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CU System Archive

CU System

CUs should prep for active hurricane season

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SILVER SPRING, Md. (6/1/10)--Credit unions in hurricane states are dusting off their business continuity and disaster recovery plans for what could be one of the busiest hurricane seasons on record. Hurricane season begins today and ends Nov. 30. The past two years have been easier on the U.S. coast--no major hurricanes hit U.S. land last year. However, the National Oceanic and Atmospheric Administration (NOAA) is projecting a 70% chance of 14 to 23 named storms this season, with eight to 14 growing into hurricanes. Three to seven of those hurricanes could be major, said NOAA (The Wall Street Journal May 28). The seasonal average is 11 named storms and six hurricanes with two of them major. In the higher numbers range, the forecast is closer to that of 2005, when Katrina struck the Gulf Coast. That year there were 28 named storms, with 15 hurricanes--seven of them major. NOAA cited two conditions that are hurricane friendly--a rapid warming of water in the Gulf of Mexico and the weakening of the El Nino system, when warm surface ocean waters in the Pacific produce wind shears in the Atlantic that hamper storm development. Last week was Hurricane Preparedness Week. At least two Gulf Coast credit union leagues that have seen their credit unions bear the brunt of past hurricanes are urging credit unions to be prepared. The Louisiana Credit Union League is posting information on its website containing a financial checklist, an emergency contact list for the credit union, a hurricane tracking map, and other tools that can be used in a disaster (E-Weekly May 26). The Texas Credit Union League also reported NOAA's projections in its newsletter (LoneStar Leaguer May 28). Nationally, the National Hurricane Center set up a special website to help people prepare for a hurricane. A hurricane is defined as a storm with winds of at least 74 mph. A major hurricane has winds of at least 111 mph. Gerry Bell, lead seasonal hurricane forecaster at NOAA, noted that although the pattern is as good as any in the past 10 to 15 years, there can be a wide range of outcomes. The more active the season, the more likelihood that a hurricane will strike land, he said. "Given this outlook, people need to start preparing for hurricane season now."

CU System brief (05/31/2010)

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* NEW YORK (56/1/10)--Newtek Business Services Inc. CEO/Chairman Barry Sloane appeared on FOX Business Channel Live Friday to discuss small business lending. Newtek, which provides small business services and financial products to small and medium-sized businesses, has an alliance with CUNA Strategic Services. Sloane was interviewed by Rebecca Diamond about President Barack Obama's $30 billion small business lending plan. The show was broadcast live from FOX's Happy Hour Show at the Waldorf Astoria's restaurant, The Bull and The Bear ...

N.Y. Coalition CDFIs aiding economy

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NEW YORK (6/1/10)--Community development financial institutions (CDFIs), including community development credit unions, continue to provide affordable credit and financial services in the face of tightening credit and state budget cuts. That was the message when more than 100 community development leaders met at the annual New York Coalition of CDFIs Statewide Conference in Albany, May 17-18. Those services to urban and rural communities create jobs, expand affordable housing, and support small businesses in main streets across New York State, said the National Federation of Community Development Credit Unions, which has staffed and operated the coalition for more than a decade. It coordinated the conference, brought representatives of New York-based CDFIs, political figures, state agencies and major banks to hear about the financial “state of the state,” the landscape for affordable housing development and small-business lending, and the impact of the economic downturn on low- and moderate-income people and communities. State Sen. Brian Foley (D-Long Island), chairman of the State Senate Banking Committee, discussed the key role that CDFIs play in creating jobs and spurring economic recovery. In 2008 alone, New York’s CDFIs had nearly $2 billion in loans outstanding to affordable housing projects, nonprofit facilities and small businesses in the state, Foley pointed out. Foley cited U.S. Treasury Department research, saying “CDFIs are able to leverage state dollars at a ratio of 20 to 1.” The coalition has sought state support for CDFI activities such as loans for affordable housing, small businesses and non-profit and child care facilities, as well as asset- building programs, and financial literacy and entrepreneurship training. In 2007, the New York State CDFI Fund was signed into law. Administered by Empire State Development Corp. (ESDC), the fund provided authority to support community-based lenders beyond other programs currently in place. Coalition Coordinator Melanie Stern, federation senior program officer, stressed that one major goal is to ensure a direct allocation for the New York State CDFI Fund remains in the governor's budget. “CDFIs are experts at leveraging public monies with private funds, and our research has shown that a $15 million investment from the state would create as much as $150 million in direct investment in our communities,” she said. “Our hope is that with adequate support, the New York State CDFI Fund will bring a renewed emphasis for the economic development of individuals and small businesses, complementing ESDC's traditional large-scale economic development projects.” Conference attendees also heard about federal opportunities for funding and support from federation President/CEO, Clifford N. Rosenthal, one of the founders and former chairman of the national CDFI Coalition. “This is new day in Washington,” Rosenthal explained. “We have an administration and a Congress that understand the impact of our institutions and their potential to assist in the economic recovery that our country so desperately needs. In providing our industry with unprecedented levels of funding and support, the president and congressional leaders are recognizing CDFIs as critical to the nation's economic growth and an integral part of the solution to the country's economic woes.”

N.C. CUs deliver good news to state lawmakers

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RALEIGH, N.C. (6/1/10)--Nearly 40 credit union staff and volunteers representing all eight North Carolina credit union chapters delivered good news to lawmakers in Raleigh during the past two weeks as part of the annual State Capital Connections program.
North Carolina’s Capital Connections program saw nearly 40 credit union staff and volunteers meeting lawmakers in Raleigh, N.C. From left, are: Maurice Smith, Local Government FCU, Raleigh; State Rep. Jennifer Weiss (D-35); and Leigh Brady, State Employees’ CU, Raleigh.
The advocates shared how their credit unions are helping members cope with the effects of the recession and financial crisis (Weekly Update May 28). The meetings came as lawmakers face challenges of their own once again this year, said the North Carolina Credit Union League. High unemployment and lower tax receipts mean that elected leaders face a tough chore in putting together the state budget during the short session of the North Carolina General Assembly, the league added. “The budget deficit is once again the hot topic of conversation in Raleigh, and some tough choices will have to be made,” said Lauren Whaley, league director of legislative and regulatory affairs. “I think it was refreshing for lawmakers to get some good news from back home, and credit unions throughout the state had a great message to share.” Nearly 20 representatives from the Foothills, North Piedmont, Northwest and Western Chapters converged on Raleigh last week. The meetings with elected leaders followed visits from representatives of the Southeast, Northeast, Tarheel and Piedmont Chapters a week earlier. One consistent, encouraging message heard in all the meetings was that credit unions continue to make loans to their members, said the league. Other credit unions have helped members in other ways, including mortgage assistance.
State Sen. John Snow (D-50), left, meets with credit unions during their State Capital Connections effort in Raleigh, N.C. Nearly 40 credit union representatives met with state lawmakers during the past two weeks. (Photos provided by the North Carolina Credit Union League)
“Some of our members have lost jobs and are struggling to pay the mortgage,” Michael Spink of Local Government FCU, Raleigh, said in a meeting with State Sen. Andrew Brock (R-34) and State Reps. Lorene Coats (D-77) and Fred Steen (R-76). “Our credit union is working hard to help people stay in their homes if at all possible.” While the legislature is not thought to be close to passing any bills that would have major impacts on North Carolina credit unions, Whaley noted that the league is tracking a number of bills in Raleigh. In the meantime, visits by credit unions have great value, “since they allow us to develop and maintain relationships with people who may have to vote on credit union legislation in the future,” she said. The state faces a $1.6 billion deficit this year and an estimated $3 billion budget gap next year. “State lawmakers face some tough choices in coming years,” said Dan Schline, league senior vice president of association services. “And they will have to consider cutting some services while looking for new sources of revenue. That’s one reason why it’s vitally important for credit unions to be consistently engaged in the political process.”

Vermont CUs elect AVCU board members

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SOUTH BURLINGTON, Vt. (6/1/10)--Vermont credit unions elected board members at the 63rd annual meeting of the Association of Vermont Credit Unions (AVCU) during the weekend of May 22-23.
Bob Morgan (left), NorthCountry FCU, South Burlington, Vt., who was elected to his first term on the Association of Vermont Credit Unions (AVCU) board of directors, poses with AVCU President/CEO Joe Bergeron at the AVCU 63rd Annual Meeting. (Photo provided by the Association of Vermont Credit Unions)
Matt Levandowski of Heritage Family FCU, Rutland, was re-elected to his second term on the AVCU board of directors (Newslines Express May 28). He was joined by Bob Morgan of NorthCountry FCU, South Burlington, who was elected to his first term. In addition to Levandowski and Morgan, the 2010-11 board comprises:
* Chairman--Jim Adorisio, Champlain Valley CU, Essex Junction; * Vice-chair--Sean Gammon, Members Advantage Community CU, Barre; * Treasurer--Susan Poczobut, Granite Hills CU, Barre; * Secretary--Susan Best, ORLEX Government Employees CU, Newport; and * Director--Jeff Morse, River Valley CU, Brattleboro.

Harriet May begins CUNA Board chairmanship today

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WASHINGTON (6/1/10)--Credit Union National Association (CUNA) Vice Chair Harriet May begins her term today as CUNA's newest board chairman. May, president/CEO of GECU in El Paso, Texas, moves from the vice chair spot to complete the term of Kris Mecham, who leaves the U.S. this summer to perform church mission work in Mongolia. Her term will end at CUNA's Annual General Meeting held in February during CUNA's Governmental Affairs Conference. "CUNA has a full plate of important issues it's addressing--interchange, member business lending, alternative capital and many more," said May. "I look forward to working with my colleagues on the board, Dan Mica and, in short order, Bill Cheney as CUNA pursues an agenda that will help credit unions better serve their members," she added, referring to outgoing president/CEO Mica and Cheney, who will become president/CEO on July 5. Elections for other members of the executive committee will be conducted at the CUNA Board July 15 meeting, which is held in conjunction with The 1 Credit Union Conference, the combined conference of CUNA and World Council of Credit Unions held July 11-14 in Las Vegas. All officers will serve through the Annual General Meeting in February, when they will have the option of running for a full one-year term. Other current CUNA Board executive committee officers are:
* Treasurer: Pat Wesenberg, president, Point Plus CU, Stevens Point, Wis.; * Secretary: Mike Mercer, president, Georgia Credit Union Affiliates; and * At-Large: Dennis Pierce, CEO, CommunityAmerica CU, Lenexa, Kan.
A special election is underway for Mecham's District 5, Class B CUNA board seat. Deadline for casting ballots is Friday. Candidates for that position are:
* William Jacobs, White Sands FCU, Las Cruces, N.M.; * Angela S. McCathran, People's Trust FCU, Houston; and * Roger Heacock, president/CEO, Black Hills FCU, Rapid City, S.D.

N.J. municipal deposits bill passes Senate committee

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TRENTON, N.J. (6/1/10)--Legislation that would enable counties, school boards, municipalities and other local government entities to use credit unions as public funds depositories was passed by a vote of 3-1, with one abstention, by the New Jersey Senate Commerce Committee Thursday afternoon. “This is an important first step and helps build a real head of steam,” said New Jersey Credit Union League (NJCUL) President/CEO Paul Gentile. “It’s the result of months of effort by our contract lobbyist, league staff and numerous credit union professionals and volunteers.” Committee Chair Nia Gill (D-34) and Sens. Raymond Lesniak (D-20) and Nicholas Scutari (D-22) voted for passage, Sen. Gerald Cardinale (R-39) voted no, and Senate Minority Leader Tom Kean Jr. (R-21) abstained (The Daily Exchange May 26). Gentile, as well as league director and Garden Savings FCU CEO Lou Vetere and 1st Bergen FCU Director Rev. Vernon Walton, testified in support of the bill. The New Jersey League of Municipalities, New Jersey Association of Counties and the New Jersey School Boards Association filed statements of support but did not provide formal testimony. As expected, the New Jersey Bankers Association testified against the bill. Also attending were:
* Shawn Gilfedder, NJCUL chairman CEO of McGraw-Hill FCU, Hightstown; * Mike Reilly, league director and CEO of Central Jersey FCU, Woodbridge; * Issa Stephan, CEO of First Financial FCU, Toms River; * John Fenton, CEO of Affinity FCU, Basking Ridge; * Andy Jaeger, CEO of Credit Union of New Jersey, Ewing; * Cindy Rein-Zima, CEO of Hamilton-Horizons FCU, Hamilton; * David Snodgrass, Affinity FCU; * Beth Degnan, Affinity FCU; * Mark Malinowski, Raritan Bay FCU, Sayreville; * Edward Haubert, Raritan Bay FCU; and * Chris Abeel, NJCUL director of government affairs.
The legislation was sponsored by Senate President Steve Sweeney (D-3), Senate Republican Conference Leader Bob Singer (R-30), Deputy Majority Leader Paul Sarlo (D-36) and Deputy Republican Conference Leader Kip Bateman (R-16). The measure moves to the full Senate for consideration. A companion bill by Rep. Fred Scalera (D-36) with seven co-sponsors is pending committee consideration in the lower house.

Wis. court denies suit vs. Ambac-banks settlement

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

Man who held CU employee hostage gets life in prison

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

CUNA closed Monday no INews NowI

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

Regulators OK Summit State Central merger

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

North Star CEO appointed to Iowa CU Review Board

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

OCDC panel CUs can link agriculture finance

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

Visions FCU to merge with Progressive Neighborhood FCU

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

CUNA Mutual annual report is online

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

WOCCU launches charity golf at The 1 CU Conference

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

CUAC announces 2010 board officers

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

Wisconsin league boards elected

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

Altra FCU Average credit card balance down

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ONALASKA, Wis. (5/27/10)--The national shift in the way consumers use credit cards--with consumers carrying lower balances on average--is reflected on the local level, a Wisconsin-based credit union told a local television station. Altra FCU, based in Onalaska, Wis., was featured on WKBT.com (May 25) discussing the drop in the average balance. The credit union has seen a "definite change" in members' use of credit cards, said Jack Peplinski, chief operating officer at the $731.3 million asset credit union. In the past 12 months, the average credit card balance among Altra's members dropped by roughly 8.5%. Analysts attribute the shift to the recession. Consumers are lowering their credit card debt to save for emergenices and to avoid getting in over their heads in an uncertain economy. The lower balances mean less revenues for credit card companies. Peplinski told the station that the shift is forcing credit card companies to be more creative in finding new sources of revenue. The segment advised consumers they can improve their financial situation four ways: spend less, save more, pay down existing debt and think through the options.

Dade County FCU to acquire CU thats in conservatorship

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DORAL, Fla. (5/27/10)--Dade County FCU, located near Miami, Fla., will acquire Keys FCU, a credit union that was placed in conservatorship last fall by the National Credit Union Administration (NCUA), said Dade County FCU and NCUA officials. "NCUA has chosen us and we're still in the process of finalizing the merger," said Dade County FCU CEO George Joseph. He told News Now that the emergency merger is approved but not final as of Tuesday. John McKechnie, NCUA's director of congressional and public affairs, also confirmed that Dade County FCU was awaiting final approval on the merger. NCUA had invited several credit unions to prepare bids to acquire Keys FCU, a $156 million asset credit union in Key West, Fla. It has 13,000 members served by five branches. Keys FCU had a delinquent loan ratio of 2.26% on March 31, compared with 5.06% at the end of December. In September the ratio was 5.04%. Its net worth at the end of March was 5.67%, compared with a December net worth of 6.17%., according to NCUA statistics. Dade County FCU will benefit from the merger in that it can extend its field of membership reach from Miami/Dade County to Monroe County and the Keys, Joseph told News Now. The acquisition means Dade County will have 17 branches plus a mobile branch serving more than 80,000 members. Its assets will total $650 million, Joseph said. He added that once the official papers are signed, the merger could be complete in "two to three weeks." The process moves faster because it's classified as an emergency merger.

The 1 CU Conference sees surge in registrations

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MADISON, Wis. (5/27/10)--In spite of residual economic challenges for credit unions in the U.S. and abroad, last week’s early bird deadline for The 1 Credit Union Conference spurred a flood of registrations for the July 11-14 event, co-hosted by the Credit Union National Association (CUNA) and World Council of Credit Unions (WOCCU). More than 560 registrations were received in the past week, bringing total attendance to more than 2,000 people from 53 countries. This year’s attendance to date is already substantially greater than the corresponding 2009 conferences for both CUNA and WOCCU, which were held in Boston, and Barcelona, Spain, respectively. “We’re ecstatic that so many credit unions from around the world will be represented at our joint conference this year,” said Dave Grace, WOCCU vice president of association services. “North American credit unions know that our meeting travels globally and many are taking advantage of the fact that it’s close to home this year by sending more executives, staff and board members to experience this unique event.” The conference will take place at the MGM Grand Hotel in Las Vegas, and will feature speakers on topics applicable to credit unions worldwide. Jim Collins, author of business bestseller, “Good to Great: Why Some Companies make the Leap … and Others Don’t,” will keynote the event. “Coming together to network and learn with other leaders during a difficult year demonstrates the strength and resilience of the credit union movement,” Grace added. “It’s also indicative of credit unions’ improved financial status, allowing them to continue focusing on professional development--a crucial initiative, particularly during challenging times.” For more information, use the link.

Longs Peak members vote to merge with Elevations CU

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BOULDER, Colo. (5/27/10)--Members of Loveland, Colo.-based Longs Peak CU Tuesday approved a merger with Boulder, Colo.-based Elevations CU, during a special membership meeting. The merger also has been approved by the Colorado Division of Financial Services and the National Credit Union Administration. The merger becomes final June 1, bringing the number of Elevations members to 84,000 with total assets of more than $955 million. The merged credit unions will operate under the Elevations name, with Gerry Agnes continuing as president/CEO. Lisa Cortese, president/CEO of Longs Peak CU, will become vice president of the Loveland market. “Our members have always been supportive, and this vote confirms their continued desire to see our credit union grow and prosper for years to come,” Cortese said. “As soon-to-be members of Elevations CU, they’ll discover that they made the right decision.” Elevations CU was formed in 1952 serving faculty and staff of the University of Colorado, Boulder, and serves more than 80,000 members with assets of more than $937 million. Longs Peak CU was established in 1953 as Loveland’s first credit union, serving the entire community. It has 4,000 members and assets of $20 million.

