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CU System Briefs (05/09/2013)

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  • TACOMA, Wash. (5/9/13)--Four people, including a credit union employee, received minor injuries when a car at the drive up station at Tacoma, Wash.-based Harborstone FCU's South Hill branch crashed into the credit union building. Injured were the employee, who was in the lunchroom; the 65-year-old woman driving the car; a 61-year old passenger and an eight-month-old boy, also a passenger. The driver said she hit the brake, but the car accelerated and plowed into the building at about 1:45 p.m. Monday (The News Tribune May 7) ...
  • MINNEAPOLIS (5/9/13)--Mark Edward Wetsch, 49, Minneapolis, a suspect in the robberies of 31 credit unions and banks in the past two years, pleaded guilty Monday to five holdups. He pleaded guilty last month to a sixth robbery, said the Minnesota U.S. Attorney's Office (Minneapolis/St. Paul Business Journal Online May 7). He allegedly held up Richfield-Bloomington CU, Richfield, twice but left empty handed. He wore a black mask and black hoodie, and allegedly stole $110,000 using a toy gun.  The last robbery by the "Man in Black" was in January 2012 ...
  • FLINT, Mich. (5/9/13)--A federal judge has ordered the former head teller of Security CU, Flint, Mich., to pay nearly $70,000 in restitution after she pleaded guilty to embezzlement. U.S. District Judge Mark A. Goldsmith also sentenced Jody Kravat to serve one day in jail and three years of supervised released in a judgment filed May 2.  Kravat pleaded guilty Jan. 9. While employed at the credit union's Burton, Mich. branch, she ordered currency from the Federal Reserve, then counted and secured the money when it was delivered. She allegedly admitted to removing 698 $100 bills from the credit union's vault and replacing them with $1 bills during 2011 (mlive.com May 7) ...
  • HAMPTON, Va. (5/9/13)--A U.S. Army staff sergeant accused of robbing a York County branch of the Hampton, Va.-based Langley FCU was denied bond Wednesday in Circuit Court.  Staff Sgt. Dorman Shaw is charged with robbing the credit union April 6 by allegedly passing a note to a teller demanding $4,000 and raising his shirt to indicate he had a hand gun in a side holster. The note also said the robber had an accomplice outside and that the teller should not press the panic button because he had worked in a bank and knew financial institutions' procedures, said Poquoson Commonwealth Attorney Ben Hahn. The sported a fake scar on his face and wore a wig and Virginia Tech hat.  He fled with an undisclosed amount of cash. After the heist, police spotted Shaw near the credit union, gave chase and apprehended him. Police found a wig, a Virginia Tech hat, a toy pistol resembling a .45-caliber Smith & Wesson handgun, some Langley FCU deposit slips and a note similar to the one in the robbery (Williamsburg Yorktown Daily May 8) ...

NEW: North and South Carolina League Boards Vote To Consolidate

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COLUMBIA, S.C., and RALEIGH, N.C. (Filed at 4:50 p.m. ET 5/9/13)--In independent meetings held today, the boards of directors of the South Carolina Credit Union League and North Carolina Credit Union League voted to recommend that member credit unions in both states approve consolidation of the two leagues.

The votes acknowledge that the resulting league would be stronger and better positioned to serve credit unions in the Carolinas for years to come, said the leagues.

The new league would draw financial strength and stability from a broader base of credit unions to serve, a solid equity position, and league service corporations with track records of success.  Consolidating staff from both organizations would allow the new league to enhance its delivery of core association services: advocacy, compliance and professional development.

"Our board sees great promise in bringing together these two leagues," said NCCUL Chairman Maurice Smith.  "Consolidation provides clear value and sets us on a path to successfully meet the changing needs of credit unions in the Carolinas."

Each league will share details with its member credit unions in May and June. Final membership votes in each state are expected by September with a proposed effective date of Jan. 1, 2014 for the new league.

