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CU System briefs (05/05/2010)

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* CHICAGO (5/6/10)--A Dolton, Ill., man and a former employee of Credit Union 1, based in Rantoul, were charged with three counts Monday in the theft of more than $100,000 from the credit union with account information provided by the employee. Ronald L. Winston Jr., 23, who worked at the credit union for several months in 2007, allegedly contacted another employee, Alana M. Atchison, in early 2009, saying he needed more detailed personal information on accounts. The indictment said he allegedly offered $10,000, which Atchison never received. Atchison cooperated with authorities, who set up a fake account with $90,000 and recorded a phone conversation in which Winston allegedly specified he wanted all the information on the screen. He allegedly said he had plans to sit on the account for a month, then hit it and go to Miami (ChicagoTribune.com May 4) ... * OWOSSO, Mich. (5/6/10)--An unattended backpack outside Centel CU, based in Owosso, Mich., caused the evacuation and closure of the credit union for several hours Tuesday (The Argus-Press May 5). The bag was left under a window to the left of the credit union's front door. The state police bomb squad used an X-ray machine that revealed the backpack was empty. Members and employees evacuated the building at about 1:45 p.m. and the credit union reopened at about 2:15 p.m. ... * SAN FRANCISCO (5/6/10)--A woman who withdrew $900 from a branch of Patelco CU in Hayward before she went to lunch, got a surprise when she paid her lunch bill with one of the bills. The server said her $100 bill was a fake (cbs5.com May 4). Authorities said the bill was actually a $5 bill that had been bleached, with a $100 bill printed over the paper. While the bill looked realistic, if one held it up to the light, a faint exposure of Abraham Lincoln appeared. The woman examined the other bills she'd withdrawn. Two of the bills were fakes. Generally, financial institutions do not take back counterfeit bills, but Patelco allowed her to exchange them for 20s ... * PORTLAND, Ore. (5/6/10)--Army Capt. Michael Dung Nguyen, 28, Fort Lewis, Wash., was sentenced to 30 months in prison after pleading guilty to stealing government property and structuring financial transactions to a credit union and several banks. Nguyen admitted that while on deployment to Iraq as a project purchasing officer, he stole roughly $690,000 in Commander's Emergency Response Program (CERP) funds and transported more than half that amount into new accounts he opened in Oregon and elsewhere at America's CU, Bank of America, Washington Mutual Bank and Heritage Bank. Between June 9, 2008, and Sept. 26, 2008, he made repeated deposits of the stolen CERP funds and purchased expensive cars, computers, firearms, electronics and furniture with the funds. He also was ordered to serve three years of supervised release, pay restitution of $200,000 and forfeit his interest in all personal property bought with the stolen money as well as $300,000 in CERP funds found at his home during his arrest (States News Service May 3) ...

Aranjo loses appeal on CDCU fraud case

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BOSTON (5/6/10)--A well-known community development credit union CEO, who is serving a 54-month sentence in the $2 million embezzlement of the now-defunct D. Edward Wells FCU, has lost her appeal in the U.S. Court of Appeals. Carol Aranjo, former CEO of the Springfield, Mass.-based credit union, and her husband, Alphonso Smith, who just finished serving a 12-month sentence, were convicted after a five-week jury trial of conspiracy to embezzle and make false entries, and other embezzling charges, according to the judgment rendered Monday by the U.S. Court of Appeals for the First Circuit in Boston. They also were ordered to provide restitution of $400,000 each, plus Aranjo was ordered to pay $1 million more in restitution, according to the court documents. In Monday's decision, the appellate court ruled that the lower court judge, U.S. District Judge Michael A. Ponsor, had "reasonable cause" to dismiss, over Aranjo's legal counsel's objection, an African-American female juror under the prosecutor's peremptory challenge. Aranjo's attorneys had argued that the dismissal of "seemingly the one African American woman on the jury panel" implicates both race and gender classes. They noted that a different juror, a male, probably was not African-American and there were "very few" women on the jury. The appeals court also rejected Smith's claim that a court verdict against his wife for embezzling the funds was not sufficient proof that he knew the funds she moved to his business were illegal. The court wrote that proof of the several transactions and their impropriety was "coupled with evidence" that Smith regularly received cashier's checks or made "withdrawals unsupported by funds in his personal account or others he controlled"; that his wife was involved in giving approval for such transactions; that some payments occurred immediately after he had conferred with her at the bank; and that the negative balances were sufficiently large that he had to know that his withdrawals were misappropriating bank funds..." The embezzlements were discovered when examiners from the National Credit Union Administration (NCUA) reviewing the credit union's books for between 1999 and 2002 found including an unusually high, undocumented loan to Friends of the Credit Union, whose treasurer was Smith. Aranjo refused to permit examiners to investigate or view financial information for the credit union. As a result, in February 2003, NCUA placed Wells into conservatorship. When the agency discovered several negative balances including Aranjo's and Smith's accounts, which had negative $71,000 and negative $88,000 balances, respectively, NCUA liquidated the credit union, according to the court document. Aranjo was active on a national level, at one time chairing the National Federation of Community Development Credit Unions and testifying before Congress on a grant program for community development financial institutions.