Note red flags of fraud ID theft vs. elderly

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WASHINGTON (5/27/10)--The Identity Theft Assistance Center (ITAC) is offering advice for families, caregivers and financial institutions to help them detect the signs of fraud and identity theft against older or vulnerable adults. “We see heart-wrenching cases where older people are victimized by a con artist or a family member or friend and the anguish that follows,” said ITAC President Anne Wallace. “Financial services employees are often the first to spot fraud and identity theft and alert the authorities. We want to share our experience with the families and caregivers of seniors so they too can be on the lookout for fraud.” The 2010 Javelin Strategy and Research Identity Theft Survey Report, co-sponsored by ITAC, found that consumers over age 65 are the least likely age demographic to become victims of identity theft. However, identity fraud against older Americans may be under reported, especially if it is perpetrated by someone they know or with their consent, said ITAC. Credit unions should note these red flags:
* A vulnerable adult with no knowledge of a newly issued ATM, debit or credit card; * Discovery of a vulnerable adult’s signature forged for financial transactions or for the titles of possessions; * “Out of sync” check numbers; * A sudden flurry of bounced checks and overdraft fees; * A transaction review showing multiple small-dollar checks posting to the senior’s account in the same month; * Large withdrawals from a previously inactive checking or credit account or a new joint account; * Abrupt increases in credit or debit card activity; * Sudden appearance of credit card balances or ATM/debit card purchases or withdrawals with no prior history of these cards; * Withdrawals or purchases using ATM or debit cards that are repetitive over a short time or inconsistent with prior usage patterns; * A vulnerable adult who appears confused about the account balance or transactions on the account; * A caregiver who appears to be getting paid too much or too often; * Significant increases in monthly expenses paid, which may indicate payment of expenses for persons other than the customers; * Sudden changes in accounts or practices, such as unexplained withdrawals of large sums, particularly with a vulnerable adult who is escorted by another who appears to direct the changing activity patterns; * A vulnerable adult who acknowledges providing personal and account information to a solicitor via phone or email; and * Excitement about winning a sweepstakes or lottery.
ITAC is a partner of Intersections Inc., a CUNA Strategic Service provider.

Texas foundation awards 23544 in 2Q grants

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FARMERS BRANCH, Texas (5/27/10)--The Texas Credit Union Foundation (TCUF) dispersed $23,544 in grants during the second quarter. The grants program included credit union and chapter grants, and financial literacy initiatives, said the Texas Credit Union League. The dispersal adds to the $137,240 already awarded by TCUF in the first quarter (LoneStar Leaguer May 26). Recipients include Security One FCU, Arlington, which will use its funds to co-sponsor a “Money Matters: Make it Count” program for the Boys and Girls Club of Arlington. TCUF has supported the program for two years. “This year, the program will be available at three locations and our goal is for 100 students to participate with 75 graduating,” said Pamela Stephens, Security One president/CEO and Texas league chairman. Other grants include:
* Three Junior Achievement partnerships with credit unions; * One chapter grant; * One scholarship to send a credit union professional to the National Credit Union Foundation’s Development Educator program; * A partnership with the Financial Literacy Coalition of Central Texas to deliver the Sammy the Saver program and products to young Texans; and * Six training and conference scholarships for credit union staff and volunteers.
TCUF provides grants for financial literacy, professional development and disaster relief. The grants are supported by Texas credit unions, the Texas league, Credit Union Resources Inc., credit union chapters, corporate sponsorships, Community Investment Fund investors, industry groups and individual donations.

AOLs IWalletPopI CUs one of memberships worth the money

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MADISON, Wis. (5/27/10)--Credit unions are one of 10 memberships “worth the money” for consumers and, furthermore, could be the membership consumers “can’t afford not to join,” according to an article on AOL’s WalletPop.com. Because many people carry debt on their credit cards, rates charged by credit union cards are desirable [because they are lower than many major card companies], financial guru Suze Orman wrote in an article about safeguarding finances, WalletPop said. “What I want you to do is to go to creditcardconnection.org and find a good credit union near you,” Orman wrote. “Anybody can join a credit union … [and] get a good credit union credit card. “Do you know by law, federally chartered credit unions cannot charge you more than an 18% interest rate?” Orman added. WalletPop also referred readers to the Credit Union National Association’s credit union locator tool on its website. To read the article, use the link.

CUNA Board seat election ballots due June 4

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MADISON, Wis. and WASHINGTON (5/27/10)--Ballots are due June 4 for the Credit Union National Association’s (CUNA) District 5, Class B Board position, which is up for special election. CUNA has received three nominations for the seat. They include:
* William Jacobs, White Sands FCU, Las Cruces, N.M.; * Angela S. McCathran, People’s Trust FCU, Houston; and * Roger Heacock, president/CEO, Black Hills FCU, Rapid City, S.D.
District 5 includes Arizona, Colorado, Kansas, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, Utah and Wyoming. The seat is currently held by CUNA Chairman Kris Mecham, who resigned, effective June 1. He will leave the U.S. this summer to perform mission work in Mongolia for his church. The successful candidate’s term of office will begin immediately and will expire at the adjournment of CUNA’s 2013 Annual General Meeting. The ballots are to be returned to the firm of Johnson and Lambert.

CU System briefs (05/26/2010)

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* ST. PAUL, Minn. (5/27/10)--Kristina Wright, vice president-communications for the Minnesota Credit Union Network (MnCUN), has been re-elected to the Board of Directors of the Minnesota Jump$tart Coalition for Personal Literacy Finance. She also serves as the organization's vice president. The coalition is a state chapter of the national non-profit organization and is committed to improving personal financial literacy of Minnesota's youth. It includes representatives from government agencies, businesses, educators, financial institutions, non-profit organizations and community leaders. Also, among the five new board members elected at the coalition's May 19 meeting was Sherri Stumpf, CEO, TruStone Financial FCU, Plymouth, Minn. ... * RALEIGH, N.C. (5/27/10)--State Employees' CU of Raleigh, N.C., has extended its business day cutoff to 5:30 p.m. from 2 p.m. The extension also applies to SECU's online Member Access and Mobile Access services, and its ASK-SECU Voice Response phone system. Members requested the extended hours, which will give them more opportunity in the day to have transactions completed for same-day credit, SECU said. The extension will pave the way for future services such as "Another Chance," an upcoming program being designed to help offset potential non-sufficient funds (NSF) fees or overdrafts. SECU recently launched NSF Free Days and Two-Way Text Messaging and Alerts to help combat such issues. "Our goal is to keep money in members' pockets and these services are ways to help accomplish that goal," said Jennifer Hamrick, senior vice president of SECU's support services department ... * BOULDER, Colo. (5/27/10)--Elevations CU, based in Boulder, has established the Elevations Foundation for charitable giving. The foundation takes the place of the credit union's Community Relations Committee, which in the past decade awarded more than $1 million in scholarships, grants, volunteer time and donations to people and nonprofit organizations in Boulder and Broomfield Counties. The new foundation will collect and distribute funds that support charitable causes and education within the communities Elevations serves. Gerry Agnes, president/CEO, said the foundation's structure "allows us to sustain our charitable efforts for years to come." The foundation's new officers are: Jo Hetherington, chair; Rachael Maag, vice chair; Carol Krismann, treasurer; and Cris Jones, secretary ... * BROOKLINE, Mass. (5/27/10)--Volunteers and staff of MAFCU CU, a
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$66 million asset credit union based in Brookline, Mass., spent May 15 packing 66 boxes of sheets, pillows and pillow cases to send to hospitals in Haiti. All items were donated by members, staff and volunteers, and will be delivered to Haiti through Partners in Health, a Brigham and Women's Hospital-affiliated medical facility that has provided medical care in Haiti for more than 20 years. "Many of our members were directly affected by the earthquake in Haiti, and in this way we could help our members and their loved ones," said Nicole James, president/CEO of MAFCU. The credit union's original base of membership is in the medical area. (Photo provided by MAFCU CU) ... * ST. LOUIS (5/27/10)--Earl Ogolin, longtime credit union founder, volunteer and advocate, died May 25 at the age of 90, according to the Missouri Credit Union Association (MCUA) (The Missouri difference May 26). Ogolin began his service to credit unions in 1946 at First Missouri CU, St. Louis. He founded Southpointe CU, St. Louis, in 1951, and remained on both credit unions' boards for years. In 1957, he became one of the youngest members of the MCUA board of directors. He served on the board for more than four decades and on the Missouri Corporate CU board for nearly 20 years, including one term as president. He joined the Credit Union National Association (CUNA) board in 1966 and served on the national level for nearly 30 years. In September 2009, Ogolin was named to the Missouri Honor Roll, for demonstrating leadership and guidance in maintaining the credit union philosophy. In February, he was named to the Credit Union House Hall of Leaders in Washington, D.C. He is survived by his wife and two sons. Visitation is today at 4 to 8 p.m. at Ziegenhein Funeral Home, 4830 Lemay Ferry Rd., St. Louis, MO 63129. Services will be at 9:30 a.m. Friday at Assumption Catholic Church, 4709 Mattis Road, St. Louis. In lieu of flowers, memorials can be made to the Assumption St. Vincent DePaul Society, 4725 Mattis Road, St. Louis, MO 63128 ...

Innovations FCU Flash Mob gets the word out

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PANAMA CITY BEACH, Fla. (5/26/10)--They may be just dancin' fools, but Innovations FCU's Flash Mob team members are creating the Buzz about the credit union in an innovative way: By having fun. They have the youtube video to prove it. The mob--about 50 employees, Facebook fans, members and family--appeared at the grand opening of the NorthWest Beaches International Airport Monday in what seemed like a spontaneous display of party-down-itis. The video shows a typical grand opening crowd milling about on the asphalt until the Panama City-based, $150 million asset credit union's CEO, David Southall, snaps shut his cell phone. He takes a couple of dance steps as the music begins. Gradually people--secretly the mob--fall into step with him, form lines and dance four numbers to the likes of Jon Bon Jovi and hip hop. The mob drew people, photographers, and news hounds who watched the line-dance routines. Then the music went off and they all just milled back into the crowd. Southall told News Now that the spontaneous burst of dancing took weeks to choreograph. "It was all a secret," he said, adding they worked with a partner at the local radio station. "Holly and I choreographed everything, and we held practices for two months. We recruited team members and gave them an instructional DVD to watch so they'd be familiar with the moves when we started practicing. "We practiced every Tuesday, Wednesday and Thursday after work, with 10 or 20 team members at a time. Then we got the whole group together." The group also had to get the permission of the Transportation Authority and airport. "This was tricky because the governor was pulling up as we did the routine. We had a permit for a four-minute routine from 11:16 a.m. to 11:25 a.m.," Southall said. "People were already seated in chairs for the governor's appearance, and they were turning around, heads popping up like popcorn and cell phone cameras going off. Then the news people picked it up. We had t-shirts afterward so everyone knew we were Innovations FCU," Southall said. "We wanted it on youtube, not the news. Those watching the news wouldn't understand what we were doing." The video on Youtube proved to be so popular Monday morning that Youtube suspected the hits were falsely escalated; Youtube locked the video's hits counter but unlocked it Monday night. The video counted 1,600 hits Tuesday. "Our phones are ringing, people are talking about us on their Facebook pages. People want to become a member. They want to work at the credit union," Southall said. "Credit unions can be so boring and they don't have to be. You can't make banking cool, but you can have a bank that does cool things," he said. Innovations FCU used to be a military credit union--"old, stale and boring," he said. "We changed our business model to having fun and providing exceptional service. We got rid of the teller lines and opened up a dialogue where we meet members and work together on the transaction. We hired sales people; not everyone worked for a credit union before. Our philosophy is to have a good time providing that exceptional service. It's what others want to do but they don't have the resources." The credit union is attracting younger members. "You have to do the things that attract them, go where they go. You can't attract young people with a billboard or a TV commercial. You have to get to where they're doing things." Since Southall became CEO at the end of 2004 and the credit union became a community charter, it has seen a doubling of assets, of members and of loans, he said. The credit union will have another "flash mob" at a street festival on the first Friday in June. "It's a venue that is held outside, with music, and bands, and it's a party crowd. That's our youth market. We want their business," he told News Now Check out the video and turn the music up loud.

N.J. municipal deposits bill adds a supporter

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TRENTON, N.J. (5/26/10)--New Jersey State Sen. Christopher "Kip" Bateman (R-16) has added his name as a co-sponsor of a state municipal deposits bill, S-1807, giving it strong bi-partisan leadership support, said the New Jersey Credit Union League. The bill would mean counties, school boards, municipalities and other local government entities could use credit unions as depositories of public funds (The Daily Exchange May 25). Bateman is deputy Republican Conference leader and the third-ranking Republican in the state Senate. Other co-sponsors are Senate President Steve Sweeney (D-3), Republican Conference Leader Bob Singer (R-30) and Deputy Majority Leader Paul Sarlo (D-36). The measure is scheduled to be heard Thursday morning by the Senate Commerce Committee, the league said.

Europe debt will impact U.S. CUNA tells ITheStreetI

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WASHINGTON (5/26/10)--The uncertainty across global markets from Europe's debt problems and the tension between North and South Korea was reflected in Tuesday morning's negative stock market numbers. But the effects of Europe's debt won't be devastating to the U.S. economy, Credit Union National Association (CUNA) senior economist Mike Schenk told TheStreet.com (May 25). The Dow Jones Industrial Average had dropped 1.3% to 9,934. The S&P 500 lost 1.3%, to 1,060 and the Nasdaq lost 2.1%, at 2,168, said the article. "Equity markets thrive when there's certainty, and clearly we don't have that right now," Schenk told the publication. "There's a sense that once we have more clarity, we'll be able to see that we're going to get through this and that we'll be okay," he added.. "Now, I'm not saying that European debt issues won't drag on U.S. economic growth. I think it'll have an effect and it'll be a noticeable effect, but it won't be devastating," Schenk added. He noted that Tuesday's market numbers "is really being driven by Europe, but all the U.S. data we're getting is showing that consumers are in a much better place and even the housing market is in a better place--and that's what's pulls us out of downturns. "I'm not saying the data is being ignored, but the emphasis is in other places," Schenk said. "Once the market gets more clarity, I think the data we've been seeing will help the market stabilize." For the full article, use the link.

UBIT check is in the mail to Community First

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APPLETON, Wis. (5/26/10)--Community First CU will receive the check refunding unrelated business income taxes (UBIT) it paid the government in 2007. The refund was ordered by a Wisconsin court after the credit union's landmark win in its challenge of the government's assertion that UBIT applies to certain insurance products sold by credit unions. A check from the U.S. Treasury for $62,808.59 was sent to the credit union yesterday, according to lawyers in the case. The amount represents Community First's 2006 UBIT refund of $54,604, less a small offset for non-UBIT employment taxes, plus interest that accrued from when the credit union paid the tax in 2007 until the 2010 refund. The Appleton, Wis.-based credit union's court win more than a year ago was considered a milestone, coming after 12 years of effort to obtain clarity from the Internal Revenue Service on credit union UBIT liability (News Now May 20, 2009). The credit union filed the suit on Jan. 15, 2008 to seek a refund of UBIT paid on income from several insurance products. The Credit Union National Association (CUNA), along with the rest of the credit union industry's UBIT Steering Committee, backed the credit union in its challenge. The Steering Committee is comprised of CUNA, CUNA Mutual Group, the National Association of State Credit Union Supervisors, and the American Association of Credit Union Leagues.

Voting ends Monday on ICU MagazineI Hero of Year

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MADISON, Wis. (5/26/10)--Voting will end Monday for the Credit Union Magazine 2010 Credit Union Hero of the Year. Magazine subscribers have nominated four heroes for the 2010 award:
* Leslie Ellis, CEO of Credit Union 1, Anchorage, Alaska; * Augustine Kang (posthumous), first CEO of the Association of Asian Confederation of Credit Unions, and special project director for the World Council of Credit Unions’ China project; * Dave Maus, CEO of Public Service CU, Denver; and * Vic Thate, executive vice president of FAA CU, Oklahoma City.
This year’s winner will be honored at The 1 Credit Union Conference in Las Vegas, July 11-14, and will receive free conference registration and lodging.

North Jersey FCU launches loans for community heroes

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TOTOWA, N.J. (5/26/10)--North Jersey FCU’s Hero Loans Program, launched in 2009, was the credit union’s most successful promotion last year. The program recognizes the “every day” heroes--teachers, firefighters, police officers and others vital to the community, said the credit union. The $183 million asset, Totowa, N.J.-based credit union began as a credit union for teachers and grew into an institution serving firefighters, police officers and other vital members from local communities. These professionals tirelessly and unselfishly care for their community with little recognition, and are easily taken for granted, North Jersey FCU said. Hero Loan Campaign benefits include:
* 0.25% off the rate on consumer and auto loans, plus an additional 0.25% off the rate for making loan payments via direct deposit; * No fee for home equity loan or first mortgage applications. Also, members will receive 0.125% off the rate for full direct deposit, and automatic payment transfers; * 0.20% above the current advertised rate on a two-year share certificate; * Free checking with interest, available with a minimum balance of $100; and * e-statements, which are required for the Hero Loan Campaign.
Teachers can skip up to two consecutive loan payments during the summer months. They can customize their own payment schedule. North Jersey FCU said it is the only financial institution that provides this personalized service for its members. “I work so hard throughout the year doing what I love as a teacher,” said one teacher and North Jersey FCU member. “But when school is closed I don’t receive income. It’s really nice to be able to skip a payment on my loan when I am not receiving a paycheck during the summer months. As a member they let me do just that and it works well for me and my family’s budget.”