"Our board has concluded that a consolidated league creates a financially strong organization that can deliver powerful and effective advocacy in Columbia, Raleigh, and Washington, DC for years to come," said SCCUL Chairwoman Faye Crocker.  "We are excited about this opportunity and look forward to sharing more about our vision for the new league with credit unions in the coming weeks."

NCUA To Appeals Court: Bailout Law Overrides Deadline Statutes

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DENVER (5/9/13)--Attorneys for the National Credit Union Administration and for RBS Securities and Wachovia Capital/Wells Fargo made their arguments Wednesday morning before an appeals court in Denver, which will decide key issues involving the statute of limitations in  NCUA's lawsuits over residential mortgage back securities (RMBS) the banks sold to corporate credit unions.

At issue is whether powers granted to financial industry regulators by Congress in the Financial Institutions Reform, Recovery, and Enforcement Act  of 1989 (FIRREA) would allow a three-year extension of time beyond the statute of limitations for securities claims--allowing NCUA more time to file lawsuits in the securities cases, including suits against RMBS Securities and Wachovia.

NCUA in a number of lawsuits against big banks and securities dealers alleges that the companies misled corporates into investing in RMBS products that generated billions of dollars in losses and caused the corporates to collapse.

The banks allege the lawsuits weren't filed within the proper statute of limitations and statute of repose filing times of one year and three years.

NCUA maintained in its brief--filed by David C. Frederick, an attorney with Kellogg, Huber, Hansen, Todd, Evans & Figel PLLC law firm in Washington, D.C., on March 1--that FIRREA displaces both the one-year and three-year periods. NCUA's brief notes that Congress passed FIRREA "in response to a major financial crisis: the mass failures of savings-and-loan associations in the late 1980s."

FIRREA, said the brief, provides "federal agencies acting as conservators, receivers, and liquidating agents with at least three years to investigate, evaluate, and if necessary pursue the claims on behalf of failed institutions, and further intended that these special provisions should be construed broadly to maximize recoveries by those federal agencies."

The decision by the Court of Appeals for the Tenth Circuit would have ramifications for several other cases that NCUA has brought against a variety of Wall Street banks and securities dealers. Those suits also involve the statute of limitations issue.  Recently a U.S. District Court judge in Kansas stayed eight NCUA lawsuits, pending the appeals court's decisions in the RBS Securities/Wachovia consolidated case (News Now May 1).

Federation Launches Co-op Fellowship For CUs

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NEW YORK (5/9/13)--The National Federation of Community Development Credit Unions is launching a pilot program to cultivate future leaders for the credit union movement. Completed applications for both the fellows and participating credit unions are due May 29.

The Cooperative Finance Leaders for America (CFLA) will recruit, train and support 15 professionals for leadership positions in credit unions dedicated to providing credit and safe financial services to low- and moderate-income communities. 

Participating credit unions will gain a source of staff drawn from recent college graduates, graduate students, returning veterans and displaced financial workers, the federation said. The  paid fellowship is for six months.

The CFLA's training program will include a two-week summer institute (one week in person and one week online) in August and ongoing support throughout the fellowship.

Also, CFLA alumni will receive long-term support, aimed at their becoming the next generation of credit union CEOs and leaders. All fellowships will begin in September and continue through February.

For more information, use the link. 

For questions, contact Pamela Owens, vice president of programs at 212-809-1850, ext. 215, or powens@cdcu.coop, or Jason Chang, program associate at ext. 205 or jchang@cdcu.coop.

Baltimore Raven To Share Co-op Spirit At Federation Confab

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NEW YORK (5/9/13)--Saying the cooperative spirit is what has made a real difference in his life, Baltimore Raven Michael Oher, who was the inspiration for the Academy Award-winning movie "The Blind Side," will appear at the annual National Federation of Community Development Credit Unions conference, June 5-8 in Baltimore.

"The federation's annual conference is a great opportunity for me to meet the people who are committed to bettering lives through community development credit unions," Oher said.