CU crashers next stop Las Vegas

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MADISON, Wis. (5/6/10)--At February’s Crash the GAC, 23 young credit union professionals got to peek behind the curtain at the Credit Union National Association’s (CUNA) Governmental Affairs Conference. They rubbed shoulders with system leaders like CUNA President Dan Mica, World Council of Credit Unions (WOCCU) President Pete Crear, and National Credit Union Administration (NCUA) Board Member Gigi Hyland. In July, Crash organizer Brent Dixon, a young adult advisor at the Filene Research Institute, will take a new group of crashers to Las Vegas to crash The 1 Credit Union Conference. Today’s credit union leaders have built a worldwide system with decades of hard work. But the clock keeps ticking, and it falls to a new group to make sure that system thrives in the decades to come. More than just an alternative ticket to a big event, Crash is a look at the worldwide credit union system by an upcoming generation of leaders, Dixon said. “Opportunities to participate in events like The 1 Credit Union Conference are typically limited to top-level credit union staff, which leaves young credit union professionals under the age of 30 out of the mix,” Dixon said. “This is a shame, and we can do something about it.” Crash gives 15 credit union professionals under the age of 30 the opportunity to participate in the event by:
* Landing at networking events along the Vegas strip; * Building relationships with other under-30 credit union professionals; and * Attending daily conversation sessions with credit union leaders from around the world.
Already confirmed are credit union officials:
* Marlene Shiels, CEO of Scotland’s Capital CU and a WOCCU board member; * Mike Schenk, CUNA vice president of research and statistics; * Valerie Breunig, executive director of WOCCU's Worldwide Foundation; * Gene Blishen, CEO of Canada’s Mt. Lehman CU; and * Hyland.
The final date to apply is May 28. Crashers will be announced June 2. For more information, use the link.

Illinois Foundation provides grants scholarships

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NAPERVILLE, Ill. (5/6/10)--The Illinois Credit Union Foundation recently awarded $50,800 in Small Credit Union Development (SCUD), Community Service, Marketing and Business Development, and Financial Independence & Revitalization Effort (FIRE) grants, and $22,000 in scholarships. SCUD grants totaled $33,000 and were awarded to 16 credit unions. The grants are used for computer hardware and software/upgrades, new office furniture and other operation equipment, and help to pay for new disclosures and applications to comply with the new Visa Reg Z. The foundation also awarded $3,800 in Community Service Grants. The program to encourages and rewards chapter or credit union participation in local community projects. Credit unions and chapters can qualify for grants by hosting an established event, creating an event, or volunteering at an established event. Five credit unions and one chapter and the World Council of Credit Unions received community service grants. Also, four credit unions received Marketing and Business Development grants that totaled $8,000. The grants were established in 2006 to help credit unions with assets of up to $30 million to start or expand outreach efforts. The maximum grant award is $5,000 per credit union per year. Two credit unions received FIRE grants totaling $6,000--Sherwin Williams ECU, South Holland, and South Side Community FCU, Chicago. The FIRE program provides assistance to credit unions to expand their ability to build and maintain viable communities by providing credit and financial services to residents and businesses in low-income and underserved areas of Illinois. Sherwin Williams used its FIRE grant to partner with the Center for Economic Progress to continue the Volunteer Income-Tax Assistance program for people in the south and southwest suburban Chicago area. South Side received FIRE grant funds for starting a Second Chance program with debit cards. Finally, $22,000 was awarded in scholarships. Individuals and groups (as a chapter or group of credit unions) can apply. Scholarships may be used toward ICUL’s educational opportunities and Credit Union National Association schools. There are two more grant request deadlines during 2010--July 31 and October 31. In addition, scholarships are reviewed on an ongoing basis while funds last. Online and downloadable grant request forms are available on the Illinois league’s website. Eligibility is limited to Illinois credit unions and chapters.