Georgia CUs elect new leaders

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DULUTH, Ga. (5/26/10)--Georgia’s credit union delegates elected new leaders to head up Georgia Credit Union Affiliates (GCUA) board of directors at the GCUA annual convention. GCUA is comprised of three state support organizations--Georgia Credit Union League (GCUL), Cooperative Services Inc. (CSI) and Georgia Central CU. GCUL and CSI elections were held. The newly elected GCUL board chair is T. Greg Connor. Connor is the executive vice president of Associated CU, Norcross. He has been involved with the credit union movement in Georgia since his graduation from Georgia Southern University. Connor was an employee of Atlanta Postal CU from 1977 through 2000, when he moved to Associated CU. Connor was elected to the GCUL board of directors in 2000 and has served in several capacities. Other GCUL board officers elected are:
* First vice chairman--Marshall Boutwell, CEO, Gwinnett FCU, Lawrenceville; * Second vice chairman--Stacy Tallent, CEO, Health Center CU, Augusta; * Treasurer--Barry Heape, CEO, DOCO Regional FCU, Albany; and * Secretary--Don DeCinque, CEO, Atlanta Postal CU.
Pat Conn, CEO of United 1st FCU, St. Marys, was elected to the board of directors. Existing board members will serve out the remainder of their terms. New directors of Cooperative Services Inc. elected were: Claude Garrett, CEO, MidSouth Community FCU, Macon, and Terry Hardy, CEO, MembersFirst CU, Decatur. Current board members will serve out the remainder of their terms.

Rochester paper highlights CUs MBLs support

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ROCHESTER, N.Y. (5/26/10)--A Rochester, N.Y., newspaper highlighted New York credit unions’ member business lending (MBL) and noted support by some of the state’s legislators for increasing the MBL cap for credit unions. For nearly 100 years, credit unions have provided business lending and business services, Michael Lanotte, senior vice president and general counsel for the Credit Union Association of New York, told the Rochester Business Journal Friday. “Credit unions have been providing business lending and business services to their members who own small businesses,” Lanotte told the Journal. “They were able to meet those needs unimpeded, in a very safe and sound manner for the better part of close to 80 years.” However, a change in a federal law in the late 1990s capped the percentage of total assets a credit union could use for business lending at 12.25% , Lanotte told the Journal. Credit unions’ business lending may be more prevalent than people perceive, Lanotte told the publication. “Typically, a credit union business loan is a very small number, an average of $200,000,” he added. “Credit unions maybe aren’t classifying these types of loans as truly business loans because they’re so small. They’ll go in as a secured personal loan. “Credit unions, although [the loans] might be on the books as business loans, are really doing a lot of small-business loan help for their members,” Lanotte continued. “Others, honestly, probably haven’t gotten involved much lately simply because of this artificial cap.” U.S. Sens. Charles Schumer (D-New York) and Kirsten Gillibrand (D-New York) are co-sponsors of a job creation bill in the U.S. Senate that includes legislation to raise the MBL cap to 25%, the Journal said. The publication also noted the efforts of several New York credit unions to provide member MBL, including: ESL FCU, Rochester; Reliant Community FCU, Sodus; Family First of New York FCU, Penfield; Olean (N.Y.) Area FCU, The Summit FCU, Rochester, and Syracuse (N.Y.) FCU.

CU System briefs (05/25/2010)

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* ATHENS, Ga. (5/26/10)--A woman crashed her car into the Athens, Ga. branch of the Georgia FCU Monday morning, slightly injuring herself and ont to two credit union employees, said Athens-Clarke police (Athens Banner-Herald and WGAU.com May 24. The unidentified driver lost control from a medical problem and was taken to a hospital for observation, police said. Emergency workers treated one or two employees for minor injuries and scratches at the scene. The front of the building was demolished ... * INDIANAPOLIS (5/26/10)--George R. Chesnut, 47, formerly of Alton, Ill., was sentenced Friday to 70 months in prison after pleading guilty to two bank and credit union robberies in southern Indiana. He also is being charged with three bank robberies in Missouri. The heists included a Dec. 5, 2008, incident at the Evansville (Ind.) CU, where he took about $5,800. The judge also ordered Chesnut to undergo five years supervised release after his prison term, pay a $500 special assessment and make restitution of $38,562 (Targeted News Service May 24) ... * MADISON, Wis. (5/26/10)--CUNA Mutual Group sales staff assemble bicycles as part of a team-building event in Madison, Wis. The team build 14 bicycles and distributed
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them to seven boys and seven girls from the area's Boys and Girls Club in a surprise ceremony. Ninety members of CUNA Mutual's "Select" sales team, who provide customer service exclusively for small credit unions, assembled the bicycles as part of a two-day event where they honed their collaberation and problem solving skills as a way to better serve their customers. The exercise required the 14 teams to earn each bicycle part before they assembled them. Neither the teams, nor the children who arrived at CUNA Mutual knew beforehand about the surprise presentation. Also, team-building employees qualified for the company's Dollars for Doers program, and a $250 donation was presented to Michael Johnson, CEO of the Boys and Girls Club of Dane County. Johnson told the group, "these kids will never forget this experience and the way you have made a difference in their lives." (Photo provided by CUNA Mutual Group) ... * VANCOUVER, Wash. (5/26/10)--Columbia CU has been named the Small Business Administration (SBA) Credit Union Lender of the Year in the Portland, Ore., district. The district covers 30 counties in Oregon and four counties in Southwest Washington. Columbia was among the top 2009 financial services institutions chosen for their demonstrated commitment to small business during times of economic difficulty and credit shortages ...

Citizens CU to merge with Lake Michigan CU

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KALAMAZOO, Mich. (5/25/10)--Members of Kalamazoo, Mich.-based Citizens CU have voted to merge into Grand Rapids, Mich.-based Lake Michigan CU, pending regulatory approval. Both credit unions' boards had approved the merger proposal earlier (Kalamazoo Gazette May 21). The merger allows Lake Michigan CU to expand its footprint and services with four additional branches in the Kalamazoo area, President/CEO Sandra Jelinski told the newspaper. It will offer a full range of financial services to the new members, including a 4% Max Checking account and low-rate mortgage guarantee. Citizens CU has $60 million in assets and 9,000 members. With the addition of Citizens, Lake Michigan CU will have $2 billion in assets.

CUAC President John Dill steps down

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DENVER. Colo. (5/25/10)--John Dill has stepped down as president/CEO of the Credit Union Association of Colorado (CUAC), effective immediately, CUAC's Board of Directors announced Monday. Pete Kirchhof, CUAC's former senior vice president of government affairs, has been named interim president/CEO. "John Dill came to CUAC to revitalize and reinvigorate the credit union movement in Colorado and Wyoming," said board Chairman Mike Williams. "He had a strategic vision and put in place a legislative and political plan that has given CUAC’s membership a solid foundation. "We thank John for his leadership over the past six years as we look forward to a new strategy to meet the pressing demands of a challenging economy," Williams added. "The board is optimistic about the future in spite of the economic downturn and we want our member credit unions to thrive and grow as the economy recovers.” "CUAC is a great organization, and I wish all the members and staff much success in the future," said Dill. Credit Union National Association President/CEO Dan Mica said, "We wish John well in whatever path he chooses next and appreciate the work he has done at the state level, and nationally through AACUL [American Association of Credit Union Leagues], in the areas of political and grassroots organizing and public affairs campaigns. We look forward to continuing to work with the leadership of the Colorado and Wyoming Leagues on behalf of credit unions." CUAC's board will begin the search for a new CEO immediately.

Quest CU debuts after two Kansas CUs merge

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TOPEKA, Kan. (5/25/10)--The merger of Credit Union 1 of Kansas and Credit Unions United has resulted in a new name: Quest CU. The Topeka, Kan.-based credit union’s new name encourages members and staff to “discover the possibilities,” according to co-presidents/CEOs Gary Colcher and Vickie Hurt. “We have a track record of providing friendly service, easy account access and a full array of traditional and leading-edge services. Now, as Quest CU, that’s going to continue to be a daily goal,” Hurt said. Colcher agrees. “People want their financial institution to be friendly, financially strong and safe, reliable, professional and efficient,” he said. “They also want it to stay current on new technologies, which is very important to Quest CU. There’s always more we can do; it’s a journey. I think the way to sum it up is that we’re on a quest for excellence.” The two credit unions received regulatory approval to combine in October and put it to a membership vote in early November. Quest CU will continue to serve members throughout a combined field of membership, which expands from Topeka to communities in Eastern Kansas. “We are two healthy, well-capitalized credit unions with strong membership bases, so the consolidation wasn’t required,” Hurt said. “But we believed we could do more for our members by uniting. Not only do they gain access to more branch locations, but we’ll be open more hours. And with the increased competition for business among financial institutions today, joining together will help us continue to ensure competitive rates, low fees and greater member convenience.”

Another CU files trademark suit

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PITTSBURGH, Pa. (5/25/10)--For the second time in just over a week, a credit union has filed a trademark infringement suit in a federal court against an entity using a similar name. Clearview FCU (CFCU), based in Moon Township, Pa., filed the suit Thursday in a U.S. District Court in Pittsburgh, against Clearview Credit Inc., a Tampa, Fla.-based debt reduction service provider that includes credit counseling and debt settlement Clearview Credit Inc. (CCI) was known as Debt Reduction America Inc. until early January 2009, according to the complaint filed Thursday. CFCU offers banking services including credit counseling. It filed its trademark on Aug. 21, 2003, and registered it Jan. 24, 2006, for the design mark "Clearview Federal Credit Union" and design in connection with "credit union services." CFCU also holds a trademark for "Clearview" in connection with credit union services, which it filed for on Jan. 12, 2003 and registered on Feb. 1, 2005. The credit union alleges that the debt settlement company is targeting the credit union's 79,000 members via phone and mail solicitations "in an apparent attempt to trade on the goodwill established by CFCU in connection with the Clearview marks," and causing confusion in the market place. CCI's solicitation of CFCU's members "has, in fact, caused several instances actual confusion in the marketplace as to the source and/or sponsorship of CCI's services." Solicited credit union members "learned that CCI's solicitations did not originate from CFCU only upon being reassured by CFCU representatives that the solicitations were not authorized or provided by CFCU and that CCI is in no way associated or affiliated with CFCU." The suit seeks a preliminary and permanent injunction and restraint from using the mark or any similar mark, destruction of any materials with the mark, and damages. On May 12, another credit union, Michigan First CU, Lathrup Village, Mich., brought a trademark infringement suit in the U.S. District Court in Ann Arbor against First Michigan Bancorp Inc., based in Troy, Mich., saying that the name "First Michigan" is too similar to its name (News Now May 18).

CUNA Mutual restructures target retirement date funds

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MADISON, Wis. (5/25/10)--Because CUNA Mutual Group views managed investment accounts as an appropriate investment choice for most employees, it is teaming up with Madison Asset Management to re-engineer its Ultra Series Target Retirement Date Funds. The funds, which plan sponsors can include in employees’ 401(k) retirement accounts, treat the retirement date as an important destination, a time when new investment strategies are often developed, said Scott Knapp, director of investment strategy for CUNA Mutual. Other target date funds view the retirement date as a “flyover date,” where investment strategies remain unchanged. “When you transition from getting a paycheck and accumulating assets to generating your own income by spending down your assets, this is a major decision point,” Knapp said. “We want to protect assets at this time so people can make prudent choices without the risk of a market downturn derailing their plans.” Target date funds are gaining traction as the account option of choice, because most participants need help in managing their accounts, he said. “Why force participants to become portfolio managers when, in fact, they’re not.” In 2009, participants held about a quarter, or 24.7%, of their assets in a premixed fund--up nearly 2% from 2008 and 8% from 2007--followed by Guaranteed Investment Contract/stable-value funds, 17.1%, and large U.S. equity funds, 15.3%, according to Hewitt Associates. When available in the plan, about half of employees, 51.2%, invested in a premixed portfolio. Target date funds are now offered by 78% of plans. The redesigned Ultra Series Target Retirement Date Funds use a more conservative approach in the 10 years prior to retirement and after retirement with a focus on capital preservation, said Tom Eckert, vice president of Retirement Plan Services. “The funds’ glidepath uses a unique ‘risk management zone,’ which gives portfolio managers the ability to adjust the equity exposure based on current market valuations and economic conditions,” Eckert said. “Outcome-based plans make it easy for participants to save enough for retirement and avoid huge investment mistakes that can occur in typical plans,” he added. “Investments offered in an outcome-based plan are often not the leading hot funds, but they support better decision making among participants. Ultimately, they can end up more financially secure during retirement.” The Ultra Series Target Retirement Date Funds are used in more than 2,000 of CUNA Mutual’s 401(k) plans and feature Target 2020, 2030 and 2040 versions. The funds are managed by Madison Asset Management, a member of the Madison Investment Advisors Inc. family of companies. CUNA Mutual manages 4,000 credit union retirement plans representing $6 billion in assets under administration. Knapp said the company has embraced outcome-based retirement planning for 15 years.

Global Womens Leadership Network names scholarships

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MADISON, Wis. (5/25/10)—Eleven women who are current or potential future leaders in the credit union movement will receive scholarships to attend the 2010 Global Women’s Leadership Forum thanks to donations by members of the sponsoring organization, the Global Women's Leadership Network, a program of the World Council of Credit Unions (WOCCU).
Click to view larger image Named as this year's network scholarship recipients are Eliane Jose Ferreira, Brazil; Elenora Zgonjanin Petrovic, Macedonia; Elena Koleda, Belarus; Maria de Lourdes de Jesus Montalbo, Mexico; and Catherine Mwamba, Purity Maina, Mercy Macharia and Susan Gachora, all from Kenya. In addition, the Co-operative Development Foundation of Canada will fund scholarships for Swanzie Success Mawerenga, Malawi; and Rose Angeyamgo, Uganda; and the Louisiana Credit Union League will fund a scholarship for Natalia Vydrina, Russia. The photo above shows the network's first forum in Barcelona in 2009. (Photo provided by the World Council of CUs)
The scholarship recipients all will receive a one-year membership to the leadership network and free registration to attend the July 10-11 Global Women's Leadership Forum at the MGM Grand in Las Vegas, Nev. Several of the recipients also will have their travel expenses and registration covered for The 1 Credit Union Conference, scheduled concurrently at the same location. The Global Women's Leadership Network, which debuted last year at WOCCU's World Credit Union Conference in Barcelona, Spain, was formed to recognize the important role of women in credit unions around the world, as well as their roles at the community and family levels, said Brian Branch, WOCCU executive vice president and chief operating officer, when announcing the scholarships. "Through our development work we have seen how important women have become in helping sustain and build credit union movements not only through their institutional involvement, but through participation in savings and lending groups that help support their families and strengthen their communities," said Branch. "Our goal is to support those current and potential women leaders and help bring their commitment and expertise to new levels of achievement. The Global Women's Leadership Network provides women with an international network that engages them in professional and personal development," he added. WOCCU reports that the network now counts more than 100 women from more than 20 countries among its members. There will be a July 14 session at the conference for those interested in learning more about the network or becoming a member. There is a second invitation-only forum event offered by the network this year in conjunction with The 1 Credit Union Conference, a joint event that combines the Credit Union National Association's America's Credit Union Conference and WOCCU's World Credit Union Conference. The July 11 session will focus on educational presentations, confidential peer-to-peer exchanges and candid discussions on business-driven topics. The network also is hosting T-Up Fore WOCCU, a golf tournament fundraiser, the proceeds of which will help fund future network scholarships and development programs.

Latino CU celebrates first 10 years

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DURHAM, N.C. (5/25/10)--In its first 10 years, Latino Community CU (LCCU) in Durham, N.C., has opened 10 branches, reached nearly $100 million in assets and attracted 54,000 members. The Hispanic-focused credit union celebrated its 10-year anniversary Sunday with an event hosted by the Durham Armory. It featured speakers Gabriela Zabala, director of the Office of Hispanic/Latino Affairs for the North Carolina governor’s office, and Carlos Flores Vizcarra, consul general of Mexico in Raleigh, N.C. LCCU was created in response to violence in the Latino community in the late 1990s, when many Latinos suffered home invasions for the cash they kept in their homes instead of in a financial institution, according to The Herald-Sun (May 23). Since its inception, LCCU has provided members with financial services, including more than $130 million in loans to more than 10,000 families. Most LCCU members are low-income and were previously unbanked, the article said. The credit union wants to continue to expand geographically, and grow and provide more member business lending. John Herrera, past LCCU board chair, told the newspaper that the credit union hopes to ignite the entrepreneurial spirit with micro loans. It also wants to offer individual retirement accounts and college savings accounts, he said. LCCU’s 10 branches are located in Durham, Carrboro, Raleigh, Garner, Winston-Salem, Greensboro, Charlotte and Fayetteville. One will open soon in Monroe.

Vermont becomes first state to pass swipe fees law

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BURLINGTON, Vt. (5/25/10)--Vermont became the first state Friday to pass a law that limits swipe fees on credit and debit purchases. The passage comes one day after the U.S. Senate Thursday approved a measure to regulate interchange fees as a part of a financial regulatory reform bill. The Vermont law will allow retailers to set a $10 minimum for credit and debit card charges and give a discount to shoppers who pay with cash beginning Jan. 1 (The Washington Post May 22). The Association of Vermont Credit Unions (AVCU) lobbied on behalf of state credit unions to try and prevent passage of the bill, S. 138, saying it could harm the ability of consumers to use their credit and debit cards at merchant locations statewide. The legislation was strongly opposed by AVCU, and although the measure passed, AVCU's lobbying efforts resulted in some improvements in the final bill. (SEE RELATED: Vermont card acceptance bill moves to governor’s desk). AVCU is undecided whether to pursue a future legislative campaign to try to alter the new state law, according to Joe Bergeron, AVCU president. “Our short-term focus, and that of our state regulator should the version in Congress attached to financial restructuring legislation become law, will be to conceive how state and federal versions will interplay, if at all,” he said. “The federal provision being considered goes much, much further in its potential negative impact on credit union card programs than the far more limited Vermont provisions resulting from very active lobbying efforts in the Vermont statehouse.” Vermont Gov. James Douglas will not sign the bill, but he also will not veto it, which means it will become law. In a letter to David Gibson, Vermont secretary of state, Douglas said that he sympathizes with the concern of Vermont’s merchants regarding credit card fees, credit card rules and interchange fees imposed on them without the opportunity to negotiate terms and the freedom to choose pricing options. However, Douglas said he does not believe such legislation should be handled at the state level. “This is a national, if not an international, issue that is best addressed in a wider forum,” he said.