The event will be the nation's largest gathering of credit unions dedicated to community development, the federation said. It will offer strategies, ideas, partnership opportunities and practical solutions for connecting low- and moderate-income Americans to high-quality financial services.   

"Mr. Oher has such an uplifting story to share about perseverance and commitment," said federation President/CEO Cathie Mahon. "His life experience will resonate deeply with conference attendees and energize their commitment to serving their communities nationwide."  

The federation represents more than 250 community development credit unions that serve more than 2.2 million residents of low-income urban, rural and reservation-based communities nationwide.

For more information, use the link.

Wiemert Appointed Conn. League Interim CEO

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MERIDEN, Conn. (5/9/13)--The Credit Union League of Connecticut Board of Directors Wednesday announced the appointment of Keith Wiemert as interim president/CEO, effective immediately.

Wiemert is league board chair and president/CEO of Seasons FCU in Middletown.

Also, the league board has appointed a search committee for a permanent replacement for Tony Emerson, who has accepted a position at a Massachusetts credit union following five-and-a-half years of Connecticut league leadership.

The committee has met and devised a strategy for moving forward, the league said.

Websites Defaced, But No Action So Far Vs. U.S. CUs

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MADISON, Wis. (5/9/13)--While some websites overseas experienced defacements by hacktivists Tuesday, the 133  U.S. credit unions and banks on an OpUSA list of targets were unaffected--as of early Wednesday afternoon--by distributed denial of service (DDoS) attacks that groups had threatened to  unleash "on or about" Tuesday.

However, credit unions--even those not on the list--took precautions to make sure they were prepared and Wednesday they were still monitoring their websites.

One credit union not on the hit list--SRP CU, a $635 million asset credit union based in North Augusta, Ga.--told local media that it shut down its online services for about 24 hours to protect its members' confidential information. It had its information technology department on high alert and used onsite tools as well as a third party to monitor activity (wrdw.com May 7).  A member who was interviewed took the inconvenience in stride, noting that protecting members' information was important.

Wright-Patt CU, Fairborn, Ohio--also not on the target list--monitored its online traffic throughout Tuesday for signs of any cyberattack. The credit union prepares for such events regularly and has internal processes to address any issues, Tracy A. Fors, WPCU's vice president of marketing and business development told the Dayton Daily News (May 7).

Twelve credit unions, as well as a handful of government agencies and 121 banks, were among those on the target list posted on PasteBin by the hacker group Anonymous.  The credit unions  reported no slowdowns but were continuing to monitor traffic on their websites. The Federal Bureau of Investigation--whose site was among the agencies targeted--said the threat  alert of possible DDoS attacks would continue into today.

Instead of DDoS attacks in the U.S., what materialized on Tuesday was a series of defacements of what USA Today (May 7) termed as "random government and commercial websites" around the globe.  Most of the sites defaced have no connection to the U.S., and were in Europe, South America and China.

Corero Network Security told the publication that it appears that hacktivists focused on smaller websites that have fewer resources and may be more easily compromised. Although there was no significant impact on the financial services industry, even nuisance attacks are costly with companies devoting more technical resources to monitoring suspicious activity.

On Tuesday, Information Week noted that al_Qassam Cyber Fighters, an organization responsible for a number of DDoS attacks disrupting financial websites--including credit unions--for months, had promised to take this week off  its own cyberactivities so it wouldn't duplicate the Anonymous efforts.

Co-op Directive Seeks CUs To Mentor Young Leaders

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BERKELEY, Calif. (5/9/13)--The Cooperative Food Empowerment Directive (CoFED) is looking for credit union employees to mentor college students who work with food cooperatives.

Mentors will work with projects on campuses in the Northeast, Mid-Atlantic, Midwest, Pacific Northwest and California, connecting with students and creating opportunities to expand their younger membership.

Mentors will support small local businesses and connect with the greater co-op community while supporting young leaders as they build a cooperative food movement on college campuses.

