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Banks eyeing checking accounts for fees

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NEW YORK (6/1/09)--While credit card rates are under scrutiny in Washington, banks are already looking for other ways to boost their fee income. They are raising fees on checking accounts. Credit unions might want to monitor this development and market more aggressively their own low rates on checking accounts. Banks are making it easier for consumers to spend more than they have in their checking accounts, and when consumers do, the banks hit them with steeper punitive fees, according to USA TODAY (May 28). Also rising: ATM fees, minimum balance requirements for interest checking accounts, and monthly service fees. These fees hit record highs during 2008, according to Bankrate.com. Greg McBride, senior analyst at Bankrate.com, expects these fees to increase even more in 2009. Several banks have already announced their fee hikes:
* Bank of America will raise its monthly fee on some checking accounts and start charging a fee on accounts that remain overdrawn. The reason for the fees: the bank's costs are up and consumers are riskier today. Beginning this month, BofA will raise its monthly account-maintenance fees on its MyAccess checking to $8.95--a $3 increase. It will begin charging a one-time $35 fee if an account remains overdrawn for five business days. The bank has also increased the number of times customers can be hit with overdraft fees per day to 10, or double that of last year. * Wachovia (now Wells Fargo) doubled its fee for transferring funds to cover an overdrawn checking account to $10. It will charge the fee to a credit card rather than taking it from a linked bank account, which means the consumer could pay interest on the fees. A Wachovia spokesman said the fees were increased to make fees the same across multiple accounts. * SunTrust began charging last month a higher fee on basic checking if a customer overdraws multiple times, similar to what banks have done with late fees on credit card accounts. It also raised its overdraft fee on other bank accounts. Even though it charges higher overdraft fees on premier accounts, SunTrust automatically waives one to three overdraft charges a year on the accounts. * Citigroup is charging 3% of the transaction for certain debit purchases and ATM withdrawals made outside the U.S. Last year it charged 2%. Its fund transfers to cover overdrafts are being rounded to the nearest $100 to buffer additional transactions. It also is deducting a $10 transfer fee from checking instead of savings accounts. It also increased its overdraft fee to $34 per incident from $30 in May 2009. It considers the fee in line with industry standards.
Consumer advocacy groups are already monitoring the fees, saying that the banks are perpetrating the downward debt spiral for vulnerable consumers.

Ohio league works to add public funds to bill

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DUBLIN, Ohio (6/1/09)--As a state budget bill progresses through the Ohio Senate, the Ohio Credit Union League continues working to include credit unions as eligible depositories of public funds. According to the league, the Omnibus Budget Amendment passed last month by the state House included an amendment that added federal savings associations and savings banks as eligible depositories for public funds. Credit unions currently are excluded from the list of depositories (eLumination Newsletter May 27). The league communicated the inequity to members of the Senate and asked for the same deference. It also delivered letters to members of the Senate and sent an Action Alert to Ohio credit union officials. Amendments are under consideration, the league said. "This issue isn't about credit unions and other depositories. It is about the people, the businesses and the public entities in Ohio," league General Counsel John Kozlowski said in the newsletter. "They should have a choice of where they can deposit funds, and where they can participate in programs through Ohio's Treasurer's Office," he added.

CU System briefs (05/29/2009)

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* CHARLOTTE. N.C. (6/1/09)--Charlotte (N.C.) Metro FCU received a Telly Award--a national competition that recognizes local, regional and national creative video production--for its 2008 “coach” commercial, which aired locally during the second quarter of the Super Bowl XLII last year. The commercial featured coach Sam Vincent and forward Jared Dudley, who were then members of the National Basketball Association’s (NBA) Charlotte Bobcats. The two are shown on the floor of the local NBA arena, helping a member better understand the credit union’s financial services during a timeout in a basketball game. Charlotte Metro said it experienced dramatic increases in online account-opening and savings deposit activity after the ad aired … * WASHINGTON (6/1/09)--The Credit Union Challenge Cup of the Credit Union Cherry Blossom Ten Mile Run held April 5 in Washington was awarded to FRB FCU's "Cash Us If You Can" team at the credit union's annual meeting at the Federal Reserve Board May 27. The team scored 3:03:31, setting a new record since credit unions became the title sponsor of the run in 2002. From left are: Theresa Mann, CEO, FDIC FCU and Credit Union Miracle Day (CUMD) vice chair; Mary Beth Muething, FRB FCU team and the fastest credit union female runner; Elizabeth O'Beirne, CUNA Mutual Group and CUMD Marketing Committee; Juri Valdov, Ret. CEO, Northwest FCU and CUMD chair; Jan Roche, CEO, State Department FCU and CUMD treasurer: Theresa Trimble, FRB FCU chair; Luisa Isaacs de Perez (FRB FCU); and Kevin Moore, FRB FCU team runner). Fastest credit union team male winner was Alvin Yew of NASA FCU's "Mercury" team. (Photo provided by the Maryland and District of Columbia Credit Union Association) … * PITTSFIELD, Mass. (6/1/09)--Greylock FCU donated $10,000
Click to view larger image Click for larger view
to a "Homes for Our Troops" (HFOT) initiative to help build a house in western Massachusetts for a military veteran injured during his tour in Iraq. The Massachusetts Credit Union League is working with HFOT in supporting a home being built for Army Sgt. Peter Rooney of Worthington, Mass. Rooney, pictured here with his wife Suzanne, was injured when a vehicle he was riding in hit a roadside bomb on April 16, 2007 in Ramadi, Iraq. Recently Massachusetts league President Dan Egan sent a letter to the state's credit unions, urging them to mark the 100th anniversary of the founding of the credit union movement by supporting the HFOT effort. (Photo provided by Homes For Our Troops and Greylock FCU) … * RALEIGH, N.C. (6/1/09)--State Employees' CU (SECU) has unveiled plans for a 12-story branch and office facility in the State Government Complex in downtown Raleigh. The 240,000-square-foot building will include a six-story parking deck, a credit union branch, and about 77,500 square feet of office space reserved for future growth. The $16.7 billion asset credit union plans to begin construction in the fall. The credit union said its board had been considering building the facility for several years and decided to implement the plans to bolster the state's economy and to take advantage of much lower- construction costs. It is being built with the State of North Carolina, which plans to build new offices for the Department of Environment and Natural Resources, and to expand the state Museum of Natural Sciences, which is next to the credit union site. The coordination will save substantial costs for both SECU and the state, said SECU in a press release. The site sits on the location of the credit union's first branch office. According to Patty Munns, SECU's senior vice president of facilities services, SECU is planning to open about 15 new branches in the next fiscal year. It will have one office in each of North Carolina's 100 counties by the end of fiscal year 2010 (Photo provided by State Employees' CU) … * PHOENIX (6/1/09)--Arizona State CU has received four Hermes Creative Awards, which honor creative professionals who concept, write and design traditional and emerging media. The Phoenix-based credit union won awards for its website, 2007 annual report, and its YourSavings Economic Stimulus newsprint and an honorable mention for a corresponding radio spot. The awards are judged by the Association of Marketing and Communication Professionals--an international organization with marketing, advertising, public relations, media and web specialists. Arizona State CU has $1.3 billion in assets ...

Half of Irelands CUs may report losses

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DUBLIN, Ireland (6/1/09)--As many as half of Ireland’s 405 credit unions could report losses this year. The driving forces behind credit unions heading into the red are losses on investments and a sharp uptick in members becoming delinquent on their loans, analysts said (Irish Independent May 29). Most of the nation’s credit unions have sustained significant losses in bank bonds--known as perpetual bonds--which now are worth a fraction of their original value in the wake of the worldwide banking collapse, analysts added. Also, the inability of as many as 180 of Ireland’s credit unions to pay dividends this year will lead to a “catastrophic” run on members’ savings, the Irish League of Credit Unions (ILCU) warned (The Irish Examiner May 29). Losses at credit unions and the need to bolster cash reserves under new regulations could lead to a crisis, the league said. Kieron Brennan, ILCU chief executive, asked the nation’s Financial Regulator not to introduce strict new reserve ratios in September, which will mandate a statutory reserve of 10% of total assets for the country’s 405 credit unions. The ILCU said the new regulations will lessen credit unions’ ability to pay dividends to their 2.2 million members.

PSECU to help potential state budget impasse

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HARRISBURG, Pa. (6/1/09)--With the possibility of a potential state budget impasse, Pennsylvania State Employees Credit Union (PSECU) said it will reach out to its members who may be affected if a budget agreement is not reached by July 1. If there is an impasse, the credit union has created a special loan program for state employees who are PSECU members. Employees who stay on the job, but don’t receive a paycheck can apply for a 0% Annual Percentage Rate (APR) loan (Life is a Highway May 29). For members who meet the credit criteria, the 0% rate will be available up until 60 days after the governor signs the new budget into law. After 60 days, the loan will begin accruing interest at 3.9% APR until paid in full. Members participating in the loan program will have the option of borrowing up to $1,000 per pay period. PSECU said it also is encouraging state employees who experience financial hardship with their account from any impasse to contact the credit union about additional ways PSECU can assist them. “This loan is an example of how we haven’t lost touch with our history and purpose,” said Gregory A. Smith, PSECU president. “When we were formed 75 years ago, state employees banded together to form a credit union to help one another through hard times. What was true 75 years ago is still true today--PSECU is still a cooperative financial institution that uses the strength of all to help members in need.”

Wisconsin league monitoring anti-payday loan bill

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PEWAUKEE, Wis. (6/1/09)--The Wisconsin Credit Union League is monitoring an anti-payday lending bill announced Thursday in the state that would cap rates on payday loans. Under the bill, payday lenders could not charge more than 36% in annual interest on loans. Wisconsin in the only state that doesn’t cap the rates for licensed lenders, said state Rep. Gordon Hintz (D-Oshkosh), the bill’s author. The average interest rate for a payday loan in Wisconsin is 525% (Associated Press May 29). The league said it is reviewing the bill’s language and hasn’t decided yet whether it will support the measure. While lenders in the state argue the measure would shut down some of their lending centers, credit unions can help consumers with payday loan alternatives that cost less than half of what traditional payday lenders charge, said the league. Credit unions also encourage members to save money, receive financial counseling and make better choices to transition into more traditional loan products with lower rates, said Brett Thompson, Wisconsin league president/CEO. “Because not-for-profit credit unions exist to serve members, not drive profits, a credit union offers loan terms in members’ best interests,” Thompson said. “Lawmakers want to protect consumers because for-profit, non-traditional lenders don’t operate that way.” “While the Federal Reserve considers the minimum profitable loan to be $2,400, almost 90% of Wisconsin credit unions would grant a $500 loan to help a member and more than 75% of them would make a loan of just $100--all without the excessive costs that typify storefront lenders,” the league said. Credit unions also offer help to consumers through REAL Solutions, which helps families improve their financial position by encouraging saving and investing, the league said. Wisconsin had 530 licensed payday lenders in 2008, according to the AP.

Maine league announces board officers

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WESTBROOK, Maine (6/1/09)--The Maine Credit Union League elected its 2009-2010 slate of board officers during its recent annual meeting and convention. Officers are:
* Chairman Richard Dupuis, president/CEO, Five County CU, Bath; * Vice Chairman David Rossignol, president/CEO, NorState FCU, Madawaska; * Secretary Gail Richardson, president/CEO, Midcoast FCU, Bath; and * Treasurer Richard Lachance, president/CEO, Maine Education CU, Augusta.
Normand R. Dubreuil, president/CEO, Maine State CU in Augusta, was elected to serve another three-year term as an at-large director.

CU helps Fort Hood troops moving to Colo.

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FORT HOOD, Texas (6/1/09)--Security Service FCU staffers traveled to Fort Hood, Texas, for a weeklong community fair earlier this month to help the U.S. Army’s 4th Infantry Division prepare for its relocation to Fort Carson, Colo. More than 3,000 troops attended the fair. The troops will be reassigned from Texas to Colorado as part of the most recent Base Realignment and Closure (BRAC) Commission action.
SSG Michael Cruz receives assistance from Security Service FCU representatives Kyung Adams (right) and Kelly Pils at the Fort Hood Community Fair. The fair was held to help soldiers and their families from the U.S. Army’s 4th Infantry Division prepare for relocation to Fort Carson, Colo. (Photo provided by Security Service FCU)
To help prepare the soldiers and their families for the move, realtors, school districts, homebuilders and others were invited to help the troops make a smooth transition to their new location . They provided information about the Colorado Springs area, where Fort Carson is located. Several Security Service employees from its Texas and Colorado operations helped familiarize the soldiers with the credit union, offered information about available services, and assisted attendees with financial questions, including questions about home finance and other products and services. Security Service has operations in three major Colorado market areas, including 14 service centers with one located on the Fort Carson Army Post. The San Antonio-based credit union--the official credit union for Fort Carson--has a long-term relationship with the post and its substantial military population. “Our ultimate goal was to help the military men and women make their transition from Fort Hood to Fort Carson more comfortable,” said Mike Martinez, senior vice president for SSFCU. “We want the soldiers affected by the move to know that they can count on us for any financial advice or assistance they may need as they transition from central Texas to southern Colorado. We are just glad we could be on-site to help them.”

Scholarships announced for CU youth advocates

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COLUMBIA, S.C. (6/1/09)--The National Youth Involvement Board (NYIB)
announced eight credit union professionals will receive NYIB's annual scholarships to aid in promoting leadership development related to youth services and financial education. The awards cover conference and education fees. Five recipients will attend the NYIB Conference Aug. 3-6 in Tempe, Ariz. One will attend the World Council of Credit Unions' (WOCCU) World Credit Union Conference July 26-29 in Barcelona, Spain, and two will attend the National Credit Union Foundation's (NCUF) Credit Union Development Education (CUDE) Program, whose next session is Aug. 12-18 at Bainbridge Island, Wash. Winners will be recognized at the 2009 NYIB Annual Conference, where the group's delegate of the year and volunteer of the year will also be announced. Receiving NYIB Regional Scholarships are:
* LaTonya Allen, member service representative at GPO FCU, Washington, D.C., the East Region Scholarship; * Lauren Mayhew, marketing director at Daviess County Teachers FCU, Owensboro, Ky., the Central Region Scholarship; and * Joann Bergrud, marketing manager at NorthStar Community CU, Maddock, N.D., the West Region Scholarship.
Amy Jo Johnson, education director at the Mid-America Credit Union Association, Bismarck, N.D., will attend the NYIB Conference on the Robert L. Curry Scholarship and Award, named for the former president/CEO of CUNA Mutual Group. Another NYIB Conference participant--Cherise Hunter, youth programs VISTA at Syracuse (N.Y.) Cooperative FCU--will attend with the Serving the Underserved Scholarship, which recognizes individuals working with credit unions designated as serving low-income or underserved markets. Three other winners will participate in other education through NYIB-funded awards. They are:
* Stacey Walker, board member at XCEL FCU, Secaucus, N.J., to attend WOCCU's World Credit Union Conference; * Jeremy Cybulski, youth and community development officer at Coop Services CU, Livonia, Mich., to attend NCUF's CUDE program; and * Shannon Tackett, communications officer for Northwest FCU Foundation, Herndon, Va., also toll attend NCUF's CUDE program.

Nonprofits are key to improved N.Y. economy

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NEW YORK (6/1/09)--In the face of tightening credit and budget cuts, community development financial institutions (CDFIs) continue to lend and provide financial services to their communities--creating jobs, building affordable housing units, and supporting small businesses in urban and rural areas across New York State. This was the message heard by more than 50 community lending and development organizations at the annual New York Coalition of CDFIs Statewide Conference, May 7 in Albany, N.Y. The conference was organized by the National Federation of Community Development Credit Unions.
From left, Ron Ehrenreich, treasurer, Cooperative Federal CU, Syracuse, N.Y.; Melanie Stern, assistant director, Federation Community Development Investments and New York Coalition of community development financial institutions co-coordinator; and David Raynor, executive director, Leviticus 25:23 Alternative Fund, Elmsford, N.Y., meet at the annual New York Coalition of Community Development Financial Institutions Statewide Conference, May 7 in Albany, N.Y.
More than 100 individuals attended to hear about the financial “state of the state” and to discuss the economic downturn’s impact on low- and moderate-income communities. Attendees heard from speakers of state agencies, and experts in the fields of microfinance, homeownership and foreclosure prevention. New York Gov. David Paterson sent a letter confirming the important role CDFIs play. It said: “New York relies upon diversity within its financial services industries. Community-based institutions have far-reaching effects on our overall economic growth and are recognized for the services they provide to New Yorkers of all income levels. CDFIs in New York continue to lead with vision and fresh ideas that help strengthen local and national economic structures.” Jeffrey Metzler, vice president of Empire State Development Corporation (ESD), the state agency responsible for supporting New York’s CDFIs, discussed the expansion of funding for ESD’s economic development programs aimed at small businesses, including an additional $2.5 million, or a 170% increase, for the CDFI grant program aimed at small businesses. While the increase in lending capital for small businesses is welcome, the coalition has sought more substantial support for the full range of CDFIs’ activities. The coalition reached a major milestone in 2007 when the New York State CDFI Fund was signed into law. However, not a single state dollar has been directed toward the new fund, the federation said. “One of the coalition's major goals in 2010 is to ensure that there is a direct allocation for the New York State CDFI Fund in the state budget,” said Federation President/CEO Cliff Rosenthal. “CDFIs are experts at leveraging public monies with private funds, and our research has shown that just a $15 million investment from the state would create as much as $150 million in direct investments in our communities. Our hope is that with adequate support, the New York State CDFI Fund will bring a renewed emphasis for economic development of individuals and small businesses, complementing ESD's traditional large-scale economic development projects.”
Carol Wayman, legislative director at Corporation for Enterprise Development, in Washington, D.C, discusses the American Recovery and Reinvestment Act and its values to community development financial institutions. (Photos provided by the National Federation of Community Development Credit Unions)
Carol Wayman, legislative director of the Corporation for Enterprise Development in Washington D.C., explained that entrepreneurship and microenterprise are being embraced by President Barack Obama and congressional leaders. CDFIs are recognized as critical to the nation’s economic growth and as an integral part of the solution to the country's economic woes, she said. Also, staff of the U.S. Treasury's CDFI fund announced that President Obama's fiscal year (FY) 2010 budget requests $243.6 million for the CDFI Fund--more than doubles the $107 million appropriated for FY 2009. Conference organizers said they hope Gov. Paterson will see the need for more funding in coming years. “Greater support from the state will help position New York CDFIs to access increased federal support, and it is essential that New York State CDFIs be prepared to tap into this important source of funds,” said Melanie Stern, federation assistant director of Community Development Investments and a coordinator of the CDFI Coalition. “CDFI investment will help jump-start local economies and go a long way toward helping struggling New Yorkers through the economic recession.”

Bankrupt developer owes CU 112000

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DES MOINES, Iowa (5/29/09)--A credit union creditor in a bankruptcy case involving Iowa developer John Kline has asked the Dallas County, Iowa, court to continue the case so creditors can figure out what happened to the money they loaned Kline. Community Choice CU, based in Johnston, Iowa, has asked that the case be continued until at least Aug. 20. According to court documents filed by First Bank of West Des Moines, another creditor, Kline borrowed $108,000 from the $229.8 million asset credit union and used as collateral four automobiles (The Des Moines Register May 27). He was supposed to pay $112,105.85 to the credit union on March 12. The bank says the businessman owes it more than $4 million from a mortgage issued in 2004 for a condominium development. Kline filed a Chapter 7 liquidation bankruptcy petition Feb. 16 but claimed the Fifth Amendment right against self-incrimination when asked about his assets and debts. The petition listed 47 creditors, including 22 financial institutions, but no amounts. The document estimated he had between $1 million and $10 million in assets, and an equivalent amount in debt. Earlier this year, a Dallas County judge entered a $4.5 million civil fraud judgment against Kline on behalf of a contractor.

Its Hurricane Preparedness Week in Louisiana

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HARAHAN, La. (5/29/09)--The official start of the hurricane season is Monday, June 1. Louisiana Gov. Bob Jindal has proclaimed this week as Hurricane Preparedness Week, according to the Louisiana Credit Union League. The aim of the week is to remind people to prepare for emergencies and have a plan if a hurricane should hit the state. The league said it also is taking steps to prepare credit unions for the upcoming hurricane season. It was mailing to credit unions packets containing information such as financial checklist, an emergency contact list for the credit union, a hurricane tracking map, and other tools for disasters (eNews May 27). The National Hurricane Center has dedicated a website for Hurricane Preparedness Week. Credit unions along the coasts should have their business continuity plans up to date. The center says that during an average three-year period, roughly five hurricanes will strike the U.S. coastline anywhere from Texas to Maine and will kill from 50 to 100 people. Two of these likely will be major or intense storms of category three or higher.

Fed legislation wont boost ATM purchases

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CHICAGO and NEW YORK (5/29/09)--The recent federal legislation allowing the National Credit Union Administration (NCUA) and the Federal Deposit Insurance Corp. (FDIC) to borrow funds from the U.S. Treasury to help stabilize the system won't likely boost ATM purchases by credit unions and banks, say several ATM companies. One analyst, Gil Luria of Wedbush Morgan Securities, had suggested that the threat of huge assessments to boost the insurance funds had been a key factor that prevented credit unions and regional and community banks from buying ATMs (ATM&Debit News May 21). The legislation gives NCUA the authority to borrow $6 billion, up from $100 million originally authorized, and provides emergency borrowing authority for up to $30 billion. Because credit unions and banks were facing huge assessments, they essentially froze their budgets, said Luria. However, ATM manufacturers such as Diebold Inc. and NCR Corp. said they expect the economy to reduce sales significantly this year. They and several banks did not agree that the law would free up financial institutions' capital to buy ATMs. One banker noted reduced earnings can affect plans for equipment expansion, but another said he didn't believe that special assessments could be categorically linked to decisions not to buy ATMs. Instead, the assessments will cause financial institutions to prioritize their capital expenditures.

Harley dealers CUs capturing financing

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MILWAUKEE (5/29/09)--Harley-Davidson dealers, who say motorcycles sales are down this year, are complaining about losing financing business to credit unions. The survey of 75 Harley dealerships, conducted in late April and May by Robert W. Baird and Co., noted that new-bike sales dropped between 20% and 25% from a year ago. Used-motorcycle sales declined between 5% and 10% (Milwaukee Journal Sentinel May 27). Of the respondents, 63% indicated they were selling bikes below the manufacturer's suggested retail price. Last year for the same period, 36% of the dealers said they were doing so. One dealer criticized the drop in prices, saying it makes things worse. Dealers are also dealing with tighter consumer credit. Some of those surveyed said their consumer financing arm, Harley-Davidson Financial Services (HDFS), is charging too much in interest rates for people with good credit scores. They complained about losing motorcycle financing business to credit unions. "All we are getting are the marginal-credit customers, which makes our portfolio with HDFS look bad," one dealer said. Some credit unions have coped with the economy's downturn and its effect on the auto industry by offering leading edge rates for motorcycles (News Now May 13, 2008 and June 9, 2008). Last year's increase in gasoline prices prompted some credit unions to offer deals on cycles. One credit union said it would be more aggressive in expanding membership lending for autos, Harley Davidson motorcycles and recreational vehicles (News Now May 23, 2008).

N.Y. CU Foundation board trustees named

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ALBANY, N.Y. (5/29/09)--The Credit Union Association of New York board appointed two individuals to serve as trustees of the New York Credit Union Foundation, effective immediately. The appointees are Christopher J. Guild, account consultant manager, CUNA Mutual Group, and Michael S. Vadala, president/CEO, The Summit FCU. A third addition, Alfred Frosolone, CEO, Niagara’s Choice FCU, joins the foundation board as the newly elected chair of the association. Together they will work with seated trustees in establishing policies and overseeing the operation of the foundation.
Guild has been with CUNA Mutual since 1996. In October 2006, he was named account consultant manager for the organization’s East Region. Before that, Guild held positions as financial solutions officer, account relationship manager and lending specialist. He spent six years as assistant manager for Syracuse (N.Y.) Fire Department Employees FCU. Vadala is also a past president of the New York State Telephone Credit Union Association and still serves on its board. Frosolone was elected chair of the association’s board during its annual business meeting last week in Albany. Other foundation trustees are:
* Chair--Vicki O’Neill, president/CEO, ACMG FCU, Solvay; * Vice Chair--Bruno Sementilli, president/CEO, Quorum FCU, Purchase; * Secretary/Treasurer--Brian Clarke, chief financial officer, Bethpage (N.Y.) FCU; * Linda Bourgeois, CEO, UFirst FCU, Plattsburgh; * John C. Gibardi, CEO, Entertainment Industries FCU, New York; * Shirley Jenkins, secretary/board of directors, Municipal CU, New York; * Nancy Kasprzak-Whitmore, president/CEO, Niagara County FCU, Lockport; * Michael Lotz, operations manager, British Airways Employees FCU, East Elmhurst; * James L. Mack, business development executive, Sunmark FCU, Latham; * William J. Mellin, president/CEO, Credit Union Association of New York; * Christine Peters, CEO, Family First of New York FCU, Rochester; * John Prumo, president/CEO, GPO FCU, New Hartford; * James Stracuzzi, president/CEO, CCSD FCU, Elmira Heights; and * Dirck C. Van Deusen, senior vice president/corporate relations, Members United Corporate FCU, Warrenville, Ill.

Fox Co-ops critical to solving global crisis

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GUANAJUATO, Mexico (5/29/09)--Cooperatives will play a critical role in creating a stronger economic future, according to Vicente Fox, former president of Mexico and co-president of Centrist Democrat International. Fox will share this message with attendees of the World Council of Credit Unions’ (WOCCU) World Credit Union Conference July 26-29 in Barcelona, Spain. He is scheduled to give the keynote address. “It’s time to recompose, re-energize and reshape the global financial system to take on its proper role in serving people,” Fox told WOCCU recently. “We came into the current economic situation after experiencing our best decade in terms of reducing global poverty.” Financial cooperatives, including credit unions, provide the necessary component in serving millions of people, especially the rural poor, and it will be critical to expand those services, he added. “Cooperatives do their best work in helping stabilize communities and creating peaceful environments,” Fox said. “We all have to keep reaching for the best system possible to make sure that every citizen in the world has access to financial services.” Fox helped revitalize Mexico’s “broken” financial system when he became president in 2000. He was inspired by Grameen Bank, which was created by 2006 Nobel Peace Prize winner Muhammed Yunus. He worked to improve Mexico’s credit union system with help from WOCCU and credit union leagues and institutions. “If I could speak to the [Group of 20] nations, my most passionate recommendation would be that, in order to increase growth and prosperity among the poor, cooperative financial systems must be considered at the same levels as the banking system,” Fox said. “But they must be governed with rules and oversight appropriate to their cooperative natures.” For more information, use the link.

McNaught elected chairman of CUDL

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ONTARIO, Calif. (5/29/09)--Marge McNaught, senior vice president of Premier America CU, was elected as chairman of Credit Union Direct Lending during a May 13 board meeting. She previously served as vice chairman and has been on the board since 2003. CUDL is a point-of-sale and indirect lending network for credit unions. All four board members were re-elected to three-year terms:
* Diana Dykstra, president/CEO, San Francisco Fire CU; * McNaught; * Henry Wirz, president/CEO, SAFE CU, North Highlands, Calif.; and * David Reynolds, president/CEO, Security Service FCU, San Antonio, Texas.
Other board officers elected are:
* Larry Wilson, president/CEO, Coastal FCU, Raleigh, N.C., as vice chairman; * Terry Halleck, The Golden 1 CU, Sacramento, as treasurer; and * Reynolds as secretary.
During the meeting, CUDL President/CEO Tony Boutelle also honored outgoing chair Jim Jordan, CEO, Schools Financial CU, Sacramento.

Illinois youth saved 458401 at 23 CUs

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NAPERVILLE, Ill. (5/29/09)--Youth in Illinois joined their counterparts nationwide to more than double the amount of money they previously saved during the annual savings challenge as part of National Credit Union Youth Week. In Illinois, $458,401 was saved at 23 credit unions. More than $26.5 million was saved by youth at their credit unions nationwide in the Credit Union National Association’s 2009 “Magic of Saving” savings challenge campaign. Compared with the 2008 record of $12 million, this year’s figures show that credit unions are capturing the interest of youth and teaching them the “magic of saving,” said the Illinois Credit Union League. In 2009’s challenge, there were 139,699 youth nationwide made deposits, compared with 76,524 in 2008. In Illinois this year, 2,800 youth made deposits. New youth accounts opened nationwide tallied 10,006 in the 2009 challenge, compared with 6,748 in 2008. There were 257 new accounts opened in Illinois in this year’s challenge.

Bank to move into hospital CU evicted

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SIOUX FALLS, S.D. (5/29/09)--Sioux Falls FCU will lose its space in Sanford USD Medical Center this fall, because of the center's new relationship with a bank. The $124.3 million, Sioux Falls-based credit union had occupied the space at the medical center for 28 years (Argus Leader May 27). Hospital executives notified the credit union that it must leave because First Premier Bank would be using the space. They told the credit union that its service to hospital employees was "superior" but that the nature of the relationship with the bank took precedence. The center's namesake, T. Denny Sanford, owns United National Corp., First Premier Bank's holding company. In 2007, Sanford donated $400 million to the center. He has made other, smaller contributions also. According to a hospital spokesman, the bank approached the medical center with a "very dynamic" and "compelling proposal," which he said would provide "a significant number of service opportunities--banking-related service opportunities for our physicians, employees and guests." He did not say what the opportunities are. The bank will offer expanded hours to include nights and weekends and automated banking stations at the branch Sioux Falls FCU serves more than 1,700 hospital employees and their families. According to President/CEO Fran Sommerfeld, the credit union will serve Sanford employees through its other locations in the city.

ICU Foundation awards 75675 in grants

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NAPERVILLE, Ill. (5/29/09)--The Illinois Credit Union Foundation recently awarded $75,675 in Small Credit Union Development (SCUD), community service, marketing and business development, and Financial Independence and Revitalization Effort (FIRE) grants and scholarships. About $26,775 in SCUD grants were awarded to 11 credit unions. The grants will be used for computer equipment and software, Internet banking, computer upgrades, specialized software, website set-up, strategic planning sessions, office equipment for a new facility and new computers. The recipients are:
* Chicago Fire Officers Association CU; * CT Community CU, East St. Louis; * DeKalb County CU, DeKalb; * District 123 FCU, Oak Lawn; * Effingham (Ill.) Highway CU; * Imperial Employees CU, Lincolnwood; * Maine Township Schools CU, Park Ridge; * Murray Employees CU, Centralia; * MWPH Grand Lodge of IL FCU, Chicago; * Parish Members CU, Metamora; and * Pontiac Dwight Prison Employees CU, Pontiac.
The foundation also awarded $800 in Community Service Grants. The program encourages and rewards chapter or credit union participation in community projects. Credit unions and chapters can qualify for grants by hosting an established event, creating an event, or volunteering at an established event. One chapter and one credit union received a community service grant: the Danville (Ill.) Area Chapter of Credit Unions and CommonWealth CU, Bourbonnais. Four credit unions received marketing and business development grants that totaled $14,000. The recipients were: Alton Route CU, Normal, NICE FCU, St. Charles, Riverside Community CU, Kankakee, and State Employees Community CU, Alton. The grants 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. One credit union that received a FIRE grant for $5,000 was Sherwin Williams ECU, South Holland. The FIRE Program provides assistance to credit that provide credit and financial services to residents and businesses in low-income and underserved areas of Illinois. The goal of the FIRE Program is to enhance membership services for credit unions located in economically disadvantaged areas. Sherwin Williams used its FIRE grant to partner with the Center for Economic Progress to help bring the Volunteer Income Tax Assistance program to more people in the south and southwest suburban Chicago area. Also, $29,100 was awarded in scholarships to 37 organizations, including 34 credit unions. Individuals and groups--as a chapter or group of credit unions--can apply. Scholarships may be used toward the Illinois Credit Union League’s educational opportunities and Credit Union National Association Schools. For more information on grants, use the link.

Members at CU double refinance-savings goal

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RACINE, Wis. (5/29/09)--Educators CU members already have surpassed their yearly Fast Lane Financing savings goal of $2 million--five months into 2009. On May 13, the total savings for refinanced loans tallied $2,251,695. The $1.018 billion asset, Racine, Wis.-based credit union challenged its members to track interest savings on all refinanced loan products obtained through other financial entities. (WISN.com May 27). Educators CU came up with the challenge idea, reasoning that many people did not get as good of a financing deal with other lenders as they may have originally thought, the credit union told the station. With seven months left in the year, the credit union said it will attempt to have its members more than double the original goal--which would save members another $3 million by the end of 2009.

CU System briefs (05/28/2009)

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* SAN FRANCISCO (5/29/09)--Scott Waite, senior vice president and chief financial officer at the San Francisco-based Patelco CU, has accepted an invitation to join the Financial Accounting Standards Board's (FASB) and International Accounting Standard Board's (IASB) Financial Instruments Resource Group. The group, comprising 10 individuals from the U.S. and 10 from the international community, will be an informal channel for feedback to staff on ideas related to a project on financial instruments: improvements to recognition and measurement. Waite has worked with FASB and its Small Business Advisory Committee (SBAC) since 2003. "The objective of this new international group is to significantly improve the decision usefulness of financial instrument reporting to users of financial statements. I think it's incredible to have U.S. credit unions represented in this group of 20 individuals," Waite told News Now … *
Click to view larger image Click for larger view
HANSCOM AFB, Mass. (5/29/09)--Hanscom FCU contributed to the success of the Massachusetts Credit Union League's 2009 statewide children's book drive. The credit union collected 2,139 books for the drive. This year 41 participating credit unions collected and donated 19,241 books, which the Massachusetts Coalition for the Homeless will deliver to shelters, hospitals and other nonprofits in the state. The league's project has collected 190,326 books in the past nine years. Hanscom FCU volunteers shown organizing the books included, from left: Jim Potter, senior vice president of operations; Sandy Imbrogna, training specialist; David Sprague, president/CEO; and Paul Marotta, chairman of the board. (Photo provided by Hanscom FCU) … * CHARLOTTE, N.C. (5/29/09)--Roger Shelor, president/CEO of Charlotte, N.C.,-based Carolinas Telco FCU, died Tuesday at the age of 78. Shelor began his career at the $340 million asset credit union in 1965 as manager, then president/CEO. He served on numerous local and national committees and as a board director of the Piedmont Chapter of credit unions and the North Carolina Credit Union League. His career was highlighted when he received the "Mark of Excellence Award" from the league in 1991. He was preceded in death by his wife, Shirley. Survivors include three children. Visitation is 7 p.m. to 9 p.m. today at McEwen Funeral Home, 10500 Park Road, Pineville (South Charlotte), N.C. On Saturday, a celebration of Shelor's life will begin at 11 a.m., followed by services at noon at First United Methodist Church, 501 North Tryon St., Charlotte …

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 (UpperMichiganSource.com 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 (News-Record.com 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.

Carolina bank sues Truliant over billboards ads

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WINSTON-SALEM, N.C. (5/27/09)--A bank has filed a trademark infringement lawsuit against a North Carolina credit union, claiming the credit union is using the bank's registered "Yes you can" service mark on credit union billboards and advertisements. Truliant FCU, a $1.195 billion-asset credit union based in Winston-Salem, had until 5 p.m. Tuesday to file a response to the suit, according to court documents. The suit was filed May 13 in U.S. District Court for the Middle District of North Carolina by attorneys for CommunityONE Bank, based in Asheboro, N.C. In the complaint, CommunityONE said it purchased rights to the "Yes you can" service mark in 1999, when it was doing business as First National Bank and Trust Co. It acquired the federally registered service mark from Crestar Financial Corp., Richmond, Va. In 2007, when the bank changed names, it registered the name change with the trademark assignment, said the complaint. The mark is an extension of the bank's corporate logo and mascot, Jack (likened to a jumping jack) and is used in marketing and customer service campaigns. The complaint alleges that Truliant, a competitor to CommunityONE, posted a billboard advertisement on Interstate 40 in Greensboro near the Route 68 interchange. The ad reads "Yes You Can. Join Truliant!" The complaint says the ad "prominently incorporates CommunityONE's 'Yes you can' service mark, together with the use of a sun logo, which bears a strong resemblance to CommunityONE's 'Jack' logo." The ad also appears on at least one other billboard and "creates a strong likelihood of confusion, and causes customers, potential customers, the public, regulators, and the trade to believe mistakenly that Truliant is affiliated with, connected with, sponsored by, approved by, or otherwise associated with CommunityONE," said the court documents. The suit alleges federal trademark infringement, federal unfair competition, state unfair and deceptive trade practices, and common law trademark infringement and unfair competition. The bank seeks a preliminary injunction preventing further use of the "Yes you can" mark and seeks damages. After Truliant files its response with the court, CommunityONE will be required to file a reply by 5 p.m. EDT June 1. A preliminary injunction hearing is set for June 4 in Winston-Salem.

Corporates CUSO had blockbuster year in 2008

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WESTERVILLE, Ohio (5/27/09)--A credit union service organization (CUSO) owned by 27 corporate credit unions announced it had a banner year during 2008, with almost $9 billion in brokered certificates of deposit (CD) placements. Primary Financial Co. LLC-- which has offices in Westerville, Ohio, and Columbus, Ind.--said it reached net income of almost $4 million, and that the corporate credit union owners earned fees and distribution payments of more than $8 million. "The numbers reflect not only a great year for the CUSO, but a great year for our issuers and investors as well," said Lew Lambert, president of Minnesota Operations for Members United FCU and chairman of Primary Financial's board. "Last year, Primary Financial helped credit unions generate $650 million in liquidity and helped investors earn more than $215 million in yield" at a time when many credit unions "need it most," Lambert added. Mark Solomon, president/CEO of Primary Financial, noted a significant milestone occurred when the total number of credit unions doing business with SimpliCD program reached 4,000 during second half of 2008. "We now have relationships with more than 50% of the credit unions in the U.S. and more than 40% of all credit unions have investments in the SimpliCD program," Solomon said. Primary Financial's 2008 annual report can be viewed by using the resource link.

CUs better card rates more evident with new law

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MADISON, Wis. (5/27/09)--A new law--the Credit Card Accountability, Responsibility and Disclosure Act of 2009, know by the partial acronym the “Credit CARD Act,” which is expected to tighten credit card regulations--may make credit unions’ credit card rates more visible, according to several major media outlets. Credit cards from credit unions are “better deals than bank credit cards--and this should become more evident” with the new legislation, MarketWatch said Tuesday. It’s a good time to shop around for a better credit card, according to The Wall Street Journal (May 22). Consumer should consider smaller financial institutions or credit unions “that may be more eager for your business,” the newspaper said. Ed Lawrence, finance professor at the University of Missouri-St. Louis, told the St. Louis Post-Dispatch Sunday that “I would just quit using [my card] if they started putting annual fees on it. A lot of credit unions don’t charge annual fees, so people would have choices.” MarketWatch also noted that some credit unions may pass fees assessed by MasterCard and Visa to cardholders, but credit unions will not add them to balance transfers, international transactions and cash advances.