NCBA CEO touts CUs co-ops in IForbes.comI

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MADISON, Wis. (5/25/10)--Cooperatives embody the kind of corporate social responsibility the U.S. economy needs, the CEO of the National Cooperative Business Association (NCBA) wrote in an op/ed piece May 13 in Forbes.com. He cited in particular credit unions. After going through a huge recession in which greed and questionable business deals were prevalent, some are calling for innovative solutions, but cooperatives already exist and can help provide a cure, Paul Hazen, NCBA CEO, wrote in Forbes. “Co-ops aren't just for alternative groceries,” Hazen added. “There are some 29,000 of them in all sectors of the American economy, a recent study by the University of Wisconsin found. They have revenues that exceed $3 trillion and employ 856,000 people. Household names among them include Ace Hardware, Ocean Spray, the Associated Press and Sunkist.” Hazen calls attention to the difference between credit unions, which are cooperatively owned financial institutions, and investor-owned banks. “Large-scale banks have been publicly flagellated for the risks they took with securitized subprime mortgages and the ways they artificially--and even illegally--inflated the value of their assets,” Hazen wrote. “They did all this, we know, because they were under heavy pressure from boards and investors to maximize earnings. “Credit unions simply didn’t do that,” he continued. “Credit union executives are unabashed when they say they run boring businesses. No risky, faceless customers, no fancy junk bonds. Banking should be boring and simple, they like to say. At last these conservative practices are beginning to look more respectable, and boring banking has piqued the public’s interest, given the ill effects we’ve all seen stem from the flashy excess of Wall Street-driven banking.” To read the op/ed, use the link.

CU System briefs (05/24/2010)

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* BOISE, Idaho (5/25/10)--An Idaho man pleaded guilty to three counts of bank robbery and is headed to prison (Associated Press May 21). Russell Lee Brumbaugh, 46, said he robbed three financial institutions, including Idaho Advantage CU, Boise, in November and Payette River Community CU, Horseshoe Bend, on Feb. 3. Each charge carries a maximum sentence of 20 years, a fine of up to $250,000 and maximum supervised release of three years ... * WASHINGTON (5/25/10)--Leon Stanford, 42, has been sentenced to 10 years in federal prison for taking $920 in cash from Choice One Community FCU, Wilkes Barre, Pa., on July 23, 2008. Stanford pleaded guilty to the robbery. He is accused of handing a teller a note demanding money and claiming he had a bomb. Stanford was indicted by a federal grand jury in August 2008, and was ordered to serve three years of supervised release after his release in prison. He also was ordered to pay a $100 special assessment and restitution in the amount of $920 (Targeted News Service May 21) ... * NEWARK, Ohio (5/25/10)--Two Ohio credit unions joined forces to bring Mad City Money, a program that puts financial education into
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action, to several school districts, including Newark, Johnstown, CTEC, Granville Christian and Spring Hills Homeschool Group. Fibergas FCU, a $116 million asset credit union based in Newark, and Harvest FCU, a $23 million asset credit union based in Heath, provided the program. Here, Spring Hills Homeschool Group students receive training on how to write checks. They were given an occupation, an income, a child, and some debt. They visit "merchants" around the city to buy the house, clothes, food, car and more that they can afford. "Our reality day has proved to be very successful with each school district, and we are especially proud to have a new niche of students with the homeschoolers," said Shani Smith-Reed, vice president, marketing of Fiberglas FCU. (Photo provided by Fiberglas FCU and Harvest FCU) ... * DOVER, Del. (5/25/10)--Dover (Del.) FCU has been recognized as the first credit union in Delaware to grow past the $300 asset milestone, according to the credit union. The growth is a sign of confidence that more than 36,000 members have in the credit union's strength and ability to meet their financial needs in a time of economic uncertainty, the credit union said. "For more than 50 years our members have trusted us to provide smart financial solutions and that confidence has allowed the organization to truly excel even during tough times," said David Clendaniel, president/CEO. "And we are proud to say that this growth has been without a single penny of TARP (Troubled Assets Relief Program) funding," he added ... * HARRISBURG, Pa. (5/25/10)--Frank Wielga, 75, former credit union leader and Pennsylvania Credit Union Association (PCUA) employee, died Saturday, PCUA said (Life is a Highway May 24). Wielga was hired in the 1960s as an administrative assistant by Mike Judge, managing director of the Pennsylvania Credit Union League (now PCUA). Wielga served as manager and assistant treasurer of Wilkes-Barre (Pa.) VA Employees FCU. He designed a Credit Union Profile Analysis form that was later made available through CUNA Supply, and was still in use in the mid-1980s. Wielga left the league for a senior staff position with Philadelphia City Employees FCU. He went on to become manager of Pennsylvania State Employees CU in Harrisburg. In 1983, Wielga was honored with the William W. Pratt Memorial Award as Credit Union Professional of the Year ... * TALLAHASSEE, Fla. (5/25/10)--Clara H. Adams, 84, a co-founder of the Department of Highway Safety CU in Tallahassee, Fla., died Friday. She retired in 1966 after merging the Department of Highway Safety CU with Motor Vehicles and creating the Department of Highway Safety and Motor Vehicles CU. In March 2008, the credit union merged with First Florida CU in Jacksonville, Fla. (Tallahassee Democrat May 24) ...

CFO Council elects exec committee

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MADISON, Wis. (5/25/10)--The coming year’s executive committee and officers for the CUNA CFO Council were announced during the 16th annual CUNA CFO Council Conference May 16-19 in New Orleans. Pam Finch, vice president of administration and chief financial officer (CFO) for Mid Minnesota FCU, Baxter, Minn., will remain chair. Dan Leclerc, senior vice president and CFO for Aventa CU, Colorado Springs, Colo., is continuing as vice chair and Brandon Michaels, CFO for Mazuma CU, Kansas City, Mo., will remain secretary/treasurer. David D’Annunzio, senior vice president and CFO for Heritage Trust FCU in Summerville, S.C., and Peg Lamb, CFO for Marine CU in Lacrosse, Wis., were elected to the executive committee. They replace outgoing members Erin Mendez, senior vice president of finance and information technology for SchoolsFirst FCU, Santa Ana, Calif., and M.J. Coon, senior vice president and CFO for Ent FCU, Colorado Springs, Colo. Also on the committee are:
* Robert Warren Jr., senior vice president and CFO, Virginia CU of Richmond, Va.; * Kevin Brueseke, CFO for the Missouri Credit Union Association; * Steve Smith, CFO for Sharonview FCU in Fort Mill, S.C.; and * Derrick Peterson, senior vice president and CFO for Public Employees CU in Austin, Texas.

PCUA re-elects chairman vice chairman

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HARRISBURG, Pa. (5/25/10)--
The Pennsylvania Credit Union Association (PCUA) Board of Directors re-elected its chairman and vice chairman during its annual reorganization meeting. Officers re-elected were: Chairman, Ray Brunner, president/CEO of WEST-AIRCOMM FCU, Beaver, and vice chairman, Michael Kaczenski, president/CEO of Sun East FCU, Aston. Brunner represents District 2, which encompasses Beaver, Butler, Lawrence, Mercer and Venango counties. He has been a PCUA board member since 1999 and will lead the nine-member board. Kaczenski represents District 6's Delaware and Philadelphia counties. He has been a PCUA board member since 2004. Kaczenski also serves as chairman of the Governmental Affairs Committee/Political Action Committee Trustees, as well as the Advocacy/Marketing Task Force and the Advocacy/Marketing Steering Committee.

Judge dismisses CUs mortgage-recording tax challenge

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NEW YORK (5/24/10)--A credit union's challenge to New York's mortgage-recording tax (MRT) based on the Federal Credit Union Act's (FCUA) tax exemption for federal credit unions has been dismissed by a trial-level New York court judge. The decision against Hudson Valley FCU, Poughkeepsie, N.Y., was rendered by New York Supreme Court Justice Judith Gische on May 14 and filed Thursday, according to court documents obtained by News Now. The credit union filed the suit on May 12, 2009, against the New York State Department of Taxation and Finance (DTF), Commissioner Robert L. Megna, and the State of New York. The credit union is seeking a refund of nearly $1.9 million paid in MRT on its mortgage loans in a separate, administrative matter. In separate portions of her opinion, Justice Gische ruled that Hudson Valley was not required to exhaust its administrative remedies with respect to such refund as a precondition to the litigation of its declaratory action, and that the burden of the MRT “rest[s] primarily with the mortgage holder.” “Certainly we are disappointed with portions of this opinion," said Eric Richard, CUNA's general counsel. "We are studying the court’s decision, and will work with the Credit Union Association of New York, as well as Hudson Valley FCU, to see if an appeal or further action is advisable. As always, we will support both in any ways that we can.” CUNA, the Credit Union Association of New York, and the National Association of Federal Credit Unions filed amicus briefs in support of the credit union in the case. In addition, the United States of America, represented by the U.S. Department of Justice, filed an amicus brief in support of Hudson Valley FCU’s position. The Supreme Court of New York County is a trial court located in Manhattan. New York's highest court, the New York Court of Appeals, had ruled in previous cases, unrelated to the federal tax exemption granted by the FCUA, that the mortgage tax is a tax on the "privilege" of recording mortgages and therefore not a tax on property. Eli Mattioli, a partner with K&L Gates LLP, one of the law firms representing the credit union, noted that a key factor in the disposition was the judge's reliance on state law in deciding the impact of New York’s mortgage tax on the FCUA tax exemption, a federal law. In ruling on the federal credit union tax-exemption, Justice Gische said she felt “constrained to follow” the prior New York decisions characterizing the tax as a “privilege tax” rather than a property tax. On this basis, the judge decided that the FCUA tax exemption does not apply. The credit union had argued that the FCUA, as well as the U.S. Constitution’s Supremacy Clause, exempt its mortgages from the state's tax, which is used by the state as a general revenue collecting mechanism for its general fund, because the tax is different from most other states' recording fees, which are only used to cover the cost of operating the recording office.

CU System briefs (05/21/2010)

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* CENTRALIA, Wash. (5/24/10)--A man who held a credit union employee hostage and was shot by a police officer responding to the emergency call pleaded not guilty last week on new charges of unlawful imprisonment, robbery and burglary related to the incident. A jury in April already had found Michael Anthony Lar, 57, guilty of holding an employee of Centralia TwinStar CU hostage during a January robbery. The woman was saved when the officer pulled her from the building after she mouthed to him that the robber had a gun. The officer fired two shots, injuring Lar, who escaped while police believed he was still in the building. He is scheduled to be sentenced Wednesday on the original conviction (The Olympian May 21) ... * WASHINGTON (5/24/10)--The hotel discount deadline has been extended to Tuesday for the 36th Annual Conference on Serving the Underserved and the 6th Latino Credit Union Conference, to be held in Pittsburgh, Pa., on June 9-12, according to the National Federation of Community Development Credit Unions. For more information on the conference, use the link ...

Fraud forced Cardtronics to shut down 1000 ATMs

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NEW YORK (5/24/10)--ATM provider Cardtronics Inc. was forced to temporarily shut down more than 1,000 ATMs owned by companies and merchants earlier this year when owners of its armored-car service were charged with fraud. Cardtronics, which owns and operates more than 28,000 ATMs in the U.S., shut down nearly 4% of its ATMs after the owners of Mount Vernon (N.Y.) Money Center Corp. were arrested Feb. 8, according to Cardtronics' filing with the Securities and Exchange Commission (ATM & Debit News May 19). Arrested were Money Center Corp. President Robert Egan, 64, and Chief Operating Officer Bernard McGarry, 50. Their company supplied cash to more than 5,300 ATMs, including those of Cardtronics. The two men were indicted for allegedly defrauding banks, other financial institutions, retailers, hospitals and universities out of $50 million. Instead of segregating cash for each of their clients, they allegedly commingled funds by taking whatever cash that arrived in the vault, regardless of its source, to fill the next day's ATMs, according to the indictment. The company had to convert the ATMs to another third-party armored-service provider, which resulted in downtime at the machines. Cardtronics estimates it lost $16.2 million from the vault. Money Center has been put into receivership.

Utah mortgage broker charged with construction loan fraud

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SALT LAKE CITY (5/24/10)--A federal grand jury returned a 15-count indictment against a Salt Lake City man on charges of bank fraud and making false statements to two credit unions in an alleged scheme to get construction loans approved under false pretenses. The indictment alleges Joshua Lee Butcher, 28, worked with two credit unions--Salt Lake CU and Transwest CU--to broker new home construction loans ranging from about $384,000 to $637,000 (loansafe.org May 21). He is charged with providing false information about borrowers that caused the credit unions to approve and fund home construction loans. Butcher allegedly met with potential borrowers to obtain the financial information for the loan application, said the indictment. Borrowers provided him with accurate information--and sometimes documentation--about their income and assets. The indictment said Butcher knew the borrowers would not qualify for the loans so he prepared and submitted false loan applications on their behalf to induce approval for higher amounts. He received broker fees for the loans, said the court document. The falsified documents included: overstated income; listing of assets which the borrowers did not own; false employment information; applications for owner-occupied homes that the borrowers planned to use as investment homes; and indications that the construction loans were for primary residences of the borrowers when they weren't. The indictments include eight counts of bank fraud, with a maximum penalty per count of 20 years in prison and a $250,000 fine; and seven counts of making false statements, each having a maximum penalty of 30 years in prison and a $1 million fine.

Ohio youth deposited 4M in savings

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COLUMBUS, Ohio (5/24/10)--Ohio youth collectively saved more than $4 million through deposits at 20 Ohio credit unions during the 2010 National Youth Saving Challenge in April. The challenge is a nationwide effort to help young people understand the benefits of saving. Nearly 10,000 Ohioans age 17 or younger deposited more than $4.1 million into participating credit unions. The average deposit was $420, according to the Ohio Credit Union League. “The debt crisis in our country is one of many factors slowing economic growth,” said Paul Mercer, league president. “Helping young Ohioans see the benefits of savings allows up and coming consumers to be smart and savvy about their finances, while passing on knowledge and strong financial habits to future generations.” Statewide, credit unions opened 772 new accounts. Nationally, the number of youth savers increased nationwide by 21.6%, and new youth savings accounts rose by 4.4% from 2009, according to the Credit Union National Association (CUNA). Nearly 170,000 youth made deposits, opening 10,385 new accounts. In 2009, nearly 140,000 young members deposited $26.5 million into savings accounts during the national event, including 10,006 new accounts. The National Youth Saving Challenge is held in conjunction with the annual National Credit Union Youth Week, and is sponsored by CUNA.

Free International Year of Co-ops webinar is Wednesday

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Washington (5/24/10)--The National Cooperative Business Association’s (NCBA) International Year of Cooperatives 2012 webinar will be held Wednesday from 4 p.m. to 5 p.m. ET. The General Assembly of the United Nations (U.N.) declared 2012 as International Year of Cooperatives (IYC). The U.N. also drafted a framework that draws from the activities of the International Year of Microcredit, 2005 and other successful international years. While the U.N. is organizing among governments, each nation’s apex organization for cooperatives--such as NCBA--will coordinate national activities among cooperatives. NCBA has assembled a working group with participants from several cooperative sectors to provide overall guidance, and create a process through which many participants can discuss and organize events during the next two-and-a-half years. The webinar will outline that process and allow participants to provide input to build on the U.N. draft framework and to find ideas on how to make the IYC a success, and to avoid duplication and streamline activities. The U.N.’s resolution was supported by the World Council of Credit Unions (WOCCU). In May 2009, WOCCU CEO Pete Crear spoke at a U.N. meeting of global experts on “Cooperatives in a World in Crisis” (News Now May 6). “Declaring 2012 as the International Year of Cooperatives would shine a more intense light on cooperatives and credit unions worldwide,” Crear said. For more information, use the link.

BECU outlines CU difference for local paper

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TUKWILA, Wash. (5/24/10)--Gary Oakland, BECU president/CEO in Tukwila, Wash., shared the credit union difference Friday with a local newspaper, The News Tribune. In a question-and-answer format, Oakland talked about some of the things that separate credit unions from banks. First, credit unions are cooperatives and don’t have stockholders to pay. “We want members to see what value the co-op has that benefits them and their community,” he said. Service also sets credit unions apart. “There was a time when banks forgot about consumers, and when they came back, credit unions had a foothold,” he added. He also said BECU doesn’t have teller lines. “We don’t do transactions, we do conversations,” he said. “We have neighborhood financial centers.” BECU plans to open three to six financial centers per year and is planning growth in concentric circles. Business at the credit union is also good--it’s seeing a decline in write-offs and is well-capitalized, he said. BECU has $8.6 billion in assets.

Expect virtual currency to catch on--forum speaker

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PORTLAND, Ore. (5/24/10)--A man walks into a bar and orders a drink. The waitress says, “That will be $4.” The man pulls out his cell phone, and with a couple of clicks, pays his tab with credits from his frequent flyer account. That’s an example of virtual currency--an exchange of real money for credits. Its growing presence will be highlighted by Ron Galloway, who is slated to speak on the future of money at Southwest Corporate’s Economic Forum-West June 22 in Portland, Ore. “Other types of money are going to become more popular than currency,” said Galloway, a nationally recognized public speaker, business and technology writer for The Huffington Post and former investment adviser. “Money is a medium of exchange. And while the exchange will always take place, the medium will continue to evolve. “For example, rice, gold and even cigarettes during World War II once served as payment media, but they were replaced over time. With the financial problems that are occurring in Greece and the surrounding countries, the euro may be the next medium to disappear.” Virtual currency has driven revenue for game developers on social networking sites, such as Facebook. One analyst recently predicted in a Bloomberg Businessweek article that the sales of virtual goods would top $3.5 billion by 2012, said Galloway. “In the past, consumers have placed a great deal of faith in financial institutions, but some of that allegiance is now shifting to other institutions, including Facebook, Twitter and Google,” Galloway said. “The common thread is the combination of a distributor, such as Google or Wal-Mart, with information technology to create a virtual payments platform. “But the money flowing into these accounts has to come from somewhere, and many times it is from a credit union. For credit unions to keep those funds from leaving their institutions, they will have to stay abreast of what’s going on in the payment systems and when necessary, get involved,” he added. Credit unions already have the arsenal to keep member assets on their books--like knowing their members and providing service, he said.

