financial Institutions and the National Credit Union Administration (milwaukee.bizjournals.com May 26). With the merger, State Central members will become Summit CU members and Jim Corragio, State Central CEO, will retire. Andy Faust is CEO of Summit CU. “State Central is not having any financial difficulties,” Rebecca Gerothanas, Summit senior vice president of marketing, told News Now. “It is very well-capitalized. It wants to offer more value and products to members. Also, they knew Summit was looking to expand in the Milwaukee area, so it was a good fit.” Although the merger becomes effective June 30, systems and products will be converted Sept. 1, Gerothanas said. Summit CU has $1.4 billion in assets and has more than 108,000 members with 20 locations in Madison and Milwaukee. State Central CU has $68 million in assets and 8,600 members, with four locations in the Milwaukee and West Bend, Wis., areas.

North Star CEO appointed to Iowa CU Review Board

 Permanent link
CHEROKEE, Iowa (5/28/10)--Iowa Gov. Chet Culver appointed Jeff Hayes, president/CEO of North Star Community CU, to serve a three-year term as a member of the Iowa Credit Union Review Board. The seven-member board works with the Division of Credit Unions in the Iowa Department of Commerce to supervise the state’s credit union industry (chronicletimes.com May 27). The Division of Credit Unions’ mission is to protect the interests of credit union depositors and shareholders by enforcing laws related to credit unions. “Jeff embodies the spirit and philosophy of the credit union movement and will serve the state well in his role as board member of the Iowa Credit Union Division,” Patrick S. Jury, president/CEO of the Iowa Credit Union League, told News Now. North Star Community CU, based in Cherokee, Iowa, has $54 million in assets.

OCDC panel CUs can link agriculture finance

 Permanent link
WASHINGTON (5/28/10)--Credit unions’ cooperative structure provides them with opportunities to connect agricultural processes with economic growth, addressing key issues in global development. Greater efforts should be made to foster credit union growth to better address this need, said panelists at the Overseas Cooperative Development Council (OCDC) conference in Washington, D.C., last week.
Click to view larger image Staff members look out of the window of a Women’s Co-op branch in Sri Lanka. The credit union participates in the World Council of Credit Unions’ development program in the Asian country. (Photo provided by World Council of Credit Unions)
The one-day event, “Cooperatives: Meeting Development Challenges of the 21st Century,” attracted attendees from Bosnia, Mozambique, Rwanda, Sri Lanka and the U.S. World Council of Credit Unions (WOCCU) representative Suresh Wijesinghe, deputy director of WOCCU’s program in Sri Lanka, stressed the value and positive economic impact of the agricultural lending program for members of Sri Lanka’s Women’s Development Services Cooperative Society, known as Women’s Co-op. “Women's Co-op members are improving their lives through the credit union’s services, from group lending to insurance to health and education services,” Wijesinghe said. The agricultural lending program is being rolled as a pilot in four branches, with plans to expand to all 121 branches, said Wijesinghe. Women’s Co-op members have improved agricultural production technology and found new market links through value chains, a process that provides funding through credit union-based loans to participants taking crops from field to market, Wijesinghe said. Results of the Sri Lanka program show an average 23% increase in return, 14% reduction in production costs and 17% increase in yield. With 30% of the world served by credit unions, there is growing recognition that credit unions can assist individuals in the agricultural sector in working their way out of poverty, according to Dame Pauline Green, president of the International Cooperative Alliance, at the event. “Credit unions aid the process by providing market access [for women] to sell their goods, helping them collectively negotiate better terms, keeping ownership local and meeting members’ needs,” Green said. “These are all traditional values of the cooperative model.” Dr. John Mellor, former director general of the International Food Policy Research Institute and chief economist at the U.S. Agency of International Development, noted the essential role cooperatives play in the new global and foreign aid context. There’s a critical need for apex bodies in the credit union and cooperative movements “to organize people to raise members’ income,” Mellor said. Tim Rieser, foreign policy expert for Sen. Patrick Leahy (D-Vt.), described how U.S. government-funded programs can improve the lives of people in developing countries. Cooperatives are an important mechanism for achieving this goal, he explained. “[Cooperatives] know what they need to do and it's our job to help them,” Rieser told participants. “Cooperatives not only promote economic development on a small scale, but also enhance democratic development because they involve making joint decisions. These programs achieve results at the community level.” OCDC brings together organizations that promote, assist and support establishing member-owned cooperatives worldwide. OCDC member organizations work on promotional efforts and engage in collaborative research to improve cooperative development practices. WOCCU, a member of OCDC, helped coordinate the May 20 conference. For more information, use the link.