CUs tops in Forrester consumer opinion survey

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CAMBRIDGE, Mass. (5/27/09)--Amidst the worst financial crisis in years, credit unions have come out on top in terms of member/customer advocacy and trust--beating U.S. banks, investment firms and insurers--in a new survey released Tuesday by Forrester Research Inc. In "Customer Advocacy 2009: How Customers Rate U.S. Banks, Investment Firms and Insurers," credit unions achieved top ratings from 68% of consumers surveyed. Their rating was 16 percentage points higher than regional or local banks, which were ranked at 52%, and 27 percentage points above the largest bank rating, that of Washington Mutual at 41%. Credit unions' rank remains unchanged from the previous survey. In previous years, only insurance company USAA outranked credit unions. This year, the company's ranking dropped more than 5% to tie with credit unions. Independent financial advisors received a score of 61%, followed by State Farm Mutual Automobile Insurance Co. and an independent insurance agent tied at 53%; and Progressive and "a regional or local bank" tied at 52%. The survey ranks financial services companies based on their member/customers' perception that their providers are looking out for their best interests, not just the institution's bottom line. For the first time--and reflecting investors' dissatisfaction with their investment portfolios-- brokerage firms plummeted to the bottom of the list. Large national banks have traditionally held the bottom ratings. A common trait among the top scorers: many are customer-owned organizations, like credit unions or mutual insurance companies such as State Farm, said Forrester's report, written by Bill Doyle, Forrester vice president and principal analyst. Forrester also found that the higher the rank, the more likely the institution would keep its member/customers and the more likely those member/customers would buy more products. For the first time since the study began, the nation's three largest banks--Bank of America, Chase and Wells Fargo--climbed from the bottom. Still, banks continued to dominate the cellar. Nine of the 13 lowest-rated firms are banks, according to the report. This year, the cellar position went to Capital One Bank.

Michigan governor signs anti-foreclosure bills

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LANSING, Mich. (5/27/09)--Michigan Gov. Jennifer Granholm signed a package of foreclosure prevention bills into law Thursday. The acts will not take effect for 45 days, giving financial institutions, including credit unions, time to prepare for the changes. The Michigan Senate had unanimously passed the anti-foreclosure package on May 19, including House Bills 4453, 4454 and 4455, sponsored by State Reps. Shanelle Jackson (D-Detroit), Andy Coulouris (D-Saginaw) and Bert Johnson (D-Highland Park), respectively (Michigan Monitor May 26). Michigan has one of the highest foreclosure rates in the nation, said State Sen. Randy Richardville (R-Monroe). Given that, “it was important for the legislature to approve these measures to help struggling homeowners. We have developed a plan that will help residents who want to stay in their homes and are willing to take appropriate steps to do so.” Coulouris referred to the package as a “90-day lifeline” for homeowners. The bills offer a judicial workout option for homes that fall into foreclosure, and gives three months for the lender and borrower to find a solution. The package does not address homes already in foreclosure. Home loans that qualify for modification will qualify for judicial intervention if the lender chooses not to cooperate to modify payments. Lenders will now be required to send a notice of foreclosure to all homeowners. Borrowers can request a meeting within 14 days of receiving a foreclosure notice, at which point the lender must stop any foreclosure proceedings for 90 days. The Michigan Credit Union League did not comment on the matter.

Maine league announces awards

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WESTBROOK, Maine (5/27/09)--The Maine Credit Union League recently honored six individuals as recipients of the Maine credit union movement’s annual awards. The recipients were presented with their awards in Augusta, Maine, in mid-May during the league’s 71st Annual Meeting and Convention.
Robert Walker (center), who has been a volunteer at Monmouth FCU for 53 years, accepts the Alexander Ferguson Award for Outstanding League Volunteer from Richard Dupuis (right), chair of the league's Annual Awards and Convention Committee. Looking on are Richard Howard (back left), chair of Monmouth FCU's board, and David Walker (back right), Walker's son and a fellow board member of the credit union.
Receiving the Alexander Ferguson Award for Outstanding Credit Union Volunteer was Robert “Bob” Walker of Monmouth FCU, Monmouth, who has been a member of the credit union since 1955. He served on the credit union’s board for 53 years, and managed the credit union for 29 years. He remains an active volunteer there and a member of its board. The James M. Gratto Award for Outstanding Credit Union Manager went to Tucker Cole, president/CEO of Evergreen CU, Portland, who “always puts the needs of members first and always keeps the best interest of members in mind.” Cole has been with the credit union since 1996, and has helped it grow from $48 million in assets to over $200 million. Cole also is a member of the Maine league’s board and is president of the Alex Ferguson Chapter of Credit Unions, representing credit unions in Cumberland County. Presented the Jeannette G. Morin Award for Outstanding Credit Union Employee was Marsha Richard, who works in Card Services at Atlantic Regional FCU, Brunswick. Twenty-one years ago, she began as a
From left, David Rossignol, Maine CU League board member and last year’s recipient, poses with Tucker Cole, President/CEO of Evergreen CU, who received the 2009 James M. Gratto Award for Outstanding Credit Union Manager. Also pictured are two members of Cole’s staff, Kate Archambault and Catie Scribner. (Photos provided by the Maine Credit Union League)
teller. Richard also was recognized for spending an average of 525 hours annually on community activities including helping with Girl Scouts, the Annual Relay for Life event, and other community activities. Maine CU League President’s Award for Outstanding League Volunteer was given to Richard Dupuis, president/CEO of Five County CU, Bath, and chair of the league’s board. He was recognized by league President John Murphy for “his strong support and involvement with the Maine credit union movement.” Most recently, Dupuis has served as vice-chair of the league’s board. The Diane L. Oceretko “People Helping People” Award was bestowed on Lori Peakall-Cote, regional vice president at Down East CU, Baileyville, who was honored with this award that recognizes an individual who embodies the credit union philosophy of “people helping people.” Peakall-Cote donates five hours per week to community service, including serving as co-chair of the Maine Blueberry Festival, participating in the Relay for Life fundraiser for the American Cancer Society and helping with other causes. She has been with the credit union for seven years. Presented the Governmental Affairs Committee Chairman’s Award was Mike Foley, vice president of Five County CU in Bath. The award which salutes grassroots involvement in promoting credit unions to legislators and other political leaders. Foley has been a member of the league’s Governmental Affairs Committee for years and was recognized by Tucker Cole, chair of the committee, as “someone who is truly engaged in the legislative process working on behalf of the interests of not only his credit union but for all Maine credit unions and their 600,000 members.”

NCUF to host REAL Member Solutions video contest

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WASHINGTON (5/27/09)--The National Credit Union Foundation (NCUF) is hosting a REAL Member Solutions video contest to gather testimonials from credit unions and leagues to see the impact REAL Solutions has had on members. The contest will run from June 1 to Nov. 2. The grand prize winner will receive three trips to Washington, D.C.--one each for the winning league, credit union and member. Winners will attend the Wegner Awards Dinner at the Credit Union National Association Governmental Affairs Conference in 2010 as guests of NCUF. Five winning entries also will be featured on the REAL Solutions Impact Center and on YouTube.com and promoted nationally. NCUF will host a conference call June 8 at 3 p.m. EDT to discuss the contest. Entries can be no more than three minutes in length and must reflect the credit union members’ stories, not just highlight the REAL Solutions program, NCUF said. Some suggestions include:
* Foreclosure assistance stories; * Savings programs; * Used car programs that helped a borrower get a loan for a quality used car; * Member savings from payday loan alternative products; * Wire remittance and check cashing programs; and * Taxpayer assistance.
Entries will be judged on members who portray their stories with sincerity, humor or motivation. The story should include quantitative and qualitative information on how the credit union helped the member. There is no limit on the number of submissions. Videos must be received by Nov. 2.

WPCCU offers wedding cash gift registry

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LOS ANGELES (5/27/09)--Water and Power Community CU (WPCCU), Los Angeles, is offering MatriMoney wedding registry savings accounts to help newlyweds with their finances as June wedding season approaches. MatriMoney allows couples to establish interest-bearing savings accounts, which can be used toward honeymoon expenses, furniture or a down payment on a home. WPCCU also will match the couples’ first $100 in wedding gifts until June 30 if they complete four financial management classes online through WPCCU’s website. Accountholders must: qualify for a credit union membership, open and maintain a joint savings account in good standing with $25 and open their MatriMoney account with $50. The credit union also will provide monthly statements with a record of those who contribute to the account, WPCCU said. WPCCU has $467 million in assets.

Panel to hear Heartland case today

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LOUISVILLE, Ky. (5/27/09)--The U.S Judicial Panel of Multidistrict Litigation will convene a national panel of seven judges today in Louisville, Ky., to hear oral arguments in the Heartland Payment Systems data breach lawsuit. The panel will decide whether the case should be rolled into class action lawsuits. The panel’s decision will impact credit unions involved in litigation against the company. Actions against Heartland Payment Systems were filed in 12 U.S. district courts. The MDL panel was created by an Act of Congress in 1968, according to its website. The panel will determine whether civil actions pending in different federal districts involve one or more common questions of fact. If so, the actions could be transferred to one federal district for coordinated or consolidated pretrial proceedings. The panel also will select the judge or judges and court assigned to conduct such proceedings. Centralizing the court process would avoid duplication of discovery, prevent inconsistent pretrial rulings, and conserve the resources of the parties, their counsel and the judiciary. Heartland Payment Systems has spent or earmarked more than $12.6 million to cover costs associated with the widespread intrusion of its data systems discovered in January, according to CEO Robert Carr (Computerworld May 18). As of March 2, more than 560 financial institutions, including at least 178 credit unions, had to reissue credit and debit cards as a result of the Heartland breach. Three credit unions joined two banks in a class action lawsuit against Heartland to recoup losses related to the breach announced Jan. 20 (News Now March 2). The credit unions are: GECU, a $1.146 billion asset credit union in El Paso, Texas; MidFlorida FCU, a $1.283 billion asset credit union in Lakeland, Fla.; and Matadors Community CU, a $123 million asset credit union in Chatsworth, Calif., according to documents filed in court. They join Amalgamated Bank of New York, N.Y., and Farmers State Bank, headquartered in Marcus, Iowa, in the complaint, which was filed Feb. 20 in the U.S. District Court, Trenton, N.J., by Chimicles & Tikellis LLP, Haverford Pa., the lead attorneys in the case. They are seeking to recoup money for the cost of reissuing cards to their members/customers and for their costs related to fraudulent activity stemming from the breach.

Mongolian delegation visits Michigan league

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LANSING, Mich. (5/27/09)--A meeting between the Michigan Credit Union League and the Financial Regulatory Commission of Mongolia culminated in Commission Managing Director General Ganbat O. changing his mind about Mongolian credit unions’ tax status.
From left: Ganbat O, managing director of Mongolia’s Financial Regulatory Commission, Michigan Credit Union League Executive Vice President Patrick La Pine, and other members of a Mongolian delegation, met with the Michigan League to discuss U.S. credit unions’ regulatory structure and services. (Photo provided by the Michigan Credit Union League)
Unlike U.S. credit unions, Mongolia’s credit unions pay taxes. There are about 200 credit unions in the country and 120 in Ulaanbaatar, Mongolia’s capital. O told the league that he has “some thinking to do” after he met with the league about U.S. credit unions’ structure, regulation and services (Michigan Monitor May 26). Michigan League Executive Vice President Patrick La Pine also explained shared branching to O, who seemed interested in the concept, the league said. Mongolia is looking into merging some of its credit unions because they are spread out across the country, O told La Pine and league staff. Mongolia is about the size of Alaska.

CU System briefs (05/26/2009)

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* WHITTIER, Calif. (5/27/09)--Members and employees of Credit Union of Southern California (CU SoCal) and staff from several other credit unions and businesses fed more than 3,000 local residents in need lunch while they donated more than 100,000 pounds of food valued at $200,000. The Fifth Annual Food Distribution Day at CU SoCal's Whittier branch, held May 16, was part of the Southern California's Helping Hands, in conjunction with Heart of Compassion. The event prompted one member to say, "No bank does this like my credit union. I have never seen anything like it. CU SoCal really cares about people. You don't just bank here. The credit union gives back to you." Yolanda from Pico Rivera noted that when her husband left her with three children and two grandchildren, he was the only one working. "When he left, so did the money. Things are really tight right now. My daughter got a job, so that has helped." Another recipient, Rachel, who was laid off in March from her clerical job with a school district, said, "My husband is working part time, but it's not enough to support our family of five. Plus, we have a baby on the way." CU SoCal President/CEO Dave Gunderson said more than 300 people volunteered for the event. (Photo provided by Credit Union of Southern California) … * TAMPA, Fla. (5/27/09)--Two Gibsonton, Fla., men were indicted and charged with conspiring to rob three banks and a credit union in Hillsborough County between April 9 and April 17. The second robbery, on April 13, was at a branch of Tampa-based Suncoast Schools FCU. Jason Andrew Rosenberger, 25, faces three charges of bank robbery by force or violence and one count of conspiracy. Luke Mark Debi, also 25, is charged with two counts of bank robbery by force or violence and one count of conspiracy. According to the indictment, they scouted banks and the credit union to become familiar with the premises and their security measures (Tampa Tribune May 22) …

Survey Better rates more ATMs top members wish list

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MADISON, Wis. (5/27/09)--While most members report they are satisfied with their credit unions, better rates and expanded access to automated teller machines (ATMs) top their list of suggested improvements, says a recently released survey report by the Credit Union National Association (CUNA).
Click to view larger image Click for larger view
About 45% of members surveyed would like to see their credit union pay higher savings rates than they do now, according to CUNA’s 2009-2010 National Member Survey. Lower loan rates (27%) and more ATM locations (22%) rounded out the top suggestions from members. Higher savings rates are the leading request from members age 45 and older. More ATMs topped the list for 25- to 44-year-old members, and more convenient credit union locations ranked highest with 18- to 24-year-olds. “The desire for more convenient brick-and-mortar locations among such a technology savvy young group was interesting, and it could indicate that some young adults are doing business with a credit union located near the workplace of one of their parents, but not necessarily near them,” said Jon Haller, CUNA director of business-to-business publishing. The National Member Survey reveals trends involving members’ use of financial services and attitudes, and strategies to build loyalty and attract more business. It also provides information and analysis related to members’ demographics, satisfaction, interest in new services and delivery channels. Also, the 2009-2010 Survey of Potential Members--CUNA’s companion report to this survey--uncovers new issues, opportunities, and strategies for reaching and attracting new members. It analyzes current trends relating to non-members’ financial behaviors and loyalty to their banks, and suggests how to leverage competitive advantages to attract eligible non-members from their current provider. For more information, use the links.

Pa. CUs to help state employees with payless paydays

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HARRISBURG, Pa. (5/26/09)--Pennsylvania credit unions will help state employees who will not be paid for their work beyond July 1 unless the state budget passes. The budget deadline is July 1, but employees can continue working beyond it. Pennsylvania State Employees CU (PSECU) is developing accommodations to help state workers, according to the Pennsylvania Credit Union Association (PCUA) (Life is a Highway May 22). Other state credit unions that offer Better Choice loans are preparing to make small loans to state employees. Better Choice is PCUA’s short-term, payday loan alternative. PCUA also will help the Pennsylvania State Treasury publicize credit union alternatives to affected employees. A number of states, including California, have reported that their state workers would not be paid until the state budgets are settled. Credit unions have pitched in to help members affected by the delays. In February, 11 California credit unions provided lines of credit to residents impacted by the state’s cash crunch, which forced the controller’s office to delay roughly $3.3 billion in payments (News Now Feb. 5).

CU System briefs (05/25/2009)

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* PALO ALTO, Calif. (5/26/09)--Addison Avenue FCU has launched a virtual Family Center to provide members and their children information about managing money, student loan and scholarship offerings, and recommendations about accounts. "With a belief that developing good financial habits starts early, we recognized the need to provide our members with the tools to start their kids on the right foot," said Jonathan Gowins, e-commerce social media manager at the $2.187 billion asset, Palo Alto credit union. The Family Center also covers topics such as how to read credit reports, find the right checking and savings accounts and how to use credit cards wisely, he said … * COLORADO SPRINGS, Colo. (5/26/09)--Colorado Springs CU, a $119.1 million asset credit union, has changed its name to Aventa CU. Established in 1957 as Colorado Springs Employees CU serving utilities employees, the credit union expanded its membership and rebranded itself as Colorado Springs CU. Today, nearly 40% of its 16,000 members live outside the city and the credit union wanted a name to reflect the growing membership (Colorado Springs Business Journal May 20) … * HARRISBURG, Pa. (5/26/09)--A Nazareth, Pa., man was sentenced Thursday to more than 11 years in federal prison for a robbery spree in three states that involved 15 financial institutions and convenience stores and more than $58,000. John Snuggs, 42, was sentenced by U.S. District Court Judge Richard P. Conaboy for the crime spree through Pennsylvania, New Jersey and Virginia between September 2007 and March 2008. One of the six financial institutions robbed was Baker FCU, Phillipsburg, N.J. The prolific robber was ordered to be placed on supervised release for five years after serving the prison sentence, pay more than $58,000 in restitution, and pay a special assessment of $1,500 (States News Service May 21) … * AUGUSTA, Maine (5/26/09)--Maine State CU Wednesday announced it has awarded $20,000 in scholarships of $1,000 each to 20 Maine high school students who will attend a post-secondary educational institution next year. The $250 million asset credit union serves Kennebeck and Somerset Counties and the employees of the state of Maine (MaineBusiness.com May 21) … * HARRISBURG, Pa. (5/26/09)--Eugene "Gene" Bradley, founding member and retired CEO of Ingersoll-Rand FCU in Athens, Pa., died Tuesday at the age of 76. He was past president of the Endless Mountains Chapter of Credit Unions, according to the Pennsylvania Credit Union Association (Life is a Highway May 22). He is survived by his wife of 52 years, Hazel; five children; 11 grandchildren; and six great-grandchildren. Funeral services were Friday (Morning Times May 20) …

Charlotte Metro FCU profiled in auto-refinance story

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CHARLOTTE, N.C. (5/26/09)--Charlotte Metro FCU was profiled last week in a story about auto-loan refinancing on WSOC-TV Channel 9 in Charlotte, N.C. The segment focused on credit union member Monica Johnson, who refinanced the auto loan on her Jeep Commander two weeks ago at 6.25%, down from an initial rate of 7.64%. With the lower rate, Johnson’s monthly payment dropped to $288 from $298, which may not seem like much, but it adds up, the segment indicated. “Over the life of the loan, I’ll probably save a good--I’d say about a good $2,000,” Johnson said. Auto-loan refinancing is a big draw for new members at the $184.3 million asset credit union. No matter the type of car or the age of the vehicle, the credit union can save members a percentage point or more on interest rates, depending on the member’s loan balance and credit score, said Liz Ramos, Charlotte Metro vice president. “We can save [members] anywhere from $25 to $50, $75 [per payment],” she added. Members can refinance in about 30 minutes if they bring in their old auto finance contract, their account number and mailing address for the payoff, a 10-day payoff quote, a driver’s license and two pay stubs, the credit union said.

Citadel FCU explains difference on Philly TV

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PHILADELPHIA (5/26/09)--Citadel FCU recently explained the difference between credit unions and banks to Philadelphia’s CBS affiliate, KYW, in a news story May 4. KYW noted that credit unions have avoided risky loans and the problems encountered by large U.S. banks such as Bank of America, Citigroup and Wells Fargo. Credit unions like Thorndale, Pa.-based Citadel didn’t take government bailout money, and welcomed new members, KYW reporter Jim Donovan said. “Credit unions in general are viewed as very conservatively managed financial institutions,” Kristianna Del Grande, Citadel public relations specialist, told the news outlet. “While a bank is held accountable to its stock holders to generate a profit to boost its stock value, to boost dividends, a credit union on the other hand is only held accountable to its members, because its members are its owners.” Del Grande noted that 99% of Americans are eligible to join a credit union. Citadel recently expanded its charter to extend membership to residents who live in five other counties. At the end of the newscast, the KYW news team members noted that credit unions didn’t ask for bailout money. “We admire them for that,” they said. To watch the newscast, use the link.

WOCCU helps Kenya develop first CU reg

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NAIROBI, Kenya (5/26/09)--Seven months after passing its first credit union law, Kenya’s government is taking its initial steps toward creating regulations with the help of the World Council of Credit Unions (WOCCU). The Kenyan government is working to ensure it gets the rules for credit unions right the first time--after worldwide fallout against some poorly regulated financial institutions, said WOCCU. In November 2008, Kenya became the first country to develop a law that specifically regulates savings and credit cooperatives (SACCOs), as credit unions are known. A committee is working in Kenya to develop regulations, design a regulatory agency, create model bylaws and develop a deposit guarantee fund. WOCCU joined the 15-person committee two weeks ago in Nairobi to set priorities and timelines to establish the SACCO regulation. “WOCCU has a lot of experience working with SACCOs in Kenya and understands the strengths, challenges and opportunities that exist in the Kenyan SACCO sector,” said F.F. Odhiambo, cooperative development commissioner with Kenya's Ministry of Cooperative Development and Marketing. The ministry is involved with the technical development of the country's financial and non-financial cooperatives.
Kenyan savings and credit cooperatives (SACCOs) workshop participants, from left, Jesús Chavez, World Council of Credit Unions (WOCCU)-Kenya; Daniel Tallam, Central Bank; Brian Branch, WOCCU; David Ferrand, FSD Kenya; and Carilus Ademba, Kenya Unions of Savings and Credit Co-operatives, share ideas about forming a regulatory agency for SACCOs.
Brian Branch, World Council of Credit Unions’ executive vice president and chief operating officer, discusses the requirements for establishing a deposit guarantee fund for savings and credit cooperatives in Kenya. (Photos provided by World Council of Credit Unions)
“Given WOCCU's vast international experience in regulatory development, the task force invited the organization to help implement the SACCO Societies Regulatory Agency,” Odhiambo added. Brian Branch, WOCCU executive vice president and chief operating officer, who helped spearhead the legislative initiative, facilitated the workshop. He joined WOCCU-Kenya program directors Jesús Chavez and Erick Silé to provide an overview to the committee on the SACCO sector. “Kenya’s SACCO system has grown at a tremendous rate in the past several years, but it has lacked any kind of regulatory oversight and supervision that would enable SACCOs to really evoke trust in their communities and to compete against banks and microfinance institutions,” Branch said. “Passing the SACCO law was the first step in establishing a strong supervisory framework. Now the real work begins.” The committee agreed to establish a task force of consultants and representatives from Kenya's Ministry of Finance, Central Bank and WOCCU to draft regulations based on the new legislation and recommendations from the workshop. It also discussed establishing a deposit guarantee fund to protect the institutions and their members’ savings. The fund would be at risk of collapsing if any large SACCO failed during the next five years so the committee proposed to solicit temporary government funding to get started. Most of the workshop was dedicated to creating SACCO Societies Regulatory Authority. It would license deposit-taking SACCOs, regulate and supervise the institutions and manage the deposit guarantee fund. Regulators would be based in Nairobi rather than in the field to ensure adequate training. Of the nearly 4,000 SACCOs in Kenya, slightly more than 200 are deposit-taking institutions. The committee expects about half will be able to comply with regulatory standards required for licensing. SACCOs have 12 months from the time of their application to become licensed. The committee seeks to amend the law so that SACCOs that improve within a specific range can become certified institutions. Workshop participants included representatives from the Central Bank of Kenya, the country's Ministry of Finance, Financial Sector Deepening Kenya (an independent trust that supports the development of inclusive financial markets) and Kenya's two SACCO trade associations--Kenya Unions of Savings and Credit Cooperatives and Kenya Rural Savings and Credit Societies Union. The committee will meet every two weeks until it presents draft regulations to the Minister of Finance, planned for December. For more information, use the link to Branch’s travel blog.

Maine governor lawmakers at league convention

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AUGUSTA, Maine (5/26/09)--Maine Gov. John Baldacci, U.S. Rep. Chellie Pingree (D-Maine) and more than 650 credit union representatives attended the Maine Credit Union League’s 71st Annual Meeting and Convention May 15-16 in Augusta, Maine.
U.S. Rep. Chellie Pingree (D-Maine) expressed her gratitude to Maine credit unions attending Maine Credit Union League’s annual convention for their efforts to provide financial products and services that help state consumers. (Photo provided by the Maine Credit Union League)
Baldacci noted credit unions’ work to end hunger, according to the Maine Credit Union League. “When the first lady found out I was speaking to Maine credit unions, she wanted to make sure that you knew how much we appreciate and recognize the work of the Maine Credit Unions’ Campaign for Ending Hunger,” Baldacci said. Pingree said she was grateful for “all that credit unions do to provide financial products and services that are aimed at helping Maine consumers.” Several Maine lawmakers who weren’t able to attend the event sent congratulatory messages, the league said. Sen. Olympia Snowe (R-Maine) praised credit unions’ leadership in providing financial education to Maine children. U.S. Rep. Michael Michaud (D-Maine) reiterated his support for legislation that helps credit unions help consumers.
Maine Gov. John Baldacci (left) and John Murphy, Maine Credit Union League president, at the league’s annual convention. (Photo provided by the Maine Credit Union League)
“Despite the challenges of the past year, Maine's credit unions have again come together to meet those unique and distinct challenges that members have faced,” said John Murphy, league president. “Examples of Maine credit unions reaching out to help members, whether it be offering special low- or no-interest loans for fuel assistance or providing relief for laid-off workers, occur everyday. “Maine credit unions have always been a great deal for consumers but more and more consumers are finding out about the opportunities and values available at their local credit union,” he added. “This year's convention reaffirmed the important role and positive impact that Maine credit unions play in the lives of hundreds of thousands of Maine people.”

ACUC to celebrate movements 100th anniversary

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MADISON, Wis. (5/26/09)--The credit union movement’s 100th anniversary will be celebrated at America’s Credit Union Conference
Click to view larger image President Franklin D. Roosevelt signs the Federal Credit Union Act of 1934 into law on June 26, 1934. (Photo provided by CUNA)
and Expo (ACUC), scheduled for June 21-24 in Boston. Several sessions will focus on credit unions’ history, according to the Credit Union National Association (CUNA). The conference kicks off with a keynote session, “Honoring the Credit Union Revolutionaries,” June 21 from 4 p.m. to 6 p.m. EDT. A presentation honors the first 100 years of credit unions and tells stories about credit union pioneers past and present. During the conference, attendees will experience the 100th anniversary timeline. “Meet the Revolutionaries: Bringing the History Alive” is an interactive timeline, in which attendees will take a self-guided tour to view historic artifacts and the evolution of the credit union movement. Other events scheduled are:
* A special viewing of “King’s X.” Originally produced on film in 1953, “King’s X” stars Hugh Beaumont of the TV show “Leave it to Beaver.” The film follows the story of a family experiencing a sudden financial struggle. While searching for a solution, the main character discovers the benefits of becoming a member of his local credit union. The film covers the credit union philosophy, benefits of membership, and a brief history of credit unions. * The closing event is the 100th Anniversary Revolutionary Celebration--House of Blues, June 23, from 7 p.m. to 10 p.m. The House of Blues is dedicated to educating and celebrating the history of U.S. southern culture and African-American artistic contributions to music and art. * A pre-conference optional event--America’s CU Museum Tours, scheduled for Saturday and Sunday before ACUC, and for Wednesday after the conference concludes. The tour shows how, in 1908, the American credit union movement took a root in a house. Nearly 100 years later, in October 2002, the site became the home of America’s Credit Union Museum. Attendees can experience credit union history through exhibits, personal accounts and storytelling.
All attendees will be provided a free copy of CUNA’s new book “For the People, for 100 Years,” a history of the credit union movement, which features many photographs of key events through history.

Pa. banks tax-status failure good for other states CUs

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HARRISBURG, Pa. (5/26/09)--The failure of banks' challenges to credit unions' tax-exempt status in a Pennsylvania court can only be good for credit unions in other states, too, according to Eric Richard, Credit Union National Association (CUNA) executive vice president and general counsel. The Pennsylvania Commonwealth Court Thursday issued an order discontinuing banks' challenges to credit unions' tax-exempt status. The order "effectively ends the tax litigation," said Jim McCormack, president/CEO of the Pennsylvania Credit Union Association (PCUA) (Life is a Highway May 22). "The banking industry in Pennsylvania seems to have thought it could undermine the credit union tax exemption with this litigation," CUNA's Richard said. "That strategy has failed, and its failure can only be good for credit unions in other states, too. "Pennsylvania's credit unions and PCUA have worked brilliantly to get this issue out of the courts," Richard told News Now. The court order follows months of discovery requests and negotiations over banks' allegations that the taxing scheme applicable to Pennsylvania's state-chartered credit unions violates the state constitution. The state has seen a series of cases beginning in 2003 as banks challenged state credit unions' conversions to community charters. After losing their arguments against the charters before the Pennsylvania Department of Banking, the banks also raised the tax challenge on appeal to the court system. One community chartering case remains active. Freedom CU and TruMark Financial CU serve the well-defined local community of the Philadelphia metropolitan division, said PCUA. The Freedom/TruMark Financial case will be argued on June 10.

What do California budget woes mean for CUs

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LOS ANGELES (5/22/09)--With the state having more than a $21 billion budget deficit hole to fill, about 60% of Californians who voted Tuesday opted to reject five ballot measures designed to keep the state solvent through 2009. The measures would have prolonged tax increases, capped state spending, earmarked money for education and involved the state in a borrowing plan against its lottery. The failure of the measures, declining revenues since the state passed its budget, and significant home foreclosure rates and high unemployment have created severe financial problems in the state (The New York Times May 20). What do these developments mean for the state’s credit unions? “California faces a new, harsh fiscal reality after Tuesday's election,” Melissa Ameluxen, director of state government affairs for the California Credit Union league, told News Now. “The state’s legislative leaders now have to close an estimated $15.4 billion to $21.3 billion budget gap. It’s no secret that deep cuts are likely in the works. We also are facing the overall downturn in the economy, repercussions from slashed services, job loss and hiring freezes, all of which have an impact on our state’s credit union members,” she said. “However, California credit unions have a strong record of helping public employees,” she added. “As we approach the rarely met constitutional deadline to pass a state budget, the state stops payment to a select group of state employees and state contractors. As a service to those members, many credit unions provide bridge loans to replace the paychecks the state has temporarily cut. During this turbulent time, California credit unions stand ready to help our members with sound financial services.”

Does census youth report mean changes in CUs approach

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MADISON, Wis. (5/22/09)--Roughly half of children under age 5 are minorities, according to U.S. Census Bureau estimates released Wednesday. As the nation’s population becomes more diverse, credit unions will need to change the way they reach out to potential members, according to several credit union representatives. Phil Heckman, Credit Union National Association (CUNA) director of youth programs, said credit unions will need to change the way they reach out to youth, but noted that “immigrant populations with strong family ties present credit unions with a better opportunity to reach the children through the parents and the parents through the children.” Erayne Gee Hill, director of community and public relations at Unity One CU in Fort Worth, Texas, echoed similar thoughts. Unity One has successfully reached out to the Hispanic community in the Fort Worth area, she said. “[Credit unions] will have to change the way we communicate and which part of the population we target,” Hill told News Now. The most important way to reach out is to be visible, she said. Unity One uses its mascot to reach children under 5, and has opened an in-school branch at an elementary school. “At the start of the 2008 school year, the kids had deposited more than $21,000. Our branch staff reads every Wednesday at the neighborhood library branch, and we have become very recognizable,” she said. The credit union also formed an advisory board of community leaders, immigrants and Mexican officials when it opened a new branch in a predominantly Hispanic area of the city. “One important thing that we learned was that we should hire staff who were from the area and spoke fluent Spanish,” Hill said. “We did that, and today all employees at the branch are familiar with the area and speak Spanish fluently. It has made a difference. While this branch was first viewed as a risk by our critics, it has thrived.” Credit unions also can generate ideas about outreach just by talking to members who represent the minority they are trying to reach. Unity One recently launched a Quinceanera savings account. Quinceaneras are parties, or coming-of-age ceremonies that celebrate young Hispanic women who have turned 15. The idea for the account was generated from staff talking to members. “Our staff is good at engaging people,” Hill said. “They talk to people and get ideas about what we can do.” Josh Allison, relationship management officer, Horizon CU, Spokane, Wash., said his credit union has had a successful experience reaching out to Hispanics through a local high school. Horizon CU recently built a branch that is located just a few hundred yards from Moses Lake High School and has a large number of Hispanic students. Horizon wanted to reach out to them, but knew that historically, many Hispanics distrust banking institutions because the financial systems in some Hispanic countries are corrupt. To break down the barrier of distrust, Horizon worked with the high school to offer presentations in classes and invited students to become members of the credit union. The credit union has conducted field trips and scavenger hunts to the credit union, where students met with member service representatives and built relationships with them. “It worked,” Allison told News Now. Many Hispanic students ended up becoming members of Horizon, he added. Allison added that with the help of the credit union trips, resources from Junior Achievement and the National Endowment for Financial Education High School Planning Program, students increased their financial literacy knowledge. Students started with a 43.75% average concept familiarity percentage and increased it to a 76.75% by the end of the semester, he said. Bellwether Community CU, Manchester, N.H., participated in a Latino festival last summer and provided information sheets about its products in Spanish. It also has worked to increase bilingual staff at its branches. “We try to provide Spanish language materials if we are presenting or appearing in a market that has a higher percentage of the Hispanic community,” Madeline Anderson, Bellwether marketing manager, told News Now. Lin Standke, CUNA manager of youth programs, suggested that when reaching out to any potential member, credit unions first get their community’s demographics--including ages, ethnicities and location. “When you know where people live, work, shop, go to school you can make better decisions about how to reach them,” Standke told News Now. Credit unions can contact school districts to see what financial education they offer and whether the credit union can offer teaching assistance or set up an in-school branch. Partnerships with local churches and service organizations also can help credit unions serve the population they want to reach. Other suggestions:
* Start an advisory board for youth and adults; * Hire staff that are multilingual and cross cultural; * Teach staff how to work with multi-cultural staff and membership; * Develop marketing materials, forms or signs that are multilingual and cross cultural; and * Examine products and services to determine if any need to be or can be adapted to serve multicultural members.
In addition to outreach, credit unions also need to build relationships. “For many minorities, trust is an important factor,” Standke said. Also, bring along staff members who represent the minority you’re trying to reach, Allison added. In addition to outreach, credit unions need to commit to serving minorities in their mission statement and strategic plan, Standke said. “If you don't, your efforts will be short lived and you'll lose the respect of the community,” she said.

Former CEO claims retaliation over board spending

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WAYNE, N.J. (5/22/09)--A trial date has not been set yet in the case of a former credit union CEO who filed a whistleblower lawsuit on Dec. 3 in Passaic County Superior Court, Paterson, N.J. against First Jersey CU. The complaint filed in court alleges that former President/Chief Operating Officer Joann Lazzara, was fired Oct. 17, 2008, in retaliation for expressing concerns during a June 2007 state audit about board members' spending. Lazzara's complaint says board members violated the Wayne, N.J.'s credit union's travel spending limits and did not disclose the expenditures to members. At the time, the credit union was losing $200,000 a year in income because its new $6 million building was paid for by using liquid assets instead of taking a mortgage, and the board cut the marketing budget and refused to hire an additional business development position, the court document says. The complaint says the credit union told Lazarra it terminated her for not meeting the credit union's goals, but the lawsuit maintains the goals set were "unrealistic." Lazzara's complaint says some board members and their guests took cruises to the Mediterranean, Alaska, Panama and Scandinavia and spent more than double the credit union's per-trip limit. The document outlines expenditures totaling more than $221,743.42--an average of $5,685 per trip--for 39 trips taken by 12 board and examining committee members from 2004 through 2007. Lazzara's attorney, Robyne LaGrotta of Totowa, N.J., filed the lawsuit under the New Jersey Conscientious Employee Protection Act, on Dec. 3. She is getting depositions and told News Now that the case could drag out over two years. Currently the suit is in the 450-day discovery process and the discovery could be extended.

N.Y. association elects board chair officers

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ALBANY, N.Y. (5/22/09)--Al Frosolone, president/CEO of Niagara's Choice FCU, Niagara Falls, N.Y., was elected chair of the Credit Union Association of New York's board of directors during the association's annual meeting in Albany, N.Y.
"While these are challenging times for the credit union industry due to the volatility of the financial marketplace, it is also a time of great opportunity," said Frosolone. "I believe the association's best years are still ahead of us, and it will be my privilege to serve as chairman of this group as we navigate through the current crisis while creating value for our members now and into the future." Other officers elected included:
* Vice-chair, Lou Jimenez, CEO of Montauk CU, New York, N.Y.; * Secretary, Laurie Baker, senior vice president/chief operating officer, The Summit FCU, West Seneca; and * Treasurer, Bill Spearman, president/CEO, Mid-Hudson Valley FCU, Kingston.
Both Jiminez and John Gibardi, president/CEO of Entertainment Industries FCU, New York, N.Y., were re-elected to their director positions. New board member is Mark Pfisterer, president/ CEO of AmeriCU CU, Rome. He will represent credit unions with more than $500 million in assets. The new officers were officially seated immediately after the association's annual business meeting Wednesday. The association's board consists of 11 directors representing five asset categories: less than $25 million, $25 million to $50 million, $50 million to $100 million, $100 million to $500 million, and more than $500 million.

CUNA closed for Monday holiday no INews NowI

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WASHINGTON and MADISON, Wis. (5/22/09)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association will be closed Monday in observance of the Memorial Day holiday. News Now will not publish a Monday edition but will resume regular publication schedule on Tuesday.

CU System briefs (05/21/2009)

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* WASHINGTON (5/22/09)--California Commissioner of Financial Institutions William S. "Bill" Haraf was elected to a two-year term as treasurer of the Conference of State Bank Supervisors (CSBS) during the organization's 108th annual business meeting last week. Haraf, whose department oversees state-chartered banks, credit unions and other groups, will also serve as treasurer of the State Regulatory Registry LLC and the CSBS Education Foundation. He will also serve on the CSBS Executive Committee … * WASHINGTON (5/22/09)--Brooke Shearer, 58, a former Credit Union National Association (CUNA) communications director in CUNA's Washington office during the early 1980s, died Tuesday at her home after a battle with cancer, said an article in the Washington Post (May 10). As part of her duties, Shearer wrote a monthly column for Credit Union Magazine and was CUNA's spokeswoman. Shearer, a former journalist with the Sunday Times of London and the Christian Science Monitor as well as a private investigator, served as Hillary Clinton's personal aide during Bill Clinton's 1992 presidential campaign. Shearer was the daughter of Lloyd Shearer, who wrote for Parade magazine, and the wife of Strobe Talbott, former Time magazine editor who was second ranking official at the State Department in the Clinton administration and now heads the Brookings Institution research and policy center. During Clinton's second term, she served in the Interior Department, helping developing countries establish national park systems. She was founding director of the Yale World Fellows program and was on the board of the International Center for Research on Women. Survivors include Talbott, two sons, her mother, two brothers, and one granddaughter …

New law helps CUs says California newspaper

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INLAND VALLEY, Calif. (5/22/09)--Local credit unions struggling to pay increased deposit insurance fund fees will obtain some relief now that President Barack Obama has signed S.896, the Helping Families Save their Home Act, into law, a California newspaper said. Obama signed the law Wednesday. Of interest to credit unions are portions of the bill that will create a corporate credit union stabilization program to help credit unions weather the ongoing financial crisis and extend the $250,000 share and deposit insurance coverage ceiling until 2013 (News Now May 21). Credit unions may also spread the cost of National Credit Union Share Insurance Fund (NCUSIF) replenishment over a longer period of time. They will have a total of eight years to deal with the cost of a premium assessment that has resulted from losses at some wholesale corporate credit unions. Premiums are based on asset size. Any impairment related to the NCUSIF replenishment may be booked over a seven-year period. For Altura CU, a $900 million asset Riverside, Calif.-based credit union, the passage of the law allows it to pay $6.2 million in insurance-fund fees amortized over eight years (Inland Valley Daily Bulletin May 21). “It’s a good thing, because we don’t have to take the [$6.2 million] hit all at one time,” Mark Hawkins, Altura president/CEO, told the newspaper. Arrowhead CU, San Bernardino, Calif., will pay $5 million over seven years, and $2.2 million over eight years into the NCUSIF, the paper added. Arrowhead has $1 billion in assets. Amortization plans are similar for all credit unions, Debbie Kwon-Moore, director of federal governmental affairs for the California Credit Union League, told the paper. Without the new legislation, the burden of having to pay NCUSIF all at once could have caused many credit unions to go out of business, she added.