Michigan league endorses Hoekstra for governor

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LANSING, Mich. (5/24/10)--The Michigan Credit Union League (MCUL) Friday announced its support for U.S. Rep. Pete Hoekstra’s (R-Mich.) bid for governor. Calling the endorsement a vote for small business and for consumers, MCUL President /CEO David Adams applauded Hoekstra’s track record and leadership. “Congressman Hoekstra has been a champion for small-business interests and for policies that help the consumer,” Adams said. “These values align with those of the credit union movement, which is built on local ownership and commitment to serving middle-class America. These values are what Michigan needs as it rebuilds its economic strength and strengthens the vital financial interests of its citizens.” Hoekstra called the credit union endorsement a momentum builder. “Credit unions are about as ‘mainstream America’ as you can get,” Hoekstra said. “The league’s endorsement shows confidence in my track record of strengthening Main Street by supporting locally owned credit unions and their 95 million members across the country. The diverse and bipartisan nature of credit unions makes them a great partner for my campaign.” The MCUL’s endorsement decision was based on the congressman’s positions and votes on legislation that allowed credit unions to expand their fields of membership and their ability to expand small-business lending. Hoekstra has served nine consecutive terms in the House of Representatives since winning his first election to the Congress from Michigan’s 2nd District in 1992. In the U.S. House, Hoekstra has served on committees, including Education and Labor, Budget, and the Permanent Select Committee on Intelligence. Credit unions’ structure has positioned them as the sole sector of the financial services industry that continued to lend during the recent financial crisis brought on by Wall Street abuses. In 2009, credit unions’ small-business lending in Michigan was up 18%, while banks decreased business lending, MCUL said. State credit union membership has been growing at a record pace, with 40,000 new members in 2009, as national and local media tout the strength of credit unions, their ability to continue lending and their favorable interest rates and lower fees, MCUL said.

MCUA Grassroots efforts on highway CUs caught legislators eye

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JEFFERSON CITY, Mo. (5/24/10)--Although Missouri credit unions did not succeed in keeping their highway credit unions’ offices at the Missouri Department of Transportation (MoDOT) facilities, their grassroots efforts on the issue caught state legislators’ attention, said the Missouri Credit Union Association (MCUA). On Jan. 21, MoDOT notified 10 credit unions located in MoDOT district offices statewide that they would be required to completely sever their relationship with MoDOT and move out of the facilities by Sept. 30 (The Missouri difference May 19). MCUA mounted a campaign to “undo” the action including lobbying the state legislature and the Missouri Highway Commission, informing the press and involving the state credit union regulator, the Division of Credit Unions. Although MCUA said it would have preferred a total reversal of MoDOT’s decision, it was able to get the move-out date extended to two years. State Rep. Mike Cunningham (R-District 145), chair of the House Financial Institutions Committee, introduced HCR 70, which would have allowed the credit unions to remain in MoDOT facilities indefinitely. The bill was voted out of the House 157 to 0. The highway department credit unions are to be credited with an outstanding response to the association’s call for grassroots contacts, MCUA said. One legislator, who has not been a credit union supporter in the past, told MCUA, “I have never seen an issue get legs like this so quickly.” And, the grassroots contacts remained strong throughout the session, the association said. Although the bill did not make it onto the Senate’s calendar, awareness of Missouri credit unions in the state Capitol, and the perception that MCUA can mobilize grassroots quickly and efficiently, was generated by the campaign, the association said.

CU System briefs (05/20/2010)

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* WISCONSIN RAPIDS, Wis. (5/21/10)--Bull's Eye CU was awarded nearly $85,000 of $540,000 allegedly embezzled by the former president of Rapids Municipal CU, Wisconsin Rapids, in a settlement agreement filed in a U.S. District Court in Madison, Wis. Bull's Eye acquired Rapids Municipal CU in December 2008 after authorities discovered the money missing. Rapids Municipal's former president, David K. Henke, was indicted by a grand jury for bank fraud and embezzlement, but was found dead after he missed the plea hearing. The $85,000 Primevest investment account was held by his former spouse, Laurie Henke, who received it as part of their divorce. The government seized the account last year, saying it was directly traceable to the fraud. Bull's Eye claimed it was entitled to the money because it lost $540,000 to the embezzlement plus spent $166,000 to investigate it. The agreement reached Monday remains pending before U.S. District Judge William Conley (WisconsinRapidsTribune.com and Wausau Daily Herald May 20) ... * DES MOINES, Iowa (5/21/10)--The U.S. Small Business Administration (SBA) recognized Dupaco Community CU, Dubuque, Iowa, as its 504 First Mortgage Lender of the Year in Iowa during the Iowa Smart Conference in Des Moines May 6. SBA's 504 program provides long-term fixed-asset financing to small businesses. In it, lenders finance 50% of the cost and take a first mortgage position on the assets financed while an SBA certified development company finances 40% of the project. The small business provides a down payment that can be as low as 10%. The award goes to an SBA lender who demonstrates outstanding commitment to small businesses in the community through increased participation in multiple SBA 504 program loans. Dupaco was the first mortgage lender on three 504 deals in Dubuque in 2009. Its share of financing accounted for more than $849,000 but made available more than $1.5 million in total project dollars, creating 14 jobs and retaining eight others. Also, Dupaco approved 14 loans for $362,000 in 2009 ... * BATTLE CREEK, Mich. (5/21/10)--Inspire Community Development CU opened Monday in Battle Creek, Mich., with 13 new accounts opened. The new credit union aims to help low-income people get out of debt and save for the future, said Battle Creek Inquirer May 19). Members can start a savings account with $5 and staff will teach them how to pay down debt, apply for loans, save for emergencies and other financial skills. Its grand opening will be June 14 ...

Heartland MasterCard in 41.1M settlement

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PRINCETON, N.J. (5/21/10)--Heartland Payment Systems Inc. has agreed to pay MasterCard Worldwide $41.4 million to resolve claims from MasterCard and its issuers related to the 2008 breach of Heartland's payment system environment. The announcement comes five months after Heartland agreed to pay up to $60 million to issuers of Visa-branded credit and debit cards (News Now Jan. 11). Heartland also entered into settlements of $3.6 million with American Express and $2.4 million in a consumer cardholder class action lawsuit (News Now Dec. 21 and Dec. 29). Under the newest agreement, alternative recovery offers totaling $41.4 million will be made to eligible MasterCard issuers for losses they claimed as a result of the breach. Also under the agreement, MasterCard will recommend that eligible MasterCard issuers accept such offers. Like the Visa settlement, the MasterCard settlement is contingent upon financial institutions representing 80% of the claimed-on MasterCard accounts accepting the alternative recovery offers. The issuers have until June 25 to accept the settlement offer. This latest settlement also includes mutual releases between Heartland and its sponsoring bank acquirers on the one hand--and MasterCard and the accepting issuers on the other. Issuers that accept the alternative recovery offer must waive rights to any other recovery for claims of losses related to the breach from Heartland and its sponsoring bank acquirers through litigation or other remedies. They also must release MasterCard, Heartland and its sponsoring bank acquirers from all legal and financial responsibility related to the intrusion. All eligible issuers will receive notification from MasterCard with full details of the settlement agreement and how to accept their alternative recovery offers before the offers expire. The breach, which was announced in January 2009, exposed information from 130 million credit and debit cards--the largest breach on record. Its ramifications are still being felt. Last month, MidFlorida CU in Lakeland, Fla., said it would reissue 12,000 debit cards after recent fraud attempts stemming from the Heartland breach (News Now April 6). And CUNA Mutual's Risk Protection Center reported in January that fraudsters were still testing and successfully accessing the numbers not blocked or canceled in the Heartland breach (News Now Jan. 12).

American woman in Nigerian prison for forged checks

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LAGOS, Nigeria (5/21/10)--An American woman was sentenced Wednesday to a 24-year prison term with hard labor by a court in Lagos, Nigeria, for forgery and counterfeiting that involved foreign checks--including those of a credit union. Sharon Denis Thorpe, 27, pleaded guilty to 12 counts of forgery and counterfeiting 200 foreign bank checks. A Nigerian, Musediku Kehinde, was charged alongside her with 13 counts of forgery and counterfeiting (All Africa Global Media May 19). The two were accused of possessing 200 foreign bank checks, and fraudulently forging eight foreign banks cashier checks valued at $40,223. Included with the checks were those of Mountain America FCU, West Jordan Utah. Thorpe and Kehinde were arrested in February in Lagos while trying to export the checks.

CU workers in N. Dakota win 250K in lottery

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JAMESTOWN, N.D. (5/21/10)--Roy Musland, 17 fellow employees of First Community CU in Jamestown, N.D., and one former employee of have been pooling their money and playing the lottery for the past six years. It finally paid off. On Wednesday, Musland arrived at work and saw an e-mail from a co-worker, Sharmon Zachrison, saying he and some other employees needed to participate in a conference call later that morning. “I was wondering what was going on,” Musland told News Now. “Then, during the conference call, Sharmon said we matched five of five lottery numbers.” The group won $250,000. The winning numbers were 11-13-19-37-40. Zachrison is in charge of buying the tickets. There are two drawings per week at a contribution of $2 per person, Musland said. When he and his colleagues realized they had won, it was “total pandemonium,” he said. “People were laughing, crying, and rolling around on the floor. I kept saying, ‘You’re kidding me, you’re kidding me.’” Musland, his 17 co-workers, and the former employee, who will each receive about $9,100 after taxes, exchanged stories about what they plan to do with the money. Some will use the winnings to pay bills, take trips, or a combination of the two. One woman at First Community who got married several years ago plans to use the money so she and her husband can take a honeymoon. Their win--a one-in 3.9-million chance--was also the first for the state of North Dakota for Mega Millions, which is great for the state and community, Musland said. The employees plan to continue playing the lottery. “We’re all here today,” Musland said. “We’re not quitting our jobs. The most fun part of it is that there are so many people who are happy for us, and so many members who are excited for us.” First Community CU has $323 million in assets.

Wisconsin CUs program to boost investing by underserved

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PEWAUKEE, Wis. (5/21/10)--An investor education project that, since last fall, has provided online investor education to Wisconsin credit union employees, is taking on a new challenge. Credit union staff statewide will complete advanced investor education online, then try to motivate the least likely investors to make positive financial strides--financially underserved or low-wealth individuals. As many as 5,000 such citizens could benefit in the first year alone, said the Wisconsin Credit Union League. “Most Americans haven’t done any retirement planning,” said Brett Thompson, president/CEO of the league, which is coordinating credit unions’ effort. “But we can’t afford to let the failure of entire generations to plan for their futures become a public burden. That burden would be enormous--totally unsustainable. So we can’t afford to let the average citizen--those who live paycheck to paycheck--think they can’t become successful investors.” In July, up to 25 credit union employees statewide--who completed basic investor education online in an ongoing study of 3,520 credit union staff from 80 credit unions--can apply to enroll in 50 additional hours of online investor training this fall. The graduates will earn a Certified Financial Educator (CFEd) designation valued at $1,700. Each grad will then train at least 100 financially underserved or low-wealth individuals to turn modest contributions to investment accounts into significant assets. “By offering advanced training, we’re applying a basic concept of investing--exponential growth--to the challenge of expanding our reach,” Thompson said, noting that the program can make swift in-roads to bring investing tools and financial success to people who might otherwise never attempt to advance their financial position. “Modest wage earners often mistakenly believe that they can’t ever get ahead because they feel they have too few dollars to invest,” he added. “That’s one of many fallacies our training corrects. Every person with income, no matter how modest, can secure a solid financial future through investing.” The basic investing project kicked off last October and will continue through early 2011. Dubbed “RP3,” or REAL Progress & Pathways to Prosperity, the project engaged participants in roughly 10 hours of online learning about investment concepts, including setting goals, distinguishing among investment vehicles, managing risk, diversifying a portfolio, maximizing tax advantages, understanding mutual funds and working with investment professionals. The first phase involved 53 credit unions, whose 1,623 employees completed the courses in December with passing grades averaging 88.17%. Their knowledge of investing concepts increased 28.27%. In January, another 1,897 employees from 56 credit unions began the coursework. Upon completion of their studies in April, that group achieved an average passing grade of 87.69% and improved its knowledge an average of 23.31%. Credit unions are participating in the RP3 project as part of their REAL Solutions initiative, which helps people of all income levels build wealth. Both phases of the program are being conducted in partnership with the Puelicher Center for Banking Education at the Wisconsin School of Business, the University of Wisconsin-Madison, Precision Information, the Wisconsin Credit Union League, Gov. Jim Doyle’s Council on Financial Literacy and the Wisconsin Department of Financial Institutions. Funding for the latest phase includes a $15,000 grant from the National Credit Union Foundation and a $53,000 grant from the Investor Protection Trust (IPT), a nonprofit organization devoted to investor education.

TruMark Financial ad campaign takes on big banks

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TREVOSE, Pa. (5/21/10)--TruMark Financial CU has launched a public awareness campaign about an alternative to big bank bailouts, mergers and acquisitions, and excessive compensation among executives. The $1.2 billion asset, Trevose, Pa.-based credit union said such concerns have caused consumer confidence in big banks to plummet and frustration to soar. TruMark Financial began airing three TV commercials in the Philadelphia region on May 12. The spots tout the credit union as the trusted source for consumers’ financial needs and depict the lifestyle enjoyed by big banks’ leadership at their customers’ expense--a sore spot for many consumers. More than 40% of 1,050 households polled by Polk-Lepson Research Group on behalf of TruMark Financial said they were “very concerned” about big bank executives receiving excessive compensation. The research results also underline the public’s distrust and discontent with big banks following government bailouts, the collapse of the housing market, skyrocketing interest rates on credit cards, and increasingly higher fees. More than one-third of those polled expressed concern over big banks closing credit card lines and raising credit card interest rates, the credit union said. In contrast, TruMark Financial’s public awareness campaign reinforces the benefits of switching to TruMark Financial--no hidden fees, competitive rates and superior service. To complement the TV commercials, a series of radio commercials are airing on Philadelphia area stations and billboards are in place throughout Southeastern Pennsylvania. Ads also are displayed on buses. The commercials will run over nine weeks, and the billboards will remain in high-traffic areas for six months. While each spot is unique, the underlying message is the same: TruMark Financial is focused on its members. “At TruMark Financial it’s about you. Your family. Your money. No bailouts. No greed. No hassles,” proclaims one radio commercial. “Based on the data, we feel this is an appropriate time to let consumers know TruMark Financial has no hidden fees, has no credit card tricks, provides superior service, has competitive rates, and is a strong financial institution,” said Richard F. Stipa, TruMark Financial CEO.

CU-backed candidate loses bid in Oregon

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BEAVERTON, Ore. (5/21/10)--A credit union-backed candidate lost his bid for state treasurer in Oregon, but the Credit Union Association of Oregon (CUAO) said it was thrilled so many credit unions reached out to support him. Sen. Rick Metsger (D-Ore.) had run for state treasurer in Tuesday’s state primary election. Several credit unions in the state had placed messages of thanks on their websites to support Metsger, a longtime credit union friend. “While the election didn’t turn out as we had hoped for Metsger, we were thrilled that so many credit unions reached out with a message in support of Metsger through their websites and social media tools,” said Laura Wieking, CUAO communications director. “Oregon has a very active advocate base and as technology advances, we’re encouraged to try new tactics to support friends of credit unions who are running for office,” he said. “We believe it is important to support those who have supported credit unions, and Metsger was our leading advocate in the Senate for many years.” Credit unions supporting Metsger included:
* Valley Health and Postal CU, Salem; * Unitus Community CU, Portland; * Northwest Community CU, Eugene; * OSU FCU, Corvallis; * Oregon Community CU, Eugene; * OnPoint Community CU, Portland; * Advantis CU, Portland; and * US Agencies CU, Portland.

Phish attacks vs. CUs decline 8 in March

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BEDFORD, Mass. (5/21/10)--Phishing attacks against U.S. entities decreased 5% in March, with attacks targeting credit unions declining 8%, according to the most recent RSA Online Fraud Report. The April Fraud Report, which covers March, was released by the Bedford, Mass.-based RSA Anti-Fraud Command Center. The study counted 17,559 attacks during March. Also declining were fast-flux attacks, with the number of attacks using this method decreasing 57%, said the report. RSA said the shift has had links to the diminished activity of the Rock Phish ganag and a cut-off of the AS-Troyak infrastructure that disconnected numerous malicious networks from the Internet. RSA continues to watch for a comeback by the Rock Phish gang, which is known to deliver attacks solely over its fast-flux infrastructure and bulletproof hosting. Fast flux refers to a method by which a domain name used by phishers has multiple internet provider (IP) addresses assigned to it. Phishers switch domains quickly among the addresses. That means the address is not easy to shut down. Instead of asking one IP provider to shut down the address, authorities must go to the domain name register, which is more time consuming. In March the number of brands attacked totaled 275--a decrease from February's 282 brands attacked. Brands that were attacked five times or less make up 56% of the total, RSA said. The number of entities experiencing their first phish attack in March dropped to 20 from 31 in February. This could indicate a focus by phishers to launch a larger number of attacks on a smaller number of brands, the company said. Regional bank brands--after being the most targeted among the financial sector in the U.S. for nine consecutive months--finally got a break. Nationwide bank brands became the most targeted brands in March, with a 29% hike in attacks, while regional banks fell 21% and credit unions fell 8%. Credit unions accounted for 4% of the attacks in March, compared with 22% of attacks in March 2009. Regional banks were targeted in 39% of phishing attacks, compared with 56% a year earlier. Nationwide U.S. banks bore the brunt of 57% of the attacks, compared with 11% in March 2009.