SECU launches two-way texting alerts

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RALEIGH, N.C. (5/6/10)--State Employees’ CU (SECU) has launched two new services--two-way text messaging and alerts--to help members stay informed about their accounts. SECU announced the options this week in its member newsletter, Grassroots. More than 40,000 members have signed up for alerts and 3,000 have registered for two-way text messaging. Two-way text messaging allows members to receive current account balances and account activity information via text message. The service requires an active mobile device, which is validated during the registration process through SECU’s secure Member Access. Once registered, members can choose to receive information such as current balances or last posted transactions. Alerts allow members to receive specific account notifications via text message through an active mobile device or secure message through Member Access. Once registered, members can sign up for alerts for: new e-statements, deposits, low balances, nonsufficient funds, overdrafts or withdrawals. SECU, Raleigh, N.C., has $19 billion in assets.

Deadline to report Saving Challenge results extended

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MADISON, Wis. (5/6/10)--The Credit Union National Association (CUNA) has extended the deadline for credit unions to report their savings data for the National Youth Saving Challenge to May 11. The original deadline was Wednesday. The extension was granted due to a technical difficulty that prevented some credit unions from reporting their results. The results will be available next week, along with the names of 10 youth who deposited money during the challenge and were randomly selected in a drawing by CUNA. Each will receive $100, said Lin Standke, CUNA Youth Week manager. The challenge is offered in conjunction with National Credit Union Youth Week, which took place April 18-24. This year’s theme was, “Get in the Savings Game.” The challenge encourages the habit of saving money at an early age. Last year, nearly 140,000 young members deposited $26.5 million into their saving accounts during the challenge--more than double the amount deposited in 2008. A total of 10,006 new accounts were opened. For more information, use the links.

IUSA TodayI features student loans Ohio alliance formed

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WASHINGTON and COLUMBUS, Ohio (5/6/10)--USA Today has noted in two separate articles that an increasing number of credit unions are offering nonfederal student loans to college students. “The number of credit unions participating in Credit Union Student Choice, a group that helps credit unions offer nonfederal student loans, has nearly doubled in the past year to 126 members,” Mike Weber, vice president of marketing, told Sandra Block, USA Today personal finance columnist. Some of the new members previously offered federal student loans and want to remain in the business, Block added. (Editor’s note: That doesn’t count credit unions in other private student loan programs, such as Fynanz, a CUNA Strategic Services Alliance partner.) The average interest rate for loans offered by participating credit unions is currently 6.2%, Block wrote. In a related matter, the Alliance of Ohio Credit Unions will announce today that it is committing $150 million in assets to affordable student lending through an initiative called Ohio Student Choice. The alliance of credit unions has a combined field of membership that includes the entire state, the Ohio Credit Union League said in a press release.

Cheneys experience good for CUNA CEO post

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WASHINGTON (5/6/10)--Bill Cheney--who will succeed Dan Mica, effective July 5, as the president/CEO of the Credit Union National Association (CUNA)--brings to the position more than 25 years' experience in a variety of roles in the movement, according to CUNA Chairman Kris Mecham. Cheney has been president/CEO of the California/Nevada Credit Union Leagues since 2006. His experience encompasses strong relationships with Congress, broad experience in the credit union movement, training in business, and a commitment to community service. As CEO of both a state trade association and of a large credit union, Cheney has developed a number of relationships with current and past members of Congress, particularly with delegations from California and Nevada. Collectively, those states hold 56 House seats and four Senate seats, and count among their memberships the Speaker of the House (Rep. Nancy Pelosi, D-Calif.) and the Senate majority leader (Sen. Harry Reid, D-Nevada). Cheney also has built relationships with lawmakers in states in which his credit unions have had operations--including New York, Illinois and Texas. He has testified on behalf of credit unions before Congress numerous times on a variety of financial subjects, said CUNA. Cheney's credit union experience began in 1987 in--his home state--with Security Service FCU in San Antonio, which today holds more than $5 billion in assets and has 600,000 members. Ten years later (in 1997), after achieving the position of executive vice president, Cheney was named president/CEO of Xerox FCU (today known as Xceed FCU) in El Segundo, Calif. During nine years at the helm of the credit union, Cheney guided the credit union’s growth to more than $800 million in assets, from $350 million, growing the credit union’s membership to include operations in nine states, including California, New York, Florida, Texas and Illinois. Also while at XFCU, Cheney was elected to the board of directors of the National Association of Federal Credit Unions, which represents federally chartered credit unions. In 2006. the California/Nevada Credit Union Leagues tapped Cheney as their president/CEO. While overseeing the combined organizations’ operations, Cheney is credited with building the leagues’ affiliation while improving their operational efficiencies. Additionally, he has served as treasurer of the American Association of Credit Union Leagues, chairman of the CUNA World Leadership Development Committee, member of the board of trustees of the Western CUNA Management School, and member of the board of directors of the Richard Myles Johnson Foundation. He also has joined World Council of Credit Unions delegations to Mexico, Poland, China, and Haiti. Cheney's training in business includes a BBA in finance from the University of Texas--Austin. He has attended the “Advanced Leadership Institute” at Harvard Business School (sponsored by the Credit Union Executives Society (CUES)/California league, and the CUES Director’s Leadership Institute at the London Business School. He is a member of the American Society of Association Executives. His commitment to service began early. An Eagle Scout, Cheney is a member of the National Eagle Scout Association and has been active in local Boy Scouts of America councils. He has served as a board member of the American Red Cross of Greater Los Angeles (and previously in San Antonio, Texas), volunteers with organizations such as Heal the Bay, Santa Monica, Calif., and the Peninsula Education Foundation. He has also served as a guest lecturer at Pepperdine University. "All of this has given Bill the knowledge, background and experience to step right in without missing a beat and begin taking CUNA to new levels of high achievement," Mica told CUNA staff Wednesday.