Montana CU Network honors pro volunteer

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HELENA, Mont. (5/22/09)--The Montana Credit Union Network has honored its 2009 professional of the year and its 2009 volunteer of the year.
From left, Bob Bjelland, CEO of Fergus FCU; his wife Annette Bjelland; and Lorrie Durbin, Fergus FCU accounting manager, react when Bob Bjelland was announced as the 2009 Professional of the Year at the Montana Credit Union Network’s awards banquet.
MCUN President/CEO Tracie Kenyon (left) and Bernie Neibauer, President/CEO of Russell Country FCU (right), pose with Bryan Fox (center), Montana's 2009 Mitch Reed Volunteer of the Year and member of the board of directors of Russell Country FCU. (Photos provided by the Montana Credit Union Network)
The network named Bob Bjelland, president/CEO of Fergus FCU, Lewistown, as Professional of the Year. The award recognizes Bjelland’s contributions to credit unions and is one of the highest honors bestowed in Montana’s credit union system. Bjelland has been Fergus president/CEO for 24 years, and his credit union career extends 35 years. Under his tenure, Fergus FCU expanded services and assets and is creating a main street park for its community. The network also honored Bryan Fox, a member of the Russell Country FCU board of directors, for his commitment and contributions to the Montana credit union movement, his credit union, and his community during the past 30 years by presenting him the 2009 Mitch Reed Montana Volunteer of the Year Award. “Bryan’s 30 years of service to Russell Country FCU [Great Falls] have made him a seasoned board member, yet he still maintains a desire to keep up on the newest trends developing within the credit union industry,” said Bernie Neibauer, Russell Country FCU president/CEO. “Bryan understands the need for change in an ever-changing business climate. I appreciate his insight and value his opinion on local, national and international financial topics.” Fox assisted in two mergers and the implementation of credit and debit cards.

Early bird deadline extended for WOCCU conference

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MADISON, Wis. (5/21/09)--The World Council of Credit Unions (WOCCU) extended the deadline for reduced registration fees for the World Credit Union Conference--to be held July 26-29 in Barcelona, Spain--to help credit unions affected by the economy. The early bird price will be honored through June 2 for all attendees, companions and day tours. The extension will save registrants $200. WOCCU also negotiated reduced hotel rates at all three conference hotels, and those rates also will be honored until June 2. Attendees from more than 40 countries already have registered, WOCCU said. For more information, use the link.

Georgia CUs have to start telling our story more

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ATLANTA (5/21/09)--Georgia credit unions are aggressively trying to educate members and nonmembers about the benefits of credit unions, especially during the recession and banking crisis, according to The Atlanta Journal-Constitution (May 20). "People don't know much about credit unions," said Michael Mercer, president/CEO of Georgia Credit Union Affiliates. "We have a great reputation, but poor awareness. We have to start telling our story more," Mercer told the newspaper. The affiliates recently released a new report that shows credit unions on average offer better rates on loans and higher returns on savings than banks. Credit unions also aired a marketing campaign last fall with radio spots and billboards promoting credit unions as strong and safe, with money to lend. The article also notes that credit union executives say the financial crisis provides a chance to grab new business. In the article, Marshall Boutwell, president/CEO of Gwinnett FCU, says the recession "has caused consumers to re-evaluate where they feel comfortable, and the big impersonal bank is less comfortable than it used to be." The $112 million asset credit union is based in Lawrenceville. Credit union lending volume in Georgia rose 14% last year while banks in the state averaged flat growth. Deposits rose nearly 10% for credit unions, compared with a 3% increase in deposits at banks. To be more convenient, credit unions have opened branches in grocery stores, launched online services, and partnered with other credit unions in shared-branching arrangements, the article noted. It pointed out that the differences in the cooperative structure of credit unions and noted bankers' bristle at their tax-exempt status. The state saw 11 small banks fail last year, while no credit unions in the state have been taken over by regulators, the newspaper said.

Expect decline in remittances for 2009

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MADISON, Wis. (5/21/09)--Remittances to the Carribean and Latin America will likely decline in 2009 for the first time in nearly a decade, a trend that will impact credit unions, says the World Council of Credit Unions (WOCCU). The Inter-American Development Bank, based in Washington. D.C., started tracking international remittances in 2000, and said this is the first year they will decrease. The bank noted the amount of money sent to the region started to decline late last year (Miami Business Review May 20). “Because our recession has been a sharp and painful one, there’s been a sizeable loss of jobs” that have impacted business sectors that rely on migrant labor such as construction and tourism, Manuel Lasaga, economist and president of Miami-based Stratinfo, told the Review. Another reason for the drop is that remittances and migrant labor have grown substantially worldwide and are more sensitive to the global economy’s cyclical swings, Lasaga added. Remittance activities through IRNet, the remittance service offered by WOCCU Services Group, WOCCU’s for-profit subsidiary, are showing some consistencies with national trends, depending on the country in question and the competitive situation within each country, WOCCU told News Now. Currently, 109 U.S. credit unions participate in IRNet and send remittances to credit unions in eight countries. Since the service was established in 2001, IRNet has supported 148,000 transactions valued at $80 million. “The IRNet program has seen a slight downturn over the past four years, with Bolivia, Guatemala, Mexico and Nicaragua following the national trends in declining remittances, according to first-quarter 2009 statistics,” WOCCU said. “However, during that same period, remittances to El Salvador have remained constant, while there have been increases in remittances to Ecuador and Kenya. Peru, which entered the program this year, also has seen growth during the first quarter.” Roughly $283 billion in remittances were sent to countries worldwide in 2008, with $67.5 billion sent to Latin America alone, WOCCU added. “The global economic downturn has found many Latin American workers returning to their home countries due to lack of available work in host countries, causing significant declines in remittance activities,” WOCCU said.

Missouri CU leaders in article on U.S. Central impact

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KANSAS CITY, Mo. (5/21/09)--The Kansas City Business Journal featured two credit union leaders in a May 15 article about U.S. Central FCU.'
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Titled "Effects of U.S. Central Federal Credit Union Takeover Ripple Through System," the story included information from Missouri Credit Union Association (MCUA) President/CEO Rosie Holub and Kansas City-based CommunityAmerica CU CEO Dennis Pierce (The Missouri difference May 20). "Although retail credit unions didn't participate in subprime loans, corporate credit unions were given the powers to invest in securities," said Holub in the article. "They invested in AAA securities, thought to be the safest there were, but the underpinning home values were highly inflated and eventually brought the ratings of those securities down." Pierce noted a significant distinction that sets credit unions apart from other financial institutions. "The interesting thing with our situation is that to date we've been able to manage the cost of this event internally within the Credit Union System," he said. "There has not been any government funds used in that process. While there is some financial impact, we are still safe and sound institutions that are aggressively trying to take care of consumer needs." To read the article, use the link.

Montana CU Network names board officers

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HELENA, Mont. (5/21/09)--At the Montana CU Network (MCUN) annual business meeting May 15, member credit unions voted to retain the current members of the board whose terms were up for re-election, and elected new officers.
Click to view larger image The 2009 Montana Credit Union Network board comprises, standing (from left): Greg Strizich, Wally Berry, Bernie Neibauer, Tom Boos, Bob Bjelland and Leslie Hunter. Sitting (form left): Chris Sisco, Jeremy Presta and Kathy Shea. (Photo provided by the Montana Credit Union Network)
Kathy Shea, president/CEO of Heritage FCU, Butte, will serve as board chair; Chris Sisco, president/CEO of Montana 1st CU, Missoula as vice chair; Tom Boos, president/CEO of Billings FCU, Billings as secretary; and Greg Strizich, president/CEO of Helena (Mont.) Community CU as controller. MCUN's board consists of nine members--five who represent the state’s credit unions both regionally and demographically and four at-large seats. The current board members are:
* Wally Berry, president/CEO of Montana FCU, Great Falls, representing Montana’s Northern District; * Shea, representing the Central District; * Boos, representing the Southern District; * Leslie Hunter, president/CEO of Glendive PE FCU, Glendive, representing Montana credit unions with less than 3,000 members; and * Jeremy Presta, president/CEO of Park Side FCU, Whitefish, representing Montana credit unions with more than 3,000 members.
At-large seat board members are:
* Bob Bjelland, president/CEO of Fergus FCU, Lewistown; * Bernie Neibauer, president/CEO of Russell Country FCU, Great Falls; * Sisco; and * Strizich.

CU System briefs (05/20/2009)

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* DEER PARK, Texas (5/21/09)--Shell FCU has launched a new green corporate website, www.shellfcu.org, to strengthen its commitment to the environment. The website displays an environmentally conscious design and features such as pocasts, videos, an event calendar, knowledge base, calculators, featured rates, news, an iLife link, home banking access and more. The design also incorporates a micro site for mobile devices. The new mobile site offers more functions such as featured rates, branch locations, credit union contact information and shared-branch and ATM interactive search features. Last June, Shell received a Greenified certification from the Green Business Alliance by implementing operating procedures to benefit the environment and employees … * BAKERSFIELD, Calif. (5/21/09)--Vince Rojas, 69, plans to retire as president/CEO of Kern Schools FCU, Bakersfield, Calif., in January. A search for his replacement was launched last week. Rojas was scheduled to retire this year, but agreed to work another year as the credit union recovers from losses (The Bakersfield Californian May 19). Kern Schools FCU lost $24 million last year due to rising unemployment and the troubled housing market. Kern Schools, which has $1.7 billion in assets, lost another $26 million during the first three months of this year. The credit union is making progress restoring its net worth, and Rojas has been credited with increasing the credit union’s assets during his tenure, the newspaper said ... * CHANDLER, Ariz. (5/21/09)-- First CU, a $474.4 million asset, Chandler, Ariz.-based credit union, made a $5,000 on-air donation
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during NBC Channel 12’s First Annual “Give for Kids” Give-A-Thon benefiting Phoenix Children's Hospital (PCH). The donation was raised at First CU branches statewide by selling candy bars and toys to members, with all proceeds going to Children's Miracle Network. PCH is a member of the network. First CU employees also volunteered their time during the give-a-thon by answering phones for incoming donations. Throughout the day, local celebrities made appearances, donated gifts and challenged callers in hopes of generating more donations. The event produced $107,539 in donations. From left are: Mark Curtis, News 12 anchor; Lori Gallegos, chief operations officer, First CU; and Desiree Hoogerhuis, community outreach coordinator, First CU. (Photo provided by First CU) …

Arizona State CU employee saves members life

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PHOENIX (5/21/09)--An Arizona State CU employee saved a member’s life after going the extra mile to prevent her from taking what could have been a fatal dose of insulin. Employee Christina Maulfair received a call from a pharmacy, saying that one of Arizona State CU’s members, Denise Dewyer, had been given the wrong dose of her prescription. Dewyer, a diabetic, routinely purchased insulin from the pharmacy. The dose she had just received was five times more potent than she needed. If she took the medicine, she would die, the pharmacy said. “I never expected to receive a call like this,” Maulfair said. Dewyer used a credit union debit card to pay for her medicine. The pharmacy had no other contact information for her, so it looked up her payment records and found Dewyer paid with a credit union debit card. Maulfair could not release Dewyer’s contact information to the pharmacy to protect her privacy. Instead, she began attempting to contact Dewyer herself. After a phone call to Dewyer went unanswered, Maulfair rushed to Dewyer’s home. She knocked on the door repeatedly to no avail. Maulfair then wrote multiple notes to Dewyer and posted them at each entrance to her home. Dewyer found the notes shortly after and contacted her pharmacy before taking the medicine. “I want to express my deepest gratitude to Christina for going above and beyond and preventing me from using medication that could have killed me,” Dewyer said. “It’s not often that you get to thank someone for saving your life.” “Everyone here would have done exactly the same thing,” Maulfair said. “I’m just so glad I was able to reach her in time.” Dewyer, who has had an account with Arizona State CU for more than 15 years, said she will not be going anywhere else to do her banking. Arizona State CU, Phoenix, has $1.3 billion in assets.

Filene i3 seeks CUs for debt-management tool tests

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MADISON, Wis. (5/21/09)--The Filene Research Institute’s i3 innovation group is looking for credit unions to implement a new, Web-based debt management tool to help credit union members control their finances. Debt in Focus helps members look at debt-to-income ratios and debt payment schedules, and then creates an action plan users can follow to control their finances. The tool does not ask users for their names, Social Security numbers or e-mail addresses. Filene is seeking credit unions to implement Debt in Focus to help refine the beta version. There is no charge for the beta version, since it is being developed further at Filene. Credit unions interested in the tool can attend one of two upcoming webinars scheduled for May 27 or June 11. Both begin at 1 p.m. CDT. To register for the webinars, use the link.

2009 ICU Day theme announced

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MADISON, Wis. (5/21/09)--In response to the challenges facing credit unions and cooperatives worldwide, this year’s International Credit Union (ICU) Day theme will remind people everywhere of the advantages that credit unions provide their members. ICU Day is Oct. 15 and takes place during National Credit Union Week. The idea for this year’s theme, “Your Money. Your Choice. Your Credit Union.” was developed by Stan Cowan of A+ FCU in Austin, Texas. The theme celebrates the reasons why 177 million people worldwide choose credit unions. Value, trust and service to members, all represented in the theme, are just a few of the many reasons credit unions are chosen by people seeking access to fair and affordable financial services according to the World Council of Credit Unions (WOCCU). “This year, more than ever, consumer finance and business experts have repeatedly highlighted credit unions as safe and sound institutions where people can depend on a trusting relationship,” said WOCCU President/CEO Pete Crear. “That is truly an accomplishment we can be proud of in these tumultuous times, and we should celebrate it this October.” Credit union leaders around the world agree that now is the time to come together and promote the credit union difference, WOCCU said. “In a time of economic upheaval when control has largely been taken out of the hands of consumers, this year's theme demonstrates that members, through equal ownership and voting rights, are squarely in charge of their credit unions,” said Dan Mica, president/CEO of the Credit Union National Association (CUNA). “We are pleased to work with other national and international groups on the campaign to promote International Credit Union Day and Co-op Week,” said David Phillips, president/CEO of Credit Union Central of Canada. “We work with these groups year-round on projects that support important initiatives that help members around the world cope with trying economic times.” Like their colleagues around the world, credit unions in Peru continue to find new ways to serve their members through changing times,” said Manuel Rabines, second vice chair of WOCCU and president of the Peruvian National Credit Union Association. “As a global movement, it's important we take time this year to demonstrate our strength and remind people about the many benefits we provide to our members.” ICU Day has been celebrated annually on the third Thursday of October since 1948. The celebration of Co-op Week that same week in Canada became a national event in 1982. In the U.S., October is also designated as National Cooperative Month celebrating all cooperatives including grocery, agricultural and energy co-ops, and credit unions. “While today's economic times pose serious challenges, they also provide an opportunity for the cooperative sector to demonstrate the differences between co-ops and traditional business models,” said Canadian Co-operative Association Executive Director Carol Hunter. “We know that people are increasingly interested in supporting organizations that are open, democratic and put people before profits, and that's what cooperatives and credit unions are all about.”

Southwest Corporate updates operating insights

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PLANO, Texas (5/20/09)--Southwest Corporate updated its Operating Insights Friday and revised its capital losses at U.S. Central FCU in accordance with the first quarter 2009 financials released May 13 by U.S. Central. Total investment losses Southwest Corporate expects to record in April have been reduced by $68 million--to $314 million from $382 million, said a message on Southwest's website from President/CEO John Cassidy. When U.S. Central revised its March financial statements with roughly $500 million less in investment losses than originally reported, with credit losses revised from $2.3 billion to $1.8 billion, the change meant Southwest Corporate's member's capital account at U.S. Central was replenished by $68 million. That results in a 23% reduction, vs. a 63% reduction originally reported, said Cassidy's report. Southwest Corporate had retained earnings of $323 million as of March 31, which means current losses will be covered by retained earnings. "Unlike reported in the May 6 Operating Insights, we do not expect to reduce members' capital accounts at this time due to the change in recording $314 million in investment losses instead of the $382 million previously reported," Cassidy said. As of March 31, Southwest Corporate's total capital was $717 million, and its capital ratio was 7.07%. Investment losses of $314 million would have reduced those March 31 amounts to $403 million and 3.97%. If conditions in the economy continue to deteriorate, losses on Southwest Corporate's member capital at U.S. Central beyond the 23% are possible, as are additional losses related to Southwest's mortgage-backed securities portfolio. For the full update, use the link.

Three branch closings announced in Calif. Nevada

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CARSON CITY, Nev. and BIGGS, Calif. (5/20/09)--Two credit unions--one in Carson City, Nev., and the other in Biggs, Calif.--have announced branch closures. Greater Nevada CU, a $550 million asset credit union based in Carson City, announced it has shut down two of its older branches in Sparks and Carson City. The credit union said the branches closed because more members are using its new locations and electronic services (ktvn.com May 18). ATMs at the two branches will remain open. Members can get service at the eight full-service branches remaining open. In California, the Marysville branch of Butte FCU will close May 29. The credit union told Appeal-Democrat (May 18) the decision was difficult but that a reduction in expenses to ensure its operational efficiency was necessary with the economic times and financial stress in the region and nation. The $42 million asset credit union will keep open three other branches in Biggs, Chico and Oroville. The publication interviewed a member, David Rice, who said he liked the credit union because he was recognized as soon as he arrived at the branch.

Michigan Supreme Court to hear OFIR credit-scoring case

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LANSING, Mich. (5/20/09)--The Michigan Supreme Court will hear an appeal by the state's Office of Financial and Insurance Regulation (OFIR) over insurance credit-scoring, which the agency says is discriminatory. According to the Michigan Credit Union League, the issue has been in the courts since Gov. Jennifer Granholm and former OFIR Commissioner Linda Watters proposed banning credit scoring for determining home and auto insurance for 2004. (Michigan Monitor May 19). The rules went into effect in March 2005 but several insurance organizations challenged the rules that April. Judge James Fisher declared the rules invalid and permanently enjoined the commissioner from enforcing them against any plaintiff. Commissioner Watters appealed, and in August 2008, the Michigan Court of Appeals issued a split decision with three separate opinions, resulting in the vacating of Judge Fisher's order. The state Supreme Court will hear the case in October. "This is good news for Michigan consumers," OFIR Commissioner Ken Ross said. "After four years of waiting, we are hopeful that the court resolves this issue in favor of Michigan drivers." Removing insurance credit scoring would lower base rates for all insurance customers. OFIR says using credit scoring is unreliable, unfair discriminatory and not in line with the state's insurance code.

Hannaford ruling doesnt settle card-reissue liability

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PORTLAND, Maine (5/20/09)--A U.S. District Court ruling in Maine to dismiss all but one consumer class action lawsuits against Maine-based grocer Hannaford Bros. over its data breach doesn't address the question of whether the breached merchant is liable to card issuers for the costs of reissuing compromised cards. The Hannaford Bros. data breach compromised four million debit and credit cards and caused many financial institutions, including credit unions, to cancel and reissue the cards. Overall the Maine decision, rendered in a case that consolidated 21 consumer civil claims, is seen as a victory for merchants because it eliminates a large percentage of potential class plaintiffs, said InfoSecCompliance.com (May 19). However, "this case does not settle the question of potential liability to issuing banks for reissuance costs," said David Navetta in the publication's blog. That question "is a matter likely being settled behind the scenes pursuant to dispute resolution provisions in the operating regulations of key card companies Visa and MasterCard," he said. The Hannaford data breaches occurred between Dec. 7, 2007, and March 10, 2008. It was announced March 17, 2008. About 1,800 incidents of fraud were recorded by the time the breach was announced. Credit unions in New England, New York, and Florida were among the financial institutions that re-issued cards for members whose accounts were compromised (News Now May 14 and April 17, 2008).

Ruling a milestone CUNA tells IBNA Daily Tax ReportsI

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WASHINGTON (5/20/09)--A court ruling in Wisconsin last week that refunded to a credit union the entire unrelated business income tax (UBIT) it paid for credit life and disability life insurance and a guaranteed asset protection (GAP) product is a milestone, according to the Credit Union National Association (CUNA). The ruling follows 12 years of effort to obtain clarity from the Internal Revenue Service on credit union tax liability, CUNA Executive Vice President and General Counsel Eric Richard said. "We hope this will lead the IRS to reconsider its entire position on UBIT for credit unions," he said (BNA Daily Tax Report May 19). A jury in the U.S. District Court for the Eastern District of Wisconsin Thursday awarded Community First CU of Appleton, Wis., the full amount of the tax refund it sought--$54,604--plus trial costs. The jury found that the insurance and GAP products the credit union provided members were "substantially related" to the credit union's purpose. To be exempt from UBIT, products must relate to the purpose of the credit union. "It was a wonderful and decisive victory for state charter credit unions," said Cathie Tierney, CEO of Community First CU, said during a telephone conference call that CUNA conducted with news media Monday. Only state-chartered credit unions pay UBIT taxes. She noted that similar products have been offered by credit unions for more than 70 years and the government couldn't make its case that the products weren't part of credit unions' mission. Brett Thompson, president/CEO of the Wisconsin Credit Union League, said the ruling should send a message to IRS, which he said is stuck in a "time warp" seemingly believing that tax-exempt credit unions should not offer services beyond basic loans and savings accounts. The U.S. has 10 days to submit in writing a motion to overturn the jury's verdict. The credit union would then have 10 days to rebut that motion. "It's rare for those motions to be granted, but not unheard of," Richard said. The government could then appeal. An appeal, however, would have to be approved by the U.S. Solicitor General before it could proceed. Community First filed the lawsuit against the government in January 2008 with the support of the UBIT Steering Committee--CUNA, the American Association of Credit Union Leagues, CUNA Mutual Group and the National Association of State Credit Union Supervisors. Meanwhile, another credit union is preparing its court case against the IRS's interpretation of UBIT for a Denver court. Bellco CU, Greenwood Village, Colo., is seeking a refund of $199,000 it paid in UBIT taxes for similar products during 2000, 2001 and 2003. A court date has not been set.

Truliant FCU pays students to create new products

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WINSTON-SALEM, N.C. (5/20/09)--Truliant FCU, Winston-Salem, N.C., partnered with Forsyth Technical Community College asking students to create credit union-oriented products and services for a cash prize. The innovation contest sought to generate ideas from students on products and services relevant to the financial industry and that would benefit Truliant members, the credit union said. Truliant offered $3,000 to the first-place winner and $1,500 to the second. Students submitted applications to participate in the first annual Truliant Financial Fair, where they presented their ideas for products and services to a panel of judges. Kayla Hall won first place, and Linda Burnette received second place. Hall’s idea was to create a book buy-back program that would allow students to get a loan to pay for tuition and school books. At the end of each semester, when students sell their books back, the proceeds would directly pay off their loan with Truliant. Truliant has $1.1 billion in assets.

CUs in NYC program for small-biz loans

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NEW YORK (5/20/09)--New York City is providing $5 million in city funds to its Capital Access Program, which will guarantee up to 40% of small business loans provided by credit union and other lenders. In total, about $13 million is expected to be distributed through the program, said New York City Mayor Michael Bloomberg in his weekly radio address Sunday. Once the loans are repaid, the program will be able to generate another cycle of new small-business loans, he added (States News Service May 17). “A barbershop in Brooklyn, a family clothing store in Queens, an electrical contractor in the Bronx, a bakery, a fuel delivery company, and a shoe repair shop. Those are the kinds of small businesses that hold our neighborhoods together,” Bloomberg said. “And last week, they were among the first 28 of what we expect will be up to 400 small companies and non-profit organizations throughout the five boroughs to receive New York City Capital Access emergency loans. “Our administration has worked with private sector lenders to develop this program,” he added. “In the months ahead, loans ranging from $1,500 to $250,000 will enable businesses to buy new equipment [to] meet day-to-day expenses and, most important, keep their doors open and make their payrolls.”

Town prefers a CU reports IMarketplaceI

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DANNEBROG, Neb. (5/20/09)--Residents of Dannebrog, Neb., a small town with 350 people, voted Monday for a credit union move into town rather than another bank after one bank there failed and its successor decided to close shop, Marketplace reported. The town has been without a financial institution for more than a week, the public radio show reported. After some farm loans went bad, “Dannebrog’s only bank let the people down,” Marketplace said. Sherman County Bank collapsed a few months ago. Another Nebraska bank, Heritage, took over, but decided it didn’t make financial sense to keep a two-teller branch operating. Several residents said they need a financial institution not only for financial services it provides, but to provide a key element for the health of Dannebrog and its future. “If we don't have a bank, what I would see happening is pretty soon then the grocery store would fail, and the restaurants would have a very difficult time making it,” Carol Schroeder, a resident, told Marketplace. “The gas station. You know, I've seen a lot of small towns die, and I think it starts when you lose a bank.” About 100 people went to the town fire hall recently to hear pitches from a credit union and a regional bank after Dannebrog made it known it is looking for a new financial institution. In the 1980s, some residents formed a credit union after a bank failed, said town resident Bob Peterson. The Federal Deposit Insurance Corporation owns the bank building and will decide if a credit union can move in.

Despite economy more CUs adding shared branching

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ATLANTA (5/20/09)--More credit unions have joined shared branching year-to-date than in the same period in 2008, CO-OP Shared Branching said Monday. Between January and April, 43 credit unions were added to the network. Last year, 40 credit unions joined during the same period. Shared branching is integral for credit unions looking to trim expenses, according to Carroll Beach, CO-OP Shared Branching president and chief operating officer. “It’s a much more affordable way for credit unions to be around every corner than building proprietary branches,” he said. About 80% of this year’s new shared-branching participants employ CO-OP’s Next Generation Network technology, which facilitates shared-branching transactions. Through the network, credit unions can offer services such as fast-branch kiosks, remote deposit and mobile banking. CO-OP Financial Services and Credit Union Service Corp. recently joined to form CO-OP Shared Branching, a shared-branching network that services credit unions.

ACUC hotel rates slashed to aid travel budgets

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MADISON, Wis. (5/20/09)--The Credit Union National Association (CUNA) has reduced the hotel rates for attendees at America’s Credit Union Conference and Expo (ACUC), scheduled for June 21-24 in Boston. All three hotels adjusting the daily rates are:
* Sheraton, whose adjusted rate is $239, from $250; * Marriot is $239, from $259 single/$289 double; and * Westin is $259, from $274.
The conference will feature five keynoters. Bert Jacobs, co-founder of Life is good, will speak about how he and his brother John turned three simple words on a T-shirt into a major brand with more than $100 million in annual sales. Jacobs will discuss making a difference while making a profit by selling feel-good products and embracing optimism as a force for powerful change. The conference marks the centennial celebration of credit unions with presentations honoring the first 100 years of credit unions in the U.S. Attendees at Sunday's reception and keynote session will be treated to a humorous, thought-provoking look at the life of former U.S. Sen. George Norris, a key figure in the signing of the Federal Credit Union Act of 1934. Other keynoters include:
* Bill Hampel, CUNA’s senior vice president of research and chief economist, and Mike Schenk, CUNA's vice president of economics and statistics. They will address the best ways to respond to current economic challenges and provide insight into the outlook for the economy and credit unions, the economic slowdown and more. Hampel and Schenk's expertise has been featured throughout the year in venues such as Bloomberg TV, MarketWatch, The New York Times, USA Today, The Associated Press, The Wall Street Journal, and CNN, among others. * Dan Roam, author of “The Back of the Napkin: Solving Problems and Selling Ideas With Pictures.” Roam will show how to use pictures to describe complex concepts and solve problems, and demonstrate how anyone can use visual thinking, regardless of artistic talent, to approach and resolve business challenges. * Guy Kawasaki, best-selling author of "Rules for Revolutionaries: The Capitalist Manifesto for Creating and Marketing New Products and Services." Kawasaki will discuss his experience with world-class companies to explain how to innovate, improve, and create new credit union products and services. His presentation will be modeled after his book.
For more information or to register for the America's Credit Union Conference and Expo, use the resource link.

CU System briefs (05/19/2009)

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* MADISON, Wis. (5/20/09)--CLARIFICATION: Transactions from 7-Eleven Vcom (virtual commerce) kiosks have increased 43% compared with the same time period one year ago, according to Financial Service Centers Cooperative. News Now Tuesday referred to the units as ATMs instead of kiosks. The kiosks, which allow users to conduct any transaction they normally could at a credit union branch, function differently than an ATM, according to FSCC ... * LANSING, Mich. (5/20/09)--The league representatives for the Michigan Credit Union League’s (MCUL) credit union relations department shifted to CUcorp and report to Lisa Treat, director of credit union relations, effective May 1. The new department combines the efforts of MCUL representatives with the CUcorp in-state sales team. The move is designed to eliminate job redundancies, save money, improve sales efforts and realize tax benefits from shifting expenses, said the league (Michigan Monitor May 18) ... * COLUMBIA, Md. (5/20/09)--The Credit Union Foundation of Maryland and District of Columbia announced the appointment of two new board directors.
Jo Ann Talbot, CEO, National Capital FCU, Landover, Md., and Paul Torbeck, CEO, Point Breeze CU, Hunt Valley, Md., were newly appointed to the nine-member volunteer board. The new directors replace Lisa Jester, CEO, Central CU of Maryland, Towson, Md., and Jerry Dooley, CEO, Ft. Meade (Md.) Community CU, who reached their director term limits of six years (FOCUS Newsletter May 18) … * HARRISBURG, Pa. (5/20/09)--Collaboration was the focus of the Annual Pennsylvania Credit Union Foundation breakfast, according to the Pennsylvania Credit Union Association (Life is a Highway May 19). During the breakfast, retired U.S. Army Colonel Mark Volk recounted his experienced of working in the Pentagon on Sept. 11, 2001. His office was located in the area that was damaged in the terrorists' plane crash. He was awarded a Soldier’s Medal, the highest non-combat award for heroism, for his actions that day. Volk encouraged collaboration and said credit unions can work with schools on financial education programs. “Give back in service to the community,” he said. From left are: Norb Kaczmarek, foundation board chair; Mike Wishnow, association senior vice president of marketing and communications; Volk; Joe Wambach, executive director of the foundation; and Dave Ackerman, vice chairman. (Photo provided by the Pennsylvania Credit Union Association) ... * TAMPA BAY (5/20/09)--GTE FCU, Tampa, Fla., has created a new account, U22, for 12- to 22-year-olds and has named Evan Longoria, Tampa Bay Rays third baseman and Major League baseball’s “Rookie of the Year” as spokesperson for the accounts. He was involved with a U22 photo shoot to promote the U22 debit card and will be featured on radio commercials that will air during Rays’ home games (Tampa Bay Business Journal May 19). Young adults who sign up for a U22 account by Sept. 5 will receive two Tampa Bay Rays tickets and be given a chance to meet Longoria before the game. GTE has $1.8 billion in assets ... * LANSING, Mich. (5/20/09)--Staff and volunteers from Michigan's Oakland County Credit Union Chapter hopped a bus and traveled to Lansing May 13 for a luncheon with state lawmakers, including State. Sen. Gilda Jacobs (D-Huntington Woods), center (Michigan Monitor May 18). They met with nine lawmakers and several staffers, including Jacobs; State Sen. Deb Cherry (D-Burton): State Rep. Gail Haines (R-Waterford); State Sen. Nancy Cassis (R-Novi); State Rep. James Marleau (R-Lake Orion); State Rep. Marty Knollenberg (R-Troy) and staff; State Sen. John Pappageorge (R-Troy) and staff; State Rep. Tim Melton (D-Auburn Hills): Rep Chuck Moss (R-Birmingham); and staff from the office of State Rep. Lisa Brown (D-West Bloomfield). The group was recognized in the House during its session. (Photo provided by the Michigan Credit Union League) … * VIRGINIA BEACH, Va. (5/20/09)--A suspect has been arrested and charged with robbery, conspiracy and possession of burglary tools in two robberies of the same credit union--Virginia Beach (Va.) Schools FCU (PilotOnline.com and HamptonRoads.com May 18). Matthew Alexader Lewis Sr., 25, of Virginia Beach, turned himself in, said police. The latest robbery incident occurred May 1. Lewis is also a suspect in a June 23, 2008, robbery at the $63 million asset credit union …

UBIT not just tax issue also dual charter issue--leagues

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MADISON, Wis. (5/19/09)--Credit union leagues praised Community First CU's victory last week in a U.S. District Court in Wisconsin against the Internal Revenue Service's (IRS) interpretation of the unrelated business income tax (UBIT) on three insurance-related products offered by the state-chartered credit union. Some pointed out the broader implications of the case. "UBIT is not just a taxation issue, but also a dual chartering issue," says Paul Gentile, president/CEO of the New Jersey Credit Union League (The Weekly Exchange May 18). New Jersey was among the first leagues to support the efforts against the UBIT policy. "UBIT does not apply to federal chartered credit unions, so the anxiety among state charters becoming disadvantaged to their federal counterpart also added to UBIT's uniqueness," he said. "There was also concern among federal charters that the IRS would eventually look to broaden UBIT to federal charters," Gentile said. He noted the united front that the credit union movement provided on the issue, with the UBIT Steering Committee formed by the Credit Union National Association, CUNA Mutual Group, the National Association of State Credit Union Supervisors and the American Association of Credit Union Leagues. IRS's UBIT policy covers income that the IRS deems as "substantially unrelated to the purpose of a tax-exempt organization." State-chartered credit unions with more than $1,000 in UBIT must report it on the IRS's 990-T form. Historically, IRS hasn't clarified what does or doesn't trigger UBIT. But in 2007, IRS issued Technical Advice Memoranda that said six products could be considered as taxable under UBIT. They are: credit life and disability, accidental death and dismemberment, guaranteed asset protection (GAP, dental and cancer insurance, financial management services and auto warranties. Many credit unions had been offering these core products for years. The IRS intensified its efforts in auditing credit unions for UBIT, especially in Alabama, Connecticut and Colorado. Although a small number of states were involved, the impact of setting precedent in a few states has national implications, Gentile says. The court verdict in favor of the credit union on all three of its products is "a major victory for the credit union movement. It's unfortunate it came to litigation on products that seem so undeniably core to a credit union, but this well-deserved victory should help the credit union movement defend future UBIT challenges," Gentile said. Other leagues echoed the sentiment. "Credit unions have worked to get a resolution on the UBIT issue for nearly a decade, and this is a significant ruling," said Missouri Credit Union Association President/CEO Rosie Holub. "Most of Missouri's credit unions have these products, so it is very meaningful for credit unions in our state. This is great news." Mike Beall, president of the Maryland and District of Columbia Credit Union Association said, MDDCCUA has been a supporter of the UBIT efforts "and is a strong supporter of the dual chartering system. We are heartened and pleased with this initial court victory" (FOCUS Newsletter May 18). In the lawsuit filed in January 2008 with support from the UBIT Steering Committee, Community First CU, an Appleton, Wis.-based credit union sought $54,604--the amount it paid on taxes on credit life and credit disability insurance and GAP products. On Thursday, a jury ruled in favor of the credit union on all three products, saying they were substantially related to the credit union's mission. U.S. District Judge William Griesbach entered the judgment for the full amount plus costs (News Now May 15). The victory was deemed "a great outcome for state-chartered credit unions," by CUNA General Counsel Eric Richard. "We hope it will lead the IRS to reconsider its entire position on UBIT for credit unions," he said, adding, "but we are prepared for the next case in Denver." That case involves Bellco CU in Greenwood Village, Colo. The trial date hasn't been set yet.

CUDL works to minimize dealers closing impact on CUs

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ONTARIO, Calif. (5/19/09)--CUDL, a point-of-sale and indirect auto lending network for credit unions, is working to minimize the impact that the closing of many Chrysler dealerships nationwide will have on credit unions. On Thursday, Chrysler announced that it would close 789 of its dealerships by June 9. “The most obvious shift is where some credit union members will be going to purchase vehicles,” said Joe Greenwald, CUDL vice president of marketing and communications. “However, members still need transportation and will be looking to their credit unions for help in financing vehicles.” CUDL’s 10 regional business units are working with their credit unions to provide strategies and steps to mitigate any negative impact from the closings. About 10-12 credit unions have contacted CUDL about the closings, Greenwald said. CUDL also is monitoring General Motors (GM) announcements for closures. “We are awaiting further details from GM before we finalize strategies or make any further recommendations to our credit unions,” Greenwald said. He noted that the present timetable for GM dealership closures indicates they may take place over a “longer-term horizon” but said things could change. “The general points of action that we recommended to our credit unions for the Chrysler closures should certainly be taken into consideration and applied by credit unions for any dealership that closes,” he added. CUDL recommends that credit unions:
* Identify the number of open titles outstanding with that dealership and work to expedite the perfection of those titles; * Understand the broad picture for the dealership, most specifically whether or not that dealership has other franchises under one roof; * Consider prior history with that dealership and dealer owner/principal; * Ensure that any loan packages have the required documentation prior to funding; * Understand the source of extended service contracts because responsibility and location of service may vary among manufacturer warranties, manufacturer-backed extended service contracts and extended service contracts issued by other third parties; and * Determine if they wish to continue businesses with dealerships that could convert to independent dealerships after their franchise closes.
Credit unions need to continue strong risk management practices, CUDL said. “By following prudent lending policies, credit unions will remain well-positioned to help their members finance the vehicles that enable them to get to work, school, and the many places their lives take them,” Greenwald said.

Vote with feet move to a CU says ICNN MoneyI

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NEW YORK (5/19/09)--Consumers negotiating their way out of bank fees and other savings pitfalls "can always vote with your feet and move to a credit union," says a personal finance editor for CNNMoney.com (May 18). The article, by Gerri Willis, offers ways consumers can score a sweet deal on an auto, including "arming yourself with as much information as possible--before you head to the lot" and being prepared to walk away if the deal isn't materializing. "You also can negotiate bank fees right now. Large national banks have gotten billions from TARP (Troubled Asset Relief Program)--your tax dollars--but you don't have to give them another dime," says the article. Other advice includes cutting bank fees by avoiding out-of-network ATMs, watching for overdraft fees, and avoiding account maintenance fees and teller fees. To access the full article, use the link.

PCUA names board officers awards

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HERSHEY, Pa. (5/19/09)--The Pennsylvania Credit Union Association named board officers and bestowed awards at its annual business meeting Friday in Hershey. Ray Brunner, CEO of WEST-AIRCOMM FCU, Beaver, was elected as the new chairman of the association’s board, succeeding Diana Roberts, CEO, Hershey (Pa.) FCU, who has served as board chair since May 2007 (Life is a Highway May 18). Mike Kaczenski, CEO of Sun East FCU, Aston, was elected vice chair. Also, retiring District 4 Director Lanny Horn was honored. Maria LaVelle, CEO, Westmoreland Community FCU, Greensburg, was elected to Horn’s board seat. Other news from the business meeting:
* Norb Kaczmarek and Ron Lasich were honored as the newest inductees into the Credit Union House Hall of Leaders. Their names are on the Hall of Leaders plaque on display at Credit Union House in Washington, D.C.; and * Herb Yolles, NCUA Region II associate regional director for operations, provided an update on the status of credit unions in Region II. He told the delegates that 2009 first quarter data show Pennsylvania’s credit unions to be stronger than credit unions in other states. Overall, Region II credit unions are performing better than the rest of the country.
Lifetime Achievement Awards were presented to two credit union leaders at the association’s 75th Anniversary gala banquet. Barb Fortney, retired CEO of LANCO FCU, Lancaster, was awarded the 2009 William W. Pratt Professional of the Year Award. Herb Yost, retired board chairman of Diamond CU, Pottstown, was presented the 2009 Joseph A. Moore Volunteer of the Year Award. Thirteen young people competed for the title of the 2009 Credit Union Youth Ambassador of Pennsylvania during the 33rd annual contest on Friday night. Laura Huggins of the Harrisburg Chapter and Belco Community CU, Harrisburg, won the state title.