CUNA Mutual celebrates classic 75th anniversary

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MADISON, Wis. (5/21/10)--CUNA Mutual Group employees celebrated the 75th anniversary of the company’s incorporation Thursday with activities aimed at recognizing the company’s history serving credit unions and their members.
Click to view larger image A classic car show Thursday in Madison, Wis., was one of the events CUNA Mutual employees participated in as part of the company's observance of its 75th anniversary. The restored 1935 Chevrolet was used in “Public Enemies,” a film about John Dillinger's life of crime, starring Johnny Depp. (Photo provided by CUNA Mutual Group)
Employees at the company’s Madison, Wis.; Waverly, Iowa; and Fort Worth, Texas, locations picnicked and participated in other activities commemorating CUNA Mutual’s incorporation on May 20, 1935. “This is a special year for CUNA Mutual as we recognize and celebrate our company’s 75th anniversary,” said Jeff Post, president/CEO of CUNA Mutual. “Thursday was perfect picnic weather and a great day to celebrate our enduring partnership with credit unions and the communities in which we operate.” In Madison, more than 20 classic cars were displayed by employees and others. One vehicle, a 1935 Chevrolet Two-Door Standard, was used in the filming of “Public Enemies,” shot primarily in Wisconsin and starring Johnny Depp. The car, owned by Wayne and Linda Schuette, was accompanied by memorabilia from the movie, based on John Dillinger’s legendary life of crime. At a companywide staff forum, CUNA Mutual displayed a commendation from Wisconsin Gov. Jim Doyle, who acknowledged the company’s contributions to the community and the marketplace it serves. Hundreds of employees staked out picnic areas early and took part in outdoor games. They also participated in indoor games, including the “Heritage Challenge,” a historical interactive game that tested employees’ knowledge of the credit union movement and the company's close ties to the not-for-profit financial cooperatives. CUNA Mutual has other anniversary recognition events planned for June, in August when the company opened for business, and in October when it paid its first claim for $40 on the death of a Milwaukee Road railroad switchman.

Members United Corporate adds OTTIs in April

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WARRENVILLE, Ill. (5/20/10)--Members United Corporate FCU's unaudited financial statements as of April 30 have been announced, along with year-end 2009 audited financials, with additional other-than-temporary-impairment (OTTI) charges depleting membership capital shares (MCS) by 96.9%. Members United's assets totaled $9.5 billion as of April 30, with $4.1 billion of that held in cash and cash equivalents and overnight deposits with U.S. Central FCU, $3.5 billion in marketable securities, $0.7 billion in loans to members, $1.1 billion in term deposits at U.S. Central, and $0.1 billion in accrued income and other assets, according to the financial statements on the corporate's website. The corporate credit union recorded $116.9 million of OTTI charges during December 2009. This included a $87.1 million charge for monoline insurance exposure through Wisconsin-based Ambac. In addition, Members United recorded another $21 million in OTTI charges in April. The OTTI was partially offset by core earnings of $1.6 million rolled forward since Nov. 30, 2009. As a result, Members United has a retained deficit totaling $129.9 million, requiring it to deplete MCS in accordance with the National Credit Union Administration's rules. Capital remaining after depletion is $145 million, which includes $11.1 million of amortized shares representing capital that is placed on notice but has not met the three-year notice period of withdrawal. These shares are available to cover losses and replenish retained earnings and will be subject to depletion action on May 28. Total depletion as a percentage of beginning MCS is 96.9%, said the financial statement.

Big banks fill out hall of shame on MSN.com survey

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NEW YORK (5/20/10)--As if big banks didn't have enough to hang their head in shame about these days, yet another customer survey indicates that banks are at the bottom of the heap in customer service, according to MoneyCentral on MSN.com. MSN Money's fourth annual customer-service survey, conducted by Zogby International, identified 150 customer-facing industries, from fast food chains to financial services companies, and asked customers about their experiences with the companies. Half of the bottom 10 companies relegated to the "2010 Customer Service Hall of Shame" are banks, credit card servicers or both. The rest are telecommunications and cable companies. "There's one place that people clearly aren't feeling the love: at the big banks," said MSN Money on its website. "Of the 20 companies at the bottom of our customer-service ranking, nine sell financial services." The worst customer service was rendered by:
* AOL, with 42.3% of respondents saying service was poor; * Bank of America, with 34.6%; * Comcast, 34%; * Sprint Nextel, 32.7%; * Capital One, with 31.3%; * Dish Network, 31.2%; * Time Warner Cable, 31.1%; * Wells Fargo, 28.3%; * Citibank, 28.3%; and * HSBC, 28.1%.
All of the banks on the list are repeat Hall of Shamers. Bank of America, which has been on the list all four years of the survey, received its worst rating yet. Capital One's rating improved; last year 34.7% rated it poor, compared to this year's 31.3%. The 2010 rank is its third appearance on the Hall of Shame. Wells Fargo made the list in 2007, when 21% of those surveyed said its service was poor. Citibank was also on the list last year, when 28.4% of respondents rated its service as poor. HSBC, in the No. 10 spot, appeared on the list for a third year. None of the Top 10 companies for customer service--called the Hall of Fame--were financial institutions. For more, use the resource link.

CUNA Mutual flood response pause on non-renewals cancellations

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MADISON, Wis. (5/20/10)--In response to widespread flooding in Tennessee, CUNA Mutual Group has implemented a moratorium for policyholders there on company-initiated cancellations and non-renewals of any in-force insurance policies due to non-payment of premium. “People are enduring severe hardships due to the record-setting floods in Tennessee. CUNA Mutual will stand by its credit union customers and help them through this disaster,” said Jeff Post, president/CEO of CUNA Mutual. The moratorium is in place for a minimum of 90 days. It applies to all policyholders of in-force policies underwritten by CUNA Mutual in Tennessee. Policyholders statewide--not just those located within federally declared disaster areas--are covered by the moratorium, said CUNA Mutual. CUNA Mutual is waiving all penalties and fees for the late payment of premiums during the moratorium. It has imposed a minimum 90-day grace period for other provisions within the covered policyholders’ insurance policy that impose specific time limits on the insured or claimants and that would otherwise expire during the moratorium period. “It has always been CUNA Mutual’s policy to step forward and provide aid to our customers in the face of natural disaster," said Alastair Shore, chief underwriter at CUNA Mutual. "People have been displaced from their homes and their jobs by this flooding. Some have even lost family members or friends. As a company built on the principles of cooperation, we’re committed to helping our customers get their lives back." CUNA Mutual said it reserves the right to cancel or non-renew policies for causes other than nonpayment of premium. New policies will be required to pay premium at inception, or as otherwise required. Policyholders with questions about how the moratorium applies to them, or other questions relating to the moratorium announcement, can contact CUNA Mutual toll-free at 800-637-2676. More information on the company is available on the company’s website. Also, the state of Tennessee has provided information for Tennessee residents, including: FEMA, at 800-621-FEMA or www.fema.gov, or visit www.disasterassistance.gov, and the Division of Insurance, at 800-342-4029 or e-mail CIS.complaints@tn.gov.

CU first in U.S. to plan Europe-style smart card

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NEW YORK (5/20/10)--United Nations FCU in New York City is the first U.S. financial institution to announce plans to issue credit cards that comply with the Europay MasterCard Visa (EMV) smart card standard. The $3.09 billion-asset credit union’s new Platinum Visa EMV cards will be issued to roughly 5,000 of its high-value members and can be used anywhere EMV cards are accepted (Bloomberg Businessweek May 19). Cards based on the EMV standard use an embedded microprocessor instead of a magnetic strip to store cardholder data and information necessary to use the card for a transaction. Many financial institutions that issue the EMV chip card also require cardholders to enter a personal identification number as an extra security measure when they use the card, Bloomberg said. Although credit cards that use smartcard technology have been prevalent worldwide for several years, that is not the case in the U.S., where financial institutions have continued using cards based on less secure magnetic strip technology, Bloomberg said.

Roundup Media report CUs MBLs checking cards

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MADISON, Wis. (5/20/10)--Several recent media reports say credit unions are where consumers should go for small-business lending, credit cards for college students and free checking. The reports included:
* An op-ed column in the Toledo Blade Tuesday about member business lending written by Beth Carpenter, president of the Northwest Chapter of the Ohio Credit Union League. To address the lack of credit available to small businesses in Ohio, Carpenter said lawmakers in Washington, D.C., should pass legislation that would increase the lending authority of credit unions. “Credit unions are well-capitalized, not-for-profit financial cooperatives that have withstood difficult financial times because of smart stewardship and responsible lending,” said Carpenter. “Best of all, they have money to lend.” * A CBS MoneyWatch Web story Tuesday about credit card options for college students that tells students: “As a young adult opening up a credit card for the first time, you may want to scour the offers from your local credit union first. Credit unions generally offer the lowest annual percentage rates on credit cards. They’re also known for above-average customer service. If you want one-on-one help where they will remember your name, a credit union is the place to go.” The article also contains a link to the Credit Union National Association’s Credit Union Locator. * An AOL.WalletPop.com article Tuesday that told readers who want to open a new bank account and obtain free checking to look at Bankrate.com’s new survey of credit unions (use the link to view a News Now article about the survey) to see which credit unions offer free checking. “Of the 50 largest credit unions in the country, 39 of them have free checking,” the article said.
To read the articles, use the links.

PCUA awards honor McCormack others

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HARRISBURG, Pa. (5/20/10)--The Pennsylvania Credit Union Association (PCUA) handed out its most prestigious awards during its 76th Annual Convention held Sunday through Tuesday in Harrisburg.
Click to view larger image Pennsylvania Credit Union Association (PCUA) President/CEO Jim McCormack, left, receives the Keystone Award from PCUA Chairman Ray Brunner, CEO, WEST-AIRCOMM FCU, Beaver, Pa. (Photo provided by the Pennsylvania Credit Union Association)
Hundreds of conferees statewide attended the convention, which featured a keynote address by National Credit Union Administration Chairman Debbie Matz and other educational sessions. Individuals honored are:
* Jim McCormack, PCUA president/CEO, who received the Keystone Award for exemplary commitment to the credit union movement. * Peggy Bosma-LaMascus, president/CEO, Patriot FCU, Chambersburg, who received the William W. Pratt Award for Outstanding Professional of the Year. * Paul Nyman, board director, Horizon FCU, Williamsport, who received the Joseph A. Moore Award for Outstanding Volunteer of the Year. * The late John Marisic, former vice chairman, Pennsylvania State Employees CU, Harrisburg, who was presented the Joseph A. Moore Award for Outstanding Volunteer of the Year.
The new 2010 Credit Union Youth Ambassador of Pennsylvania is Amber Renick, 23, representing the York Chapter of Credit Unions. She is employed at First Capital FCU, York. As Youth Ambassador, Renick will promote credit union youth activities and serve as a PCUA representative during events and meetings. Also, Amanda Eckert of the Harrisburg Chapter of Credit Unions and Members 1st FCU, Mechanicsburg, was named first alternate; and Amy Swonger, representing the Erie Chapter of Credit Unions and Meadville (Pa.) Area FCU, was named second alternate. A number of awards were presented to credit unions in recognition of their work within their communities. The Desjardins Youth Financial Education Awards were presented to:
* Keystone FCU, Downingtown, $50 million to $150 million in assets category; * AmeriChoice FCU, Mechanicsburg, $50 to $150 million; and * TruMark Financial CU, Trevose, more than $500 million.
The Louise Herring Awards for Philosophy in Action were presented to:
* Superior CU, Collegeville, less than $50 million in assets; * Erie General Electric FCU, Erie, $50 to $250 million; and * TruMark Financial CU, more than $250 million.
The Dora Maxwell Awards for Social Responsibility were awarded to:
* Greater Pittsburgh Police FCU, $20 million to $50 million in assets; * MEADVILLE (Pa.) FCU, $50 to $100 million; * Cross Valley FCU, Wilkes-Barre, $100 to $200 million; * Erie (Pa.) Federal CU, $200 to $500 million; and * American Heritage FCU, Philadelphia, more than $500 million.

MBLs top Illinois CUs dialogue with Rep. Halvorson

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NAPERVILLE, Ill. (5/20/10)--Member business loans (MBLs) were the top issue under discussion when Legislative Forum Representatives (LFR) from Illinois met in an open dialogue with U.S. Rep. Debbie Halvorson (D-Ill.) this week.
Click to view larger image Representatives from the Illinois Credit Union League and state credit unions recently met with U.S. Rep. Debbie Halvorson (D-Ill.) at NuMark CU. From left, are: Michelle Balog, executive vice president and David Harris, volunteer director, both of NuMark CU; Halvorson; and, from NuMark, Ann Dubie, CEO; Bill Tierney, director of commercial and residential services and Will County Chapter of Credit Unions legislative forum representative; and Linda Sachaschik, human resources manager. (Photo provided by the Illinois Credit Union League)
The meeting was hosted by NuMark CU in Crest Hill, Ill., and moderated by Bill Tierney, Will County Chapter of Credit Unions LFR and director of commercial and residential services at NuMark. More than 20 credit union executives, volunteers, LFRs and individuals from the Illinois Credit Union League (ICUL) and four league chapters--Bloomington, Kankakee Valley, Tri-County and Will County--attended. Halvorson said the lack of available small business loans is the No. 1 complaint from small business owners in her district. Ann Dubie, CEO of NuMark, said: “Many of our members are small business owners. The current limitations on MBLs restrict our ability to serve them as their primary financial institution. By increasing the asset cap from 12.25% to 25% and raising the MBL exception dollar amount from $50,000 to $250,000, we will be able to fully serve their needs.” The group also discussed interchange fees, regulatory reform, courtesy pay and overdraft protection. “Rep. Halvorson has always been a tireless worker and very supportive of credit union legislative and regulatory issues in Illinois, and in fact, holds a perfect voting record with us,” said Don Edwards, ICUL senior vice president of federal government affairs. “The perspective she brings to the table helps credit unions not only here, but also across the country, and we appreciated the ‘open door’ policy and dialogue session.”

Corporate One announces new board officers

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COLUMBUS, Ohio (5/20/10)--Corporate One FCU, Columbus, Ohio, elected three members to its board for three-year terms during its annual meeting in late April. Board members are:
* Sonja Delaney, president/CEO, Midwest Community FCU, Defiance, Ohio; * Charles Plassenthal, CEO/manager, Dayton (Ohio) Firefighters FCU; and * John Shirilla, president/CEO, Best Reward CU, Walton Hills, Ohio.
Delaney, who will serve her first term as a board member, also is as a trustee and treasurer for the Ohio Credit Union Foundation. Plassenthal will serve his third term, and Shirilla will serve his fourth term on the corporate’s board. Plassenthal previously served as a director of the Ohio Credit Union League. In a reorganization meeting after the annual meeting, Corporate One also elected Gerald D. Guy, president/CEO of Kemba Financial CU, Columbus, as chairman, and Janice L. Thomas, president of PSE CU in Parma, Ohio, as vice chairman. Corporate One FCU has more than $5.1 billion in assets and serves nearly 800 credit unions.

Filene reports on financial firestorm

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MADISON, Wis. (5/20/10)--The Filene Research Institution’s most recent publication, “Withstanding a Financial Firestorm: Credit Unions vs. Banks,” examines how the recession affects credit unions and banks. The report found a quantifiable correlation between unemployment and bank lending--with each percentage point rise in unemployment, bank lending growth dropped 1.15%. At credit unions, there was no statistically verifiable decrease, Filene said.

Withstanding a Financial Firestorm: Credit Unions vs. Banks

Other points the paper noted:
* The magnitude of delinquencies and charge-offs at banks is more pronounced than at credit unions; * Because credit unions are about 75% as sensitive to macroeconomic shocks as banks are, regulators should consider imposing lower capital requirements to account for the lower risk; and * More open charters do not seem to have made credit unions more risky. Despite gradual moves away from closed charters after the passage of the National Credit Union Membership Access Act, credit unions have retained conservative portfolio strategies.
The publication was written by David M. Smith, Ph.D, and associate professor of economics at Pepperdine University, and Stephen A. Woodbury, Ph.D., professor of economics at Michigan State University.

CU System briefs (05/19/2010)

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* ST. LOUIS (5/20/10)--June 26 is the date that the Missouri Credit Union Association (MCUA) and Homes for Our Troops (HFOT) will hand
Click to view larger image Click for larger view
over to Staff Sergeant Robert Canine, a severely wounded veteran, the keys to his new home. Missouri credit unions reached their $100,000 fundraising goal, which covers the cost of building the specially adapted home. Credit unions will be landscaping the property on June 19 (The Missouri difference May 19). MCUA pledged to build a second specially adapted home in Missouri, and HFOT is searching for another veteran. SSG Canine, an avid St. Louis Cardinals fan, is shown here with his family and credit union representatives at a Cardinals warm-up Monday. Anheuser-Busch Employees' CU arranged the event. The group spent time on the field and met the players. After the game, the group met former Cardinals player and radio sportscaster Mike Shannon and Al Hrabosky, former Cardinals player and FSN Midwest broadcaster. (Photo provided by Missouri Credit Union Association) ... * MANSFIELD, Ohio (5/20/10)--GR Ohio Community CU, formerly Gorman-Rupp & Associates CU, based in Mansfield, Ohio, has donated bulletproof glass to the Richland County Clerk of Courts office to help protect the office's employees. The 20-foot piece of glass will replace an interior, weaker glass barrier. The glass is worth between $5,000 and $7,000. Installation by county staff will cost about $3,000 (News Journal May 15) ...