Since its national launch in Fall 2010, CoFED has worked with more than 200 students starting or operating cooperative, sustainable food ventures on their campuses.

In August, CoFED will launch a training program for people in the food and cooperative movements. It will recruit six future food movement leaders for an immersive professional development experience. The fellows will support hundreds of students who grow cooperative and sustainable food businesses on their campuses. 

CoFed noted that fellows need expert help from credit union mentors in financial literacy, financial management, and general business development. The time commitment is two hours per month consisting of 20- to 30-minute calls or e-mails with teams and/or regional organizer fellows.

CoFED will feature mentor credit unions on its website. Use the link. Mentors also will have networking opportunities with students and local business partners. 

For more information, e-mail megan@cofed.org

CUNA Trainers To Present Generation-Tailored Mobile Learning

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MADISON, Wis. (5/9/13)--Two of the Credit Union National Association's professional development experts, Kevin Smith and Marlo Foltz, will present a session on generation-tailored mobile learning at the 2013 Mobile Learning Conference & Expo, June 18-20 in San Jose, Calif.

The conference, hosted by the eLearning Guild, informs attendees of the benefits, pitfalls and recent advances in mobile education delivery.

The session, "Assumptions Gone Awry: Mobile Learning for Baby-Boomers and The Silent Generation," will address CUNA's solutions to generational education constraints amidst quickly accelerating technological advancement. Participants will receive insights into CUNA's success with tailoring mobile learning for credit union board members by combining "old-school" training content with newer, more accessible delivery formats.

"Today's rapid advances in technology put more and more power into the hands of the adaptive younger generations," Smith said. "But within the credit union movement and a number of other industries, the traditionally technology-resistant generation still calls the shots. We need to acknowledge their needs as an industry."

While the majority of the conference's content is presented by professionals who have produced successful results for their organizations, Smith and Foltz said they believe ideas beneficial to the industry as a whole are the most worthwhile investment. They designed training programs and techniques to drive trends of positive change in the credit union movement.

"You can invest time and innovation within your company and you'll see results, but your success can only progress within the limits of your industry," said Foltz. "We're looking at the big picture."

As CUNA's director of volunteer education, Smith develops and oversees training and education for directors and supervisory committee members of more than 7,000 credits unions in the U.S.

Foltz is CUNA's director of blended learning, and she develops and implements training and certification programs for credit union employees, executives and volunteers.

Court: CU Can Subpoena 3rd Parties On Phish Attacks

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COLUMBIA, S.C. (5/9/13)--A federal court in Columbia, S.C., has granted a credit union's motion for expedited discovery, allowing it to subpoena third parties to learn the identity and whereabouts of people using the credit union's name in a text-message SMS phishing scam.

In its suit against the unknown "John Does and Jane Does," filed April 17 in the U.S. District Court for the District of South Carolina, Columbia division, AllSouth FCU seeks information from third party Internet Service providers that are not considered part of the scam.

The Does conduct SMS phishing scams directed at consumers with telephone and cell phone numbers in the 803 area code and use Columbia-based AllSouth's identity in the messages. In its motion, the credit union said efforts to obtain the identities of the phishers were unsuccessful, but with discovery tools and subpoenaed documents it could learn identities and prevent further fraud.

The credit union began receiving notifications around April 4 from members and nonmembers who received SMS text messages indicating their account with the credit union had been restricted. The recipients were told to call a number to remove the restriction. Upon calling they were directed by a digitized automated recording to provide a member number, account number and other personal information, including Social Security number and driver's license number.

Since then, AllSouth has spotted suspicious activity on multiple members' accounts. More than 125 members reported they had revealed personal data.

The credit union has identified five Internet Provider addresses used in the scam, said the court documents.

The suit alleges infringement of registered trademarks, federal unfair competition, false designation of origin and false advertising, dilution of a famous mark, service mark counterfeiting, racketeering under the Racketeer Influenced and Corrupt Organizations Act, and violation of the South Carolina Common Law Unfair Competition.