N.Y. CUs supported by towns on municipal deposits

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ALBANY, N.Y. (5/19/09)--The Association of Towns of the State of New York issued a Memorandum of Support May 8 that “calls upon the governor and the New York State Legislature to pass legislation that amends all applicable state law to allow local governments to deposit funds in credit unions and thrift institutions.” “The law addressing municipal funds was enacted in 1909 before the existence of credit unions,” said William J. Mellin, president/CEO of the Credit Union Association of New York. “Clearly it is time to fix this antiquated law on the state level.” Escalating real property taxes needs to be addressed, the Association of Towns said in its memorandum. Providing municipalities with ways to reduce expenses could help lower those taxes. The group cited a recent economic study that showed local governments could save $12 million to $16 million annually if they could do business with their local credit unions. Also noted was that “town officials like the idea of local tax dollars helping their local economy by providing choice in community banking.” Commercial banks currently enjoy a virtual monopoly over the deposit of state and local funds in New York State, the credit union association said. New York is one of 13 states that don’t allow municipalities the credit union option. Municipal Deposit bills were introduced in both the Assembly (A.4319) and the Senate (S.717) this session. State Rep. and Banks Committee Member Harvey Weisenberg (D-20), and Senate Banks Committee Member Owen Johnson (R-4) are the sponsors. The credit union association will continue to work behind the scenes to encourage passage of the amendments to current banking law on municipal deposits so local governments can keep their investments in their local communities. “By retaining local money in communities through municipal deposits, credit unions will be adding funds to the lending pool at a time when funds have been somewhat scarce at more traditional financial institutions,” Mellin said. “Allowing credit unions to accept funds from municipalities also makes it possible for credit unions to offer lower loan rates while creating more affordable loan products for their communities.”

Biz Kid nominated for two daytime Emmy Awards

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FEDERAL WAY, Wash. (5/19/09)--Biz Kid$, a financial education show aimed at youth and funded by credit unions, has received two Daytime Emmy Award nominations from the National Academy of Television Arts and Sciences. “For credit unions, this is a major milestone in the ongoing effort to improve consumer financial education,” said Washington Credit Union League President/CEO John Annaloro. The show is taped in Washington (Focus May 15). “The nominations are testament to the show’s technical quality, which enhances the efficacy of the show’s message,” he added. Biz Kid$ first broadcast in January 2008 and has aired in market of more than 118 million households nationwide. More than 97% of public television stations are airing the program. The show is underwritten by America's Credit Unions, comprising more than 150 credit unions, credit union foundations and other supporting organizations. The largest sponsor is the National Credit Union Foundation. The 36th Annual Daytime Emmy Awards will be televised Aug. 30 in Los Angeles.

CU System briefs (05/18/2009)

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* QUEENS, N.Y. (5/19/09)--New York police divers fished four stolen ATMs--part of a chain of "smash and grabs" where thieves used heavy equipment to steal the machines--out of a creek in Flushing Meadows-Corona Park Friday. Valentin Garcia, 34, who has 24 prior arrests, was charged with grand larceny of a car, criminal possession of stolen property and criminal mischief. He is accused of ramming a stolen van into the ATMs, then hauling them away and stealing cash. Some machines had as much as $12,000. Garcia was arrested April 21 when police received a call about someone attempting to dislodge an ATM on the Lower East Side. He was captured when he jumped into the East River. He was released on bail April 28, only to be arrested again pril 29 for a March heist. Garcia is charged with stealing three machines throughout Manhattan in December, March and April (NY1.com May 16 and 1010wins.com May 15) … * ANNAPOLIS, Md. (5/19/09)--Credit unions and the Maryland and
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District of Columbia Credit Union Association (MDDCCUA) were in attendance when Maryland Gov. Martin O'Malley signed Senate Bill 500 into law May 11 (FOCUS Newsletter May 18). The law requires the Prince George's County Board of Education to develop and implement a pilot program in three county high schools that includes a semester-long elective course in financial literacy. Seated from left: Senate President Mike Miller, Gov. O'Malley, and Speaker of the House of Delegates Michael Busch. Standing, from left, are Denise Tyler; Sen. Anthony Muse; Kalimah Matthews of Signal Financial FCU; Chris Conway of Educational Systems FCU, and Brian Tate of MDDCCUA. (Photo provided by the Maryland and District of Columbia Credit Union Association) … * POPLAR BLUFF, Mo. (5/19/09)--U.S. Rep Jo Ann Emerson (R-Mo.) met with financial institution leaders, including Poplar Bluff (Mo.) FCU President Kirk Mondy, while on a visit in the Eighth District May 8 (The Missouri difference May 15). Emerson is the new ranking Republican on the Financial Services Subcommittee of the House Appropriations Committee. Mondy said he asked Emerson questions related to S 896, the Senate version of the Helping Families Save Their Homes Act. "Specifically, would she support removal of the 'cramdown' provisions that were passed in the House bill? She assured me that 'cramdown' is dead and won't be in the final bill," he said. "I assured her that Missouri credit unions approve the amendments in S 896," Mondy told the Missouri Credit Union Association … * EL PASO, Texas (5/19/09)--Government Employees CU in El Paso is distributing free discount prescription drug cards to people in El Paso, Texas, and the surrounding area. The El Paso Drug Card is a free prescription assistance program to help uninsured and underinsured residents afford prescription medicines. It provides savings of up to 75%, although savings average roughly 30% (El Paso Times May 18) … * RANCHO CUCAMONGA, Calif. (5/19/09)--A crew of California credit
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union members and vendors raised a record $8,301.25 for the Richard Myles Johnson (RMJ) Foundation--the state foundation for credit unions in California and Nevada--by participating in the 62nd annual Newport to Ensenada International Yacht Race. From left are Jim Crowley, SWBC; John Willard, Camino CU; Chris Gunnare and Matt Flynn, The Members Group; foundaton board member and skipper of the crew Jim Updike, Honda FCU; Don Gensler, CUNA Mutual Group; Tim Sidely, WesCorp; and Todd Lane, California Center CU. Not pictured was Brian Scott, The Members Group. (Photo provided by the California Credit Union League) …

Rep. Holmes Norton to chapter No parallel to CUs

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WASHINGTON (5/19/09)--U.S. Rep. Eleanor Holmes Norton (D-D.C.) thanked credit unions for all that they do in the district to help people achieve financial stability during comments made at the D.C. Chapter of the Maryland and District of Columbia Credit Union Association's Annual Legislative Reception and Annual Meeting.
U.S. Rep. Eleanor Holmes Norton, left, (D-D.C.) praised credit unions during a legislative reception and annual meeting May 14 of the D.C. Chapter of the Maryland and District of Columbia Credit Union Association. (Photo provided by the Maryland and District of Columbia Credit Union Association)
More than 50 credit union leaders and professionals attended the May 14 event, said the association (FOCUS Newsletter May 18). Norton, a long-time credit union supporter and advocate, praised credit unions' efforts in the current economic environment, saying, "Credit unions are where you want to be. Credit unions didn't cause the current economic crisis. Credit unions played by the rules. Now, credit unions are being asked to do even more to help." She stated her strong support for the credit union practice of offering membership to people with a minimal deposit requirement. She also pointed out the distinction between democratically operated, member-owned financial institutions and for-profit banks that answer to stockholders. "If you want to be a stockholder or owner, join a credit union." The credit union philosophy of "people helping people" is really more than words, Norton said, adding that they help people in their local communities by lending in the local communities and advocating financial literacy and consumer responsibility. "I have been in Congress for 18 years, and I can find no parallel to credit unions. In our society, mutuality has gone dormant. However, members all over the world can go to credit unions because they are trusted and responsible," Norton added. Other featured guests included District of Columbia Banking Commissioner Thomas Hampton, Washington, D.C. Councilmember Michael Brown and Economist Robert Ebel. Brown mentioned he is a credit union member and looks forward to working with them on financial services issues, including financial literacy. Hampton said he has seen firsthand how credit unions serve their members, specifically by educating members on financial issues and leading in the effort to increase awareness of financial literacy.

Jane Bryant Quinn to PCUA CUs have social value

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HERSHEY, Pa. (5/19/09)--Jane Bryant Quinn, nationally known personal finance commentator, says credit unions “have social value.” She made the comment as the keynote speaker for Friday’s general session at the Pennsylvania Credit Union Association’s Annual Business Meeting in Hershey, Pa..
Jane Bryant Quinn (left), nationally known personal finance commentator, and Diane Roberts, Pennsylvania Credit Union Association board chair, at the Pennsylvania Credit Union Association’s Annual Business Meeting in Hershey, Pa.
Jim McCormack (left), president/CEO of the Pennsylvania Credit Union Association, greets Tom Corbett, Pennsylvania attorney general, who spoke at the association’s Annual Business Meeting in Hershey, Pa., Friday. (Photos provided by the Pennsylvania Credit Union Association)
After giving a historic review of the economy’s ups and downs over the years, Quinn told attendees, “Now is your time.” During the economic boom, banks were attractive to consumers and credit unions had to work hard to compete. Today, banks are struggling and credit unions are thriving, she added (Life is a Highway May 18). “Credit unions have a great message to tell,” Quinn said. “Credit unions have social value, and their specialty is personal service and one-on-one financial counseling.” Quinn recently agreed to appear as the spokeswoman for the National Credit Union Administration in a television commercial running nationwide in those areas most impacted by the economic recession. In another speech at the meeting, Pennsylvania State Attorney General Tom Corbett, a credit union member, congratulated the association on its 75th milestone and thanked credit unions for “making Pennsylvania better for all of us.” Credit unions are committed to members, especially during the economic crisis, and are key to the economic turnaround, Corbett said. The attorney general is a consumer advocate and has used credit unions as a partner for his initiatives. He emphasized the importance of financial literacy in schools and informing members about identity theft.

Mid-Atlantic Corporate updates stabilization impact

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MIDDLETOWN, Pa. (5/19/09)--Mid-Atlantic Corporate FCU issued a corporate stabilization update Thursday after U.S. Central released its results Wednesday of its first-quarter financials. The update states that Mid-Atlantic will see its Membership Capital Shares (MCS) at U.S. Central deplete by 23% of their value instead of the 63% previously estimated. U.S. Central’s previous estimates were released May 1 (FOCUS Newsletter May 18). U.S. Central will still exhaust 100% of Paid-in Capital (PIC) versions I and II, along with the depletion of 23% of MCS as of March 31 for all corporates. Previously, Mid-Atlantic had $49.5 million in PIC and $95 million in MCS at U.S. Central. The corporate will apply its retained earnings of roughly $98 million to the loss, leaving about $26.5 million in retained earnings. “Although these reported numbers may indicate that our members’ Membership Capital Accounts (MCA) could be untouched, if our certified public accounting (CPA) firm determines that the potential for additional losses to MCS is likely, it could still have us take the worst-case scenario and write-down all of our MCS with U.S. Central. In this scenario, Mid-Atlantic Corporate’s members holding MCA will, in turn, be forced to take a 23% loss on their MCA with us,” the corporate said. As for the corporate’s capital, the release said: “Current regulatory requirements for capital are set at 4% minimum regulatory reserves and 2% minimum tier 1 generally accepted accounting principles (GAAP)-qualified reserves. While retained earnings and PIC qualify as both regulatory and tier 1 GAAP capital, MCS only qualifies as regulatory capital. “Prior to the conservatorship of U.S. Central and the extinguishment of Mid-Atlantic’s capital held at U.S. Central, Mid-Atlantic had 9.6% regulatory capital and 2.9% tier 1 GAAP capital; both exceed the regulatory requirements,” the release continued. “Following the U.S. Central conservatorship and exhaustion of Mid-Atlantic’s capital, its total regulatory capital level remains above the 4% minimum at 6.8%, but the tier 1 GAAP capital level has fallen below the regulatory requirement to 0.8%.” Mid-Atlantic encouraged its member credit unions to consult with their CPA firms to determine how to reflect these transactions on their income statements and balance sheets. Mid-Atlantic Corporate FCU is based in Middletown, Pa. U.S. Central is based in Lenexa, Kan. For more information, use the link.

CFO Council names 2009 executive committee

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MADISON, Wis. (5/19/09)--The new executive committee and officers for the CUNA Chief Financial Officers (CFO) Council were announced during the council’s 15th annual conference and roundtable, May 17-20, in Las Vegas. Pam Finch, vice president of administration and chief financial officer (CFO) for Mid Minnesota FCU in Baxter, Minn., moved from vice chair to chair. She replaces Erin Mendez, senior vice president of finance and information technology for SchoolsFirst FCU in Santa Ana, Calif., who reached her term limit as chair but will remain on the committee. Dan Leclerc, CFO for Lacamas Community CU in Camas, Wash., was named vice chair. Brandon Michaels, CFO for San Francisco Fire CU in San Francisco, is secretary/treasurer. During recent elections, Michaels and Derrick Peterson, senior vice president and CFO for Public Employees CU in Austin, Texas, were elected to the executive committee. They replace outgoing members Louis (Jay) Scungio, vice president of finance and chief financial officer for Freedom CU in Springfield, Mass.; and Peg Lamb, senior vice president of finance for DFCU Financial CU in Dearborn, Mich. Other committee members are:
* M.J. Coon, senior vice president and CFO for Ent FCU in Colorado Springs, Colo.; * Robert Warren Jr., senior vice president and CFO of Virginia CU in Richmond, Va.; * Steve Smith, CFO for Sharonview FCU in Fort Mill, S.C.; and * Kevin Brueseke, CEO and CFO for the Missouri Credit Union Association.

City police urge no hathoodsunglasses policies

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COLUMBUS, Ohio (5/19/09)--City police are urging the credit unions in Westerville, Ohio, to strictly enforce policies that require members to remove their sunglasses, hats or hoods when entering to avoid potential robberies. Suzanne McCann, vice president of sales and operations at CME FCU in Columbus, Ohio, told The Columbus Dispatch Friday that she witnessed a robbery at the credit union. The robber wore a hat and sunglasses, she said. CME has a similar “no hats, sunglasses” policy that has been enforced at every branch, the newspaper said. Some credit union members weren’t happy with the policy, but McCann said the policy helps keep everyone safe. Although only a few cities nationwide have “no hats” policies, voluntary participation is increasing, Harry Trombitas, an FBI special agent based in Columbus. Most bank robbers want to avoid conflict, and complying with a request to take a hat or sunglasses off could attract more attention, he said. There have been 22 Columbus-area robberies this year, five fewer than this time last year, the newspaper said. Credit unions in several states have adopted “no hat, no hoods, no sunglasses” policies. In 2003, the Delaware Credit Union League provided posters and signs to credit unions that ask member to remove these articles of clothing when they enter the credit union (News Now Aug. 25, 2003). The same year, the Missouri Credit Union Association adopted a similar policy. Other states with “no hats, hoods or sunglasses” rules include South Carolina, Massachusetts and Oklahoma (News Now June 3, 2005). Though the policies have been implemented to increase safety, they have been criticized. Earlier this year, a Muslim woman who was a member of Navy FCU said she was denied service from the credit union for wearing a traditional head scarf as required by her religion. Navy Federal contacted the member and apologized to her (News Now Feb. 4).

CUs celebrate UBIT victory await resolution

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APPLETON, Wis. (5/18/09)--The Wisconsin credit union that won its lawsuit against the government's interpretation of three insurance products as falling under the unrelated-business income tax (UBIT) took some time Friday to assess the impact of Thursday night's decision by a federal jury. "We're thrilled," said Cathie Tierney, president/CEO of Appleton, Wis.-based Community First CU, after she admitted being "a little numb" from the four-day ordeal before the U.S. District Court in Green Bay, Wis. The trial involved over more than 100,000 documents and 15 depositions requested by the government, she told News Now. "It was the culmination of years and hundreds of hours and days and weeks' effort. It was an incredible team effort by partners such as the UBIT Steering Committee and their organizations, and all the attorneys," she said. She noted that "it meant so much to have the Credit Union National Association (CUNA) and CUNA Mutual Group there supporting us." When Community First filed the suit in January 2008, it was with the support of the UBIT Steering Committee--CUNA, the American Association of Credit Union Leagues, CUNA Mutual Group and the National Association of State Credit Union Supervisors. CUNA General Counsel Eric Richard and CUNA Counsel for Special Projects Michael Edwards were present during the trial. The collective effort "shows credit unions are very special places in the way that they come together with their resources and ideas," said Tierney. The Wisconsin Credit Union League also supported the effort, and league President/CEO Brett Thompson testified on behalf of the credit union Tuesday morning. He told News Now that he testified about the history of Wisconsin credit unions, how the league services its member credit unions, and how products such as the insurance and GAO products contribute to the purpose of credit unions in serving their members. During the trial, the judge ordered witnesses outside the courtroom and told those in the courtroom not to talk about the testimony because other witnesses hadn't testified yet. "It's strange to testify with a (gag) order in place because you don't know what has been said in the courtroom," Thompson told News Now. "We are pleased by the jury's decision …that the credit insurance and GAP products sold by Community First CU are substantially related to the purpose of credit unions so that income earned from those sales is not taxable," Thompson said in a statement released by the league. "These products provide credit unions' member borrowers with greater peace of mind and so can be instrumental in re-starting our economy. This decision ensures consumers won't be denied this opportunity or be forced to pay more for the protection they want," he added. "But even more important, today's ruling clarifies that these loan-related products are part of the everyday mission and purpose of credit unions. The jury agreed that these services help mitigate losses to the credit union, enabling Community First to make more loans--a central task related to credit unions' mission of serving members." Thompson said the league was grateful to Tierney and the board and members of the credit union "for challenging the IRS and championing this case for the credit union movement." The ruling, he said, "strengthens the credit union movement's position in other pending litigation related to UBIT issues." Community First's Tierney told News Now that "we were fortunate to find a jury that was very familiar with credit unions." The jury--three men and five women--took less than two hours to find that all three products at issue were substantially related to the purpose of the credit union's mission--and therefore were not taxable under UBIT. The trial went "better than expected" in terms of timing and it was a smooth process. But it was hard to hear some of the government's accusations, said Tierney. "It was difficult to listen to the government saying for all intent and purposes that credit unions were 'rip-off artists' and that their [insurance] products were not good," she said. "We are totally grateful to the two members [Yurri Sauerhammer and Robin Jorde] who testified. They are everyday people willing to tell their story. It was very heartwarming and it shows what special places credit unions are--that we're not a typical financial institutions but are cooperatives serving the best interests of members. Sauerhammer and Jorde testified about their experiences with the credit life and disability life and guaranteed asset protection products. One of the widows told the court she would have lost her home after her husband died, if it hadn't been for the product. After the verdict, the government's attorney asked the judge to set aside the verdict in a special oral motion. "My guess is that that is not going to happen," said Tierney. "It was a very decisive victory." The government's attorney has 10 days in which to file a written motion to set aside the jury's verdict, according to CUNA's Edwards. Tierney expressed "thanks to everybody in the movement and all the credit unions that supported us in their thoughts. Now we're getting back to running the credit union," she added.

CU System briefs (05/15/2009)

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* SAN DIEGO (5/18/09)--Thirty-six men and women--part of the 60 suspects in a Lincoln Park Gang counterfeit ring that defrauded Navy FCU in San Diego of more than $500,000--pleaded not guilty in San Diego Superior Court to the fraud charges. Most of those charged are students, members of the military and new parents. Sixteen are believed to be members of the gang. Authorities say the gang recruited credit union members to give their account number information and personal identification numbers. They would deposit counterfeit checks into the accounts, then withdraw thousands at an ATM in a casino. The accountholders allegedly received a percentage of the payoff. California Attorney General Jerry Brown and county District Attorney Bonnie Dumanis said the arrests were the first time a gang in California was targeted for its alleged involvement in bank fraud (Union-Tribune May 15 and News Now May 15) … * NEW YORK (5/18/09)--A former credit union treasurer was sentenced to roughly three years in prison for stealing more than $100,000 from St. Charles Borromeo Church FCU, Harlem, N.Y. The theft, which the credit union discovered in December 2005, led to the credit union’s collapse and insolvency. Former manager and treasurer Chinithia Bills pleaded guilty to bank fraud in January (Associated Press May 14). Bills took the money using various schemes and used the funds for personal expenses, according to prosecutors ... * PERRY, Ga. (5/18/09)--A 29-year-old Perry, Ga.-man was sentenced to life in prison for a 2007 armed robbery of Robins FCU, a $1.122 billion asset, Warner Robins, Ga.-based credit union. Anthony Scott Chairmont won’t be eligible for parole for 30 years, said Houston County District Attorney Kelly Burke. Chairmont was sentenced as a recidivist due to two prior felony convictions. Under Georgia law, the required sentence after a conviction of a “capital offense” such as an armed robbery of a credit union, is life in prison, Burke said (Macon Telegraph May 15) …

Keep cash in CUs for higher returns says expert

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MOUNTAIN VIEW, Calif. (5/18/09)--A financial expert and author speaking at Intuit's Town Hall series at the company's California headquarters about personal finance lists credit unions as one of her "seven ways to make money." "Look beyond your regular bank" is Farnoosh Torabi's fifth tip to Intuit employees (Business Wire May 15). Torabi notes that while the Federal Deposit Insurance Corp. is guaranteeing balances up to $250,000, "don't be afraid to look beyond your regular bank. Consider keeping that cash in online banks or credit unions for higher returns. Compare rates at BankingMyWay.com or Bankrate.com." Torabi is author of "You're So Money," a best-selling personal finance book. Mountain View, Calif.-based Intuit provides business and financial management solutions for financial institutions such as credit unions, small and mid-sized businesses, consumers and accounting professionals. To review the seven ways to save money, use the link.

Illinois state senator receives Desjardins

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NAPERVILLE, Ill. (5/18/09)--Illinois State Sen. Jacqueline Collins (D-Chicago) was presented with the 2009 Desjardins Youth Financial Literacy Award for State Lawmakers by the Illinois Credit Union League during the league's Legislative Day in Springfield.
Illinois Credit Union League President/CEO Dan Plauda presents the 2009 Desjardins Youth Financial Literacy Award for State Lawmakers to state Sen. Jacqueline Collins (D-Chicago) during the league's annual Legislative Day in Springfield. (Photo provided by the Illinois Credit Union League)
Collins, who chairs the state Senate Financial Institutions Committee, was nominated for her active leadership role in working to create enhanced opportunities to promote financial literacy throughout Illinois schools. During the 95th Illinois General Assembly, she helped enact four legislative measures:
* S. B. 2098 (P.A. 95-920), which authorizes the state treasurer to create the State Treasurer Financial Education and Savings Not-for-Profit Corp. to promote financial literacy and savings, and to issue grants and scholarships; * S.B. 2378 (P.A. 95-0863), which amends the School Code to add these topics to the financial literacy component of consumer education: home ownership, how to obtain a mortgage, fixed- and adjustable-rate mortgages, subprime loans and predatory lending; * H.B. 1662 (P.A. 95-0358), which creates the Illinois Children's Savings Accounts Act and a task force to come up with a plan to implement a savings account at birth for every child born in Illinois to state residents; * S.B. 2191 (P.A. 94-0929), which amends the School Code and State Finance Act and requires the State Board of Education to develop and adopt curricula, materials and guidelines for school boards in implementing financial literacy instruction within courses offered in the state's public high schools. It also creates a Financial Literacy Fund in the Treasury for grants to school districts for financial literacy.
The Desjardins award is sponsored by the Credit Union National Association (CUNA). "Senator Collins has shown great leadership in helping to promote financial literacy education for students and residents across Illinois," said Dan Plauda, league president/CEO. "We are pleased that CUNA has chosen her for this award and that we had the opportunity to honor her in front of so many credit union political activists.

The Golden 1 announces 25 layoffs at headquarters

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SACRAMENTO, Calif. (5/18/09)--The Golden 1 CU, Sacramento, announced Thursday that it has reduced its headquarters staff by 25 full-time back-office positions in response to weak local and national economic conditions. The layoffs represent 1.7% of the credit union’s total work force, Teresa Halleck, The Golden 1 CU president/CEO, told News Now. The credit union has had a 7% total reduction in work force with attrition. “These are difficult times that call for difficult decisions,” Halleck said. “Our hearts go out to those affected by these changes.” The Golden 1 CU does not have plans for more layoffs. “We’ll see what happens the rest of the year,” Halleck said. “I’m hoping there won’t be any more, but I can’t make any promises.” California has been “battered” by the economic conditions. The Sacramento area has a 11.3% unemployment rate as of March, compared with the state average of 11.5%. California is leading the nation in foreclosures, she said, citing local economic statistics. The credit union has experienced an increase in loan delinquencies as members continue to lose their jobs. As of March 31, The Golden 1 had a loan delinquency rate of 1.51%, compared with a 2008 year-end rate of 1.26%. “Others have higher delinquencies, but that’s a lot for us,” Halleck said. However, The Golden 1 CU remains strong, she added. The credit union recently received its highest member service score to date. “The members’ perception of The Golden 1 is wonderful,” Halleck said. “They knew we weren’t part of the trigger that melted down the economy. We’ve done really well.” The credit union also will add two branches in Salinas from a merger with Steinbeck CU soon. “It’s a good addition to Golden 1,” Halleck said. “It’s a long-term growth opportunity for us. It fills in the areas [in which] we had a hole.” The Golden 1 will continue to do everything it can to manage the financial storm, Halleck said. “These have been hard choices,” Halleck said. “We’ve eliminated anything we could that wasn’t impacting member service. We’re here--we will survive,” she concluded. The Golden 1 has 77 branches and $7 billion in assets.

Texas House fails to take up data security bill

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AUSTIN, Texas (5/18/09)--A Texas data security breach bill, House Bill 345, died late Thursday night, missing a deadline as the Texas House became bogged down in floor debates on bills preceding it on the House Calendar. The bill stipulated that merchants have a duty to safeguard the sensitive personal information they collect from plastic cards, the league said. “The league and Texas credit unions worked very hard, and are obviously very disappointed,” said Texas Credit Union League (TCUL) Chief Advocacy Officer Buddy Gill. “Since 2007, the retailers fought strongly against the bill every step of the way, yet every time this legislation has gotten to vote whether in committee or on the floor, lawmakers have unanimously favored the bill” (LoneStar Leaguer May 18). A recent Texas voter poll confirms overwhelming public support for legislative changes sought to address the problem, with 29% of Texas voters reporting having a debit or credit card canceled due to fraud or a merchant's lax security and resulting data breach, TCUL said. Three in four voters said retailers would safeguard their card data better if the merchants were held financially responsible for any losses. Four in five said the Texas legislature should pass a law requiring businesses to take reasonable steps to protect the data they collect from debit and credit card transactions. There is no question public opinion favors the credit unions’ position on the data security breach issue, TCUL said. Major retailers at the national level activated grassroots efforts, urging Texas House members to oppose the bill, the league said. “As long as data security breaches occur and lax security is determined to be the culprit, with major impacts on our credit unions and thus our members’ bottom lines, this issue is not going to go away,” Gill said. “If we see the same big, costly data security breaches occurring in the remainder of 2009 and in 2010, then you can bet in 2011 the gloves will come off again on this issue,” he added. “Until merchants have some ‘skin in the game’ and are on the hook for possible losses due to their own lax or lapsed security, they have no effective motivating incentive.”

Letter to editor CUs work to fill lending void

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MADISON, Wis. (5/18/09)--Wisconsin credit unions are working to fill the lending void, Wisconsin Credit Union League President/CEO Brett Thompson wrote in a letter to the editor that appeared in The Capital Times Wednesday. The Capital Times is based in Madison, Wis. Thompson wrote in response to a letter written by a banking trade group in Wisconsin that suggested banks can’t “immediately fill the entire void for loans and it is unfair for critics to suggest otherwise.” Credit unions can fill the lending void, Thompson argued, but are prevented from doing so because of a 12.25% member business lending cap. “Nearly half of credit unions’ member business loans go to households with incomes less than $50,000. Credit unions could do more, at no cost to taxpayers, but banks consistently oppose attempts to lift an arbitrary cap on business lending that only applies to credit unions,” Thompson said. The banking trade group’s letter also noted that some healthy Wisconsin banks have accepted taxpayer-provided Troubled Asset Relief (TARP) Funds “to take advantage of below-market cost of capital, something that may not fit with every bank’s growth plans, but it clearly does for some.” The Wisconsin league president argued that banks accepting TARP money may be doing so as a growth strategy to spur lending, instead of using the money as a bailout. Last week, Wisconsin business people addressed a congressional oversight panel to express their frustration at the lack of credit available from banks. The panel said only 29% of small business owners can meet their borrowing needs, Thompson noted. “We suggest that consumers and businesses look to their locally owned, democratically operated credit unions for the funds they need,” Thompson added. “And we suggest it is ‘unfair,’ to use Kurt Bauer’s word, for banks to block a ready source of increased funds for small businesses.”

Crown Prince of Spain to open World CU Conference

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MADISON, Wis. (5/18/09)--His Royal Highness The Prince of Asturias, Felipe de Borbon y Grecia, will welcome attendees of this year's World Credit Union Conference in Barcelona, Spain, July 27 during the Opening General Session. The only son of King Juan Carlos and Queen Sofia, Prince Felipe is the heir apparent to the Spanish throne. He will introduce the Monday keynote speaker, former president of Mexico Vicente Fox. Prince Felipe's international education includes attending high school in Ontario, Canada, and Spanish military, naval and air force academies; receiving an undergraduate in law from Autonomous University, Madrid; and receiving a master's degree in international relations from Georgetown University, Washington, D.C. He married Princess Letizia, a journalist, in 2004. Their wedding in Madrid was the capital city's first royal marriage in almost a century. They have two daughters. King Juan Carlos is a direct descendant of European rulers, including Queen Victoria of the United Kingdom through his grandmother, Victoria Eugenie, and Louis XIV of France through the House of Bourbon. The World Credit Union Conference, presented by the World Council of Credit Unions, will be July 26-29 at the Barcelona Convention Centre and will attract credit union leaders from more than 40 countries. The early bird deadline for discounted registration ends Wednesday. For more information, use the link.

Valdov Perkins receive Virginias top awards

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RESTON, Va. (5/18/09)--Former Credit Union National Association (CUNA) Chairman Juri Valdov and Charles Perkins were presented with top honors by the Virginia Credit Union League during the league's 75th Annual Meeting in Reston, Va. earlier this month.
Valdov, retired president/CEO of the $1.5 billion, Herndon-based Northwest FCU, received the league's Eugene H. Farley Jr. Award of Excellence. As CUNA chairman from 2005 to 2007, Valdov championed credit union involvement in financial education efforts, especially for young people. He retired the CEO position at Northwest in December 2007 after a 36-year career in the credit union movement. Until March this year, Valdov served as the credit union's senior vice president of external affairs. That position allowed him to continue promoting credit unions' participation in charitable and community-based projects and financial education initiatives, such as Credit Union Miracle Day Inc. and the annual CU Cherry Blossom 10-Mile Run in Washington, D.C. Perkins, a longtime credit union leader in Virginia and retired president/CEO of Roanoke-based Freedom First FCU, was awarded the league's James P. Kirsch Lifetime Achievement Award. Perkins worked for several credit unions and credit union trade associations. In addition to Freedom First FCU, he served with Woodbridge-based Belvoir FCU, two Washington D.C.-based credit unions--Walter Reed Army Medical Center FCU and Agriculture FCU--and Ohio-based Schiable Employees CU. He also worked for the Virginia and Michigan credit union leagues.

NACUSO announces board election results

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NEWPORT BEACH, Calif. (5/18/09)--The National Association of Credit Union Service Organizations (NACUSO) announced the results of its 2009 Board Directors at its annual membership meeting May 4. The meeting was part of NACUSO’s 2009 Annual Conference in Las Vegas. Under NACUSO's by-laws, the board of 11 directors--four from Platinum Partner members, three from credit union service organizations members that are not Platinum Partners and four without qualifying representative connection. Re-elected were Mike Hales, partner in the Rochdale Group, a credit union consulting firm, and Judy Sandberg from Gateways Services Group, a CUSO providing insurance services and investment and trust program management services.
Valorie Seyfert, president/CEO and co-founder of CUSO Financial Services, a broker/dealer CUSO in San Diego, and Mark Zook, president/CEO of MaPS CU in Salem, Ore., were newly elected to the board. Board member Tom Davis did not run for re-election because he is now CEO of NACUSO. Due to the resignation of a director and the change of another from one category to another, there are two vacant director seats on the board. Both directors must be persons representing members that are CUSOs, but not Platinum Partners. The board can appoint persons to fill the vacancies until the 2010 election. Officers for the NACUSO 2009 board of directors are:
* Chairman--David Serlo, president/CEO, PSCU Financial Services; * Vice-Chairman--Pete Snyder, president, SCS, Snyder Consulting Solutions LLC; * Treasurer--Lisa Renner, president/CEO, CU Holding Company LLC; and * Secretary--Judy Sandberg, senior vice president of strategic direction, Gateway Services Group LLC.

Wisconsin league board exec committee named

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PEWAUKEE, Wis. (5/18/09)--The Wisconsin Credit Union League’s board of directors and executive committee were announced at its annual convention May 6-9 in Milwaukee.
Elected to the 2009-2010 Wisconsin Credit Union League Executive Committee are, from left: Chair, Kevin Hauser; Secretary, Mike Mallow; Treasurer, Jack Gill; and Vice Chair, Pat Lowney. (Photo provided by the Wisconsin Credit Union League)
The 2009-2010 League Board of Directors are:
* Region 1--Kevin Hauser, Westby (Wis.) Co-op CU; * Region 2--Jack Gill, First Community CU of Beloit; * Region 3--Jennifer Schilling, Empower CU, Milwaukee; * Region 4--Pat Lowney, Lakeview CU, Neenah; * Region 5--Mike Mallow, Sheboygan (Wis.) Area CU; * Class A--Carol Pecsi, First CU, Oak Creek; * Class B-- Kimberly Youngblood, Focus CU, Menomonee Falls; * Class C--Daryl Gessler, Connexus CU, Wausau; * Class D--Paul Kundert, University of Wisconsin CU, Madison.
The 2009-2010 Executive Committee are:
* Chair--Hauser; * Vice Chair--Lowney; * Secretary--Mallow; and * Treasurer--Gill.

Virginia league board elections announced

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LYNCHBURG, Va. (5/18/09)--Four incumbents were re-elected to the Virginia Credit Union League’s board of directors during the league’s annual meeting May 8 in Reston, Va. Directors re-elected to three-year terms are:
* Michael Guida, Members Trust CU, Virginia Beach; * Suzanne Hughes, University of Virginia Community CU, Charlottesville; * Joe Blevins, Mountain Empire FCU, Marion; and * At-Large Director Bill Cook, Northwest FCU, Herndon.
Guida was elected to Region 1, which includes Greater Hampton Roads and the Virginia Beach area. Hughes will represent Region 3, which includes Northern Virginia, Charlottesville and the Shenandoah Valley. Blevins will serve Region 4, which includes Roanoke, Lynchburg, Danville and Southwestern Virginia. The league also re-elected officers:
* Chairman--Stan Leicester, BayPort CU, Newport News; * Vice Chairman--Robert Petty, Bronco FCU, Franklin; * Treasurer--Hughes; and * Secretary--Guida.

Community First CU wins UBIT case

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GREEN BAY, Wis. (5/15/09)--Community First CU has won its challenge against the federal government over the Internal Revenue Service's (IRS) interpretation of the unrelated-business income tax (UBIT) as it relates to three insurance products. Eight jurors delivered the verdict at 5:45 p.m. CT Thursday in favor of the credit union on all three products, according to Michael Edwards, counsel for special projects with the Credit Union National Association (CUNA), who was present in the courtroom. "The jury deliberated less than two hours, which is pretty short," Edwards told News Now. U.S. District Judge William Griesbach entered the judgment in favor of the credit union for $54,604, the full amount the credit union was seeking, plus costs, which could go into a five-figure amount. The amount represents taxes paid on credit life and credit disability insurance and guaranteed asset protection (GAP) products. "This is a great outcome for state-chartered credit unions," said CUNA General Counsel Eric Richard, who attended the trial earlier this week. "We hope it will lead the IRS to reconsider its entire position on UBIT for credit unions, but we are prepared for the next case in Denver." The verdict means that the jury was not persuaded by the government's two key expert witnesses--Birny Birnbaum, a self-employed consulting economist, and Gordon Karels, chairman of the finance department at the University of Nebraska-Lincoln, said Edwards. Birnbaum and Karels are the only government witnesses in a similar UBIT case involving insurance products filed by Bellco CU of Greenwood, Colo., last May. That complaint seeks a refund of $199,000, based on UBIT taxes paid for 2000, 2001 and 2003. Community First's trial began Monday in Green Bay, Wis. The Appleton, Wis.-based credit union filed suit against the government in 2008 after the IRS determined that certain GAP and insurance products offered to members fall outside the credit union's main mission and are subject to UBIT. Earlier in the day Thursday, Judge Griesbach had reversed an earlier preliminary ruling issued last week, in which he said credit disability and credit life insurance could be treated as a single issue under "credit insurance related" issues. Instead, he ruled Thursday that the two products would be treated as separate issues, said Edwards. The judge cited two reasons for the split: 1) factual differences between the two products and 2) different premiums on the products as they relate to rate of loss for the insurance company. In its closing argument, the credit union argued that all the insurance products are related to all of the credit union's purposes under Wisconsin law; that the insurance and GAP products are a source of credit with fair and reasonable rates and are directly connected to the loans made; and that the credit union educated members about the products to improve their financial conditions. In its closing argument, the government argued that the products were "a rip-off" because they were "overpriced" relative to theoretical alternatives (that do not exist on the market). The government also argued that "mystery dollars" were going to CUNA Mutual Insurance Society (CUMIS), the insurer and that several witnesses had ties to CUMIS and were therefore "biased." Community First filed the suit in January 2008 with the support of the Credit Union National Association, the American Association of Credit Union Leagues, CUNA Mutual Group and the National Association of State Credit Union Supervisors. The Wisconsin Credit Union League also supported the effort, and league President/CEO Brett Thompson testified on behalf of the credit union earlier in the week.

Board officers at AVCU announced

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BURLINGTON, Vt. (5/15/09)--More than 170 people last week attended the 62nd annual meeting of the Association of Vermont Credit Unions (AVCU), which elected its board and officers. Re-elected to three-year terms on the board of directors were Sean Gammon, Members Advantage Community CU, and Susan Poczobut, Granite Hills CU, both credit unions in Barre. Board Chairman John Benoit, NorthCountry FCU, South Burlington, announced he would step down as chairman after holding the position for eight years. He will remain on the board. Officers for the 2009 AVCU Board are:
* Chairman Jim Adorisio, Champlain Valley CU, Essex Junction; * Vice-Chairman, Gammon; * Treasurer, Poczobut; and * Secretary, Susan Best, ORLEX Government Employees CU, Newport.
Other directors are Matt Levandowski, Heritage Family FCU, Rutland, and Jeff Morse, River Valley CU, Brattleboro.

League CUs in Idaho surviving recession

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BOISE, Idaho (5/15/09)--Idaho credit unions have weathered the current U.S. economic recession well, according to Alan Cameron, president/CEO of the Idaho Credit Union League. The state’s first credit union charter was filed in 1934 and now nearly a third of Idaho’s residents (514,000) are members of credit unions with 62 credit unions available from which to choose (Idaho Business Review May 11). “There are places in this state where credit unions are the only financial institution available,” he told the publication. The strength of the credit unions system lies in its conservative nature, Cameron added. “I think that’s a point that needs to be stressed,’ he said. “The incentive of the organization is to find the best possible way to serve the members, building the [credit union] into a strong financial institution. “You do have to charge for your services, you do have to charge interest, but what the focus comes down to is what’s best for the member,” Cameron continued. When asked if credit unions were suffering as much as banks, Cameron drew a line of separation. “We haven't had any [credit unions] close this year,” he told the Review. “I don't want to downplay that, there have been challenges this year. We did have two credit unions that merged this year. They merged in both instances because their fields of membership basically went away or were no longer viable. Those are factors outside our control. In order to protect the members’ money, and provide a continuation of service to the members, often times a [merger] is necessary. It's typical in what we see. “We’ve never had a failure of a credit union in Idaho,” he added.