Three CUs help get word out theres money to lend

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SAGINAW, Mich. (5/19/10)--Three credit unions in Saginaw County, Mich., are helping get the word out that there's money to lend to small businesses. Wildfire CU of Kochville Township, United Financial CU of Bridgeport, and Frankenmuth (Mich.) CU have earmarked a collective $2.5 million specifically for small businesses, said The Saginaw News (via mlive.com May 18). The three credit unions are among more than 30 credit unions in the state that formed the Michigan Credit Union Small Business Financing Alliance, pledging a collective $43 million to lend through the program. Wildfire said it pledged $1 million because there is a need in the community for business lending. Andrea Hales, Wildfire's vice president of business lending, noted the economy has tightened credit and businesses are finding it harder to get loans. As a result credit unions "have become bigger players in the market, which gives customers an alternative," she told the newspaper. Wildfire has loaned to small businesses for years, but the alliance makes the process easier because it is getting the word out that credit unions have money to lend,. Some people still don't know that, Hales said. The alliance works with the Michigan Economic Development Corp.'s 12 regional Michigan Small Business and Technology Development Centers across the state to educate entrepreneurs and small business owners about how to start a business and apply for credit, said Dave Adams CEO of the Michigan Credit Union League. While Michigan banks cut back on small business loans by 68% in 2009, Michigan credit unions increased small business loans by 18%, Adams told the newspaper. United Financial CU told the newspaper it earmarked $1 million for the program but would lend more if the opportunity arose. Frankenmuth CU said the cooperative effort will make a difference because small business lending is the biggest addition to its business.

Bergengrens daughter Dorothy Hartman dies

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BERLIN, Vt. (5/19/10)--Dorothy Bergengren Hartman, daughter of credit union pioneer and Credit Union National Association (CUNA) founder Roy F. Bergengren, died May 3 in Berlin, Vt., CUNA has learned. Hartman died at her home at the age of 93. She was preceded in death by her husband, Edward M. Hartman. She graduated from the University of Wisconsin in 1939. She was Berlin town clerk from 1987 to 2002 and assistant town clerk from 1973 to 1987 (Times Argus May 4). Bergengren founded the Credit Union National Extension Bureau--CUNA's predecessor--in 1921 to work toward establishing credit union laws in all states and at the federal level. He served as CUNA's first managing director (now CEO) when it was formed in 1934. Hartman's daughter Kathleen Pelletier spoke at the America's Credit Union Conference in Boston, Mass., last year as part of CUNA's commemoration of its 75th anniversary. Hartman is survived by four children, 21 grandchildren and 15 great-grandchildren.

Mid-America CUA announces Dakotas scholarships

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BISMARCK, N.D. (5/19/10)--Mid-America Credit Union Association awarded 10 scholarships of $500 each to North Dakota and South Dakota high school students. Five students from these North Dakota high schools received scholarships:
* Richardton-Taylor (N.D.) High School; * Devils Lake (N.D.) High School; * Edgeley (N.D.) High School; * Bishop Ryan High School, Minot; and * Century High School, Bismarck.
Five students from these South Dakota high schools received scholarships:
* Timber Lake (S.D.) High School; * Britton-Hecia School, Britton; * Tea (S.D.) Area High School; * Watertown (S.D.) Senior High School; and * Andes Central High School, Lake Andes.
The scholarships are awarded to students who are credit union members. Recipients are selected by a panel of five judges. Applicants must write an essay answering one of two questions, “How, through your involvement in community/school activities, events or volunteer efforts, have you shown the cooperative spirit?” or, “What can your credit union do to continue providing you with financial solutions for a lifetime?”

Where are low card rates At CUs says IForbesI

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NEW YORK (5/19/10)--Credit unions are good places for consumers to look for low interest rates on credit cards, Forbes.com said Monday. In an article titled, “Where the Low Credit Card Rates are Hiding,” writer Asher Hawkins said Forbes has urged readers for a long time to look into the benefits of joining a credit union. “There are eligibility rules for these organizations as well, but chances are there’s at least one credit union you’ll be eligible to join,” Hawkins wrote. “Credit unions have become increasingly attractive as consumers tire of high rates and various fees charged on plastic issued by big commercial banks,” he added. To read the article, use the link.

Shot fired during robbery no one hurt

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SUFFOLK, Va. (5/19/10)--A man who Monday attempted to rob Metropolitan Church FCU in Suffolk, Va., fired a shot in the credit union, but no one was hurt. The masked robber entered the credit union, flashed his gun and demanded money, according to Suffolk police (The Virginian Pilot via HamptonRoads.com May 18). The man fired a shot when a teller ran to the back of the credit union. He fled the credit union on foot. Police are investigating the incident.

Illinois youth saved 861756 during challenge

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NAPERVILLE, Ill. (5/19/10)--Illinois youth saved $861,756 during the National Youth Saving Challenge as a part of National Credit Union Youth Week, sponsored by the Credit Union National Association (CUNA) April 19-23. Nineteen Illinois credit unions participated in the challenge, said the Illinois Credit Union League. The money youth saved at Illinois credit unions is part of the $25 million saved by youth nationwide. This year’s theme was “Get in the Savings Game.” The number of youth savers increased nationwide by 21.6% and the number of new youth savings accounts increased by 4.4%, said CUNA. About 168,438 youth made deposits and opened 10,385 new accounts, with an average deposit of $147. In 2009, about 138,444 youth deposited $26 million and opened 9,946 new accounts. The average deposit was $190. Credit unions nationwide hosted special activities and events at their branches to celebrate Youth Week. Many also offered financial literacy lessons. Next year’s National Credit Union Youth Week will be held April 17-23.

Oregon CU advocates help raise candidates profile

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BEAVERTON, Ore. (5/19/10)--Eight Oregon credit unions put a message of thanks on their website home pages to raise the profile for Sen. Rick Metsger (D-Ore.), who ran for state treasurer in Tuesday’s election. Results were not yet available as of press time. Metsger has supported credit unions for many years, according to the Credit Union Association of Oregon. UFCW FCU, Portland, placed information about Metsger on its Facebook page, and Rogue FCU met with the senator in Medford and said it would get the word out on his campaign to membership. CUAO also advocated for Metsger. CUAO named Metsger its Legislator of the Decade at last year’s annual meeting. The treasurer position opened after the death of another longtime credit union friend, Ben Westlund, in March, said CUAO.

Recession shapes consumer choices for personal finance

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RANCHO CUCAMONGA, Calif. (5/19/10)--The recession is shaping consumers’ choices for personal financial tools, according to CO-OP Financial Services. Many consumers are weighing safety, convenience and services, and are discovering that credit unions are changing the way people manage their money. “These are times when people are looking to get the most from their time and money, and they’re actively looking for alternatives to for-profit banks,” said CO-OP President/CEO Stan Hollen. Credit unions are offering increasingly technologically-advanced financial tools, such as mobile banking through mobile phones or iPhones, home check scanning and deposits, debit card services, reloadable prepaid cards, kiosks with branch-teller services, member call centers, and branch and ATM locator technologies through text, smart phones or global positioning systems. Credit unions also are expanding convenience to their members through shared branching. Members can access CO-OP’s 28,000 surcharge-free ATMs at credit union branches and retail locations such as 7-Eleven, Costco, Walgreens and Publix. “Interestingly, younger credit union members are not only early adopters of credit unions’ advanced electronic channels, but are also the largest member segment to use brick and mortar shared branching,” Hollen added. CO-OP Financial Services, a credit union service organization, is based in Rancho Cucamonga, Calif.

Former Porsche CEO Crear at N.Y. CUs meeting

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ALBANY, N.Y. (5/19/10)--Peter Schutz, former president/CEO of Porsche AG Worldwide, and Pete Crear, president/CEO of the World Council of Credit Unions (WOCCU), will address credit unions and credit union supporters during the Credit Union Association of New York’s three-day Annual Business Meeting and Convention.
The event will be held in Cooperstown, N.Y., June 7-9. Baseball great Johnny Bench also will be a convention keynoter. Schutz will provide techniques for gaining and sustaining a competitive edge. Under his leadership from 1981 to 1988, Porsche’s worldwide sales nearly doubled, and revenues more than tripled. His work earned him the Henry Townley Heald Award, presented to individuals whose positive ethics impact an entire industry. Today, Schutz lectures on management techniques around the globe. He also authored “The Driving Force: Extraordinary Results from Ordinary People.” Crear has directed the activities of WOCCU since 2005. He will discuss global credit union growth and the role credit unions play in developing countries. Crear is a member of the Michigan Credit Union League Hall of Fame, Credit Union Executives Society (CUES) and the Cooperative Development Foundation, and is the recipient of lifetime achievement awards from the African-American Credit Union Coalition and the National Credit Union Foundation. New York’s 2010 Annual Business Meeting and Convention also will feature 16 education sessions led by industry experts on topics ranging from compliance to risk management to growth strategies.

Wendell Bucky Sebastian named NCUF exec director

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WASHINGTON (5/19/10)--The National Credit Union Foundation (NCUF) board Tuesday named credit union system veteran Wendell “Bucky” Sebastian as the charitable organization’s new executive director, effective June 14. Sebastian is well known within the credit union community, having spent 20 years as CEO of Tampa, Fla.-based GTE FCU. He also was executive director and general counsel of the National Credit Union Administration (NCUA) from 1981 to 1985 during Edgar F. Callahan’s tenure as chairman. After his service at NCUA, Sebastian co-founded Callahan & Associates, a credit union consulting firm. He is also a former general counsel of the Illinois Department of Financial Institutions. “Bucky is an innovator whose breadth of experience, deep understanding of the credit union movement, and passion for our mission make him the ideal choice to take the foundation to new and higher levels of success,” said NCUF board Chairman Allan Kemp McMorris, CEO of Oakland County CU, Waterford, Mich. The executive director position had been vacant since the departure in December of Steve Delfin, who left to become CEO of America’s Charities. NCUF has been run on an interim basis by Managing Administrative Director Tom Candell during the executive search process. The search committee was chaired by Gary Oakland, CEO of BECU, Tukwila, Wash. Candell will continue in his role as the NCUF’s managing administrative director. As executive director, Sebastian will manage the foundation’s eight-member staff, cultivate and maintain relationships with the credit union system’s donor constituency, seek grants for program priorities and foster initiatives that further the NCUF’s development goals. He will be based in the foundation’s Washington, D.C. office. Sebastian also has served on the boards of the Federal Reserve Bank of Atlanta, CO-OP Financial Services and has chaired the boards of National Center for Member Trust and the Tampa Firefighter’s Museum.

CU System briefs (05/18/2010)

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* SALT LAKE CITY (5/19/10)--Tyson James, also known as James Michael Thayne, 31, was sentenced Thursday to seven years in prison after pleading guilty to robbing TransWest CU in Salt Lake City on April 14, 2008. U.S. District Judge Dale Kimball also said James will be placed on supervised release for three years after the prison term. James pleaded guilty to brandishing a firearm during a crime of violence. He pulled out a Smith & Wesson pistol, racked a bullet into the gun's chamber, and demanded money before fleeing with more than $6,300. A family member identified James as the robber after viewing the credit union's surveillance tape (The Salt Lake Tribune May 14) ... * LANSING, Mich. (5/19/10)--Michele Myrick, former executive vice president of Port Huron, Mich.-based E&A CU, who died March 17, has been honored posthumously with the Michigan Credit Union Foundation's 2010 Community Credit Union Volunteer Award. for exemplary volunteer service outside the credit union system. Myrick was involved in many organizations, including the Blue Water Area Chamber of Commerce, Blue Water YWCA, the Sanilac Economic Alliance, and charitable causes such as the March of Dimes and United Way's "Walk for Babies." Also, the CURE Defense Fund board of trustees voted to name scholarships created from CURE Golf Outing funds the "Michele Myrick CURE Defense Fund Scholarships." The scholarships are used to send Michigan credit union leaders to grassroots lobbying events in Washington, D.C. (Michigan Monitor May 17) ... * RALEIGH, N.C. (5/19/10)--State Employees' CU (SECU) members through the SECU Foundation granted $300,000 to Caldwell Hospice and Palliative Care to assist with the construction of an additional hospice facility in the county. On hand were the foundation's check presentation were hospice officials, credit union representatives, and SECU Advisory Board volunteers, including Joan Vaughn of the Lenoir Board and Peggy Throneburg of the Granite Falls Board. Currently under construction, the 15,135-sq.ft., 12-bed patient care unit is located in Hudson, N.C. The facility will triple the capacity of hospice beds in the country to 18 from the current six. The patient care unit also will provide a family living and dining area, family kitchen, chapel, and children's play room. The center serves more than 120 hospice patients a day. (Photo provided by State Employees' CU) ... * GERMANTOWN, Md. (5/19/10)--Mid-Atlantic FCU (MAFCU)has been selected as a "2010 Workplace Excellence Winner" by the Alliance for Workplace Excellence (AWE) for the fourth consecutive year. For the past 11 years, the alliance has identified the Washington, D.C., area's best places to work. The award highlights businesses that promote professional fulfillment and personal wellness at work, at home and in the community. "We are continuously evaluating our benefits programs," said Theresa Elliott, vice president of human resources with MAFCU. "It is important to find creative ways to fulfill the changing needs of our employees so that they can maintain work-life balance." The award will be presented June 1 at AWE's annual awards luncheon ...

School ECU votes to merge with Numerica CU

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RICHLAND, Wash. (5/18/10)--Members of School Employees FCU (SECU), based in Richland, Wash., approved a plan to merge with Spokane Valley, Wash.-based Numerica CU. Eighty-seven percent of members voting at a special meeting May 6 approved the the merger. SECU obtained regulatory approval in March for the merger from state regulators and the National Credit Union Administration. "We believe that service to the members is of utmost importance," said Eldon Ladd, CEO of SECU, expressing that the credit union was pleased the membership supported the proposal. Dennis Cutter, president/CEO of Numerica, noted the credit union aims to "provide the best financial products and services to our members, and we are thrilled to have the opportunity to expand that to the SECU members." SECU, which was founded in 1960, has assets totaling $12 million and 3,000 members within the Tri-Cities area. Its members will benefit from the enhanced products, services and delivery channels offered by the $997 million asset Numerica, said SECU. Numerica was founded in 1937 and has 80,000 members in Central and Eastern Washington and Northern Idaho. It became a part of the Tri-Cities community in 2004, when it opened a branch in Kennewick. It now has two branches in Kennewick and Pasco that SECU members can use. The merger will be effective May 31, at which time the credit unions will being the process of consolidating their data systems and other records. They expect the merger will be completed in August.

CU sues on trademark when bank acquires failed bank

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ANN ARBOR, Mich. (5/18/10)--A credit union based in Ann Arbor, Mich., has filed a trademark infringement lawsuit against a bank with a similar name, less than two weeks after the bank acquired a failed bank that would put the bank and credit union in competition in the same market. Michigan First CU, a $550 million asset credit union based in Lathrup Village, Mich., filed the suit on May 12 in the U.S. District Court for the Eastern District of Michigan in Ann Arbor seeking an injunction against First Michigan Bancorp Inc., which is based in Troy, Mich. According to the complaint filed, the credit union has adopted and used several service marks, all incorporating and prominently featuring the words "Michigan First." These include 'Michigan First Credit Union" for its credit union services, "Michigan First Credit Union Moneyworks,' for its internet banking services, "Michigan First Wealth Management Group" for its financial planning and estate planning services, and www.michiganfirst.com, the credit union's website. As a result of its "extensive use and promotion of the Michigan First marks, these marks have come to be associated in the public mind with credit union, banking and other financial services offered and sold by Michigan First," the credit union said in its complaint. The bank's use of the First Michigan Bank mark is "in conscious disregard of First Michigan's trademark rights," the credit union's complaint said, ands "creates a likelihood of public confusion, in that consumers seeking Michigan First's services will be diverted" to [the bank] defendant, and/or will erroneously believe that the services offered by [the bank] defendant are offered, sponsored, or endorsed by Michigan First, when in fact they are not." On April 30, state regulators closed Port Huron-based CF Bancorp, which operated 22 branches under the Citizens First name--19 of them in Michigan cities and many of them in the same market as the credit union. The regulators sold the bank's deposits and some of its assets to First Michigan Bank (Detroit Free Press via freepress.com May 1). First Michigan Bank is relatively new, having been formed in 2007. The suit seeks an injunction to prevent the bank from using the name.

Capital Educators FCU grants give back to community

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MERIDIAN, Idaho (5/18/10)--Capital Educators FCU, Meridian, Idaho, is offering a grant program that allows it to share its earnings and help benefit school-related activities in the community. The credit union introduced the program in 2008, and has awarded 37 CapEd grants for a total of $27,913, said Kathy Palumbo, vice president of marketing. The credit union picks three monthly winners from a pool of 30 to 40 grant applications each month based on need. The maximum grant amount is $750, and winners must account for how each dollar is spent, said the Idaho Business Review (May 7). Palumbo told the newspaper that the credit union aims to ensure the winners are “people who have no other source [of funding].” The grants can be used to pay for materials, projects and field trips. Some of the grants have funded:
* Sixty copies of a book called “End Game,” which was used to teach English lessons on theme, foreshadowing and irony; * A greenhouse project; * A device to monitor the growth and wellness of fish in an aquarium; * A wireless listening center, which helped a teacher instruct a “split class.” In such a class, two groups can learn different subjects without disturbing each other because the wireless capability eliminates the necessity of being confined to one space; * Art supplies, including paint, yarn and chalk; and * A mobile science lab.
The credit union has $292 million in assets.