Iowa league Greater unity will help Panamas CUs

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PANAMA CITY, Panama (5/6/10)--Greater unity among Panama’s credit unions could benefit their overarching goals, according to the Iowa Credit Union League (ICUL).
Click to view larger image Credit unions worldwide benefit when they can bring a simple message in a unified voice to lawmakers, Iowa Credit Union League President/CEO Patrick S. Jury told a group of credit unions meeting in Panama. (Photo provided by the World Council of Credit Unions)
Stressing the need for greater unity, a delegation of officials representing ICUL and three Iowa credit unions traveled to Panama last week to participate in the fourth International Seminar on Best Practices and Credit Union Operations, which addressed challenges facing Panama's credit unions. Panama’s credit unions are concerned that government regulations not specifically designed to address financial cooperatives’ unique nature could raise further challenges for an industry already struggling with growth and the ability to provide competitive services to members. Executives and staff from the ICUL have pledged to help their Central American counterparts vault this hurdle. The meeting was the latest event in the ongoing relationship between ICUL and Corporación Fondo de Estabilización y Garantía de Cooperativas de Ahorro y Crédito de Panamá, R.L. (COFEP), brought together in 2005 through the World Council of Credit Unions' (WOCCU) International Partnerships Program. This year’s meeting included Congreso Nacional de Cooperativas de Panama, the country’s national cooperative trade association with which COFEP last year formed an alliance so cooperatives could speak with Panama's lawmakers in one voice. “ICUL has made significant contributions to WOCCU's International Partnership Program even beyond its six-year relationship with Panama,” said Victor Miguel Corro, WOCCU senior manager in charge of the program. ICUL and WOCCU have assisted COFEP’s efforts to seek credit union-specific legislation and establish shared branching since the beginning of the partnership. ICUL delegates this year focused on ways to build a coalition to better realize the benefits in supporting COFEP’s efforts. They discussed benefits of forming for-profit ventures to help mitigate risk and share rewards among partners while alleviating reliance on the banking industry, according to Patrick S. Jury, ICUL president/ CEO. “Iowa's role is to help COFEP with its efforts to create unity and collaboration among the Panamanian credit unions in order to move the industry forward,” said Jury. “By sharing our examples we hope to give COFEP additional tools and support needed to enhance its system.” Iowa Credit Union representatives gave presentations on advocacy, regulation and risk management to more than 50 Panamanian credit union attendees during the day-long seminar. ICUL staff members Murray Williams, chief operating officer, and Emily Oliver, marketing and public affairs director, spoke about the importance of grassroots lobbying efforts and maintaining a consistent advocacy message. The pair also discussed consensus and cohesion as the building blocks of an effective advocacy campaign, helping Panama’s credit unions better understand the need for a unified approach toward critical regulatory issues, said Jacinto Villarreal, COFEP CEO. “We are in a crucial moment in Panama; the movement needs to unite to face growth and regulation challenges,” Villarreal said. “I’m glad that WOCCU and ICUL are our allies in this fight.” The seminar also featured its annual panel of Iowa credit union CEOs, including ICUL Chair Pat Drennen, CEO of 1st Gateway CU, Camanche; ICUL Director Tim Wallen, CEO of Ace Community CU, Ames; and ICUL Director Joe Gonzalez, vice president of Alliant CU, Dubuque. They addressed credit union regulation, risk management and asset growth.