Visions FCU to merge with Progressive Neighborhood FCU

 Permanent link
ENDICOTT, N.Y. (5/28/10)--Visions FCU, Endicott, N.Y., will merge with Progressive Neighborhood FCU, Rochester, N.Y., June 1. Progressive has two branches--one is a main office and the other is an in-school branch. Both will be known as Visions after the merger, Frank Berrish, Visions president/CEO, told News Now. The National Credit Union Administration approached Visions about the merger with Progressive because Progressive is in a negative capital position (Press & Sun-Bulletin May 27). Berrish said Progressive is a community development credit union that focuses on serving low-wealth individuals. The credit union relied on grant money to serve members, and many of the grants have since dried up. The two credit unions have discussed merging since March. “Progressive is an inner city credit union that works with the poor and disadvantaged,” Berrish said. “We [Visions] will continue that mission with them.” Visions has 23 branches in Pennsylvania and New York, and 24,000 members. The credit union has $2.5 billion in assets. Progressive has 2,400 members and more than $2 million in assets.

CUNA Mutual annual report is online

 Permanent link
MADISON, Wis. (5/28/10)--CUNA Mutual Group’s 2009 Annual Report is available online and shows the company enhanced its financial strength in every key capital measure compared to 2008, the company said. The report reflects CUNA Mutual Group’s 75th anniversary. In 2009, CUNA Mutual generated net income of $51 million after experiencing a net income loss in 2008. The company said it strengthened itself in key areas, including Generally Accepted Accounting Principles Capital, Total Adjusted Capital and Risk-Based Capital Ratio. In the first quarter of 2010, the company posted positive revenue and operating gain results, exceeding 2009’s results for the same period in both categories. CUNA Mutual started 2010 with $666 million in total revenue in the first quarter, a 5.5% increase over the same period in 2009. Net income for the quarter was $39 million, which exceeds the first two quarters of 2009. Each capital measure continued to improve in the first quarter, with total adjusted capital within $53 million of its all-time high. To read the full report, use the link.

WOCCU launches charity golf at The 1 CU Conference

 Permanent link
LAS VEGAS (5/28/10)--Golfers wanting to “drive” for global credit union development can participate in the T-Up FORE WOCCU golf tournament July 10 in LasVegas at The 1 Credit Union Conference. Proceeds from the event will help women who are leaders and their communities.
Click to view larger image Bear’s Best Las Vegas will be the site of the July 10 Global Women’s Leadership Network's T-Up FORE WOCCU charity golf tournament. (Photo provided by World Council of Credit Unions)
The event is sponsored by the Global Women’s Leadership Network, a relatively new World Council of Credit Unions (WOCCU) initiative. The tournament, a charity event open to the public, will raise funds for the network, which provides peer-to-peer networking and educational events for credit union women who are leaders from both developed and developing countries. Golf tournament proceeds will fund scholarships to attend the network’s annual forum and WOCCU development programs providing assistance to women in Colombia, Kenya and Sri Lanka. CO-OP Financial Services, a WOCCU associate member organization, is a presenting sponsor. Other tournament supporters include CU*Answers, Ser-Technology, CUDL, and Mitchell, Stankovic & Associates. “CO-OP Financial Services is a strong advocate for WOCCU and its mission,” said Stan Hollen, CO-OP's president and CEO. “We're committed to making this inaugural golf tournament a success because the funds will be put to such a good use in promoting credit union development worldwide.” For information on The 1 Credit Union Conference, shows and tours, use the resource link. For more information on the golf outing, sponsorship opportunities or the Global Women’s Leadership Network, contact Valerie Breunig, executive director of the Worldwide Foundation for Credit Unions, at vbreunig@woccu.org or 608-395-2055.