MSCUA board awards announced

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JACKSON, Miss. (5/15/09)--More than 500 managers, volunteers, staff and guests from Mississippi credit unions attended the Mississippi Credit Union Association’s (MSCUA) 72nd Annual Meeting in Biloxi, Miss., last week. During the meeting, four MSCUA board directors were re-elected for a three-year term:
* Guylean Cooper, Valley Gas Employees CU, Jackson; * Doug Adams, MUNA FCU, Meridian; * Ray Scott, University of Southern Mississippi FCU, Hattiesburg; and * Laurin Avara, Navigator CU, Pascagoula.
The MSCUA board officers are:
* Chairman, Lt. Col. Dean Todd (ret. USAF), Keesler FCU, Biloxi; * Vice-Chairman, Dion Williams, Central Sunbelt FCU, Laurel; * Treasurer, Ray Scott, University of Southern Mississippi FCU; and * Executive Committee Member, Jimmy Smith, Singing River FCU, Moss Point.
During the event, two individuals were presented the state’s highest honor, induction into the Mississippi Credit Union Hall of Fame. They were:
* Francis J. Frederic Jr., Navigator CU; and * Pete Fairley, Singing River FCU.
Also, Jackson Area (Miss.) FCU received an award for being the top 2008 Credit Unions for Kids fundraiser.

IWSJI Economy hits Arizona Centrals loan demand

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NEW YORK and PHOENIX (5/15/09)--The weight of the economy on loan demand is addressed in The Wall Street Journal in an article that cites Arizona Central CU as an institution with money to lend but fewer loan applications because of the way consumers are responding to the recession. The article notes loan demand fell sharply during the end of 2008 and is still weakening in first quarter 2009. It reported 60% of U.S. banks say demand is down. The Phoenix-based credit union with nearly $400 million in assets saw loan applications plunge last fall when the credit crisis intensified, said the Journal (May 14). In September, 3,000 loans applications totaled $13.9 million--a fairly normal month, said Patty Aker, chief lending officer. Loans dropped to 2,300 applications the following month, then 1,000 applications in November and 900 in December, said the article. In February, loan applications totaled 895 for more than $4 million. Aker told the Journal that the credit union had money to lend but people were so nervous about the economy. Many had lost jobs and others were afraid that if they bought a car, GM might not be around to honor its warranty, she said. Arizona Central said vehicle loans make up more than two-thirds of its $285 million loan portfolio. Other types of consumer loans account for the rest. About 10% are small business loans.

Texas data breach bill set for House floor debate

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AUSTIN, Texas (5/15/09)--The Texas Credit Union League (TCUL) said it helped get a data security breach bill, House Bill 345, out from the state House Calendars Committee, where opponents had tagged the bill in an effort to kill it. TCUL said it accomplished this with the help of House Speaker Joe Straus and targeted credit union grassroots contacts (Lonestar Leaguer May 14). The bill stipulates that merchants have a duty to safeguard the sensitive personal information they collect from plastic cards, the league said. Opponents’ efforts continue. As with the 2007 legislative session, time is the biggest enemy, TCUL said. The bill was set for a second reading this week on the General State calendar, but there are over 100 bills in the queue before it, the league added. If the bill does not get a second reading this week, it is dead, Buddy Gill, TCUL chief advocacy officer, told News Now. “However, there may be some other options after that,” Gill added. The Texas Senate has yet to hear the bill. Media attention on the issue also is increasing. Texas weekly newspapers statewide carried an item by TCUL discussing the problem and the need for legislation. Radio activity also increased, said the league. More than 700 e-mails have been sent to 150 House members in the past few weeks, supporting the measure. TCUL said it may issue a request for grassroots phone calls to House offices in support of H.B. 345 this week once the timing becomes clear on the House floor vote. In March, the Texas House Business & Industry Committee held a hearing on data security breaches and has since worked with stakeholders to negotiate a bill. Texas banking trades joined with the league in publicly supporting the legislation at the March hearing, TCUL said (News Now March 18). In March, Gary Davis, CEO of Chocolate Bayou FCU, Alvin, testified for the league on behalf of a bill, noting the hundreds of thousands of cards compromised at Texas credit unions in a Heartland Payment Systems breach last year.

E-Scan Brace for recession aftershocks

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MADISON, Wis. (5/15/09)--While there are some indications the recession has hit bottom, credit unions should prepare for a few aftershocks in what could be a slow road to recovery, advises the Credit Union National Association’s (CUNA) 2009-2010 Credit Union Environmental Scan (E-Scan). The recession topped this year’s list of Top 10 E-Scan Insights, which identifies the key trends and challenges affecting credit unions in the coming years. Credit unions use the E-Scan as a source of issues and trends affecting the financial services industry and to prepare for strategic planning sessions, budgeting, product development and new initiatives. The top insights, as identified by E-Scan analysts:
* Recession--Evidence is building that indicates the economy, while a long way from recovery, might have hit bottom. Credit unions are well-positioned to take advantage of opportunities in the credit and deposit markets, if they’re willing to be bold in a time of risk aversion. * Unemployment--The U.S. unemployment rate is the highest it has been in 25 years as employers continue to cut jobs. It could hit 9.5% by year-end and 10.5% in 2010. CUNA economists expect unemployment to continue to increase at about 300,000 jobs per month through the end of 2009. * Housing--Rising foreclosure numbers and the supply of unsold homes puts even more downward pressure on home prices. Analysts say the housing market will continue its slide through 2009, despite reports of higher home sales in some areas and slight improvements in home construction. * Bankruptcy--The weak economy and its repercussions--rising unemployment, lower pay, fewer people with health insurance and the mortgage crisis--all play a role in rising bankruptcies. Analysts expect bankruptcy filings to reach nearly 1.5 million by the end of the year--a 36% increase over the 1.1 million filings in 2008--and surpassing the average number of annual filings (1.4 million) that took place before new bankruptcy laws were enacted in October 2005. * Lending--Although credit union loan growth will fall to 6% in 2009, credit unions should look for excellent lending opportunities in business, auto, student and mortgage lending in 2010. This is because many banks will be reluctant to lend in these areas due to their capital constraints, higher risk aversion, cash hoarding and tighter underwriting standards. Loan growth will rebound in 2010 to an 8% annual growth rate, the strongest pace since 2005. * Membership growth--For the first time in more than 20 years, credit unions saw an increase in the percentage of members in their prime borrowing years (age 25 to 44), to 42% of all members in 2008 from 38% in 2006. At the same time, younger members between the ages of 18 and 24 declined to 4% in 2008 from 6% in 2006. This represents a large, attractive market for credit union growth. * Corporate credit uinions--The National Credit Union Administration (NCUA) will continue to work through its corporate stabilization plan and its corporate restructuring initiative. While the costs and accounting procedures of the plan have yet to be finalized, it’s clear the plan will reduce credit union earnings. * Legislation--NCUA’s corporate stabilization plan will dominate credit union legislative and regulatory efforts this year and possibly beyond. CUNA will continue to monitor other important issues, such as lifting the business lending cap, mortgage cramdowns and interchange fee income. * Earnings--Credit union return on assets is expected to be only 0.4% in 2009 and 0.5% in 2010 as deteriorating credit quality and slower loan growth reduce earnings. Improving loan credit quality in 2010 will reduce provisions for loan losses and boost credit union earnings. * Consumers--Consumers are saving more and spending less as the national savings rate, below 1% from 2005 to 2008, is now back above 4%. After losing a large portion of their personal wealth, consumers will need help and personal finance education from credit unions to manage their finances and live within their means.
The E-Scan also covers key issue areas: trust, demographics, economics, marketing, lending, financial literacy, payment systems, human resources, and legislation and regulation. For more information, use the link.

Sixty gang members nabbed in 500000 scam vs. CU

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SAN DIEGO (5/15/09)--More than 60 members and associates of the San Diego Lincoln Park Street Gang were arrested Tuesday and charged with stealing $500,000 from a credit union by recruiting young credit union members to give up their account information so the account could receive counterfeit check deposits. The gang then withdrew thousands of dollars from an ATM at a casino and the accomplice account holders, who received a portion of the payout, would file a police report for an unauthorized withdrawal, said California Attorney General Edmund G. Brown Jr. and San Diego District Attorney Bonnie Dumanis in a press release. In a multi-agency operation termed "Bank Gig," a Tuesday morning pre-dawn sweep by more than 100 law enforcement officers took the suspects into custody. They are being held on 347 felony charges related to conspiracy, grand theft, money laundering, recruiting to commit a felony for a gang, unlawful sale of access card information , burglary and gang enhancement. After obtaining personal account information and personal identification numbers from members of Navy FCU, gang members would deposit counterfeit checks into the members' accounts, then withdraw thousands from an ATM machine at Barona Casino near San Diego. "The size, scope and sophistication of this operation show us that criminal street gangs in San Diego are expanding their criminal enterprise into white collar crime," said Dumanis. The investigation began when the credit union in 2005 reported to the U.S. Secret Service a significant increase in fraud reports from young members reporting their account information and PINs had been stolen.

CU System briefs (05/14/2009)

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* WARMINSTER, Pa. (5/15/09)--To celebrate its 75th anniversary, Freedom CU offered 7.5% Annual Percentage Yield on new certificates of deposit (CD) or individual retirement accounts (IRA). The special-rate CDs and IRAs, which were offered to new members, had a one-year term and were for$1,000 maximum. Overall, 441 new members signed up for the special CD or IRA, which could be opened with a phone call, on the Internet or at any credit union branch. Based in Warminster, Pa., Freedom CU has $380 million in assets … * DENVER (5/15/09)--A man suspected of robbery and a bomb threat at White Crown FCU, in downtown Denver, was arrested less than two hours later in a bar about a half- mile away. John Lee McMillen, 52, is alleged to have robbed the credit union Tuesday morning before leaving behind a backpack that he said contained a bomb. An undisclosed amount of cash was taken during the heist. Police said they did not know if a weapon was used during the robbery. A robot was sent into the credit union by Denver Police and Federal Bureau of Investigation agents to shoot water on the backpack. No explosive was found, police said (The Denver Post May 13) … * NEWBURGH, Ind. (5/15/09)--During 2008, Heritage FCU partnered with more than 110 local organizations to help with their service missions. It donated funding and/or in-kind gifts totaling more than $75,900 to organizations such as Ronald McDonald House and nearby campus groups at University of Evansville and University of Southern Indiana. Heritage's employees also volunteered their time and talents for 48 organizations last year, donating more than 1,380 hours through organizations such as Habitat for Humanity, Easter Seals--where the credit union won an award/traveling trophy for raising the most funds--and Evansville area public broadcasting stations. President/CEO Ruth Gaon noted the credit union's employees "truly understand that volunteerism is alive and well in America, especially at Heritage FCU." … * POUGHKEEPSIE, N.Y. (5/15/09)--Hudson Valley FCU, based in Poughkeepsie, has teamed up with the Poughkeepsie Journal as part of the Newspaper in Education program, the newspaper reported (May 9). They created an educational supplement, "Dollars & Sense," which offers money management tips such as setting goals and making budgets. The section is delivered to middle and high school students in Dutchess and Ulster counties. Credit union employees also conducted "Show Me the Money" presentations at four local schools. The program fosters students' awareness about developments in their community and the world. It also provides newspapers as a classroom resource, curriculum guides, lesson plans and other special supplements …

Hannaford breach judge dismisses all but one claim

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PORTLAND, Maine (5/14/09)--A federal judge has dismissed all but one of the 21 consolidated civil claims filed against Maine-based grocer Hannaford Bros., whose security breach compromised four million debit and credit cards and caused hundreds of financial institutions--including credit unions--to reissue the cards. The claims, which alleged the supermarket failed to protect and notify consumers during the breach, were consolidated before the U.S. District Court in Portland, Maine. They sought damages for the loss of time, effort and incidental personal expenses in dealing with compromised accounts (Portland Press Herald and Computerworld May 13). U.S. District Court Judge Brock Hornby, in a 39 page decision, ruled that only consumers who were not reimbursed by their financial institutions for fraudulent charges on their accounts will be allowed to proceed with the lawsuit. One plaintiff, Pamela Lamotte of Colchester, Vt., was the only Hannaford shopper named in the complaint who suffered fraudulent charges that were not reversed by her bank. In dismissing the claims, Hornby said that without any actual and substantial loss of money or property, consumers could not seek damages. Under Maine law, he wrote, "consumers whose payment data are stolen can recover against the merchant only if the merchant's negligence caused a direct loss to the consumer's account." Also, consumers who might have had fraudulent charges on their accounts that were later reversed could not sue. He noted that three of the claims against Hannaford were valid under Maine law. When someone uses a debit or credit card in a grocery transaction, Hannaford should use reasonable care in protecting the card data, he wrote. Similarly, the company's apparent delay in disclosing the data breach constituted an unfair trade practice under Maine law, Hornby wrote. "A jury could find that, if Hannaford had disclosed the security breach immediately upon learning of it from Visa, customers would not have purchased groceries at its store with plastic" until the problem was corrected, the judge said. LaMotte will be able to proceed on her claims for breach of implied contract, negligence, and an unfair or deceptive act or practice under Maine law,Hornby said. The data breaches occurred between Dec. 7, 2007 and March 10, 2008. The breach was publicly announced the following March 17. By then, about 1,800 incidents of fraud had occurred. Credit unions in New England, New York and Florida were among the financial institutions that reissued cards for members whose accounts were compromised (News Now April 17, 2008).

U.S. Central quarterly financial report posted

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LENEXA, Kan. (5/14/09)--U.S. Central FCU's first-quarter 2009 financial results Wednesday were as expected, with additional other-than-temporary impairment (OTTI) charges at year-end 2008 and first quarter 2009 exhausting all retained earnings and Paid-in-Capital (PIC). Membership Capital Shares (MCS) were depleted by roughly 23%. U.S. Central noted that its approach to OTTI was revised after the National Credit Union Administration (NCUA) placed it into conservatorship on March 20. "The revised approach to OTTI will change reported OTTI as of year-end 2008 from $1.2 billion to approximate $3.8 billion, based on Generally Accepted Accounting Principles (GAAP) in effect through 2008, whereby OTTI is recognized based on the mark-to-market value of the securities expected to experience credit losses," said the report. As of Jan. 1, roughly $2.7 billion of the OTTI charge, representing the non-credit portion of the loss, is added back to the retained earnings under new GAAP issued in April. For first-quarter, U.S. Central recorded an OTTI charge of $687 million, which represents the projected principal loss of $918 million discounted to reflect the net present value based on the respective effective yield or spread to LIBOR of each security on the date of purchase. On a cumulative basis through March, principal shortfalls of $2.3 billion with an associated net present value of $1.8 billion are projected from 229 securities. All 525 non-agency residential mortgage-backed and commercial mortgage-backed securities were evaluated by an independent consultant. The report could be revised further since the 2008 financial statement audit for the wholesale corporate credit union is not yet complete. To review the entire report, use the resource link.

CU government present witnesses in UBIT case

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GREEN BAY, Wis. (5/14/09)--In the third day of trial in its challenge of the Internal Revenue Service's unrelated-business income tax (UBIT) policy, Community First CU concluded its case Wednesday and the government presented its first witnesses. The trial began Monday in a U.S. District Court in Green Bay, Wis. The Appleton, Wis.-based credit union filed suit against the government in 2008 after the IRS determined that certain guaranteed asset protection (GAP) and insurance products offered to members fall outside the credit union's main mission and are subject to UBIT. The credit union is seeking a refund of $54,000 in taxes paid on credit life and credit disability insurance and GAP products. According to Eric Richard, general counsel for the Credit Union National Association (CUNA), who was present for the morning session, the credit union concluded its case with two witnesses. Yurri Sauerhammer, a member of Community First, described her experiences with the credit union's credit disability insurance product. Glenn Potts, an expert witness and professor of finance at University of Wisconsin-River Falls, gave his professional opinion about the role that the insurance products play in a credit union and their relationship to the purposes of a credit union. The morning also saw the government's first witness, Birny Birnbaum, a self-employed consulting economist, executive director for the Center for Economic Justice operated out of his home, and a former insurance regulator in Texas. Birnbaum gave an analysis of insurance products and he supported the idea that the insurance products do not support the purposes of a credit union. Gordon Karels, the government's second witness, testified Wednesday afternoon, according to Michael Edwards, counsel for special projects at CUNA. Karels is the Nebraska Bankers Association Professor of Finance and chairman of the Finance Department at University of Nebraska-Lincoln. He is also a board member and investor of a new thrift, Community Bank of Lincoln. Karels teaches a depository institution management class and a personal finance class, and is author of 40 papers, four of them about credit unions. He testified about credit insurance, Edwards said. A judicial order issued by Judge William Griesbach on Monday discourages those in the court room from reporting on the specific content of the testimony, since witnesses who haven't testified yet have been excluded from the courtroom. Community First filed the suit in January 2008 with the support of the Credit Union National Association, the American Association of Credit Union Leagues, CUNA Mutual Group and the National Association of State Credit Union Supervisors. Today the credit union's attorney, Michael M. Conway of Foley and Lardner law firm, will present two expert rebuttal witnesses on behalf of the credit union. They are Gary Fagg, the consulting actuary and owner of Credit Re located in Hurst, Texas, and Michael Medland, retired chartered professional life underwriter with various life insurance companies, including CUNA Mutual Group. Richard told News Now that there is a "good chance" the trial will end early.

Ohio foreclosure bill minus cramdown passes House panel

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COLUMBUS, Ohio (5/14/09)--After removing a "cramdown" provision that would have allowed judges to modify mortgage terms, the Ohio House Housing and Urban Revitalization Committee Tuesday voted out of committee a bill that would set a six-month moratorium on foreclosures in the state. The bill also would reduce foreclosure filing fees to $750 from $1,500. Credit unions and commercial banks with less than $2.5 billion in assets are exempt from foreclosure filing fees and the moratorium stipulated in the measure, said John Kozlowski, general counsel at the Ohio Credit Union League. "We didn't believe the moratorium was necessary," Kozlowski told News Now. "Credit unions work with members consistently on foreclosure issues. We've worked diligently with the General Assembly and with members of the committee." He noted the bill's sponsor, Rep. Mike Foley (D-Cleveland), "understands the role that credit unions play in the community." Foley told The Columbus Dispatch Tuesday that credit unions and small banks "are bending over backwards to work with borrowers--unlike the big guys, who could care less." "We are very appreciative of members of the General Assembly who recognize the role credit unions play in the community [in helping members] under current economic conditions," Kozlowski said. The filing fees will be paid to the Ohio Department of Commerce, which houses the state-chartered credit unions' regulator, the Division of Financial Institutions. The fees will go to provide money and programs for foreclosure prevention, education and counseling, Kozlowski said. "Credit unions have been involved around the state with foreclosures and HUD-authorized agencies pertaining to foreclosure issues," he said. The bill still would require the borrower to pay half their monthly mortgage payment during the moratorium. It also made provisions for notification to homeowners about the moratorium. And all mortgage lenders, including credit unions, will be required to conduct background checks. "The bill will allow credit unions to continue to operate within the community and to continue to work in close contact with members who may be under distress," Kozlowski told News Now. "Credit unions' aim is to help them stay in their homes. This is a priority for credit unions. We do NOT want to foreclose. We want to keep them in their houses," he emphasized. "The bill provides them opportunities to assist." The bill was to go to the House Rules Committee Wednesday and then to the House floor for a vote. After it moves out of the House, it will be taken up in the Senate.

Conference outlines investment services benchmarking trends

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LAS VEGAS (5/14/09)--A speaker at the National Association of Credit Union Service Organizations (NACUSO) conference outlined investment services benchmarking trends May 5 in Las Vegas. Pete Snyder, president, Snyder Consulting Solutions LLC, presented results from the “Callahan/SCS 2009 Retail Investment Services Benchmarking Study for Credit Unions,” which will be published later this month. The data provided by participating broker dealers suggest that the credit union retail investment service channel continues to steadily grow. Snyder cited institutional metrics that are key indicators of growth:
* The number of credit unions that provide their members with “face-to-face” retail investment services grew by 3.64% to 968 from 938 between 2005 and 2008. Given that the total number of credit unions continues to shrink as the result of merger activity, the report suggests that the minimal growth factor of 3.64% includes some reductions in programs as a result of merger activity, he said. * Representatives that serve credit union members grew to 3,051 by the end of 2008 from 1,902 in 2005. * Total gross dealer concessions generated in 2005 were $289 million and grew to $352 million by year-end 2008. * The average gross dealer concessions per credit union increased to $363,894 by year-end 2008 from $308,375 in 2005.

Randolph-Brooks FCU named SBA CU Lender of the Year

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SAN ANTONIO (5/14/09)--Randolph-Brooks FCU (RBFCU) was named the Small Business Administration’s (SBA) Lender of the Year. The credit union will be recognized for the award during National Small Business Week in Washington, D.C., next week (San Antonio Business Journal May 13). Kenan Pankau, RBFCU business services lending manager, will accept the award and attend a panel meeting at the White House to discuss the financial climate. RBFCU began offering SBA loans in 2006. The SBA’s lending programs help business owners who may be overlooked by larger business lenders, Pankau said. As of December, 204 credit unions had SBA loans outstanding, according to Credit Union National Association research. RBFCU, based in Universal City, Texas, has more than $3 billion in assets.

Mass. leagues Governmental Affairs Day held

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BOSTON (5/14/09)--The Massachusetts Credit Union League’s annual Governmental Affairs Day was held at the Massachusetts State House. The event marked a celebration of the 100th anniversary of the founding of the credit union movement in Massachusetts and the role Pierre Jay, Massachusetts’ first Commissioner of Banks, played in the process. Mary Ann B. Clancy, league senior vice president of legislative affairs and general counsel, welcomed the group. League President Daniel F. Egan Jr. updated the attendees on the status of U.S. Senate Bill 896, the Helping Families Save Their Homes Act, which incorporates the corporate stabilization plan (E-Weekly May 13). Banking Commissioner Steven Antonakes congratulated credit unions on 100 years of service and recognized the insight of his predecessor Pierre Jay. Antonakes also discussed challenges that financial institutions, consumers and regulators are facing. State Sen. Michael R. Knapik (R-2nd Hampden and Hampshire), who serves as the ranking Republican on the Senate Ways and Means Committee, provided an overview of the current budget deliberations in the state legislature and the challenges that the current revenue shortfall poses to state government, said the league. State Sen. Stephen J. Buoniconti (D-Hampden), who chairs the Joint Committee on Financial Services, urged credit unions to continue to be proactive in educating the legislature about their unique character and contributions to the quality of life in Massachusetts. He noted the legislature will be examining possible income sources during this session. Dr. Andrew Smith, director of the University of New Hampshire Survey Center, provided an overview of the political landscape in the wake of the 2008 elections both nationally and in Massachusetts. State Rep. Peter J. Koutoujian (D-10th Middlesex) praised the work done by the credit unions of Massachusetts for the consumers of Massachusetts. State Treasurer Timothy Cahill spoke about key public/private partnerships that credit unions are participating in, such as the state’s Savings Make Sense program. He lauded credit unions for their public spiritedness.

ASI FCU dedicates community facility in New Orleans

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NEW ORLEANS (5/14/09)--ASI FCU, New Orleans, has dedicated a new community facility--the Clifford N. Rosenthal Community Resource Center--to city residents to help revitalize the Upper Ninth Ward, which was devastated by Hurricane Katrina in 2005.
Clifford Rosenthal (far right), president of the National Federation of Community Development Credit Unions, cuts a ribbon May 5 at the grand opening of the Clifford N. Rosenthal Community Resource Center in the Upper Ninth Ward of New Orleans. (Photo provided by the National Federation of Community Development Credit Unions)
The center is named after the National Federation of Community Development Credit Unions president/CEO. It will offer free first-time homebuyer classes, one-on-one credit counseling, financial literacy education and other asset-building products from ASI FCU, which also will have a branch on site. “This new community resource center is a concentrated effort on the part of A Shared Initiative Inc. (ASII) to revitalize the Upper Ninth Ward, and no one in the credit union movement represents those ideals better than Rosenthal,” said ASI FCI President/CEO Mignhon Tourne. On May 5, the center celebrated its grand opening with more than 100 leaders of the credit union and community development movement attending. “The center not only represents an extension of the credit union’s mission to serve the underserved, but also an opportunity for our nonprofit to expand vital community services to promote homeownership to restore this once-vibrant community,” said Sarah Taylor, senior vice president of marketing and community development, ASII and ASI FCU. The federation helped ASI FCU survive several challenges in the aftermath of Hurricane Katrina. Several of its branches were destroyed and staff were displaced. When money from the Federal Emergency Management Agency arrived, ASI’s net worth ratios were at unsustainable levels. The federation stepped in and expanded its investment of secondary capital in ASI and lengthened its term to aid recovery. Secondary capital is subordinated debt that can be counted toward a credit union’s net worth. “It was the best investment we ever made,” Rosenthal said. “ASI FCU was simply too important to the community to allow it to fail, particularly at a time when the credit union’s services would be so critical to helping low-income New Orleans residents resettle their communities.” The federation also accepted donations into a fund that grew to $1 million. The donations allowed the federation to make grants of $150,000 to ASII and $250,000 for ASI FCU to promote mortgage lending. ASI FCU has $260 million in assets.

WesCorp March 2009 financials posted

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SAN DIMAS, Calif. (5/14/09)--Western Corporate FCU (WesCorp), based in San Dimas, Calif., posted its March 2009 financial statement with some special accounting adjustments. As of March 31, WesCorp posted a credit loss of $5.566 billion related to its securities portfolio. Of that, $390.5 million was from recognizing credit losses in the collateralized debt obligation positions. The remaining $5.175 billion came from the rest of the securities portfolio--mostly from Alt-A and particularly the Pay-Option Arm collateral portions. This amount represents an unaudited estimate of future credit losses and is considered to be other-than-temporary impairment (OTTI) in accordance with accounting guidelines, said WesCorp in its financial summary. Additional unrealized losses related to WesCorp’s securities portfolio were $6.034 billion, recorded as of March 31. WesCorp is operating with a Prior Undivided Earnings Deficit of $3.745 billion, which is guaranteed by the National Credit Union Share Insurance Fund. In an effort to release March financial information as soon as possible, WesCorp recorded its estimates of OTTI as of March 31, before it completed Dec. 31 audited financial statements. This required that all of the impact of OTTI be recorded through the income statement during March 31--even though the majority of OTTI expense is attributable to the period ending Dec. 31. As a result, March financial statements are not presented in accordance with generally accepted accounting principles because net losses are materially overstated in March for amounts that should be recorded as of December and adjustments to interest income on securities that are impaired as of Dec. 31. Once the Dec. 31 audited financials have been completed and issued, WesCorp said it will correct and restate January, February and March 2009 financial statements as appropriate. On March 20, the National Credit Union Administration (NCUA) board placed WesCorp into conservatorship and appointed itself as conservator. The NCUA board has given overall management authority to conduct day-to-day operations to the CEO and management of WesCorp, so that the corporate may continue to operate. For more information, use the link.

N.Y. foundation touts CUs fin-ed at literary forum

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ALBANY, N.Y. (5/14/09)--Diane LaVigna-Wixted, executive director of the New York Credit Union Foundation, was a featured speaker at the New York Financial Literacy Forum where she touted credit unions’ financial education initiatives. At the second annual forum, held last week at Hofstra University in Queens, policy leaders, education experts and corporate leaders shared their experiences and insights about the need for financial literacy education in schools. LaVigna-Wixted said the “teachable moment” is now. Even though the economy is unstable and schools are facing budget cuts, now is the perfect time for schools to adopt financial education programs supported and promoted by credit unions, such as the National Endowment for Financial Education’s free High School Financial Planning Program, the National Consumer League’s free LifeSmarts program, the brass|STUDENT PROGRAM, and programming offered through public broadcasting’s “Biz Kids$” television show, she said. Keynote speaker U.S. Rep. Carolyn McCarthy (D-Metropolitan) talked about her commitment to work with Congress to ensure that education bills are passed. A “crisis is a terrible thing to waste,” she said. U.S. Rep. Gregory Meeks (D-Metropolitan) spoke about his parents’ financial ignorance and how they were taken advantage of in financial matters. It was those childhood memories that made him a staunch proponent of financial education for children. New York Banking Committee Chair Brian X. Foley (D-Long Island) also spoke about the urgency of incorporating financial education in every school district statewide.

UBIT jury hears witnesses on behalf of CU

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GREEN BAY, Wis. (5/13/09)--During the second day in the trial over the Internal Revenue Service's interpretation of the unrelated-business income tax (UBIT) related to insurance products at a Wisconsin credit union, the jury heard testimony and depositions from six witnesses and experts on behalf of the credit union. The trial began Monday in a U.S. District Court in Green Bay, Wis. Community First CU, based in Appleton, Wis., filed suit in January 2008 against the government after the IRS determined that certain guaranteed auto protection (GAP) and insurance products offered to members fall outside the credit union's main mission and are subject to UBIT. The credit union is seeking a refund of $54,000 in taxes paid on credit life and credit disability insurance and GAP products. Community First filed the suit with the support of the Credit Union National Association (CUNA), the American Association of Credit Union Leagues, CUNA Mutual Group and the National Association of State Credit Union Supervisors. According to Eric Richard, CUNA general counsel, six witnesses testified. A judicial order issued by Judge William Griesbach on Monday discourages those in the court room from reporting on the specific content of the testimony, since witnesses who haven't testified yet have been excluded from the courtroom. "The day began with the jury viewing a videotape of CUNA Vice President of Economics and Statistics Mike Schenk, in which he described a study of the value that Community First CU provides to its members," said Richard. Others testifying Tuesday on behalf of Community CU included:
* Kevin Hartz, senior vice president of branch operations at the credit union. Hartz, who has been with the credit union for 24 years, has experience with the products at issue; * Brett Thompson, president/CEO of the Wisconsin Credit Union League; * Kathy Graham of CUNA Mutual Group, which offers credit life and disability insurance; * Richard Fischer, director of product management at CUNA Mutual Group; and * Robin Jorde, a member of the credit union who has experience with the products.
Also, parts of a deposition from Denise Lynch of Allied Solutions, a provider of GAP insurance products, were read by counsel and a member of the credit union's staff. Today, the credit union's attorney, Michael M. Conway of Foley and Lardner law firm, plans to call two more witnesses on behalf of the credit union: Jurri Sauerhammer, a member, and expert witness Glenn Potts, a professor of finance at the University of Wisconsin-River Falls. "Then the government will present its case, with two expert witnesses, and the credit union will present two more rebuttal witnesses, " Richard told News Now. "There is some possibility that the trial could end ahead of schedule, but that still remains to be seen," he said. The credit union's lawsuit maintains that the revenue from the sale of the products is "substantially related" to the purposes and functions of the tax-exempt, state-chartered credit union (News Now April 30). CUNA and the Wisconsin league are following the case closely. Earlier this year, CUNA President/CEO Dan Mica wrote a letter to IRS on the UBIT issues (News Now Feb. 24). Mica's letter reiterated CUNA's concern that the IRS "may not understand that credit unions are an integral part of the credit markets, especially for consumers, and have been playing a vital role in keeping credit flowing to consumers. "Tax policies that undermine credit unions' ability to lend are completely at odds with current efforts to free up the credit markets and can contribute to pro-recessionary credit shortages." Credit unions feel so strongly about the UBIT issue that thousands gave Community First CU President/CEO Cathie Tierney a standing ovation at several conferences, including CUNA's Governmental Affairs Conference in Washington, for filing the lawsuit.

Delfin Thomas highlight CU outreach on CNN

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FAIRFAX, Va. (5/13/09)—National Credit Union Foundation (NCUF) Executive Director Steve Delfin and Fairfax County FCU President/CEO Joe Thomas are appearing daily on CNN Headline News’ Cox “Local Edition.” Delfin focuses on the importance of credit unions reaching emerging markets and their role to better serve low-wealth, modest means households and working families. “This is work that’s very important right now in our environment with what’s happening in the financial services sector,” Delfin said. “And it’s also important for the growth of credit unions--because in emerging markets like the Hispanic market, that’s where credit unions are going to see their growth in the future.” Thomas focuses on how Fairfax County (Va.) FCU is reaching the Hispanic market. Fairfax has $223 million in assets. With a $99,900 NCUF Innovation Grant, Thomas said “we’ve been able to increase our educational output and our products and services to increase savings [in the Hispanic community] and ultimately generate wealth for their local families.” One of the most popular products is Safe Accounts for immigrants who don’t have a Social Security Number. “They’re still required by the Internal Revenue Service(IRS) to have a Taxpayer Identification Number,” Thomas pointed out. “We’ve now become an agent for people to come to us, and we will be able to act on their behalf and get their Taxpayer Identification Number ... We will submit the forms to IRS on their behalf.” CNN Headline News’ interview with Delfin and Thomas began airing May 5 and will continue to air seven times a week through July 5. The cable television broadcast reaches 244,000 households each day throughout Fairfax County, home to diverse communities near Washington, D.C. The video is also posted on the Cox YouTube channel. With additional visibility and outreach made possible by an Innovation Grant, Fairfax County FCU projects that by year-end, Hispanics will account for up to 25% of the credit union’s new members. Delfin concluded that as long as credit unions continue investing in the Community Investment Fund, NCUF will be able to continue funding programs for credit unions and their members.

Branch capture users surveyed about efficiencies

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DALLAS (5/13/09)--Nearly 80% of credit union respondents cited greater efficiency as a primary value of branch capture, according to the results of a recent survey conducted by Southwest Corporate FCU. The efficiencies credit unions cited:
* Scanning checks eliminates hand encoding, enabling staff to pursue other tasks; * Transmitting deposits throughout the day speeds work flow and saves payroll expense; and * Online archival provides more timely access to images and eliminates a separate microfiche or image process.
About 16% of credit unions said reduced costs were the leading benefit of branch capture. Survey results were compiled from 124 credit union respondents, with assets ranging from under $10 million to more than $1 billion. About two-thirds were in the $20 million to $200 million range. Respondents were from more than a dozen states. The survey was conducted last month. Branch Capture is part of the corporate’s suite of Remote Deposit Solutions.

N.J. CUs create cooperative student lending program

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HIGHTSTOWN, N.J. (5/13/09)--Credit unions in New Jersey are collaborating through a new student lending program that aims to help students pay for school and drive credit union membership. Set for launch the first week of June, the program will comprise 17 credit unions and offer about $60 million in financing. Students and their parents will be driven to an online portal platform where they will take a membership test to see which credit unions they are eligible to join for financing if they are not already credit union members. From there, they can apply for a loan, which will be offered with common pricing, according to Paul Gentile, New Jersey Credit Union League president/CEO. “It is the ultimate example of collaboration and cooperation among credit unions,” he said. Aside from offering students financing, the program also strives to drive up membership. “It’s a great [way] for credit unions to get closer to younger members,” Gentile told News Now. Credit unions will be able to nurture relationships with their young members as they make monthly loan payments, he added. The program also is beneficial for small credit unions because the loans are offered cooperatively. No credit union will hold more than 10% of a student loan on its books. Each loan will have an originator, and financing will be spread among nine other credit unions. “There will always be 10 credit unions [total],” Gentile added. “[It helps] small credit unions get a piece of the action.” The league and credit unions are talking to local universities with the goal of being listed as a preferred lender. A high percentage of New Jersey high school students attend colleges in the state or within a three-hour radius of their hometowns, Gentile said. The league estimates that there are at least 200,000 potential college students in the state. Another feature of the program is that it will reward students who maintain good grades. A student who maintains a good grade point average will receive better rates on loans, because students who maintain good grades and are on track to graduate will likely pay their loans back, Gentile said. The key to creating a program such as New Jersey’s lending program is constant collaboration. “It wasn’t just the league telling credit unions, ‘Here’s what we’re going to do.’ We kept relying on credit union feedback,” Gentile said. “It was a fascinating experience.”

Members United Corporate to spin off CUSO

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WARRENVILLE, Ill. (5/13/09)--Nextworks LLC, a credit union service organization (CUSO) initially seeded by Members United Corporate FCU, will spin off from the corporate and is currently seeking funding from credit unions. Since the formation of Members United’s innovation department in 2006, the group now called Nextworks “exists to bring a competitive advantage to credit unions through a refined process and a strategic approach to innovation,” said Charlie White, the corporate’s former chief innovation officer and Nextworks’ president. “The corporate continues to explore cost-cutting measures, and it made sense for our department to morph into a CUSO,” he added. “Innovation is incredibly valuable to credit unions, and we want to focus resources in a manner that will generate value for them.” White’s team has a number of projects in the innovation queue, most notably “Modoh,” a solution to help credit unions attract and retain younger members. It offers an interactive environment to help young members learn about responsible spending, saving, charitable donations and credit. It features an immersive financial simulation game, and a youth card program to reinforce financial concepts and independence. Also, Modoh can help a credit union establish a comprehensive brand that appeals to the younger demographic. Nextworks is releasing Modoh this spring. Nextworks’s process ties strategy to market changes and provides dedicated resources that reduce the risks of product development through a shared funding pool. “This down cycle is the perfect time to leverage a small investment in the future,” White said. Nextworks is seeking ownership funding. The CUSO is capitalized through June 30, and then will rely on capital funding from member credit unions to operate.

Survey CUs win on trust reliability confidence

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NEW YORK (5/13/09)--Credit unions made major gains in trust, reliability and confidence during the first four months of 2009, according to a new Trust Study released Tuesday by TNS, a custom research company.
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Despite large-scale brand marketing initiatives currently underway, the nation's large national banks, insurance companies and brokerages continued to slip further behind credit unions and smaller regional banks in consumer trust ratings. Reflecting the economy, consumer trust decreased across the board during the first four months of 2009, with the largest drop for banks and brokerage/investment firms, public sector/government, and automotive sector from the prior period (October 2008 to January 2009. Although every category saw a drop in confidence levels, credit unions experienced the least decline, with 17% of consumers surveyed saying their trust had declined in the past three months. That compares with 61% whose trust had declined in large national banks, and 24% for small local and regional banks.
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"The exceptional news is the way that credit unions are making such positive progress across multiple trust dimensions, despite continuing economic and financial insecurity," said TNS. In the measures "across nine different trust dimensions, including overall, rational and emotional attitudes, consumers surveyed showed significantly greater trust and confidence in these smaller players who they feel show greater understanding and reliability than the large national banks." "The credit unions alone demonstrated significant bounce-back in consumer trust from January to April 2009," said TNS. It noted there were minor gains for small and regional banks but the "change was not significant."
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"The fact that credit unions have improved their consumer trust and confidence scores implies they are doing a better job of engaging their customers and making them feel safe with their financial choices," said Trish Dorsey, senior vice president, financial services brand and communications TNS. "The larger institutions need to step up and take a leadership role in reassuring customers of their financial stability." "Consumers' continued distrust of large national banks and brokerages is a signal that they are looking to large financial institutions for strength and leadership," Dorsey said. "As a category, it is clear that they have not demonstrated their leadership position effectively and consumers are left feeling inadequately supported and deeply distrustful." The company surveyed 1,000 U.S. consumers in October 2008 and January and April 2009 to chart trust levels across several major industries.

TNB Card Services to sell card portfolio to Elan

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DALLAS and MINNEAPOLIS (5/13/09)--Town North Bank (TNB), parent company of Town North Bank Nevada, announced Tuesday that it has sold its agent-issuing credit card portfolio to Elan Financial Services, but will continue to serve its credit union clients through its card processing operation, TNB Card Services. Elan, a provider of outsourced solutions, will become the new issuing partner to the 168 credit unions representing TNB’s former agent issuing partnerships. TNB sold the portfolio to reduce assets and generate capital in a move to offset losses from the bank’s investment portfolio in 2008, said John C. Reap, TNB president/CEO. “As everyone in the financial industry is painfully aware, 2008 was a challenging year,” Reap said. “The damage done to our own investment portfolio has compelled us to make this strategic decision.” TNB is working closely with Elan and its credit union agent clients to make the transition smooth. Full transition of the agent accounts from TNB Nevada to Elan will be completed in November. TNB will service the accounts as they are transitioned. Elan has partnered with credit unions for about 40 years and has agent-issuing relationships with more than 350 credit unions, TNB said. TNB is based in Dallas. Elan is based in Minneapolis.

Filenes CU Harmony website aims to connect

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MADISON, Wis. (5/13/09)--The Filene Research Institute’s i3 innovation group is piloting CU Harmony, a website that connects credit union people with one another to share information and ideas about credit union-related issues. The website offers listings of credit union topics for others that are seeking information. Visitors can post questions or comment on the ones already posted, or place a “watch” for a particular item of interest. “CU Harmony can help credit unions reduce their operating expenses, mitigate risks, and enhance compliance training and fraud prevention,” said Denise Gabel, Filene chief innovation officer. “We’re looking for help from credit union innovators across the nation to help gauge industry interest in making the CU Harmony program available. The site is a prototype, and Filene is looking for feedback on it through June 15. After that date, the i3 group will meet again to determine the next step. The name of the website also could change. “We’re also asking for specific feedback on the program’s functionality so we can refine it before offering it as a fully tested product,” Gabel said. Filene has already received a strong response. CU Harmony has had 139 hits and seven comments from six different credit unions, Gabel added.

CU System briefs (05/12/2009)

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* BOSTON (5/13/09)--Kelly Curley, 35, a former loan officer at a Boston area credit union, was sentenced to two and a half years in jail Monday for embezzling more than $200,000 from the credit union last year (Nashua Telegraph May 12). Curley pleaded guilty to five counts of embezzlement and one count of identity theft, said Massachusetts Attorney General Martha Coakley. Between June 2006 and February 2008, Curley secured five loans for herself by using co-workers' computers and the names and information of a relative and two friends. She used some of the loans to pay off earlier loans. She was indicted in December and pleaded not guilty at a Jan. 13. However, on Monday she pleaded guilty. Curley is to serve eight months of the sentence with the remainder suspended for three years. She will be on probation for three years and banned from working in the financial services industry, said Coakley … * COLUMBIA, Md. (5/13/09)--Credit unions across Maryland and Washington, D.C., used a turnkey program from the Credit Union Foundation of Maryland and District of Columbia that offered newsletter articles, posters, statement stuffers, Web links and funding to offer $11,000 in scholarships to college-bound members. The program led to more than 200 essay and video applicants in the foundation's 2009 College Scholarship Program (FOCUS Newsletter May 11). The video category was new this year. In it, applicants produced a one-minute video on "How are Banks and Credit Unions Different?" The essay's topic challenged applicants to envision credit unions run by staff and volunteers, all under the age of 30. Scholarships were awarded to the top 10 essay applicants and top video applicant. The winning entries are at the foundation's website … * BURLINGTON, Mass. (5/13/09)--The Credit Unions at Heart program presented $320,000, raised by employees, volunteers and friends of 48 participating credit unions, to Children's Hospital Boston. The
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donation brings the total funds presented by Kids at Heart to more than $3 million. The presentation was made at a party celebrating patient-partners and their Boston Marathon runners, one of credit unions' numerous fundraising events for the hospital. The weekend before the 113th Boston Marathon on April 20, Children's Hospital honored 13-year-old Andy Martin with the Katie Lynch Award, recognizing him for his courage and upbeat attitude in the face of serious adversity. He is the patient-partner of Ray Phillips, a board member of Hanscom FCU, Bedford, Mass. (Photo provided by EasCorp) …

Delaware league elects board presents awards

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NEW CASTLE, Del. (5/13/09)--Two board members were elected to serve on the board of directors of the Delaware Credit Union League at the league’s 52nd annual meeting May 2.
Awards presented at the Delaware Credit Union League’s 52nd annual meeting May 2 were, from left: Outstanding Volunteer--John Lewis, Sussex County FCU, Seaford; Outstanding Volunteer--Anthony Casarino, ICI America FCU, New Castle; and Outstanding Professional--Edwin Grebe, Newark, Del., City Employees FCU. (Photo provided by the Delaware Credit Union League)
Incumbents Sharon Schaeffer of Delaware First FCU, Wilmington, and Kate Toner of Wilmington (Del.) Postal FCU, were re-elected to serve three-year terms. The league also announced its 2009 board officers:
* Chair--Joel Romaine of DPL FCU, Newark; * Vice Chair--Jerry King, DEXSTA FCU, Wilmington; * Secretary—Toner; and * Treasurer--Meredith Jeffries of New Castle County Delaware Employees FCU, New Castle.
The board also includes members: Cheryl Chilcutt, Chestnut Run FCU, Wilmington; Schaeffer; and Allen Riley, Sussex County FCU, Seaford. The annual meeting included the presentation of outstanding credit union professional and volunteer awards for 2008. The 2008 Outstanding Credit Union Volunteer was awarded to: Anthony A. Casarino Sr., who has been a credit union volunteer with the ICI America FCU, New Castle, for 15 years, and John W. Lewis, a volunteer with the Sussex County FCU, Seaford, for 26 years. The 2008 Outstanding Credit Union Professional was Edwin W. Grebe, who has served credit unions for more than 50 years and was an original charter member of the league. He is the manager of the Newark, Del., City Employees FCU.

UBIT trial begins judge orders witnesses excluded

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GREEN BAY, Wis. (5/12/09)--The trial in the lawsuit brought by a Wisconsin credit union challenging the Internal Revenue Service's interpretation of the unrelated business income tax (UBIT) got underway Monday in a U.S. District Court in Green Bay, Wis., with the judge issuing a ruling to exclude witnesses who haven't yet testified from the courtroom . The first morning of the trial in Community First CU v. United States of America resulted in the selection of an eight-person jury comprising five women and three men, according to Credit Union National Association (CUNA) General Counsel Eric Richard, who was present at the trial. U.S. District Court Judge William Griesbach issued an order excluding witnesses who haven't testified yet from the courtroom. "The order 'discourages' those in the court room from reporting on the content of today's testimony," Richard told News Now. Opening statements were made by the attorneys, Mike Conway of Foley & Lardner, representing the credit union, Appleton, Wis.-based Community First CU, and Allyson Baker, representing the government, said Richard. Also Monday, the court heard testimony from the plaintiff's first two witnesses, Maurice Dresang, founder and retired CEO of the credit union, and Cathie Tierney, the credit union's current CEO. CUNA Vice President of Economics and Statistics Mike Schenk is scheduled to testify today, via videotape, on behalf of the credit union. Community First CU filed suit in January 2008 against the government after the IRS determined that certain guaranteed auto protection (GAP) and insurance products offered to members fall outside the credit union's mission and are subject to UBIT. The credit union is seeking a refund of $54,000 it paid in taxes on credit life and credit disability insurance and GAP products (News Now May 11). The credit union's lawsuit maintains that the revenue from the sale of the products is "substantially related" to the purposes and functions of the tax-exempt, state-chartered credit union (News Now April 30). The trial is expected to end Friday.

HELOC fraudster convicted for duping CUs banks

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NEWARK, N.J. (5/12/09)--A New York man pleaded guilty Friday to selling Social Security numbers to an identity theft ring that targeted large home equity lines of credit (HELOCs) and siphoned off at least $2.5 million from dozens of credit unions and banks in New Jersey. Yomi Jagunna, 44, pleaded guilty in a U.S. District Court in Newark of setting up a sham collection agency to gain access to a commercial database and selling 39 Social Security numbers for $30 each to the group. Prosecutors said they had evidence he mined more than 100,000 Social Security numbers, a statement disputed by the defense attorney (Star-Ledger via nj.com May 9). Jagunna is among eight people charged in New Jersey between August and November 20089 in connection with the alleged ring. They are part of a larger, nationwide ring. So far, 17 people have been charged nationally. The group targeted victims with large HELOCs, and often transferred more than $100,000 and as high as $800,000 in transfers from the HELOCs. Members of the theft ring fooled financial institution employees into transferring funds to accounts in at least seven countries. Authorities are still trying to recover the funds. In the scheme, the ring thwarted credit unions' and banks' attempts to verify the transfers with telephone calls. Some allegedly posed as the victims and persuaded phone company employees to reroute the victims' calls. Then, when the credit union called to verify the transfers, thieves' cell phones would ring and they would "verify" the transfers. In early 2008, CUNA Mutual Group warned credit unions about the sophisticated fraud scheme. At the time, 18 credit unions had reported losses or fraud attempts totaling more than $6.5 million, and the losses were expected to increase (News Now Jan. 16, 2008).

CU alerts members of staffers viral meningitis

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LIBERTY LAKE, Wash. (5/12/09)--Spokane Teachers CU (STCU) members who recently used the Liberty Lake and Cheney branches have been notified that an employee who worked at both branches was hospitalized with viral meningitis. The credit union issued the alert Friday to make members aware of the situation, even though the risk of spreading the disease is considered low (The Spokesman-Review May 9). Anyone who feels ill and is experiencing a fever, headache or stiff neck should talk to a physician, the newspaper said. STCU management also has disinfected work areas and is offering hand sanitizers to credit union staff and members, the paper added. The credit union’s actions occurred during the nation’s heightened awareness of pandemic illnesses brought about by the H1N1 (swine) flu. Knowing whether meningitis is caused by a virus or bacterium is important because the severity of illness and the treatment differ. Viral meningitis is generally less severe and resolves without specific treatment, while bacterial meningitis can be quite severe and may result in brain damage, hearing loss, or learning disability (www.cdc.gov).

Aggregators help accelerate CUs auto market share

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MADISON, Wis. (5/12/09)--Loan aggregators that provide a single portal to access several credit unions are helping pick up the slack in the automotive lending arena after many lenders ceased auto lending in the last year amidst the credit crunch. When Long Island, N.Y., auto dealer Keith Donnelly needed to find auto lenders, he turned to GrooveCar, Inc.--a 10-year old loan aggregator. Donnelly guided his consumer loan contracts to 27 credit unions (Automotive News May 4). In the past eight months, 70% of his retail financing has gone through credit unions, Donnelly told the publication. “It’s worked out fantastic,” he added. “The money has been there for us. There are plenty of funds to finance our customers.” Credit unions’ share of automotive consumer lending leapt to 28.5% in the fourth quarter. For the past two years, it was under 23%, Automotive News said. Convenience for auto dealers is the key to aggregators, the publication said. In the past, credit unions competed with dealers to provide consumer loans. But now, aggregators provide one-stop shopping for dealerships that desire to do business with several credit unions. Dealers pay a fee to be a part of this type of network.

N.J. Supreme Court rules for CU in stolen ID case

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TRENTON, N.J. (5/12/09)--The New Jersey Supreme Court last week reinstated a trial judge's dismissal of a malicious prosecution suit against a credit union by a man who spent 13 days in jail after his identity was stolen by someone who defrauded the credit union. The state's highest court ruled May 5 that a bank--or in this case, Affinity FCU, a $1.855 billion asset credit union based in Basking Ridge, N.J.--has no duty before pressing charges against an apparent defrauder to investigate whether the target is a victim of identity theft (New Jersey Law Journal May 11). The Appellate Divisions had ruled that Affinity FCU owed Howard Brunson, even though he wasn't a member, a duty to conduct a "reasonable investigation" into the possibility that he might not be the person who defrauded the credit union. The Supreme Court justices, however, unanimously found no basis for inferring such a duty. The appellate ruling had relied on an Alabama case that said banks can be held liable for false arrest of someone whose identity is stolen to open an account and that banks have a duty to conduct a reasonable investigation before pursuing criminal charges. But New Jersey Justice Roberto Rivera-Sota said the Alabama ruling was "expansive" and had "been met with near universal disapproval." He said federal courts and courts in Delaware, Georgia, Texas and Washington state have declined to adopt it. The case began after someone opened at account at the credit union with Brunson's name, Social Security number, an identification card with his birthdate, and a Paterson, N.J., address. The fraudster then deposited $9,506 in phony payroll checks. The charges against Brunson were dropped when the identity theft was discovered two weeks after he was jailed. Brunson was not present during the lawsuit. He is serving a prison term for an unrelated crime.

New SECU branch is site of first rural CU in South

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RALEIGH, N.C. (5/12/09)--State Employees CU (SECU) is purchasing land for a new branch building at the site of the first rural credit union in the South. The credit union, Lowe’s Grove Rural CU, opened Jan. 20, 1916 in Durham, N.C. A highway historical marker currently denotes the site where the credit union was located. SECU and the Lowe’s Grove Historical Marker Committee worked together to facilitate the land purchase, said Gus Godwin, committee chair and SECU member. “SECU has been looking to purchase land in the Lowe’s Grove area for quite some time,” added Shirley Bell, SECU board chair. Branch construction is scheduled to begin this summer. Durham banker John Sprunt Hill initiated the opening of Lowe’s Grove CU after studying the credit cooperative concept in Europe while part of a commission appointed by President Woodrow Wilson. He said a credit union would be of great value to the agricultural community in North Carolina. SECU has $16 billion in assets.

CU in conservatorship to sell new headquarters

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APPLE VALLEY, Calif. (5/12/09)--High Desert FCU, which was placed into conservatorship by the National Credit Union Administration (NCUA) in October, is selling its new headquarters building. The Apple Valley, Calif.-building was completed in September, but the credit union never moved in. The property--a 24,000 square foot, two-story building--is listed for $5.2 million. The listing price is about $800,000 less than it cost to construct the building (McClatchy-Tribune Regional News May 10). Although the new building was supposed to house the credit union’s corporate headquarters, High Desert FCU CEO Ken Chapman told the newspaper it would be in the credit union’s best interest--due to the economy--to sell the property.

Michigan CD laws signed by governor

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PLYMOUTH, Mich. (5/12/09)--Michigan Gov. Jennifer Granholm signed two pieces of legislation May 5 pertaining to the Certificate of Deposit Account Registry Service (CDARS). The new laws were backed by the Michigan Credit Union League (MCUL) and permit public schools and corporations to invest in CDARS. CDARS is a network in which financial institutions can offer more than $250,000 insurance coverage on deposits by investing them throughout a registry, thus allocating the risk among several institutions (Michigan Monitor May 11). The two bills--S.B. 195, sponsored by State Sen. Tony Stamas (R-Midland), and H.B. 4397, sponsored by State Rep. Jeff Mayes (D-Bay City)--became public acts for 2009. CDARS permits only Federal Deposit Insurance Corp. (FDIC)-backed institutions to participate in the program. While credit unions cannot participate, MCUL worked to ensure the legislation would not prohibit credit unions from accepting the deposits if they become participants in the CDARS network or if a credit union registry is created. “These new laws don’t have an immediate impact on credit unions, but we’ve looked ahead to when CDARS or a comparable program could open to credit unions--it could be a valuable move down the road,” said MCUL Executive Vice President Patrick LaPine.

Maryland governor signs financial literacy laws

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ANNAPOLIS, Md. (5/12/09)--Maryland Gov. Martin O’Malley Thursday signed several credit union-supported legislative measures involving financial literacy. S.B. 500 would require Prince George’s County Board of Education to develop and implement a pilot program in three county high schools that includes a semester-long course in financial literacy. The bill was sponsored by State Sen. Anthony Muse (D-26). The bill also requires that a progress report be submitted to the Prince George’s County Senate and House delegations in the General Assembly, said the Maryland and District of Columbia Credit Union Association (MDDCCUA). Two other bills--S.B. 140 and H.B. 120--increase the membership of a Task Force to Study How to Improve Financial Literacy in the State and provide more staff. The bills also extend the task force’s reporting date to Dec. 1 and its termination date to June 30, 2010 (FOCUS Newsletter May 11). Witnessing the signing of the bills were Muse and three credit union representatives-- Chris Conway, Education Systems FCU, Greenbelt, Md., and MDDCCUA board member; Kalimah Matthews, Signal Financial FCU, Kensington, Md.; and Brian Tate, MDDCCUA vice president of legislative affairs. MDDCCUA said it would continue to support the financial literacy cause, and provide updates on the progress of the task force.

AACUC creates Eastern Region chapter

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BALTIMORE (5/12/09)--The African American Credit Union Coalition (AACUC) has created an Eastern Region Chapter, according to the Maryland and District of Columbia Credit Union Association. The chapter comprises Maryland, Virginia, Delaware, West Virginia, Pennsylvania, New York, New Jersey, Rhode Island, Connecticut, Massachusetts, Vermont, New Hampshire, Maine and Washington, D.C. (FOCUS Newsletter May 11). The first networking meeting is scheduled for June 13 in Baltimore. Heading the chapter are:
* President Thelma Matthews, MECU, Baltimore; * Vice President Michael Richardson, Mid-Atlantic FCU, Germantown, Md.; * Secretary Joann Clark, DC FCU, Washington, D.C.; * Treasurer Mark Brantley, Municipal CU of New York, New York City; and * Parliamentarian Adrian Johnson, MECU.
The chapter hopes to build an alliance of credit union professionals in the region and provide financial literacy and outreach in communities.

Member pops question at annual meeting CEO says yes

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PORT HURON, Mich. (5/12/09)--It was all business at E&A CU's annual meeting May 4, but the conclusion brought a surprise and some happy drama to the Port Huron, Mich.-based credit union's meeting.
Port Huron, Mich.-based E & A CU member Norm Krol gives President/CEO Jan Rose an engagement ring after a successful marriage proposal at the credit union's annual meeting on May 4. (Photo provided by the Michigan Credit Union League)
Board Chairman Tom Wik and President/CEO Jan Rose had opened the meeting with statements about the condition of the $170 million asset credit union. Board elections saw Kathleen Bennett, Deborah Turnbull and Donna Kalmeta re-elected to the board, according to the Michigan Credit Union League (Michigan Monitor May 11). As the meeting came to a close, member Norm Krol asked Rose how she felt about mergers. "We evaluate merger and partnership opportunities on an individual basis and reflect on the merits of each situation," answered Rose. Krol then asked if Rose would agree to a merger on a personal level--with him--and he proposed marriage. Rose agreed, and "the meeting ended with thunderous applause."

Pa. court to hear community charter case June 10

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HARRISBURG, Pa. (5/12/09)--The Pennsylvania Commonwealth Court will hear arguments about community charters for Freedom CU and TruMark Financial CU on June 10, says the Pennsylvania Credit Union Association (PCUA). The argument was remanded back to the court by the Pennsylvania Supreme Court, the state's highest court. It told the lower court to take a closer look at procedures used by the Pennsylvania Department of Banking when it adjudicated challenges from certain banks and bank trade groups in 2004 (Life is a Highway May 11). According to Rick Wargo, PCUA executive vice president/general counsel, the issues in before the court are largely procedural. "To some extent, the hearings concerning Freedom and TruMark Financial raised novel issues of Pennsylvania administrative law. We are prepared to support the Department of Banking with regard to the way it conducted its proceedings in 2004." The court will hear arguments from bank trade groups; the state banking department, which oversees state-chartered credit unions; the credit unions and PCUA. Freedom CU is a $360.4 million asset credit union in Warminster. TruMark Financial is a $1.080 billion asset credit union in Trevose. They each were granted a community charter for five counties from the state banking department. In 2004, bankers challenged the decision (News Now Sept. 29, 2008).

Times announced for new hot topic ACUC sessions

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MADISON, Wis. (5/12/09)--The Credit Union National Association (CUNA) has announced specific times for new “hot topic” sessions for the America’s Credit Union Conference and Expo, scheduled for June 21-24 in Boston. One session offered is “Corporate Credit Unions & Critical Issues: A Q&A with CUNA President/CEO Dan Mica,” which will be held June 23, from 9 a.m. to 10 a.m. during the conference’s general session. “This is one of the most difficult years most professionals will ever have to face in a lifetime of credit union involvement,” said Mica. “The issues seem to change almost daily, and the information needed to be proactive is in a constant state of change, which is why we felt it was important to add these sessions to help prepare credit unions for the balance of this year and next.” Corporate credit union stabilization will be addressed in several of the sessions. Other new breakout sessions featured are:
* “Net-Worth Management in the New CU Environment”: Many credit unions are feeling net worth pressures. What does it mean in terms of restoring net worth? What are the issues in developing a net-worth restoration plan? These questions and more will be addressed. * “Lending Best Practices During Tough Economic Times”: Attendees will hear from a panel of lending experts discussing: The benefits and how to’s of participating in the Obama administration’s Making Home Affordable Refinance and Modification Program; How CUs are negotiating loan modifications; How are CUs finding good collections people in a competitive environment? * “Key Examination Issues for Credit Unions”: Attendees will hear the latest updates regarding credit union examinations. The session will include a discussion on how examiners will address the issues related to the Corporate Stabilization plan. * “Legislative and Regulatory Update”: Legislative/Regulatory/Troubled Asset Relief Program (TARP) Update--What are the latest developments on key policy issues for the Credit Union System? Issues addressed include spreading out credit unions’ costs associated with the corporate credit union system, bankruptcy, regulatory restructuring interchange fee income, and what TARP has done for banks and how it impacts credit unions.
For more information on times of specific sessions or to register for the America's Credit Union Conference and Expo, use the resource links.

U.S. Central to release quarterly financials Wednesday

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LENEXA, Kan. (5/11/09)--U.S. Central FCU plans to release its 2009 first-quarter financial report on Wednesday, according to its website. It had planned to release its March 2009 financial statements Friday, according to the National Credit Union Administration's (NCUA) weekly corporate credit union update Friday. However, the financials for the month were not posted publicly on U.S. Central's website. The corporate credit union reported to its members last week that 100% of its paid-in-capital funds and 63% of its membership capital accounts have been exhausted (News Now May 4).

Preliminary jury rule in UBIT trial favorable to CU

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MADISON, Wis. (5/11/09)--The trial in a Wisconsin credit union's challenge of an Internal Revenue Service's (IRS) interpretation of an unrelated business income tax (UBIT) begins today in a U.S. District Court in Madison, Wis. Friday the judge issued a ruling on jury instructions that is overall favorable for the credit union. Community First CU, based in Appleton, Wis., filed suit in January 2008 against the government after the IRS determined that certain guaranteed auto protection (GAP) and insurance products offered to members fall outside the credit union's main mission and are subject to UBIT. The credit union is seeking a refund of $54,000 in taxes paid on credit life and credit disability insurance and GAP products (News Now Jan. 16, 2008, and April 30). Friday U.S. District Court Judge William Griesbach issued a jury instruction memorandum with instructions in three areas--two of them favoring the credit union. The ruling rejected the government's assertion that, for UBIT purposes, federal law adds an additional "mutual purpose" element to the state law definition of a state-chartered credit union's purpose. Based on the government's pre-trial filings in the case, the government had planned to argue to the jury that this federal "mutual purpose" language required that every GAP or insurance product offered by the credit union had to be economically beneficial to every member virtually every time it was sold in order to be exempt from UBIT. Judge Griesbach said that the federal "mutual purpose" language only applied to whether the credit union qualified as a tax-exempt institution as a threshold matter and was not relevant to UBIT. The judge held that only the state law under which the credit union was chartered defined its "tax-exempt purpose." The issue of what constitutes the credit union's tax-exempt purpose is central to the case because a product must be "substantially related" to the credit union's tax-exempt purpose in order to be exempt from UBIT. Wisconsin law sets forth three purposes of a credit union: "to encourage thrift among its members, create a source of credit at a fair and reasonable cost, and provide an opportunity for its members to improve their economic and social conditions." The judge held that there was no basis to expand on the state's definition as the government attempted to do. "We won on that issue," Michael Edwards, counsel for special projects with the Credit Union National Association (CUNA), told News Now. "The judge is saying that the state's definition of a credit union's purpose is the controlling definition for UBIT purposes. This is consistent with Supreme Court precedent cited by the judge that the 'mutual purpose' language in I.R.C. section 501(c)(14) is only relevant to whether the state has grossly misused the term 'credit union,' such as if Wisconsin tried to make an entity tax-exempt that should not be, like a stock bank, just by calling it a 'credit union.'" The judge also rejected the government's request to have the jury treat credit life insurance and credit disability insurance as separate issues. He stated that "both simplicity and the interest in avoiding jury confusion would warrant a single question rather than two." CUNA's Edwards noted this is good because otherwise it would have been possible for the jury to conclude, illogically, that credit life should be exempt from UBIT but credit disability should be taxed, or vice versa. On the third issue, Judge Griesbach ruled against the credit union. "The point we lost on is about a Wisconsin regulation on the sale of credit insurance, which says it [the insurance] is 'directly related' to the business of the credit union. We wanted to bring that up in the trial, and the government didn't," Edwards said. "Overall, the rulings were pretty favorable, especially because it kept the additional 'mutuality' concept out of the picture," Edwards told News Now. CUNA General Counsel Eric Richard and Edwards will be attending the trial this week to monitor the case's progress. CUNA Vice President of Economics and Statistics Mike Schenk will be one of the expert witnesses testifying, via videotape, on behalf of the credit union. Check News Now throughout the week for updates.

Lawsuit alleges discrimination against deaf consumers

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LOS ANGELES (5/11/09)--A class action suit has been filed against a credit union based in Santa Clara, Calif., by the Disability Rights Advocates (DRA), alleging discrimination against deaf consumers. The suit, filed in Alameda County against KeyPoint CU, a $837.3 million asset credit union, alleges the credit union refused to accept telephone relay service calls from deaf members and potential members (AllHeadlineNews May 7). The suit said the credit union "repeatedly refused" to accept the calls and engaged in "systemic civil rights violations" in violation of state and federal anti-discrimination laws. The $837.3 million asset credit union serves high-technology workers. DRA is a non-profit group based in California.

First Carolina Corporate signs share guarantee agreement

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GREENSBORO, N.C. (5/11/09)--First Carolina Corporate CU's board of directors voted May 4 to participate in the Temporary Corporate Credit Union Share Guarantee Program, based on modifications made by the National Credit Union Administration (NCUA). The revised program is more flexible and provides corporates the opportunity to receive share guarantee extensions. Effective immediately, all of First Carolina's uninsured shares--except capital accounts--are covered under the program through at least Sept. 30, 2011, with quarterly extensions available through Dec. 31, 2014. NCUA re-opened the program to all corporate credit unions. First Carolina's board earlier had decided not to participate in the program because of concerns about protecting member credit unions' capital and protecting the membership's ability to have a voice in determining its corporate's future. At its April 21 meeting, NCUA's Board voted to revise the program to include more precise language and increased flexibility. "Frankly, the revised Share Guarantee Program is a better deal and addressed many of the issues that we had concerns with in the prior program," said David Brehmer, president/CEO of First Carolina. "We appreciate the time NCUA's staff and board took to take another look and make certain changes, and we support their efforts to stabilize liquidity within the corporate system to minimize future losses to credit unions," he said. First Carolina's board based its decision on liquidity, the current recapitalization effort, member feedback, the changing landscape in the corporate network and improvements to the overall share guarantee program, said the corporate.

Sen. Dodd calls Connecticut league with legislative update

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MERIDEN, Conn. (5/11/09)--Chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs Christopher J. Dodd (D-Conn.) hosted a conference call Thursday with the Credit Union League of Connecticut to discuss S. 896, the Helping Families Save Their Homes Act. The bill passed the Senate on Wednesday by a vote of 91-5. According to a league press release, Dodd provided an update and discussed S. 896 with the league and its member credit unions. "We sincerely appreciate Senator Dodd's efforts to include and assist credit unions and their members throughout the U.S., especially during this difficult economic time," said league President/CEO Tony Emerson. The league noted that the legislation was significantly improved by Dodd's amendment, which increases deposit insurance to $250,000 effective until 2013 and permanently increases the National Credit Union Administration's (NCUA) borrowing authority to $6 billion, with a possible extension to $30 billion in exigent circumstances. It also creates a temporary Corporate Credit Union Stabilization Fund, enabling credit unions to spread the cost of replenishing the National Credit Union Share Insurance Fund over eight years. "I was pleased to discuss the Helping Families Save Their Homes Act with members of the Connecticut Credit Union League yesterday," Sen. Dodd said Friday in the league's press release. "Credit unions play a critically important role in our economy, which is why I worked to ensure that the bill we passed in the Senate this week included provisions that will help credit unions weather these tough economic times and expand lending. Not only will these provisions help the 143 Connecticut credit unions, but they will also help the countless Connecticut residents and small businesses who rely on them," the release said.

Coastals new teller system increases branch traffic

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RALEIGH, N.C. (5/11/09)--Coastal FCU, Raleigh, N.C., has experienced a strong increase in the number of members using its Wakefield branch--especially in the evenings--because of a new Express Teller system.
Coastal FCU, Raleigh, N.C., has experienced a strong increase in branch traffic at its Wakefield location because of Express Teller, which allows credit union tellers to serve members at multiple locations from a remote site. (Photo provided by Coastal FCU)
Express Teller, which allows tellers to provide traditional services at multiple branches from one location, is in place at four of Coastal’s 18 branches. Coastal is looking to install the machines--priced similar to regular ATMs--at 10 branches by the end of the year (News and Observer May 8). With Express Teller, members can make transactions from 7 a.m. to 7 p.m. Monday through Friday at Express Teller branches in Raleigh, Garner and Cary. The credit union said it expects that the teller system will improve service and facilitate growth. Express Teller also frees in-branch employees to focus on opening accounts and making loans. Tellers working on the system are based at Coastal’s Raleigh headquarters. The technology helps the credit union operate with only half the tellers needed with a traditional set-up. Tellers have been transferred to other branches or given new job assignments at branches with Express Teller, but no layoffs are expected, Coastal told the newspaper. Coastal is the only financial institution in the state and one of five in the U.S. using Express Teller. It has $2.2 billion in assets.

Jeffco CU members vote to merge with Westerra CU

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DENVER (5/11/09)--The membership of Jeffco CU--a credit union serving Colorado’s largest school district, Jeffco Public Schools--voted by a margin of 90% to merge with Denver-based Westerra CU. The vote Thursday was the final step for merger approval. The proposed merger already was approved by state and federal regulators and both credit unions’ boards of directors. “This alliance enables us to offer local financial resources in our community through more locations, enhanced technology, a high level of service and more convenience all around,” said C. Alan Peppers, president/CEO of Westerra CU. Through Westerra CU, Jeffco members will have access to 11 branches across the Denver metro area and 150 Colorado service center locations and 800 surcharge-free ATMs. The combined credit union will have over $1 billion in assets and serve 88,000 members when the merger is effective July 1. Peppers will continue as Westerra president/CEO. The full integration of Jeffco CU operations will take place throughout the second half of 2009. Connie Ephland, chairman of Jeffco CU, said that both credit unions share a commitment to financial education through classroom presentations, online financial literacy tools, college scholarships, and providing resources for members to help with their financial decisions.

State-budget limits cancel CU Commission meeting

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GREENSBORO, N.C. (5/11/09)--In the wake of travel restrictions enacted by North Carolina to save money, the North Carolina Credit Union Division announced last week its state Credit Union Commission meeting June 16 has been cancelled. The meeting will be rescheduled to take place in Raleigh at a date to be determined, said the North Carolina Credit Union League (Weekly Update May 8). The meeting, which is required by state statute to be held twice per year, was originally scheduled to take place in Pinehurst.

Jobless rate affects Nashville CUs growth

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NASHVILLE (5/11/09)--Tennessee’s unemployment rate might be affecting the growth of Nashville credit unions. Nashville credit unions are growing more slowly than credit unions nationwide. Total assets at Middle Tennessee credit unions rose 3.7% in 2008 from 2007. Nationally, credit unions’ assets increased 7.7% last year. Also, Nashville credit unions’ membership was flat in 2008, while nationally credit union membership grew by 2% (Nashville Business Journal May 8). Because the state’s unemployment rate is about one point higher than the national rate, it could be harming local credit union performance, some in the state’s credit union industry believe. However, some local credit unions are reporting robust first-quarter growth, the Journal said. Cornerstone Financial FCU, with $187.8 million in assets, has experienced a first-quarter upshot in deposits. The growth is attributed to members pulling money out of the stock market or mutual funds, said Cornerstone President Henry Flurry. Cornerstone opened 531 new accounts in the first quarter. “That’s a pretty good growth number for us,” Flurry told the Journal. However, provisions for loan and lease losses at area credit unions rose 129% last year while the national rate was 112%. Area credit unions are anticipating roughly the same degree of loan loss portfolios as credit unions nationwide, Thomas Gaines, president of the Tennessee Credit Union League, told the Journal.

CU System briefs (05/08/2009)

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* HARAHAN, La. (5/11/09)--Two Louisiana credit unions are again the targets of phishing attacks aimed at collecting personal information, according to the Louisiana Credit Union League. Jefferson Financial CU, based in Metairie, and Jefferson Parish Employees FCU, based in Harahan, reported that members and non-members are receiving text messages and phone calls informing them their accounts have been closed, are negative, or show suspicious activity. The league noted the calls are not coming from legitimate sources and told credit unions to tell members to report any contact to the Federal Trade Commission (FTC) at 877-382-4357. The phone number that the call or text originates from is not important, but the number recipients are asked to contact is. Informing the FTC that there is a fraudulent 800 number activated will encourage the FTC to disconnect the number, the league said … *
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REDWOOD CITY, Calif. (5/11/09)--San Mateo CU's (SMCU) Redwood City branch helped fourth graders from Sandpiper Elementary School convert pennies into a check that they could send to their chosen cause, Pennies for Peace, during a field trip Thursday to the branch. Students have collected pennies since Feb. 1. The campaign aims to build a bridge for peace by offering educational alternatives to 400 mountain villages in remote northern Pakistan and Afghanistan. (Photo provided by San Mateo CU ) …

California CUs keep close watch on rare May fire

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SANTA BARBARA, Calif. (5/11/09)--A wildfire on hills near Santa Barbara, Calif., hasn’t closed down some area credit unions, but they are staying alert. Fueled by 60 mph winds, the fire has burned about 3,500 acres and evacuated 30,000 people from their homes as of Friday morning (The New York Times May 9). “We are still open for business,” Theresa Zanini, CEO of the $34.7 million-asset Santa Barbara County FCU, told News Now. “We’re in a warning area because the fire is right next to us. Members are still coming in to get cash. We’re going to stay open until the police tell us to move out or the smoke [from the fire] gets too bad. We’re OK, other than smoke from the fire being all over Santa Barbara.” On Friday, the credit union was half-staffed because about half of the employees were evacuated from their homes that morning. Erratic winds were blowing the fire’s embers “all over the place,” Zanini added. “Not a lot of homes have been lost at present, because the fire still is in the foothills of the city,” she explained. So far, about 1,400 firefighters, 14 helicopters and 12 airplanes were battling the fire, Zanini said. WesCom Central CU, a $3.237 billion asset credit union based in Pasadena, Calif., has two branches in the Santa Barbara area--a Le Cumbre branch and a Miltas branch. Neither has closed. “We are still operating,” Deena Spicer, WesCom vice president of marketing and communications, told News Now. “So at this point--knock on wood--there is no news. We’re keeping in touch with the branches. At this time, we are not in the evacuation zone. “We have normal staffing at the branches,” she added. “We also are fortunate that no employee homes have been damaged.”

Court upholds sending part of breach suit to Fla.

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BOSTON (5/8/09)--The lst U.S. Circuit Court of Appeals has upheld a Maine federal court's decision to remand one of the class action lawsuits it received involving the Hannaford Bros. data breach back to a Florida court for litigation. The case was remanded under the Class Action Fairness Act (CAFA) home state exception to federal jurisdiction (Law.com May 7) in an opinion Friday by a three-judge panel. More than 20 lawsuits were filed against the supermarket chain and its affiliates after a data breach exposed more than four million credit and debit card numbers to hackers last year. The Maine U.S. District Court had consolidated a number of cases from New England, New York and Florida, where the hacked supermarket accounts were located. The plaintiff in the remanded case had sued Kash 'N Karry Food Stores Inc., which does business as Sweetbay Supermarket and Sweetbay Liquors, in a Florida court,. Kash 'N Karry had the case removed to a Florida federal court under the CAFA provision. That case eventually was combined with the multidistrict litigation because corporate entities related to the grocery faced similar claims. Credit unions in New England, New York and Florida were among the financial institutions that reissued cards for members whose accounts were compromised in the Hannaford Bros. breach. Between Dec. 7, 2007, and March 10, 2008, cyber criminals hacked into Hannaford's system and accessed card numbers used at 165 Hannaford supermarkets in the Northeast and 106 Sweetbay stores in Florida. Of the four million cards compromised, at least 1,800 numbers were stolen and used for unauthorized purposes. The breach was discovered Feb. 27, 2008, and made public by Hannaford on March 17, 2008.

2009 Youth Saving Challenge smashes record

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MADISON, Wis. (5/8/09)--The Credit Union National Association’s (CUNA) 2009 National Youth Saving Challenge has more than doubled last year’s record in deposits. The challenge brought in more than $26 million in deposits, compared with $12 million brought in last year.
Click to view larger image Preschoolers from the Jefferson DeFrees Family Center got to peek in the vault of WACOPSE FCU, in Warren, Pa., during Youth Week. (Photo provided by WACOPSE FCU)
“By more than doubling the amount they saved last year, our young members have told us loud and clear that they believe in the future,” said Dan Mica, CUNA president/CEO. “Their willingness to set money aside for their goals during a severe recession should inspire the rest of us to redouble our efforts to advance the credit union principles of thrift and the productive use of credit. This phenomenal vote of youthful optimism could not have come at a better time.” About 397 credit unions reported receiving deposits from 139,669 young members, including 10,006 who opened new accounts. This year’s results average out to $190 deposited per child. Last year’s nearly $11.8 million savings total averaged $156 deposited per child, up from $87 per child in the 2004 inaugural year. For the first time, credit unions had the option of hosting the challenge throughout April, which was National Financial Literacy Month.
Click to view larger image Bubbles the Clown taught financial literacy concepts through magic tricks at an annual kid’s night during Credit Union Youth Week at Atlantic Financial FCU in Hunt Valley, M.D. (Photo provided by Atlantic Financial)
“We didn’t limit it to National Credit Union Youth Week to give credit unions more flexibility," said Lin Standke, CUNA’s manager of youth programs. “There is good news coming out of this economic mess we’re in, and it's that youth are learning to save at their credit unions.” CUNA also selected 10 credit unions at random from those who reported their results to receive $100 each, to award to the young saver of their choice. The winning credit unions are:
* PCM Employees CU, Green Bay, Wis.; * St. Pius X Church FCU, Rochester, N.Y.; * Good Shepherd CU, Lincoln Park, Mich.; * Eastmill FCU, East Millinocket, Maine; * Mountain Laurel FCU, Saint Marys, Pa.; * Service Plus CU, Riverside, Calif.; * Two Harbors (Minn.) FCU; * Service 1 FCU, Muskegon, Mich.; * Canton (Ohio) Police and Firemens CU; and * Portland (Mich.) FCU.
Next year’s Youth Week will be April 18-24.