CUAC announces 2010 board officers

 Permanent link
DENVER (5/28/10)--The Credit Union Association of Colorado (CUAC) announced its 2010 association board of directors. Directors include:
* Chairman--Michael A. Williams, president/CEO, Colorado CU, Littleton; * Vice chair--John Uchida, president/CEO, Space Age FCU, Aurora; * Treasurer--Keith Cowling, president/CEO, Credit Union of Denver, Lakewood; * Secretary--Sundie Seefried, president/CEO, Eagle Legacy CU, Arvada; * Gerry Agnes, president/CEO, Elevations CU, Boulder; * Doug Ferraro, president/CEO, Bellco CU, Greenwood Village; * Dave Maus, president/CEO, Public Service CU, Denver; * Lynn Morrison, president/CEO, SunWest Educational CU, Pueblo; * Sandy Neves, president/CEO, Fitzsimons FCU, Aurora; * Steve Pearson, president/CEO, Fellowship CU, Lamar; and * Kristy Porter, president/CEO, Western Rockies FCU, Grand Junction.
Williams was elected at CUAC’s annual meeting in Colorado Springs. Williams, who was vice chair, replaces Doug Ferraro, who served as chair from 2008 to 2010. Ferraro took over the leadership role after the sudden death of Bill Sterner, former CEO of Elevations CU.

Wisconsin league boards elected

 Permanent link
PEWAUKEE, Wis. (5/28/10)--The Wisconsin Credit Union League announced its 2010-11 board and executive committee during the league's annual convention earlier this month.
The Wisconsin Credit Union League Board's executive committee for 2010-11 includes, from left: Chair, Kevin Hauser, Westby Co-op CU; Secretary, Paul Kundert, University of Wisconsin CU; Vice Chair, Mike Mallow, Sheboygan Area CU; and Treasurer, Jack Gill, First Community CU of Beloit. (Photo provided by the Wisconsin Credit Union League)
The league also introduced members of its Services Corp. board and the Wisconsin Credit Union Foundation board, according to the league's newsletter (The League News May 25). League board members include:
* Kevin Hauser, Westby Co-op CU, Black River Falls, region one; * Jack Gill, First Community CU of Beloit, region two; * Jennifer Schilling, Empower CU, Milwaukee, region three; * Pat Lowney, Lakeview CU, Neenah, region four; * Mike Mallow, Sheboygan (Wis.) Area CU, region five * Carol Pesci, First CU, Oak Creek, Class A, less than $20 million in assets; * Kimberly Youngblood, Focus CU, Menomonee Falls, Class B, $20 million-$100 million assets; * Daryl Gessler, Connexus CU, Wausau, Class C, $100 million to $500 million; and * Paul Kundert, University of Wisconsin CU, Madison, Class D, more than $500 million.
The league board also announced its executive committee: Hauser is chair; Mallow is vice chair; Kundert is secretary; and Gill, treasurer. Members of the Services Corp. board include:
* Hauser, chair; * Mallow, vice chair; * Youngblood, secretary; and * Gill, treasurer; * Val Mindak, Park City CU, Merrill; * David Stark, Bull's Eye CU, Wisconsin Rapids; and * Don Gillespie, A M Community CU, Kenosha.
The board members of the Wisconsin Credit Union Foundation and its executive committee include:
* Chair--Carol Adler, Marshfield (Wis.) Medical Center CU; * Vice Chair--Carla Altepeter, CitizensFirst CU, Oshkosh; * Secretary--Debra Woods, Taylor CU, Medford; * Treasurer--Kundert; * Cathie Tierney, Community First CU, Appleton; * Hauser; and * Brett Thompson, the Wisconsin Credit Union League.