Speaker Streamlined loan process can ease Reg Z change

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MILWAUKEE (5/8/09)--Understanding their lending process and simplifying it to accommodate applicants and staff will help credit unions determine how multi-featured open-end lending can benefit them and their members. So says Robert Israelite, CUNA Mutual sales specialist, speaking to members of the Wisconsin Credit Union League Thursday at the league’s annual convention in Milwaukee. Israelite, who serves credit unions in southern Wisconsin and nine other states, provided information for the group on compliance changes to Regulation Z, which deals with how credit unions conduct their lending business. The Federal Reserve Board recently issued regulatory changes that specifically affect multi-featured, open-end lending--a practice used for nearly 30 years that allows a credit union and a member to have a single lending contract covering multiple lending products. Under the plan, the member can have multiple sub-accounts with different program features and rate structures. The final rule keeps the multi-featured, open-end lending program intact with the several commentary changes:
* Each sub-account is not required to have a self-replenishing credit limit; * Language was retained that views the plan as a whole while some features may be used infrequently; and * Credit unions are permitted to verify information in certain circumstances to assure continued creditworthiness.
Although credit unions have until July 1, 2010, to comply with the new rules, Israelite cautioned the group to “understand your entire lending process across all delivery channels from start to finish” to ensure the maximum benefits of multi-featured open-end lending. “The loan experience should be engaging and efficient,” he said. “Look at how many times a loan is handed off before it is closed. Each hand-off makes the entire process that much more complicated.” To illustrate, Israelite showed a complex diagram of what might be considered a typical lending transaction. “If this looks like your lending process, you probably need to simplify what you’re doing,” he said. Changes to the regulation may also require credit unions to change their policies, procedures and documents. Israelite urged the group to “work with business partners who understand these changes and whom you can trust.” Despite challenges to the practice of multi-featured open-end lending by some other financial institutions, Israelite stressed the importance of the ability to provide this product to credit union members. “Multi-featured open-end lending is still a viable and legal way to conduct lending transactions,” said Israelite. “The Federal Reserve Board had an opportunity to do away with multi-featured open-end lending by removing the commentary all together. They chose to keep it in.” The Credit Union National Association and CUNA Mutual will continue to analyze the recent Regulation Z changes to determine the extent that they may impact multi-featured, open-end lending.

Auto leaser CU Fleet files to dismiss bankruptcy

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MILWAUKEE (5/8/09)--CU Fleet, a Wisconsin-based auto lease dealership that filed for Chapter 11 bankruptcy in early April, has filed a motion to dismiss the case (The Business Journal of Milwaukee May 1). The auto dealership is partly owned by Richard Jungen, founder and former CEO of Central States Mortgage Co. and by the dealership's general manager, Tom Burns. The mortgage company filed for receivership in March. It was 70% owned by credit unions (News Now April 13). CU Fleet filed for bankruptcy April 3 in the U.S. Bankruptcy Court in Milwaukee, allegedly owing three credit unions--Guardian CU, West Allis; Prime Financial CU, Cudahy; and Landmark CU, New Berlin--at least $2.8 million combined. The West Allis, Wis.-based company filed the motion to dismiss on April 20. Papers said the three credit unions support dismissing the Chapter 11 reorganization, said the business journal.

Tech Council seeks best practices awards applicants

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MADISON, Wis. (5/8/09)--Nominations are being sought for the CUNA Technology Council’s Best Practices awards. No fees are required for entry, and entries are due by June 12. The awards recognize outstanding approaches to technology challenges with potential for universal application across the credit union movement. Judges will choose award winners from Credit Union National Association (CUNA)-affiliated credit unions, without regard to asset size. The awards will be based on strategy, process, application and results in several categories:
* Technology Infrastructure--looks at the technical and procedural environment for safely accessing infrastructure, how the system monitors this access, and its current and future storage-management capabilities; * Information Security/Privacy--examines the technical and procedural environment to minimize the possibility of internal and external unauthorized access to member information; * Member Service/Convenience--emphasizes the benefits to members and employees, and covers the technical environment and system integration technologies that allow members to open accounts or receive information about existing accounts across all delivery channels; * Sales Management/Marketing Automation--recognizes the use of innovative automated systems to manage member information, create personalized product offers, plan and track sales leads, measure return on investment, and so forth; * Miscellaneous--for any technology success story that does not fit the other categories.
Award winners will be recognized at the 14th annual CUNA Technology Council Summit, Aug. 5-8 in San Francisco. For more information, use the link.

CUs pledge to continue Chrysler support

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LIVONIA, Mich. (5/8/09)--America’s credit unions, through the “Invest in America” program, are pledging their support for Chrysler LLC during its comprehensive restructuring announced last week. Because Chrysler Financial will cease to provide financing for an undetermined time, credit union loans will become an even more important source of auto financing, according to the Michigan Credit Union League (MCUL). Through an expanded partnership between Chrysler and CUcorp--a marketing company based in Livonia, Mich., and wholly owned subsidiary of MCUL--participating credit union members will receive either a $1,000 incentive on five of the most popular Chrysler, Jeep and Dodge vehicles or a $500 incentive on seven additional vehicles. These discounts are on top of their best deal, accompanied by low-rate financing provided by a credit union. The expansion increases the cash incentive and applies it to a broader range of cars and trucks through June 1. More than 1,500 credit unions, representing 40 million credit union members in 50 states, have been promoting Chrysler’s Credit Union Member Cash program, said the league. With credit remaining tight for domestic autos, credit unions boast more than $160 billion in liquidity available for member loans of all types, including new car loans. “About 86,000 vehicles have been purchased in the first three months of this year through Invest In America, and about 72,000 have been financed through credit unions,” Dave Adams, CEO of CUCorp and MCUL president, told participants in a conference call Thursday. “New-car loans financed through credit unions nationwide have risen to 25% in March of 2009 from 14% in March of 2008.” “Credit unions indeed are prepared to fill the void left by Chrysler Financial shutting down and the overall credit crisis [nationwide], so people can buy new vehicles with affordable financing rates,” Adams concluded. Invest in America is credit unions’ auto loan discount program with auto manufacturers General Motors Corp. (GM) and Chrysler Corp. The program started in December with a four-state pilot program for GM and a 12-state pilot for Chrysler. The campaign includes contractual credit union member incentives from GM and Chrysler. GM is offering supplier pricing, which averages about $1,500 per vehicle, with its Credit Union Member Discount. Chrysler is offering $500 or $1,000 rebates through its Credit Union Member Cash program.

KCUA Kansas treasurer sponsor money camp

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TOPEKA, Kansas (5/8/09)--The Kansas State Treasurer’s office is partnering with Kansas credit unions and others to sponsor a Money$mart Financial Management Camp today at Atchison (Kan.) Middle School. It aims to teach students about the importance of sound personal financial practices. Kansas State Treasurer Dennis McKinney said he believes in the importance of encouraging fiscal responsibility for all Kansans. “One of the biggest advantages we can provide our children is a basic education in finances,” McKinney said. “This outreach educates students on responsible use of a credit card, saving, budgeting and cash management.” The Money$mart camp was created with the Kansas Credit Union Association (KCUA) for Kansas middle school students. Other co-sponsors include Students In Free Enterprise at Wichita State University, and KCUA’s Northeast Chapter of Credit Unions, which worked with the school to make the event possible. Credit unions participating include:
* Bradken CU, Atchison; * CU of Leavenworth County, Lansing; * Eagle FCU, Atchison; * Free State CU, Lawrence; * Frontier Community CU, Leavenworth; * Jayhawk FCU, Lawrence; * Kansas University FCU, Lawrence; * Leavenworth (Kan.) Teachers and Community CU, * McCormick Midwest Employees CU, Atchison; * Meritrust CU, Wichita; * Midwest Regional CU, Kansas City; * USPLK Employees FCU, Leavenworth; and * Wakarusa Valley CU, Lawrence.
Participants in the Money$mart camp will include 120 students in seventh grade.

Even Doonesbury knows a good benefit--CUs

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MADISON, Wis. (5/8/09)--Even comic strips know credit unions are a good, desired employee benefit. Garry Trudeau’s comic strip “Doonesbury” mentions credit unions Tuesday as a perk when an employee asks a human resources staffer at the Central Intelligence Agency (CIA) about his CIA employee benefits. Credit unions are part of a “basic civil service package” he’s told. To view the comic strip, use the link.

Missouri CU Division Director Branson to retire

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ST. LOUIS (5/8/09)--Missouri Division of Credit Unions Director Sandra Branson will retire at the end of the month, the Missouri Credit Union Association (MCUA) said. Branson has served as director since 2005. She previously held the position from 1987 to 1993. She also was president/CEO of Missouri State CU, Jefferson City, between the two state tenures (The Missouri Difference May 7). During her tenure, Branson “encouraged open dialogue between the state regulator” and credit unions in Missouri, according to Rosie Holub, MCUA president/CEO. MCUA and the division have had a good relationship, and Branson’s door was always open to talk about credit union issues, Holub added.

CU System briefs (05/07/2009)

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* MADISON, Wis. (5/8/09)--CLARIFICATION: In an April 24 System News story, "CU Museum holds financial literacy fair," News Now reported the wrong credit union involved with the CU 4 Reality Financial Literacy Fair at America's Credit Union Museum. The story should have said the credit union was New Hampshire FCU of Concord, N.H. News Now regrets the error. … * ALBANY, N.Y. (5/8/09)--The New York Credit Union
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Foundation has launched its redesigned website at www.nycuf.org. In addition to the redesign, the site features additional content. Visitors can learn about the foundation's education programs, apply for grants, learn about foundation-supported projects, and read its bi-annual newsletter, Solutions. The website also features a secure online contribution capability, via a "Donate Now" button. (Photo provided by the New York Credit Union Foundation) … * HARRISBURG, Pa. (5/8/09)--Representatives from First Commonwealth FCU, Bethlehem, Pa., and the Pennsylvania Credit Union Association (PCUA) visited lawmakers Wednesday in Harrisburg (Life is a Highway May 7). They met with Reps. Dick Hess (R-78), Doug Reichley (R-134), Gary Day (R-187) and Joseph Brennan (D-133). Hess, the minority chair of the House Commerce Committee, was interested particularly in credit union member business lending and how it helps businesses needing financial assistance. All the lawmakers were pleased to learn how the credit union is helping members in their areas, said PCUA. Pictured from left are: John Cathers, First Commonwealth vice president, sales and service; Molly Snody, director, business advisory services at PCUA; Dave Yandrasitz, business lending and services manager at First Commonwealth; and Rep. Hess. Not pictured was Christina Mihalik, PCUA vice president governmental affairs. (Photo provided by the Pennsylvania Credit Union Association) … * RANCHO CUCAMONGA, Calif. (5/8/09)--Valley First CU, based in Modesto, Calif., has opened its newest branch in Madera and plans a ribbon cutting soon. The branch was formerly with Valley Oak CU, based in Three Rivers. Valley Oak handed the branch to Valley First in an unusual move aimed at providing continual service to members. Valley First assumed the branch, employees, and members. "We are eager to serve the Madera community, and help members become financially savvy and successful even in these tough economic times," said Valley First CU President/CEO Hank Barrett. It will support the local community and join the local Chamber of Commerce, Barrett said …

CUSO sues CU over participation loan deals

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DALLAS (5/7/09)--Credit Union Liquidity Services (CULS), a Texas-based credit union service organization (CUSO), has filed a lawsuit against a credit union in North Carolina, saying it owes money because CULS overpaid interest from participation loan deals related to Lincoln Mall in Chicago and a project in Pennsylvania. CULS, formerly known as Texans Commercial Capital LLC, a member business lending CUSO affiliated with Texans CU, filed the complaint Friday in the U.S. District Court for the northern district of Texas in Dallas against Coastal FCU, based in Raleigh, N.C. The complaint alleges that on Aug. 30, 2006, CULS and the credit union entered into two participation agreements on loans CULS was making to finance the Lincoln Mall in Chicago and Mockingbird Commons in Pennsylvania. On June 6, 2007, a third participation agreement was signed for the Mountain Village in Pennsylvania. In 2007, CULS and the mall amended the agreement's terms. CULS maintains it did not need Coastal's consent to make material amendments to the loan participation agreement terms. Coastal paid $5 million for an "all in" participation in the Lincoln Mall loan, with its participation interest initially set at 24.75%. As the loan commitment increased, the interest was to be reduced to 12.68%. However, the court documents say, CULS "inadvertently continued paying" Coastal the original interest of 24.75%. CULS also alleges it overpaid Coastal by more than $486,909 for the Lincoln Mall participation and more than $558,163 for the Mockingbird Commons project. Texans CU, a $1.7 billion asset credit union in Richardson, Texas, sold off most of Texans Commercial Capital LLC in 2007 as losses mounted from the Lincoln Mall project. In February, CULS filed to foreclose on a $39 million balance of its $62 million loan on the Lincoln project.

Pa. SECU sues Heartland over data breach

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HOUSTON (5/7/09)--Pennsylvania State Employees CU (PSECU) filed a class action lawsuit Friday in a U.S. District Court in Texas against Heartland Payment Systems, seeking to recoup losses from the card payment processor's massive data breach revealed in January. In the complaint filed, the Harrisburg, Pa.-based credit union said Heartland violated the Payment Card Industry (PCI) Data Security Standards required by Visa and MasterCard. Heartland had a duty to comply with the PCI standards, properly secure Visa and MasterCard credit card and/or debit card magnetic stripe information and not disclose the information to unauthorized third parties, said the complaint filed in Houston. The breach exposed all Visa and MasterCard accounts processed by the Princeton, N.J.-based Heartland between May 15, 2008, and Nov. 13, 2008. As a result of the breach, more than 105,000 Visa cards issued by PSECU to its members were compromised, cancelled and reissued. The suit alleges breach of contract, negligence, equitable indemnification (in which the credit union says Heartland benefited from the credit union cancelling and replacing cards for its members), restitution, unjust richment and violations of the New Jersey Consumer Fraud Act. The credit union is seeking actual damages related to the costs of reissuing members' cards and administrative expenses related to monitoring and preventing fraud, notifying members and dealing with member confusion, and other losses. The $3.4 billion asset credit union also is seeking injunctive relief requiring Heartland to boost the security of its systems, and attorney's fees, and court costs. U.S. District Judge Lee H. Rosenthal ordered an initial pretrial and scheduling conference for the case on Sept. 25.

Going green means happier employees members

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MADISON, Wis. (5/7/09)--Keep your credit union employees healthy, and they’ll be good to your members. That’s the motto that Michigan State University FCU (MSU FCU) in East Lansing has embraced with the construction of its new green headquarters building. “Our CEO [Patrick McPharlin] is firmly committed to keeping employees happy and making their surroundings nice,” Joyce Banish, MSU FCU vice president of university and community public relations, told News Now. “He thinks they will better serve the membership and raise the level of service.” The headquarters building opened in September and is seeking Leadership in Energy and Design (LEED) certification, which should be decided shortly, Banish said. MSU FCU is confident it will receive at least a silver rating, but is aiming for gold. MSU’s building uses an air purification system, thermapane windows and recycled materials such as low toxicity paint on the walls and bamboo floors. Lights automatically turn off if there is enough natural light in the room--and because all of the offices are located on the outside of the building, 75% of the workday’s light comes from the sun, Banish said. “People who are exposed to natural light are happier,” Banish added. The credit union also reduced its water use by 40% with waterless urinals and low-water toilets. Landscaping around the credit union requires little water and the plantings actually filter out oil and runoff, Banish said. MSU FCU offers employees a cafeteria so they don’t have to drive to get lunch, and an exercise room, a walking path and a shower area to encourage them to walk or bike to work. The credit union recommends carpooling and gives employees are given an incentive to drive compact cars by offering them parking spaces near the front of the building. Besides leaving a smaller footprint, the building has increased energy savings and has made happier, healthier employees. Employees that are happier and healthier will be more productive and have less sick time, and the credit union has better retention, Banish said. MSU FCU members also “love” the new building, she added. “The university and community are very dedicated to preserving the planet.” A green building can be more costly than a non-green building, but it depends on a building’s quality and size. The cost difference between LEED and non-LEED buildings could be a difference of 1% for large buildings, and 5% for smaller buildings. “The costs are minimal when you consider the energy savings,” she said. Banish said credit unions wishing to go green should:
* Use e-statements and e-mail instead of direct mail; * Cut out disposable items--such as styrofoam coffee cups; * Encourage healthier lifestyles for employees to cut down on sick time; and * Upgrade or remodel using recycled materials and low toxicity paints;
In California, Redwood CU (RCU), Santa Rosa, also has embraced green concepts. RCU’s administrative office and Santa Rose branch is LEED-certified. The building received a silver rating after RCU remodeled the 1960s-era building. After purchasing the building in 2005, RCU modified it to make it more light and energy efficient. Some of the features include:
* Recycled and/or renewable construction materials, including carpeting, linoleum, hardwood flooring and lighting fixtures, and a recycling program for materials removed from the building during the remodel; * Low-VOC (volatile organic compounds) and formaldehyde-free paints and finishes; * Environmentally sound water-based adhesives for carpet and flooring; * Automatic stepped lighting to maximize the use of natural light, and motion sensors that turn off lights when they detect that a room is unoccupied; and * Water-efficient restrooms, landscaping and irrigation.
“The result of this remodel has not only been an environmentally sound and positive workplace for nearly 200 of RCU’s 350 employees, but the facility also provides a comfortable and healthy atmosphere for members to conduct business at the on-site branch and two ATMs,” RCU said on its website. The remodel allowed RCU to consolidate its administrative work force from three buildings into one, reducing the need for cross-town travel. The new facility has a 200-seat community room that provides space for company meetings and events, and events for nonprofits and community groups at no charge. RCU also pursued green friendly efforts in its new Cloverdale branch, which opened last year. The credit union used green materials for the paint and carpet. RCU has been recognized for its sustainability efforts by the City of Santa Rosa, the Sonoma County Business Environmental Association and the California Credit Union League. Robin McKenzie, Redwood CU senior vice president of marketing and public relations, also noted that at a recent annual meeting, the credit union hired a green caterer who offered an environmentally friendly food setup. RCU also participated in a recent parade in Petaluma, Calif., where it provided a hybrid vehicle and handed out recycled shopping totes to attendees. “We offer a website for tips and resources for members to go green,” McKenzie said. RCU encourages e-statements and use of online banking. It also offers “green” loans, hybrid vehicle loan discounts and socially responsible investments where members can invest their money in funds that maximize return on investment and social responsibility. "RCU's members, employees and communities are interested more now than ever before in doing business with or working for organizations they can trust, who do the right thing, and who are committed to their communities and the environment," McKenzie told News Now. "RCU is very committed to all of these things, and we work hard to demonstrate our commitment in many ways. We consistently hear from members and employees that they appreciate and feel proud of RCU for our green efforts. "Being a true partner in sustainable practices and hearing positive feedback from our members, employees and communities is the true reward--even more so than the awards we've received in this area," she said. For more information, use the links.

Beach addresses branching after the bailout

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LAS VEGAS (5/7/09)--Bank closures are presenting credit unions with great opportunities in serving former bank customers, according to Carroll Beach, president/chief operating officer of CO-OP Shared Branching. In "Branching after the Bailout," a session at the National Association of Credit Union Service Organizations (NACUSO) Annual Conference in Las Vegas this week, Beach shared information and insights to help credit unions better serve their members and take advantage of opportunities in the current market. With today's financial climate, events in the movement and banking industry will impact the future for credit unions, particularly their branching strategies, he said, adding that shared branching can help in tumultuous times. "With all the bank closures and mergers going on right now, credit unions are presented with some great opportunities," he said. "The customers of these banks must go somewhere. Why not your credit union? You can send a powerful message to potential members about the strength of credit unions" and gain new members, he said. However, "some credit unions are responding to the economic crisis by shutting down branches to cut expenses. Experts warn that the key is to make sure operational cuts aren't leading to losses in member service. Closing branches can send a negative message to members. For credit unions, where member retention and service take priority, account accessibility must remain in place," Beach said. "Just because your credit union may have to close a branch, it does not mean you can't be in the neighborhood anymore. When proprietary branches are being shuttered, credit unions can direct members to a nearby shared branch, where they can continue to conduct transactions just as if they were in their home credit union." Nearly 1,300 credit unions offer shared branching in 3,600 locations through CO-OP Shared Branching.

Irish league elects Bailey president

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DUBLIN, Ire. (5/7/09)--Mark Bailey was elected president of the Irish League of Credit Unions after a vote by delegates attending the league’s conference at the end of April. Bailey had served two years as league vice president and is a board member of Dunshauglin CU (Business and Finance Daily News Service April 28). “The credit union movement is facing into an important period where the challenges facing the economy and financial sector will require the league to have very clear priorities to ensure that we can continue to serve our 2.9 million members in line with our founding ethos,” Bailey told the newspaper. “Chief among our priorities for the year ahead will be the need to proactively engage with the government and its agencies to ensure that any regulatory framework drawn up for credit unions is appropriate,” he added. The league “aspires … to maintain a strong and properly managed credit union movement. We support and welcome regulation, but regulation that takes account of the credit union's unique, not-for-profit and member service ethos.”

Wis. CUs to study investment eds effect on behavior

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PEWAUKEE, Wis. (5/7/09)--A study launched Wednesday that will involve Wisconsin credit unions aims to prove that as little as 10 hours of education can motivate consumers to seek and use the investment tools they need to build wealth. The prescription can not only improve personal finances but also heal a much-weakened national economy, said the Wisconsin Credit Union League. “The investment scams and frauds that worsened the economy over the past year could have been avoided with better financial education,” said John Hoffmire, director with the Puelicher Center for Banking Education at the Wisconsin School of Business, University of Wisconsin-Madison. Hoffmire is spearheading the study. “Americans appear apathetic when it comes to investing, when in fact a small amount of education may be all it takes to stimulate the kind of positive action that will help heal our nation,” he said. The 18-month study will provide up to 30,000 hours of online investment education to 4,000 participating employees, starting with those at credit unions. The study is funded by a $200,000 grant from Investor Protection Trust--and coordinated and promoted by the league, Wisconsin Gov. Jim Doyle’s Council on Financial Literacy and the Wisconsin Department of Financial Institutions. The Educated Investor University provides an online investment education program in which each employee will complete up to 10 hours of online learning. Many will receive additional information about investment products and opportunities, and have access to an educational coach--a formula Hoffmire says is critical to stimulate positive behavioral change in investing. Although Americans save more now because they fear imminent job loss, Hoffmire says it shouldn’t be this level of economic pain that pushes the average person to do what’s in their best interest. Saving is just part of the remedy. Americans are seriously under-prepared in investing for retirement and commonly fail to use investment vehicles such as savings programs for health care and higher education, he added. “We need to identify what can be done consistently to motivate the average household to take advantage of the investment opportunities they’ll need--in addition to just saving--to reach future goals,” Hoffmire said. A prime “teachable moment,” Hoffmire says, is during tax season. Filers often spend tax refunds instead of investing these dollars. The study, therefore, will focus heavily on converting tax filers to investors. Many credit union employees help prepare and file taxes, facilitate refunds via direct deposit and educate about available tax credits and wealth-building opportunities in free tax-preparation programs. The study will seek to determine a preferred approach for coaching and what mix of information works best to encourage investment behavior for different types of filers--based on age, income, education level, geographic location and other attributes. Pre- and post-tests will measure participants’ investment knowledge, and behavior will be tracked quarterly for one year to determine whether participants have initiated investment activity. “We expect that the participating employees will emerge from the study better informed to serve their members’ needs,” Hoffmire adds. “If you understand the importance of investing on a personal level, you’re better positioned to direct members to those resources more effectively.” A steering committee for the study is being assembled from Wisconsin credit unions. Participating credit unions also are being identified so that participant education can begin late this summer. Credit unions’ participation in the program is part of their ongoing REAL Solutions initiative, which strives to help Wisconsin families improve their financial position over time by encouraging saving and investing, improved creditworthiness and long-term wealth building.

Take responsibility for sustainability says NACUSO CEO

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LAS VEGAS (5/7/09)--Sustainability of credit unions and the credit union industry is the most critical issue facing credit unions today, and individuals must take responsibility for their credit union's growth and survival, said Thomas C. Davis, president/CEO of the National Association of Credit Union Service Organizations (NACUSO). Davis made the comment in a speech Monday at NACUSO's Annual Conference in Las Vegas. The conference ended Wednesday. "Today's credit union industry is in the mature phase of its growth cycle and experiencing some of the most significant challenges of any time in its history," he told the conference. "We are confronted with an economic malaise unmatched since the Great Depression and an unprecedented credit union corporate bailout that will adversely impact credit union capital positions. "Coupled with these issues are the industry woes of the past several years associated with slow member growth, rapid consolidation and minimal market differentiation. When we consider the aggregate impact of all of these challenges, the most critical issue facing us today is the sustainability of credit unions and the credit union industry," Davis said. A key factor in addressing that challenge involves establishing opportunities for collaboration and getting credit unions to work together in business networks to create scale and meet shared needs, he noted. "Now is the time for credit unions to transform themselves and the industry by embracing innovation and the unique advantages of collaboration and networked business models," he added. "'Business as usual' is reaching an evolutionary dead end. When the going gets tough, the tough collaborate," Davis said. "Economic downturns provide an opportunity to create a gap between credit unions and their competitors." Collaboration, he concluded, "is the furnace that will drive credit union and industry sustainability."

NACUSO conference stresses collaboration innovation

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LAS VEGAS (5/7/09)--Collaboration and innovation were stressed by speakers at the National Association of Credit Union Service Organizations (NACUSO) annual conference held Sunday through Wednesday in Las Vegas. More than 280 participants attended. They learned what some credit union service organization (CUSO) lenders think credit unions can do to stand out as low mortgage rates lead to a refinancing boom during a presentation, “Innovative Mortgage Practices and Opportunities.” Credit union leaders must break the traditional lending rules and step outside of their comfort zone if they want to see growth in mortgage originations, Cory Mackwood, co-founder/president/CEO, CUSO Development Company, and Keith Varney, chief operating officer, TruHome Solutions, told the conference attendees. One effective way to exceed member expectations and generate earnings is to partner with an experienced mortgage lending CUSO, they said. They cited a study that indicated credit unions operating as a part of a multi-credit union CUSO benefit from more loans, increased assets and growth in membership. Other highlights of the conference:
* A breakout session titled “Positioning CUSO Value Propositions to Raise Capital” identified the key strategic funding differences between single focus and multi-purpose CUSOs and highlighted the processes that exist for raising capital. Jon Jeffreys, president/CEO of Credit Union Student Choice and vice president of Callahan Financial Services, and Jeff Russell, president/CEO of TMG Financial Services and chief information officer and vice president of strategic development for The Members Group, made the presentation. * A preview of NACUSO’s first Executive Certification Program, scheduled for Oct. 4-7, was provided by Randy Karnes, CEO of CU*Answers and faculty member at Pepperdine University. The event will combine the educational weekend with year-long networking, featuring university programs with distance learning, collaborative project work, and an opportunity to build relationships with CUSO leaders. * A session on ways to improve a credit union’s performance immediately while strategically positioning it to succeed in the future was presented by Bill Winter of Winter & Associates and Jeff Pflipsen of HTG Architects. By examining key factors from branch location and building design to merchandising, Winter and Pflipsen shared research findings and strategies to improve the performance of a credit union branch. The session included credit union case histories and programs in place.

CUs with strong MBL programs will lead future

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LAS VEGAS (5/7/09)--Credit unions with strong member business lending programs will be the industry’s leaders of the future, according to Kent Moon, president/CEO of Member Business Lending LLC. Moon spoke to attendees of the 2009 National Association of Credit Union Service Organizations (NACUSO) Annual Meeting in Las Vegas Monday. Moon, a former Small Business Administration (SBA) official, noted that if credit unions do not take advantage of the new opportunities presented to them under a new presidential administration, they will miss a “period of tremendous growth.” Moon also noted the impact that President Barack Obama’s stimulus plan will have on credit union member business lending programs. “The temporary elimination of borrower fees has made the SBA programs increasingly attractive to borrowers. And with the 90% guaranty, cap issues have virtually been eliminated,” Moon said. He also provided a “reality check.” SBA 7(a) loan product is down about 56% compared with this time last year, yet total volume is up 24% compared with 2000, Moon said.

West Virginia attorney general shuts down bogus CU website

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CHARLESTON, W. Va. (5/7/09)--West Virginia has shut down a bogus website that claimed to be operated by a Charleston, W.Va., credit union. State Attorney General Darrell McGraw's office worked with GoDaddy Group Inc., a domain registration company, to shut down the site, named statecreditunion.net (Charleston Daily Mail May 6). The site falsely claimed it represented the "West Virginia State Credit Union." There is no such credit union; however the name is similar to The State CU, a $37 million asset legitimate credit union. Its website is at www.wvpecu.org. Consumers who applied for loans through the bogus site received e-mails identifying the company as the fake credit union and were told that to qualify for the loans, they had to pay $1,250 for "insurance." The fraudsters directed the victims to wire the money to a location in Canada. After sending the money, the victims never heard from the "credit union" again.

CUs are so smart its obvious--Oregon ad campaign

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BEAVERTON, Ore. (5/7/09)--Credit unions are so smart, it’s obvious, according to a Credit Union Association of Oregon (CUAO) ad campaign with animated TV spots that will run through the end of June. The spots, launched late last month, feature several situations that could get one into trouble--such as salmon fishing next to a grizzly bear. Each spot ends with the question, “So why would you do your banking anywhere besides a credit union?” “Making the choice between a bank and a credit union has always been clear to those of us in the [credit union] movement and members who have been with us their whole lives. And our economy is only making the distinction more clear,” said Laura Wieking, CUAO director of communications. “But we still have a lot of work to do to make consumers understand that credit union membership is available to everyone.” The campaign was funded by voluntary contributions from 49 Oregon credit unions. CUAO has incorporated pre- and post-campaign measurement to gauge the campaign’s effectiveness in raising credit union awareness. To view the spots, use the link.

CU System briefs (05/06/2009)

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* ANNISTON, Ala. (5/7/09)--Answering nature's call has led to the arrest of a former convict who escaped the Calhoun County Substance Abuse Center April 20 and allegedly robbed Fort McClellan CU in Anniston, Ala., a day later. Glasco Stephens, 43, was arrested after a Columbia, S.C., woman found him using a toilet in her home. Stephens, who was apprehended Tuesday, had been living in an uninhabited house nearby. South Carolina authorities likely will extradict him to Alabama to face robbery charges (The Anniston Star May 5) … * FARMINGTON, Mich. (5/7/09)--LOC FCU President/CEO Dennis A. DeWitt will retire in August after serving in the position since 1983. At that time, announced LOC FCU's board of directors, James R. Dickinson Jr. will become the new president/CEO. Dickinson was executive vice president/chief financial officer (CFO) and has been with the credit union since 1988. When he assumes the helm, Kari L. Hassa will become the executive vice president/CFO. Hassa has been with the credit unit union since 1994. During DeWitt's tenure, the credit union's assets grew from $4 million to $110 million, and products expanded from standard savings and loans to a full range of savings and loan products, home loans, and 24/7 electronic services that include home bank, bill pay and e-statements …
* MADISON, Wis. (5/7/09)--Col. Howard M. Buenzli (Ret.), a former CUNA Mutual Insurance Society vice president of personnel, died Saturday at the age of 93. Buenzli was in the position from 1957 to 1979. During his retirement, he was active with the National Association of Retired Credit Union People (NARCUP) and the American Red Cross, and volunteered his legal expertise to write wills and tax preparation for senior citizens. He is survived by two daughters, six grandchildren, and three great-grandchildren. Services will be Friday at Our Lady Queen of Peace Catholic Church in Madison, Wis. (The Capital Times and Wisconsin State Journal May 5) …

Filene studies single-regulator issues

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MADISON, Wis. (5/7/09)--Regulatory restructuring of the financial services industry appears to be on the horizon. One potential component of the changes being considered is a single regulator for the entire financial services industry, says the Filene Research Institute. What would such a development mean for credit unions? That’s the question addressed in Filene’s new report, “Evaluating the Single Financial Services Regulator Question,” by Filene Chief Research Officer George A. Hofheimer. Hofheimer suggests that political, economic, and social trends foreshadow the potential for a single regulator, even though credit unions stand against the creation of such an entity. Hofheimer also advises credit unions to be constructive in shaping the changes to come. Credit unions have an opportunity to influence the new public policy structure to benefit “simple” banking organizations like themselves. Paradoxically, credit unions may have the opportunity to benefit in a new, more limited regulatory structure. While it would be premature to predict what the exact regulatory structure will look like, the probability of a more consolidated structure is high, Filene said. The report notes that financial regulation is a constantly shifting standard due to changes in the economic environments and the current U.S. financial regulatory system is replete with regulatory gaps. The current economic crisis is viewed by many, in part, as a failure of regulation, suggesting that major changes are necessary, the report said.
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The worldwide trend in financial services regulation has been toward a more consolidated structure, even though the link between financial regulatory structure and safety, soundness, and/or performance is weak, Hofheimer added. Due to credit unions’ difference from other financial institutions--their not-for-profit nature--little efficiency would be accomplished by including credit unions under a combined bank regulatory scenario, the Credit Union National Association (CUNA) has maintained and specifically said in a comment letter to the U.S. Treasury. CUNA also mentioned in the letter to the Treasury that the National Credit Union Administration--in its dual role as regulator and insurer of credit unions--has effectively served the best interests of credit unions and their members for nearly 40 years. For credit unions, the message is that public and political opinion seems to be pushing for a major regulatory overhaul, Hofheimer said. If the tide of change is too strong, credit unions should be proactive in getting what they want. “Credit unions may be the only major financial institutions that continue to have reputations for honesty, integrity and fairness. As such, credit unions have a unique opportunity to help lead the political process that results in a new financial regulatory system for the U.S,” said Filene Fellow William E. Jackson III, of the University of Alabama, in the report’s foreword. For more information about “Evaluating the Single Financial Services Regulator Question,” use the link. For information about Filene studies or becoming a member, call 608-231-8550.

Smart appointed to Lending Council exec committee

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MADISON, Wis. (5/7/09)--Gary Smart, vice president of business services and lending for Crane FCU in Odon, Ind., was recently appointed to a vacant seat on the CUNA Lending Council executive committee. The council is a source of best-practices information for lending professionals in the credit union industry. Smart began his career in the financial services industry in collections and most recently focused on consumer and small business lending. He is also a four-year member of the council and active on its conference committee. “Gary's background and experience will be a valuable addition to the executive committee as credit unions become more involved in business lending,” said Lloyd Gill, council chair and executive vice president and chief operations officer of City County CU in Margate, Fla.

Web-only REALTORS FCU now in business

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CHICAGO (5/6/09)--The nation's first Web-only credit union, REALTORS FCU, is now up and running online, and ready for members. The new credit union serves members of the National Association of Realtors (NAR), their families and staff. NAR has 1.2 million registered members nationwide. It also is open to members, employees and families of NAR affiliates, and state and local realtor associations. "We offer a full menu of checking and savings accounts, lines of credit, consumer and mortgage loans," CEO Tom Glatt said in his "welcome" message on the site. The credit union is designed to accommodate NAR members' busy professional and personal schedules, said Glatt. "We know that many of you are independent contractors and work evenings and weekends. We are also aware that for many of you, your car is your office and your cell phone is your business lifeline." In a message to NAR staff, NAR's office of the CEO noted that the credit union is "one of the most important initiatives we have ever undertaken." Accompanying the message was a set of instructions to walk potential members through the account opening process. New members will need to have an existing checkbook handy to fund the opening of the account. The credit union's 24-hour phone center is 866-295-6038. The website is at located at www.REALTORSFCU.ORG. Use the link.

CU System briefs (05/05/2009)

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* FARMERS BRANCH, Texas (5/6/09)--Firstlight FCU, El Paso, has earned the Juntos Avanzamos (Together We Advance) designation from the Texas Credit Union League (LoneStar Leaguer May 5). That means the credit union has demonstrated it has the capacity and commitment to serve the Hispanic marketplace. It can fly the Juntos Avanzamos flag, letting members of the Hispanic community know they can receive friendly, affordable financial institutions at the credit union. The designation helps the league channel resources to specific credit unions to help them grow their outreach programs. Credit unions with the designation receive 500 free copies of the Building a Financial Foundation for Your Family brochure, a Spanish language brochure, and are eligible to apply for grant dollars through the Richard L. Ensweiler Fund … * HARRISBURG, Pa. (5/6/09)--Members lst FCU opened a student branch at Harrisburg Science and Technology High School in downtown Harrisburg, the fifth student branch the credit union has opened in the city (Life is a Highway May 5). Mayor Stephen Reed praised the credit union and the credit union movement for continuing to provide loans and other services to consumers, unlike banks, during turbulent economic times. He presented Members lst President/CEO Bob Marquette with a proclamation from the city. Harrisburg Schools CEO/Superintendent Gerald Kohn noted the branch would enhance the school, bring a direct benefit to students, and train students in the financial services industry. Also attending: Joseph Wambach, executive director, Pennsylvania Credit Union Foundation; Mary Rosenkrans, acting director, Pennsylvania's Office of Financial Literacy; and George Nahodil, executive vice president, marketing, Members lst. …

Colorado Wyoming leagues to pursue formal merger

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DENVER (5/6/09)--The Credit Union Association of Colorado (CUAC) and the Credit Union Association of Wyoming (CUAW) announced Tuesday they are pursuing a formal merger and intend to create a new organization to serve credit unions in both states. A merger would build upon an already-close relationship between the two states. Since 1997, they have shared staff under a management contract with CUAC serving the day-to-day needs of the Wyoming association. It also would continue the trend toward consolidation at both the credit union and league level. A formal merger will require a majority vote from Colorado's 104 affiliated credit unions and Wyoming's 26 affiliated credit unions. No time line has been set for a vote, pending a full discussion of merger-related issues, the associations said. A six-member group of board members--three from Colorado and three from Wyoming--began meeting last year. A letter of intent assumes the creation of a formal Wyoming-Colorado Task Force to explore the matter further. "Our two states have already forged a close working relationship," said Larry Knopp, chairman of the Wyoming association and president of UniWyo FCU, Laramie. "Examining an actual merger is the next logical step to produce economies of scale and to put us in position to better serve our credit unions and prepare for future consolidations among credit unions and leagues." Doug Ferraro, chairman of the Colorado association, said, "All our members are looking for real value from their associations, whether it be advocacy, education and training, regulatory compliance or collaboration. Over the years, we've learned from each other, and a formal merger would allow us to collectively strengthen all our individual efforts." John Dill, CEO of both associations, noted the long history of working together. "The boards are looking not just to merge, but to create something bigger and stronger out of our combined efforts." Dill outlined issues that the joint task force will address, including governance, board and committee appointments, dues structure, annual meeting locations, and staff coverage.. "There is no guarantee that a formal merger will occur," said Knopp, "but in this time of consolidation of credit unions, our members want us to pursue ways to continue providing them high quality association services while looking for new ways to operate more efficiently and effectively." "There are going to be fewer credit unions and, therefore, fewer leagues," said Ferraro. "Colorado and Wyoming are fortunate to have already formed a close bond, which makes these discussions both easier and hopefully more successful."

23 named certified CU executives in April

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MADISON, Wis. (5/6/09)--Certified Credit Union Executive (CCUE) designations were awarded to 23 individuals from 10 states, bringing the total nationwide to 2,638, according to the Credit Union National Association (CUNA). CCUE, instituted in 1975, is designed for managers and those aspiring to credit union leadership. It teaches advanced credit union management and operations techniques. Eight individuals earned the Certified Financial Services Professional (CFSP) designation, which began in 1999 as a designation targeted at educating credit union professionals specializing in financial services. The Certified Executive Program (CEP) awarded specialty certifications to 18 credit union professionals. These certifications require in-depth courses in a specialty area such as compliance, lending, financial management, marketing and human resources. The CEP is the overall name for the self-study program allowing for the already mentioned designations. Recommended for college credit by the American Council on Education (ACE), the classes and materials are tailored to those working within the Credit Union System. All new designations were awarded in April. Those graduating with honors:
* James P. Frost, CCUE, University CU, Orono, Maine; * Angela M. Muxworthy, CCUE, New Mexico Educators CU, Albuquerque; * Keith P. Connolly, CFSP and CCUE, Spokane, Wash.; and * Stephanie R. Montgomery, CFSP, Weokie (Okla.) CU.
High honorees include:
* Gary K. Nakata, CCUE, Aloha Pacific FCU, Honolulu; * Heather K. Luciani, CCUE and CFSP, Marshall (Mich.) Community CU; and * Frost, CFSP.
For a full list of graduates, use the link.

CU measures progressing in Texas legislature

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AUSTIN, Texas (5/6/09)--Three legislative measures concerning credit unions are in various stages of progress in the Texas legislature. The credit union sunset bill (HB 2735) passed into engrossment Saturday by a unanimous vote. The bill now moves to the Texas Senate committee on Governmental Organization, according to the Texas Credit Union League (The Advocate May 4). The bill embodies recommendations of the Texas Sunset Advisory Commission to continue the Texas Credit Union Department (TCUD) for an additional 12 years (News Now March 18). The Texas CU Act (SB 1647) is now in the state House, having passed the Senate, and is scheduled to be heard by Pensions, Insurance and Financial Services Monday. Current law provides for both regulatory oversight and corporate governance of credit unions. The bill amends the finance code to provide for additional regulatory oversight of credit union activities and addresses provisions concerning corporate governance. It also adds provisions to the finance code for regulatory coordination between state and federal agencies. The bill provides the credit union commissioner additional regulatory and supervisory oversight of credit union activities and amends various provisions relating to the administration and operation of credit unions. Every few years, the TCUD is charged with reviewing the act and rules to keep them modernized. The last major revisions to the state Credit Union Act occurred in 2003. The bill has a number of sections dealing with TCUD powers, credit union powers and board governance issues (News Now April 24). Also, the SB1 general appropriations bill--which would provide TCUD full funding--is in conference committee deliberations. Indications are positive that TCUD will retain full funding, the league said.

Ohio CUs raise 80000 for kids hospitals

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COLUMBUS, Ohio (5/6/09)--Credit union leaders from throughout Ohio presented an $80,000 check to Children’s Miracle Network as a result of their fundraising march to benefit children’s hospitals.
Click to view larger image Ohio Credit union individuals make the final five-mile trek from Rainbow Babies and Children’s Hospital to the Cleveland Convention Center to raise money for Children’s Miracle Network. (Photo provided by Ohio HealthCare FCU)
Joe Dearborn, senior managing director of Children’s Miracle Network, accepted the check. Spearheaded by the Ohio Credit Union League’s Credit Unions for Kids Committee, the annual Marching Miles for Miracle Kids march-a-thon distributes the money to Ohio children’s hospitals. Since the event’s inception three years ago, Ohio credit unions have raised more than $260,000. “A fundraising event of this magnitude is a great display of the cooperative spirit embraced by Ohio’s credit unions,” said Paul Mercer, league president. “We are proud to support the Children’s Miracle Network, and I want to extend my thanks to credit union staff and volunteers who helped make this year’s Marching Miles a tremendous success.” The 190-mile relay-style march kicked off in Newark April 5 and concluded in Cleveland April 23 at the league’s Zenith 2009 convention at the Cleveland Convention Center. On average, marchers traveled 10 miles a day during the 19-day trek.

CUs have good stories to tell--Crear to U.N. group

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NEW YORK (5/6/09)--Despite continuing challenges facing U.S. credit unions, financial cooperatives worldwide have a “good story to tell” in terms of stability, member service and their ability to “spread” financial risk, according to Pete Crear, World Council of Credit Unions (WOCCU) president/CEO. Crear took the credit unions’ positive message last week to a United Nations (U.N.) meeting of global economic experts on “Cooperatives in a World in Crisis.” “Credit unions have not contributed to the creation of the global economic crisis,” Crear told participants representing 13 countries. “However, through their roles as member-owned and operated financial cooperatives, credit unions are contributing to the healing process.” The group met for three days to examine the role and capabilities of cooperatives, including credit unions and financial cooperatives, to counter the effects of the ongoing economic downturn. Participants, comprising primarily academics and cooperative association executives from the U.S. and other countries, submitted reports before the meeting, outlining the role of cooperatives in their countries. To view WOCCU's report to the U.N. work group, use the link. Crear’s paper evaluated how credit unions in nine member countries and regions have been affected by market disruptions due to the financial crisis, their inclusion in financial rescue programs and changes made to deposit insurance for both banks and credit unions relative to the crisis. To WOCCU’s knowledge, credit unions have not accepted government funds for bailout purposes, Crear said. “Credit unions’ overall approach of accepting member deposits, providing loans to members and generating strong capital bases has kept the majority of them out of harm’s way as bad investments take their toll on the for-profit financial services industry,” Crear said. “Their conservative practices are driven by a philosophical mandate to place member needs ahead of institutional profits.” WOCCU also supported the U.N.’s International Year of Cooperatives, proposed for 2012. The U.N. celebrated its first International Day of Cooperatives in July 1995 to recognize and reaffirm cooperatives’ role in economic, social and cultural development. The event would expand that recognition to better draw attention to major global issues and the role cooperatives can play in addressing them, Crear said. “Declaring 2012 as the International Year of Cooperatives would shine a more intense light on cooperatives and credit unions worldwide,” Crear said. “Such a ‘blessing’ by the U.N. and its member governments would lead to greater support for cooperatives and credit unions, enabling them to better serve members.” Last week’s meeting was held in response to U.N. resolution 62/128, “Cooperatives in social development,” which introduced the concept of the International Year of Cooperatives. The resolution also urged the strengthening of cooperatives worldwide and the development of increased public awareness of their overall socio-economic impact.

Corporate One board officers elected

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COLUMBUS, Ohio (5/6/09)--Three leaders were elected to the Corporate One FCU board of directors at its annual meeting in late April. Bob Burrow, president/CEO, Bayer Heritage FCU, Proctor, W.Va.; Phil Buell, CEO, Superior FCU, Lima, Ohio; and Lee Powell, president/CEO, DESCO FCU, Portsmouth, Ohio, were elected to three-year terms.
In his first term on Corporate One’s board of directors, Burrow brings more than 25 year’s credit union experience to his position. He has served as president/CEO of the credit union since 1994. Burrow also served as the senior vice president of Auto Body CU, Lansing, Mich., from 1991 to 1994. He served with the Ohio University Employees’ CU, Athens, Ohio, and Ormet CU, Clarington, Ohio. Burrow also was a member of the West Virginia Corporate CU board from 1998 to 2005. Buell has served on Corporate One’s board of directors since 1999. Since 2003, Buell has served as the CEO of Superior FCU and is a current trustee of the Ohio Credit Union League Political Action Committee/Ohio Credit Union Legislative Action Committee and the Ohio Credit Union Defense Coalition. Powell, re-elected to his second term on Corporate One’s board, has been president/CEO of DESCO FCU since 2004. Powell has also served as an audit committee liaison and enterprise wide risk management committee member on Corporate One’s board and as a member of the Ohio Credit Union League Services Corp. board and the league board. Corporate One’s new board officers are:
* Chairman, Gerald D. Guy, president/CEO of KEMBA Financial CU, Columbus, Ohio; * Vice Chairman, Janice L. Thomas, president of PSE CU, Parma, Ohio; * Treasurer, John J. Shirilla, president/CEO of Best Employees FCU, Walton Hills; and * Secretary, Buell.
Corporate One FCU is based in Columbus, Ohio.

EasCorp to participate in NCUA share guarantee program

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BURLINGTON, Mass. (5/6/09)--Eastern Corporate FCU (EasCorp) will participate in the National Credit Union Administration's (NCUA) Temporary Corporate Credit Union Share Guarantee Program (TCCUSGP), according to EasCorp. EasCorp's Board of Directors voted April 27 to participate (Inside EasCorp May). "NCUA has accepted our participation and, effective immediately, all of EasCorp's uninsured shares are now covered under the Guarantee Program through at least Sept. 30, 2011," EasCorp said. Quarterly extensions will be possible later, at NCUA's discretion. EasCorp's board declined to participate in the program when it was offered by NCUA in February. Several factors contributed to that decision, "most especially our interest in protecting your capital and EasCorp's retained earnings, generated through your patronage," the newsletter said. "The board felt that, by accepting the TCCUSGP agreement, EasCorp would potentially lose control of its future." However, a turning point came after the NCUA Board met to consider extending the guarantee program and enabling all corporate credit unions to participate. The action included revisions to the program's agreements with corporates to eliminate ambiguities and provide greater flexibility. EasCorp's board, after consulting with legal counsel, "was satisfied that all previous concerns had been addressed and remedied in the revised agreement." The guarantee program has been modified and extended, said EasCorp. New share deposits covered under the guarantee are allowed a maximum two-year maturity. The guarantee currently expires Sept. 30, 2011. At least 30 days before the end of each calendar quarter, beginning this September, NCUA's Office of Corporate Credit Unions will evaluate the need to extend the expiration date. Any expiration date extensions will be announced at least 15 days before the end of each quarter by NCUA's executive director to allow members to adjust their investment horizons and make maturity decisions. The first opportunity NCUA will have to announce an extension will be Sept. 15. If the option to extend each quarter is fully used, the final guarantee would expire Dec. 31, 2014, said EasCorp.

Northwest FCU car show generates 221000 in loans

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HERNDON, Va. (5/5/09)--Northwest FCU's members-only Car Show at its Herndon, Va., headquarters April 18 showcased 100 new vehicle makes and models and resulted in $221,000 in loans. The vehicles were from 13 area dealerships that participate in Northwest's auto locating service, said the $1.6 billion asset credit union. The four-hour event featured one-stop shopping, with a variety of makes and models on one lot, on-site trade-in appraisals and on-the-spot financing. Attendees also received a coupon with a 0.75% discount off Northwest's auto loan rates along with dealer incentives worth up to $300 on vehicle purchases. Nine vehicles were sold, and the credit union sold two cars from its selection of off-lease vehicles. "This event was mutually beneficial for our members, the credit union, and our network of dealers," said Mark Rumsey, auto resources manager at the credit union. "At a time when auto sales are down and consumers are experiencing economic challenges, it's exciting to have had such a positive response to this show."

MarylandD.C. and Virginia leagues to develop ad campaign

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COLUMBIA, Md. (5/5/09)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) and the Virginia Credit Union League (VACUL) are working together to develop an advertising campaign focusing on the credit union difference. According to MDDCCUA, representatives from credit unions in Maryland, the District of Columbia and Northern Virginia met recently to create a cooperative campaign employing radio, metro bus and Internet advertising (FOCUS Newsletter May 11). "The need is greater than ever for policy makers and consumers to understand that credit unions are not responsible for the conditions we face and that we will continue to act in the best interest of our members," said MDDCCUA. Media professionals will develop message points, determine ad placement in the region and analyze results. The campaign is scheduled to begin this month. It is being financed by the two credit union associations and contributions from their credit unions.

Former Hawaii league chairman Okimoto dies

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HONOLULU (5/5/09)--Humio Okimoto, former board member for the Hawaii Credit Union League (HCUL) and long-time credit union volunteer, died April 14 at the age of 83 at Maui Memorial Medical Center. Okimoto was an HCUL board member for eight years and its chairman for four years. He served the national credit union movement as a Credit Union National Association (CUNA) national director, as a member of CUNA’s future committee, and 20 years as a member of the CUNA Mutual Group board of directors, including a stint as its chairman. He was a pioneer in Hawaii’s credit union movement, and his service spanned half a century. He was secretary and president of the HCUL’s Valley Isle Chapter for more than a decade. Okimoto also served the statewide credit union movement as a member of the league’s annual convention, personnel, planning, ad hoc policy review, bylaws and finance committees.

Filenes Basement files for Chapter 11 bankruptcy

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BOSTON (5/5/09)--Filene's Basement, the Boston, Mass. discount store founded in 1909 by U.S. credit union pioneer Edward A. Filene, filed for Chapter 11 bankruptcy protection in Delaware Monday. It was the second time in 20 years, it has filed bankruptcy papers. The store said it will sell 17 of its 25 stores, including its flagship store in Boston, to Crown Acquisitions for $22 million (The New York Times May 5). The retailer, hit by sluggish sales at new stories and increased competition from other discount stores, owed $4.4 million to CIT Group Commercial Services, $1.1 million to Best Buy, and millions to others. It estimated it had $50 million to $100 million in assets and $100 million to $500 million in liabilities, said the Times. The retailer closed 11 underperforming stores in January and its parent company, Retail Ventures, was renegotiating leases for 25 stores and its corporate office and warehouse. Filene founded Filene's Basement to clear out excess merchandise from his father's store upstairs. The store helped earn millions for Filene and enabled him to donate $1 million (which today would amount to more than $20 million) to help organize credit unions in the U.S. During his travels, Filene discovered financial cooperatives operating in India's small villages in 1907. He returned to the U.S. and helped establish the first credit union in America--St. Mary's Bank CU, in Manchester, N.H., which celebrated its 100th anniversary in 2008. Filene hired Roy F. Bergengren to promote credit unions, and with Bergengren founded the Credit Union National Extension Bureau--the predecessor of the Credit Union National Association (CUNA). Filene also pioneered workplace practices such as the 40-hour workweek, minimum wages, profit-sharing plans and medical insurance for employees (News Now Aug. 2, 2005)

N.C. mortgage loan bill with CU provision clears committee

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GREENSBORO, N.C. (5/5/09)--A mortgage loan bill has cleared the North Carolina Committee on Financial Institutions with a key change that will benefit credit unions, the North Carolina Credit Union League announced Friday. The bill--the Secure and Fair Enforcement Mortgage Licensing (SAFE) Act--aims to reduce mortgage fraud. The bill’s original language did not include credit unions. “In reviewing the original bill, it was clear to our legal counsel that credit unions would have reported to the North Carolina Commissioner of Banks to comply with the SAFE Act,” said Dan Schline, North Carolina league senior vice president of association services. With the change, credit unions can report to their regulator regulator, the State Credit Union Division, instead of the State Banking Commission. A federal statute mandates that each state have a law such as the SAFE Act on the books by July 31. The bill now moves to the State Finance Committee.

CU savings rise loan growth to fall

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MADISON, Wis. (5/5/09)--The credit union movement’s capital-to-asset ratio fell to 9.58% in March from 10.26% in February as credit unions recognized the costs of the Corporate Stabilization Plan, according to Steve Rick, senior economist with the Credit Union National Association (CUNA). With earnings expected to be weak and savings growth strong, the capital-to-asset ratio could fall below 9% later this year, Rick added. Credit union loans outstanding decreased 0.1% in March, but rose 0.6% for the first quarter of 2009, according to the March CUNA monthly sample of credit unions. Fixed-rate first mortgages rose 1% during March, followed by increases in adjustable-rate mortgages (0.5%), used-auto loans (0.4%), and other mortgages (0.1%). Declining in March were other loans (4.1%), home equity loans (1.1%), credit card loans (0.7%), and unsecured personal loans (0.6%).
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Credit union savings balances grew 1.2% in March, the same rate as during March of last year. Savings growth for the first quarter of 2009 was 5.7%, compared with 5% for the same period last year. Growing in March were money market accounts (3%), regular shares (2.5%), one-year certificates (1%) and individual retirement accounts (0.7%). Share drafts declined 3.3% during March. “During the first quarter, credit union savings balances rose 5.7%, up from the 5% recorded in the first quarter of 2008,” Rick said. “U.S. households are changing their financial behavior by saving more, spending less, and trading down to less expensive substitutes. “Households’ decline in spending is reflected in credit union loan growth numbers,” he added. “For the first quarter, credit union loan balances rose 0.1%, down from 0.4% reported last year. For the full year, we expect loan growth to fall to 6%, the slowest since the 5.8% reported in 1998.” The movement’s overall capital-to-asset ratio decreased to 9.58% in March from 10.3% in February. The total dollar amount of capital ended the first quarter at $83 billion, a decrease of 6.5% from the previous month.
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The loan-to-savings ratio decreased to 78.8% in March from 79.9% in February. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 20%. Credit union 60-+-day delinquencies were 1.54% in March, an increase from 1.48% in February. “Credit union loan quality deteriorated further in March as the overall loan delinquency rate crossed over 1.5% to reach 1.54%,” Rick said. “With the unemployment rate expected to reach double digits over the next year, the delinquency rate is expected to climb over 1.75% in 2009.”

IBuffalo NewsI Many prefer CUs to banks

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BUFFALO, N.Y. (5/5/09)--Many consumers prefer credit unions to banks, according to The Buffalo News (May 4), which says attractive rates and friendly service are helping credit unions to grow. The article explains credit unions' history. In it, Patrick Keefe, vice president of communications at the Credit Union National Association, explains the structure and philosophy of credit unions. "Every saver in the credit unions owns the credit union, and it doesn't matter the amount they have in a credit union. Everybody has an equal share," Keefe told the publication. "Credit unions are democratically elected, volunteer-led, cooperatively owned and not-for-profit," Keefe noted. "That doesn't mean that credit unions do no realize a net return after paying all their bills. The real difference is a bank exists to maximize profit for shareholders. Credit unions exist to maximize service for members." The article makes mention of area credit unions such as Buffalo Metropolitan FCU, Buffalo Postal Community FCU, St. John Buffalo FCU, Cornerstorne Community FCU, and Kenmore N.Y. Teachers FCU. The newspaper article also discusses credit unions' focus on members, their difference from banks and the fact that credit unions are gaining momentum by improving their accessibility. For the entire article, use the link.

Fla. league letter to IMiami HeraldI stresses CU soundness

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MIAMI (5/5/09)--In a letter to The Miami Herald, Florida Credit Union League President/CEO Guy M. Hood stresses that credit unions overall are sound. The letter responds to bankers' attacks after the conservatorship of Eastern Financial Florida CU, a $1.7 billion asset credit union in Miramar, Fla., was announced. The credit union's situation is "an anomaly in the credit union movement and not reflective of credit unions as a whole," Hood writes. He reiterates that the credit union continues to be financially sound and each member's deposits are federally insured up to $250,000. "Credit unions are extremely responsible lenders. The Florida Bankers Association's agenda toward credit unions clearly nullifies any opinion they might offer concerning credit unions," he says. Although loan delinquency rates and charge-off rates at credit unions are edging up in the bad economy, as might be expected, "they are still low compared with those of commercial banks…" Hood adds. Credit unions continue providing better rates because they are member-owned and not-for-profit cooperatives, and although others are unable to lend, the credit union industry's lending is expected to increase in all categories, he says. He also mentions' credit unions' healthy capital-to-asset ratio of 10.9%, and the fact that credit unions are more highly regulated than any other financial institution. "What happened at Eastern Financial is not costing taxpayers one penny in terms of bailout or subsidy. Can that be said about banks caught in similar situations?" he concludes. For the full published letter, use the link.

Lehrers News Hour features work of CU

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NEW YORK (5/5/09)--Jim Lehrer’s “NewsHour” on PBS recently focused on helping low-income residents in New York’s Washington Heights, noting the work of Neighborhood Trust FCU. The NewsHour piece opened with a story about a hairdresser from the Dominican Republic who wanted to open her own salon but didn’t have the means to do so. Neighborhood FCU helped her come up with a budget, avoid bouncing checks, pay her bills on time and save the money she needed to eventually open the salon. Neighborhood Trust FCU is operated by Credit Where Credit is Due and was established by Mark Lavine, a Washington Heights schoolteacher. Lavine got to know the families of his students and was shocked by how few had bank accounts and how many used loan sharks and pawn shops to receive credit. Lavine raised money to open Neighborhood Trust, which has a bilingual staff and offers small loans to those with no credit. The credit union has 4,000 members and is located in a bus terminal under the Washington Bridge. Neighborhood Trust offers free financial counseling and has expanded to other parts of New York City. The credit union’s financial education classes have been more in demand with the down economy, according to NewsHour. Neighborhood Trust has $6.6 million in assets. To hear the newscast, use the link.

Hawaii league announces board of directors

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HONOLULU (5/5/09)--The Hawaii Credit Union League announced its 2009-2010 board of directors at its 71st Annual Convention April 25. On the board are:
* Chairman, Wallace Watanabe, president/CEO of Aloha Pacific FCU, Honolulu, Oahu; * Vice chairman, Gordon Sam, chairman of Pearl Harbor FCU, Waipio, Oahu; * Treasurer, Scot Tsuchiyama, manager of Kekaha FCU, Kekaha, Kauai; * Secretary, Alan Arai, president/CEO of Valley Isle Community FCU, Kahului, Maui; * Director, Albert “Benny” Rodero, chairman of Hamakua Coast Community FCU, Pepeekeo, Hawaii; * Director, Clayton Fuchigami, president/CEO of Maui FCU, Kahului, Maui; and * Director Melvin Chiba, president/CEO of Kauai Community FCU, Lihue, Hawaii.

IL.A. TimesI CUs most misunderstood banking bargain

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LOS ANGELES (5/5/09)--Nonprofit cooperatives such as credit unions are the most misunderstood bargain in banking, according to a Los Angeles Times article. Although credit unions offer higher rates for deposits, lower costs for loans and reduced fees for overdrafts and checking accounts, many consumers are confused about how to go about banking with one, the article said (May 3). “Many consumers have an old-school notion that credit unions are always exclusive clubs, only open to employees of a single company, members of a particular church, union or profession. But with many credit unions that’s no longer the case,” the article continued. To help consumers find a credit union, the article cited the locator tool on the Credit Union National Association's consumer web page, www.creditunion.coop, as a resource. The article’s author, Kathy Kristof, said she conducted a search of credit unions in 10 minutes and found five that could have accepted her, based on geography alone. Working as a teacher, engineer, broadcaster or public worker could yield access to a dozen credit unions or more, Kristof said. Kristof also noted that deposit rates are 25% better at credit unions than at banks and six of the top 10 earning checking accounts offered through www.checkingfinder.com were credit union accounts.

CU System briefs (05/04/2009)

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* CLEARWATER and SARASOTA, Fla. (5/5/09)--Sarasota Coastal CU is in new merger talks, this time with Achieva CU, based in Clearwater, Fla., according to a news release from Achieva. The two began initial discussions about the feasibility of a merger and will perform a due diligence review beginning this week, said Achieva, a $650 million asset credit union. If a merger is completed, the combined credit union would have more than $800 million in assets and 11 branches serving six counties in Florida. The merger requires the approval by the Florida Office of Financial Regulation and the National Credit Union Administration. If approved, the merger could be completed by the end of September. Last week the $235 million asset Sarasota Coastal CU called off a planned merger with MidFlorida FCU of Lakeland (News Now May 1) … * WORCESTER, Mass. (5/5/09)--Wilfred Cook, 34, was sentenced to five to eight years in prison after pleading guilty to charges of robbing a branch of Digital FCU Nov. 4 and assaulting two tow company employees with a knife during the getaway (Worcester Telegram & Gazette April 30 . After the robbery, Cook ran to a nearby tow yard near the getaway car. The yard's employees gave chase and grabbed him as he climbed a chain-link fence. Cook swung a knife at the employees, dropped some of the stolen money, escaped over the fence and left in a vehicle that belonged to his girlfriend. Cook also was sentenced to five years of probation after his release from prison and was ordered to complete a program for repeat offenders. * RALEIGH, N.C. (5/5/09)--All State Employees' CU (SECU) member credit cards now comply with the "Safe Credit Card Standards" recently issued by The Pew Charitable Trusts' Safe Credit Cards Project. The standards are designed to protect consumers from unfair and deceptive credit card practices and help educate consumers about how to evaluate competing card offers for financial fairness. SECU's board approved adopting the standards, as of last Friday. Under the standards, cardholders will be charged only the interest rate they agree to pay; fees will be imposed responsibly and will be transparent to the cardholder; cardholders will have enough time to review and pay their bills; and payments will be applied first to balances carrying the highest interest rate … * ALEXANDRIA, Va. (5/5/09)--HEW FCU is now a corporate sponsor of DC Divas, the local professional women's tackle football franchise, according to the Maryland and District of Columbia Credit Union Association (FOCUS Newsletter May 4). The partnership means the credit union will provide financial services and seminars to the team's players, staff and game attendees. HEWFCU will have a presence at each home game and will offer free membership to eligible potential members throughout the season. DC Divas is a members of the Independent Women's Football League … * GREENSBORO, N.C. (5/5/09)--The North Carolina Credit Union League has hired Lauren Whaley as its first director of legislative and regulatory affairs, announced Dan Schline, the leagues senior vice president of association services (Weekly Update May 1). Whaley joins the league from the Jennings public relations, branding and advertising agency in Chapel Hill, where she served as public relations and advertising account leader for nearly two years. Prior to that she was communications coordinator at Truliant FCU, Winston-Salem. Whaley will provide advice and assistance in managing state legislative affairs, monitor regulatory issues that impact credit unions in the state, and conduct training on relevant regulatory matters. Schline added that the league's long relationship with Amy Fullbright and the legal team at Hunton & Williams will continue. … * LOS ANGELES (5/5/09)--The Los Angeles Police FCU has donated 25 card readers to the Los Angeles Police Department to assist in the battle against card-related crime. The Magtek Inc. Mini Swipe readers will be used in each of its 23 stations plus at two stations scheduled to be open in the future. The department's Commercial Crimes Division receives 600 to 700 card-related identity theft complaints per month. The readers will help police during bookings of suspects. Officers can check magnetic stripes on credit, debit and gift cards to determine if the person arrested actually owns the card. The readers cost the credit union $85 each (ATM & Debit News April 30) … * HARRISBURG, Pa. (5/5/09)-- Maureen Moss, CEO/treasurer of Indiana Bellco FCU, based in Blairsville, Pa., died Wednesday after a short battle with cancer. She was 38, according to the Pennsylvania Credit Union Association (Life is a Highway May 4). Funeral services were Saturday …

Court orders sale of CU National Mortgage servicing

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NEWARK, N.J. (5/4/09)--A U.S. Bankruptcy Court order in New Jersey Thursday authorized the sale of assets related to mortgage servicing rights held by Pine Brook, N.J.-based CU National Mortgage and parent company, U.S. Mortgage Corp., to Symbionce Financing Solutions LLC. Symbionce, whose address is a post office box in Roselle Park, N.J., was one of two bidders for purchasing servicing rights out of a market of 23 potential bidders, according to documents filed with the court. The documents list Ann South, CEO of Novartis FCU, East Hanover, N.J., as managing owner of Symbionce. A key element of the purchasing agreement is that Symbionce will receive the assets "free and clear" and not be liable for any liens, claims, interests and/or encumbrances related to the servicing rights sold. Novartis is one of four credit unions named in the court order as exercising their right of first refusal with the mortgage companies. Judge Rosemary Gambardella said the court would honor that right and that the four--which also included Oakland Municipal CU of Oakland, Calif.; Energy Capital FCU of Houston, Texas; and Piedmont Advantage CU of Winston-Salem, N.C.--would pay the mortgage company debtors what they owed on their servicing agreements as of the court date. Objections to the sale were filed by Suffolk FCU, Medford, N.Y.; TCT FCU, Ballston Spa, N.Y.; Treasury Department FCU, Washington, D.C.; First Florida CU, Jacksonville, Fla.; and Educational Systems FCU, Greenbelt, Md. U.S. Mortgage and CU National filed for Chapter 11 bankruptcy Feb. 23 in the Newark court, listing more than $200 million in debts to Fannie Mae and 19 credit unions, among others (News Now March 2). The bankruptcy set off a flurry of lawsuits, with credit unions such as Dover, N.J.-based Picatinny FCU alleging in a court petition that the company sold $14 million of the credit union's mortgage loans without authorization to Fannie Mae. The court ordered the mortgage company to turn over all funds belonging to the credit union and to transfer mortgages it had been servicing to Picatinny's new servicer (News Now March 24). Among the top 20 creditors with the largest unsecured claims against CU National are 19 credit unions from New Jersey, New York, District of Columbia, Maryland, North Carolina, Florida and California. Nearly 300 creditors were listed in the bankruptcy petition's accompanying papers.

Members at R.I.-based CU OK bank charter

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CRANSTON, R.I. (5/4/09)--Members of a Cranston, R.I.-based credit union approved its plan to convert from a credit union charter to a mutual savings bank at a membership meeting Wednesday night. Nearly 80% of members who voted approved the conversion of Coastway CU (Providence Journal May 1). The $300 million has 30,000 members. About 6,000 members voted. The next step is to submit the election results to the National Credit Union Administration and the state Division of Banking. If approved, the conversion could come as early as three to four months, said the credit union. It will change its name to Coastway Community Bank. The credit union said it is up against its business lending cap and will be able to expand business lending as a bank. Analysts have estimated that as many as 25 credit unions may be considering charter changes (US Banker May 1). That compares with eight credit unions that switched charters in the past five years. They attribute the increase to the mortgage market meltdown and the impact on the bottom line of recapitalizing corporate credit unions. Of the 34 credit unions that have converted since 1995, 27 have either gone public or merged with other banks.

Top 10 INews NowI stories for April

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MADISON, Wis. (5/4/09)--Here are the Top 10 News Now stories most requested by readers during April. Use the link to review the entire story online. 10. NCUA advisory addresses changes in Corporate CU Share Guarantee Program ALEXANDRIA, Va. (4/27/09)--The National Credit Union Administration (NCUA) Board Friday issued another media advisory to provide information on recent changes to the Temporary Corporate Credit Union Share Guarantee Program. 9. Senate card bill includes NCUA emergency borrowing WASHINGTON (4/1/09)--Voting 12 to 11 in favor of a credit card best practices bill, the Senate Banking Committee passed legislation Tuesday that included consideration of amendments important to credit unions, including creating National Credit Union Administration (NCUA) emergency lending authority. 8. NCUA releases summary of PIMCO report ALEXANDRIA, Va. (4/20/09)--The National Credit Union Administration (NCUA) released a summary of the analysis of the Pacific Investment Management Company LLC (PIMCO) on the residential mortgage-backed securities held by corporate credit unions Friday. 7. NCUA memo guides on delaying NCUSIF write-downs WASHINGTON (4/7/09)--In a memo Friday to regional directors and examiners, shared with the Credit Union National Association (CUNA), the National Credit Union Administration (NCUA) is providing guidance to field staff on an accounting bulletin (AB 09-02) released earlier in the week addressing corporate credit union issues. 6. Limited services, smaller numbers among CUNA recommendations WASHINGTON (4/7/09)--A revamped corporate credit union system would be most effective if it offered limited services (leading to reduction in the number of corporates), served a national field of membership, met stronger capital requirements, and included a prescribed number of "outside directors" who could "contribute diverse experiences" to a corporate's board, the Credit Union National Association (CUNA) has written in a comment letter to the National Credit Union Administration (NCUA). 5. NCUA reiterates: Flexible stance on impairment accounting WASHINGTON (4/2/09)--The National Credit Union Administration (NCUA) intends to issue an accounting bulletin stating the agency will be flexible about when a credit union books the cost of the premium being assessed to replenish the National Credit Union Share Insurance Fund (NCUSIF). 4. FASB acts on mark-to-market, OTTI WASHINGTON (4/3/09)--The Financial Accounting Standards Board (FASB) Thursday adopted rule changes on mark-to-market accounting and on treatment of the "other-than-temporary impairment" (OTTI) of assets. 3. NCUA says guidance coming on 'extinguishment' ALEXANDRIA, Va. (4/16/09)--The National Credit Union Administration (NCUA) intends to issue its next accounting guidance on corporate credit union issues Friday as part of its weekly release of information on the corporate situation. 2. NCUA provides deeper info on corporate analysis ALEXANDRIA, Va. (4/13/09)—National Credit Union Administration (NCUA) Chairman Michael Fryzel Friday released a summary of the agency's analysis of the distressed securities held by U.S. Central FCU (U.S. Central) and Western Corporate FCU (WesCorp). 1. More accounting guidance sent to NCUA examiners WASHINGTON (4/10/09)--National Credit Union Administration (NCUA) examiners received additional clarification today regarding credit unions' flexibility in booking the National Credit Union Share Insurance Fund (NCUSIF) deposit impairment, according to NCUA.

CO-OP Financial Services elects board notes successes

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RANCHO CUCAMONGA, Calif. (5/4/09)--The shareholders of CO-OP Financial Services voted to re-elect board members and also noted successes at its Annual Shareholders’ Meeting April 4. Newly re-elected to serve second terms were:
* Rick Craig, president/CEO, America First FCU, Riverdale, Utah; * Terry Laudick, president/CEO, New Mexico Educators FCU, Albuquerque, N.M.; and * Patsy Van Ouwerkerk, president/CEO, Travis CU, Vacaville, Calif.
Board members who are continuing their terms:
* Douglas Allman, president/CEO, NASA FCU, Bowie, Md.; * Dianne Addington, president/CEO, Genisys CU, Auburn Hills, Mich.; * David Maus, president/CEO, Public Service CU, Denver; * Gary Oakland, president/CEO, BECU, Seattle; * J. David Osborn, president/CEO, Anheuser-Busch Employees CU, St. Louis; * Bucky Sebastian, president/CEO, GTE FCU, Tampa, Fla.; and * Gary Wolter, president/CEO, Alabama Credit Union League.
The board elected to keep its table officers unchanged. They are:
* Osborn, chairman; * Allman, vice chairman/chairman-elect; * Laudick, treasurer; and * Addington, secretary.
Osborn provided highlights of CO-OP’s successes. In 2008, CO-OP:
* Announced a record patronage distribution for the year, paying shareholders $10.8 million in cash distributions; * Grew to nearly 3,000 participating member credit unions and 26 million cardholders; * Completed more than $1.7 billion in transactions; * Mentioned surcharge-free ATM transactions reached an all-time high on Dec. 24, when transaction volume totaled 6.7 million; and * Continued as the largest credit union-owned and operated electronic funds network and processor in the country.

Michigan GAC meets amidst roller-coaster events

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LANSING, Mich. (5/4/09)--The Michigan Credit Union League’s (MCUL) Governmental Affairs Conference (GAC) was held last week amidst many legislative events that affect credit unions. Last week, MCUL staff handed an action alert to Michigan credit
Michigan State Rep. Lesia Liss (D-Warren) spoke with Jim Shereda of ARC CU, Roseville, at the Michigan Credit Union League’s Governmental Affairs Conference. (Photos provided by the Michigan Credit Union League)
unions regarding the U.S. Senate’s consideration of S. 896--a foreclosure prevention bill that has been a focus of ongoing credit union lobbying (Michigan Monitor April 29). In response to the Credit Union National Association's (CUNA) action alert issued concerning S. 896, about 20,000 contacts were generated nationally, CUNA said. In Senate version of the bill, the Senate voted down an amendment that would have authorized the mortgage “cramdown” provision--in which bankruptcy courts would be allowed to modify terms of existing mortgages so borrowers can continue making payments--that has been opposed by the credit union industry. The Senate version also could contain a manager’s amendment by U.S. Sen. Christopher Dodd (D-Conn.)--the bill’s sponsor--that would make permanent the $250,000 deposit insurance increase for the National Credit Union Share Insurance Fund and help credit unions spread out National Credit Union Administration (NCUA) premium assessment costs. The amendment has not yet been voted on--but is widely believed to have good prospects. The Senate expects to vote on the bill either today or Tuesday.
Mike Schenk, vice president of economics and statistics for the Credit Union National Association, talked about the National Credit Union Administration’s Corporate Stabilization plan and other issues affecting credit unions, at the Michigan Credit Union League’s Governmental Affairs Conference last week.
Mike Schenk, vice president of economics and statistics for the Credit Union National Association, discussed several fiscal and growth challenges facing credit unions--including the NCUA Corporate Stabilization plan and its possible consequences. Schenk told the league several difficult years are ahead for credit unions--especially if S. 896 does not pass with the amendment that spreads the NCUA premium assessment over several years. However, the good news is that there is solid evidence that credit unions have avoided “toxic” lending, and they have experienced across-the-board loan growth while bank lending has retreated, Schenk said. Also, Robert Manning, Ph.D., from the Rochester Institute of Technology, gave his presentation before the Michigan Senate Banking and Financial Institutions Committee. There, he shared findings in his continuing work on Michigan’s foreclosure crisis and pointed out the opportunity for credit unions as a solution (News Now April 30). Michigan State Sen. Wayne Kuipers (R-Holland) received the MCUL’s state lawmaker of the year award at the GAC.

State official discusses Chrysler thanks CUs

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LANSING, Mich. (5/4/09)--Michigan Lt. Gov. John Cherry discussed automaker Chrysler’s declaration of bankruptcy and also thanked credit unions for helping consumers when he spoke at the Michigan Credit Union League’s Governmental Affairs Conference (GAC) last week. Chrysler declared bankruptcy last week to buy time to create a partnership with Italian auto-maker Fiat Group SpALt 9 (Michigan Monitor April 30). “My guess is that when all is said and done, Chrysler will remain an American company,” Cherry told GAC attendees. “It will continue to manufacture cars here in Michigan, but the decision of [hedge funds refusing to help] is going to make it a bit more difficult.” Chrysler joined the Invest in America credit union loan partnership shortly after it was launched in December. The program provides access to affordable financing options and special discounts for credit union members (News Now Dec. 17). Cherry also thanked credit unions for doing their part to help consumers “realize their dreams.”

CU System briefs (05/01/2009)

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* COLUMBUS, Ind. (5/4/09)--A robbery suspect was nabbed within minutes of a holdup at the Centra CU when he casually walked past Indianapolis police with a bag containing $150,000 in stolen cash. James Edward Cole, 37, was arrested on preliminary robbery charges (Indystar.com (May 1). The incident occurred at 9 a.m. Friday when a man approached a clerk opening the credit union and complained the ATM next to the entrance didn't work. He shoved his way inside and demanded money. She gave him some, but he demanded more and shoved her to the floor. The woman screamed for help, alerting a deliveryman at a grocery store next door. He called 911. Police said Cole also was carrying a revolver … * HARRISBURG, Pa. (5/4/09)--Pennsylvania Credit Union Association's (PCUA) Credit Union Development Task Force, appointed by PCUA Chair Diana Roberts to assist credit unions with less than $10 million in assets, held its first meeting April 25 in Harrisburg (Life is a Highway April 29). The group will advise PCUA on how small credit unions can thrive and survive in the future. It also will develop measurable goals for the program and for credit unions. Chairing the task force is PCUA Director Cookie Yoder, CEO of Pittsburgh FCU. Members include: Joni Brown, CEO, Service Center for Credit Unions, Philadelphia; Tina Dolgash, CEO, Peoples Choice FCU, Wilkes-Barre; Linda Hazlett, CEO, Westco FCU, Greensburg; Linda Baginski, CEO, EC & EE Employees FCU, Erie; Jenna Kaczmarek, CEO, Community of Healthcare Employees CU, Chambersburg; John Marsh, CEO, Our Family FCU, Lancaster; and Debra Cohn, corporate account representative, Mid-Atlantic Corporate FCU … * HIGHTSTOWN, N.J. (5/4/09)--New Jersey's credit unions were represented at a New Jersey Business and Industry Association's "Meet the Decision Makers" breakfast April 15 in Jamesburg (The Weekly Exchange April 20). The event gave New Jersey Credit Union League President/CEO Paul Gentile and Director of Government Affairs Chris Abeel the opportunity to discuss pending municipal deposits legislation with the joint legislative leadership and other lawmakers and policymakers. From left are Abeel; Senate Majority Leader Steve Sweeney (D-3), who introduced the municipal deposits bill in the state Senate; and Gentile. They also talked with Senate Minority Leader Tom Kean Jr. (R-21). (Photo provided by the New Jersey Credit Union League).