CUNA Mutual CUs system need changes

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GREEN BAY, Wis. (5/18/10)--The economic downturn has created opportunities and challenges for the credit union system, but credit unions--and the system--may need to change if they want to meet the challenges and take advantage of the opportunities, say CUNA Mutual Group. John Lass, senior vice president of strategy at CUNA Mutual, delivered that message to members of the Wisconsin Credit Union League at the league’s annual convention. Lass provided an overview of the economic crisis and the financial health of the credit union system to make his case. “We have come through a truly historic period of economic crisis,” Lass said. “As we now move into a recovery period, the question is how the credit union system can grow as a result of the upsurge in member trust that credit unions are experiencing and the decline in confidence in the large national banks.” His discussion explored practical ways “to take advantage of this unique opportunity.” Lass illustrated the need for a strong and competitive credit union system:
* Credit unions have a local presence and are funded locally, making them not as dependent on the capital markets as banks and finance companies. As a lending institution, credit unions use local underwriting and decision-making. In many cases, the credit union staff know the borrower on a first-name basis, which is typically not true of national bank lenders. * The cooperative ownership structure makes it difficult for any group of outside individuals to exert undue influence on credit unions’ strategic decisions. By comparison, many bank holding companies have institutional ownership. * Credit unions offer the affordably priced products and services that consumers require now more than ever. Credit unions provide an average benefit of $198 per member household, or $104 per member, according to the Credit Union National Association’s Benefits of Membership Report of December 2008. * The credit union system is not nearly as concentrated as the banking industry. Today the five largest bank holding companies control nearly 40% of total bank deposits in the U.S. The credit union system, by comparison, has less concentration. * The credit union system entered the economic crisis with strong capital. Despite combined impacts of assessments and loan losses, the average capital ratio on Sept. 9, was 300 basis points above the National Credit Union Administration’s (NCUA) “well-capitalized” benchmark. * The cooperative structure does not reward excessive risk-taking, resulting in lower delinquencies than banks. Banks reported a 4.94% delinquency ratio, according to the Federal Deposit Insurance Corp.’s Quarterly Banking Profile from third quarter 2009. During the same reporting period, according to NCUA’s 5300 data, credit unions reported a 1.69% delinquency ratio. * Credit unions can successfully pursue a customer-intimate strategy in a way that’s more difficult for a bank to achieve. Customer intimacy is considered the most powerful value proposition an organization can build. It not only commands the deepest and longest lasting customer loyalty, but enables the organization to better anticipate the needs of its customers. * Credit unions consistently achieve high consumer trust ratings in independent surveys, including the Financial Trust Index of Jan. 27, in which credit unions earned a trust rating of 58%, compared with local banks at 53%, national banks at 31% and banks in which government has a stake at 21%. The trust factor ranked credit unions seventh among top-ranked companies in Forrester’s 2010 Customer Experience Index. * Credit unions did not cause the current economic crisis. Recent credit union losses are more a result of being caught in the backwash of the broader financial and real estate markets. As a result, credit unions--for the most part--avoided the subprime and related lending practices that led to the current financial crisis. * Ironically, credit unions were formed in response to a similar environment of economic crisis, leading to federal legislation to establish credit unions in 1934. Times like this are why credit unions were formed.

Yokum Watkins honored by Virginia CUs

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LYNCHBURG, Va. (5/18/10)--The Virginia Credit Union League honored two individuals for their commitment to the credit union movement and to their communities during the league’s annual meeting in Reston May 7.
Click to view larger image Jane Watkins, (left) president/CEO of Virginia CU, received the Virginia Credit Union League’s Eugene H. Farley Jr. Award for Excellence from retired league president Gene Farley.
Jane Watkins, president/CEO of Virginia CU, Richmond, was presented the Eugene H. Farley Jr. Award of Excellence for her service to state and national credit union communities. The award is named after former league president Eugene Farley. Watkins joined Virginia CU in 1982 as an accounting manager and was named president in 2000. Under her leadership, the credit union grew to $1.9 billion assets from $629 million in 2000. Virginia CU also was among the first in the U.S. to hire a full-time educator to teach financial literacy in schools. “I’m proud of the way our credit union has grown, certainly, but the greatest satisfaction comes when I hear success stories directly from our members,” Watkins said. “I love to hear from members who have discovered the value of saving, rebuilt their credit, or bought their first car with the credit union’s help. These stories demonstrate the positive difference we have made for our members.”
Click to view larger image Jean Yokum, (left), president/CEO of Langley FCU, received the James P. Kirsch Lifetime Achievement Award from the Virginia Credit Union League. She is pictured with league President Rick Pillow. (Photos provided by the Virginia Credit Union League)
Jean Yokum, president/CEO of Langley (Va.) FCU, was honored with the James P. Kirsch Lifetime Achievement Award, presented to leaders in Virginia’s credit union movement for their service to the credit union and community. Yokum joined Langley FCU in 1953 as a teller. She became president/CEO in 1979. Under her leadership, the credit union began offering the Langley Saves Share Account, which gives younger or low-income members an opportunity to build savings in high-yield accounts; the QuickCash loan; CreditBuilder; and the Financial Learning in Progress program, which teaches young people money management basics. “We’ve always had a simple philosophy when it comes to leadership: lead by example, be strong, be true, be someone that others can believe in,” she said. “I hope that others see the loyalty and passion that I have for our members, for this credit union and for our employees.”

Minnesotans have higher opinion of CUs than of banks

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ST. PAUL, Minn. (5/18/10)--In Minnesota, credit unions have been insulated from the negative public opinion against financial institutions stemming from recent financial industry distress. The results of a new Minnesota Credit Union Network (MnCUN) survey indicate that 20% of bank customers in Minnesota think credit unions are more attractive than other financial institutions. The survey found that 40% of the state’s consumers trust banks less than they did before troubles occurred in the financial industry. The survey explored Minnesotans’ current attitudes toward credit unions and banks, reasons for choosing a primary financial institution, and general knowledge of and preferences toward the services credit unions and banks provide, MnCUN said. Other findings include:
* Roughly 30% of Minnesotans find credit unions more appealing, considering recent financial industry problems; * About 82% of Minnesotans trust credit unions about the same as in previous surveys and 13% trust them more in light of the financial industry’s problems. Comparatively, 43% trust banks less and 56% trust them about the same because of issues in the industry; and * Credit union members are twice as likely to recommend their credit unions to others as bank customers are to recommend their banks.
“With this study, we wanted to obtain an objective view of how Minnesotans currently view primary financial institutions--regardless of whether those views are positive or negative--so that our member credit unions have clearer insight into how they can better address the needs of their current members and potentially attract new ones,” said Mark D. Cummins, MnCUN president/CEO. “These findings tell us that the value credit unions bring to consumers really resonates with Minnesotans.” About 400 Minnesotans were randomly selected and interviewed via telephone for the survey between Feb. 25 and March 17. Padilla Speer Beardsley, an independent research and communications consulting firm, conducted the study and analyzed the results on behalf of MnCUN, while Information Specialists Group, a polling group, conducted the phone interviews.

Bankrate study Free checking alive and well at CUs

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NEW YORK (5/18/10)--While analysts are speculating that free checking accounts may disappear altogether from many national banks, a study by Bankrate Inc., indicates that free checking is alive and well--at many of the nation's credit unions. Bankrate's first annual 2010 Credit Union Study also looked at fees, account balance minimums and the cost of using an ATM at the 50 largest credit unions in the nation (PRNewswire May 17). Among the findings:
* Of the 50 largest credit unions in the U.S., 39 offered free checking accounts; * Forty-one credit unions studied have no balance requirement or monthly fee on their checking accounts; * Among the nine credit unions that charge a monthly service fee, the highest fee was $10 and the lowest was $1; * Nearly all (47) of the credit unions allow unlimited monthly transactions; * More than half --27--do not require a minimum opening balance on their free checking accounts; * Of those requiring a minimum balance for free checking, the average minimum opening balance required for a non-interest account is $16; and * Nineteen of the credit unions surveyed have interest-bearing checking accounts.
"With free checking accounts becoming less prevalent in national banks, credit unions can be an invaluable resource for the average consumer," said Greg McBride, senior financial analyst for Bankrate.com. "Credit unions offer many of the same services as most large banks. They just happen to be not-for-profit organizations that are owned by and in operation for the benefit of their members," he said. The results of the study can be found at the resource link.

Virginia league board election results announced

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LYNCHBURG, Va. (5/18/10)--The Virginia Credit Union League announced individuals who have been elected/re-elected to its board of directors. They are:
* Robert “Bob” Petty, Bronco FCU, Franklin--at-large director; * Paul Phillips, Freedom First FCU, Roanoke--at-large director; * Karen Orie, Hampton (Va.) Roads Educators’ CU--representing credit unions in the Hampton Roads and Tidewater chapters with less than $50 million in assets; * Stan Leicester, BayPort CU, Newport News--representing credit unions in the Hampton Roads and Tidewater chapters with $50 million or more in assets; * Iris Ellis, Assurance FCU, Richmond--representing credit unions in the Richmond and Southside chapters with less than $50 million in assets, and * Cliff DeMars, Roanoke (Va.) Postal Employees FCU--representing credit unions with $50 million or more in assets in the Lynchburg, Piedmont, Roanoke Valley, and Southwestern Virginia chapters.
Orie was elected to a two-year term, serving the remainder of Michael Guida’s term. Guida recently retired from membersTrust CU, Virginia Beach. All others were re-elected to three-year terms. Results were announced at the league’s May 8 annual meeting.
The league board also held a reorganization meeting and elected executive committee members. They are:
* Chairman, Petty; * Vice chairman, Suzanne Hughes, University of Virginia Community CU, Charlottesville; * Treasurer, Phillips; and * Secretary, Cheryl Dickerson, Fairfax City (Va.) FCU.
Leicester remains on the executive committee as immediate past chairman. The board also elected the executive committee for the league’s wholly owned subsidiary, Virginia Credit Union Services Inc. Members are:
* Chairman, Bill Cook, Northwest FCU, Herndon; * Vice chairman, Audrey Bollinger, Peoples Advantage FCU, Petersburg; * Treasurer, Phillips; and * Secretary, Barbara Lockard, Partners Financial FCU, Glen Allen.

Governor declares today as Louisiana CU Day

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BATON ROUGE, La. (5/18/10)--Louisiana Gov. Bobby Jindal has declared today as “Louisiana Credit Union Day.” Today also marks the opening session of the Louisiana Credit Union League’s Governmental Affairs Conference in Baton Rouge, the league said (eNews May 12). The highlight of the conference will be afternoon visits with state legislators at the Capitol. Later this evening, the league will host a reception to celebrate Louisiana Credit Union Day. The league is seeking stories and pictures from credit unions about how they celebrated the day. Information can be sent to Lacey Hyer, public relations specialist, at lhyer@lcul.com.

CUNA CFO Council hits 1000 membership mark

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MADISON, Wis. (5/18/10)--Membership in the CUNA CFO Council has exceeded 1,000 members, an all-time high. Pam Finch, chair of the council and chief financial officer (CFO) at Mid Minnesota FCU, Baxter, Minn., announced the number at the council's annual conference May 16-19 in New Orleans. Founded in 1994 with more than 100 members, the council has grown every year except 2001. The record "is a testament to the value of the CUNA CFO Council as a resource," said Finch. "These may be the toughest times we've ever seen and CFOs face more challenges than ever." The council's growth "speaks volumes about how CFOs regard it as a critical resource for credit union financial professionals," she added. To celebrate the milestone, the CUNA CFO Council is asking members to submit a success story of how the council helped them. The contest will run until June 18, and the randomly chosen winner will receive an Apple iPad. For more information and an entry form, use the resource link and click to "Tell Us Your Story." To be eligible to choice CUNA CFO Council, individuals must be paid staff with finance responsibilities from credit unions affiliated with the Credit Union National Association (CUNA).

Calif.Nevada leagues train the trainers in fin lit

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ONTARIO, Calif. (5/18/10)--More than 50 teachers, financial planners, and credit union professionals from throughout California attended a free workshop May 12 on offering financial literacy education in classrooms.
Click to view larger image Teachers, financial planners and credit union professions from throughout California attended a free workshop on offering financial literacy education in classrooms. The event was sponsored by the California and Nevada Youth Involvement Network ahd held at the California and Nevada Credit Union Leagues' headquarters. (Photo provided by the California and Nevada Credit Union Leagues)
The seminar was sponsored by the California and Nevada Youth Involvement Network (CNYIN), and held at the California and Nevada Credit Union Leagues' headquarters in Ontario, Calif. Participants included teachers from San Bernardino and Riverside counties. Credit union professionals from as far away as San Jose and San Diego attended. The “Train-the-Trainer” Roundtable was open to teachers who currently use or would like to use the National Endowment for Financial Education’s (NEFE) High School Financial Planning Program (HSFPP), as well as CNYIN members and certified public accountants. “This was a great opportunity for those interested in learning how to include financial literacy education into their curriculum, or wish to improve on what they’re already offering,” said Catherine Arra, league liaison to the CNYIN. “There is a great need for practical application,” said Karen Allen, a skills for living and computer applications teacher at Bellflower, Calif.-based Somerset High School. “The average student is so under-informed on this subject.” In the session, Mike Jones of Educational Employees CU, Fresno; Michelle Lawrence of American First CU, La Habra; and Connie Costello of UC Riverside Extension presented the seven-unit HSFPP curriculum and offered teaching techniques to keep young adults engaged and motivated. Dhara Sanchez from Inland Empire CU, Pomona, assisted with a panel discussion on getting financial literacy education into schools. Attendees learned about goal setting, budgeting, understanding credit, protection from fraud, dealing with insurance, choosing a financial institution, investing, and preparing for a career. Attendees also teamed up to teach the sections themselves as if they were presenting to a classroom. Each attendee received a NEFE HSFPP instructor’s manual, student manual, and introductory program package. The CNYIN works to increase the financial literacy of youth in California and Nevada through classroom presentations and other means. For more information, contact Cathy Arra at 800-472-1702, ext. 6025, or at catherinea@ccul.org.

Mid-Atlantic Corporate releases 2009 report

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MIDDLETON, Pa. (5/17/10)--Mid-Atlantic Corporate FCU has accumulated $6.5million in retained earnings through 2009, according to its annual report for 2009 posted on the Middleton, Pa.-based corporate credit union's website. The year-end asset size grew by more than $1 billion to $3.8 billion from 2008. The corporate's gross earnings of $60.3 million was comprised of $43.8 million in investment and loan income and $16.5 million in operating income, said the report. Mid-Atlantic returned $28.6 million of its gross income back to its members in the form of dividends and interest. Operating expenses for the year totaled $25.2 million lower than 2008, said Joan M. Moran, treasurer, in the report. She noted the capital position of Mid-Atlantic Corporate remains strong, compared with its peers' capital position. "Although the retained earnings ratio at 0.18% is below the regulatory minimum, Mid-Atlantic's total capital ratio of 4.52% is above the regulatory minimum. Mid-Atlantic worked to diversify its correspondent relationships to strengthen its liquidity. At the end of 2009, its diversified cash holdings totaled more than $1 billion and access to lines of credit totaled $1.4 billion. The corporate diversified cash and investment holdings at U.S. Central FCU from over 90% in past years to 42% at the end of 2009. The corporate's holdings outside U.S. Central are almost evenly split between short-term investment positions and cash positions with highly rated and well-established correspondent banks, said the corporate's report. These are divided among four primary categories: U.S. Agency securities asset-backed securities, corporate notes and bank certificates of deposit. The corporate's adoption of the accounting standard recognizing other-than-temporary impairment (OTTI) charges, as required by regulators since April 2009, "did not have a material impact on the [corporate] credit union's financial position, results of operation or cash flows, the corporate said. The report is located on the corporate's website under "Corporate Financials."

U.S. Mortgage Corp. servicing manager pleads guilty

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NEWARK, N.J. (5/17/10)--The former servicing manager of U.S. Mortgage Corp. pleaded guilty Thursday in a U.S. District Court in Newark, N.J., to conspiracy to commit wire fraud. Credit unions lost $136 million when the company and its subsidiary, CU National Mortgage LLC, fraudulently sold hundreds of their mortgage loans to Fannie Mae, then went bankrupt. Leroy Hayden, 47, of East Stroudsburg, Pa., was the servicing manager of Pine Brook, N.J.-based U.S. Mortgage from 2004 through Jan. 28, 2009. He admitted conspiring with company president Michael J. McGrath Jr. and several others to fraudulently sell the loans belonging to the credit unions, said the Department of Justice in a press release (PR Newswire May 13). Hayden provided to credit unions reports that falsely stated the loans that had been sold were still in the credit unions' portfolios, and, at McGrath's direction, concealed the sales. He also admitted he modified data in U.S. Mortgage's servicing system to help carry out the scheme, said the Department of Justice. The scheme used the proceeds from the sales to Fannie Mae to fund U.S. Mortgage's operations, McGrath's personal investments and investments he made on the company's behalf, said prosecutors. Hayden faces up to five years in prison, a maximum fine of $250,000, and possible restitution to the victims. His sentencing is scheduled for July 27. McGrath pleaded guilty in June 2009 to conspiracy to commit mail and wire fraud, and conspiracy to commit money laundering. He is scheduled to be sentenced on July 6.

N.C. governor appoints two to fin lit council

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GREENSBORO, N.C. (5/17/10)--North Carolina Gov. Beverly Perdue has appointed Winston-Salem (N.C.) City Employees’ FCU President/CEO Tony Ebron and State Employees’ CU Senior Vice President of Education Services Leigh Brady to the North Carolina Financial Literacy Council. Their appointments began in March and run for a three-year period, according to the North Carolina Credit Union League (Weekly Update May 10). The state General Assembly created the council last year to address the need for financial education in public schools and communities. The council will document existing programs and policies related to financial education in the state, establish student financial literacy goals and benchmarks, monitor implementation of financial education statewide and connect students an adults to financial institutions and curricula. SECU is based in Raleigh, N.C.

Tennessee CUs step up to help flood victims

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NASHVILLE (5/17/10)--Credit unions in Nashville are responding to the needs of their members affected by recent flooding in the area. Vanderbilt University Employees’ CU, is doing “what we need to do to get people’s lives back to the baseline,” said board president William Rochford. Nashville experienced significant rainfall the weekend of May 1-2, which caused severe flooding in the metro area and many areas along the Cumberland and Harpeth rivers. Many residents lost their homes, cars, and even their lives. While the sun is starting to dry up the water, Nashville is working to rebuild. Vanderbilt University Employees’ CEO Michael Bittle said the $20-million asset credit union jumped to help its members immediately after the flood. “We didn’t wait for the first person to ask us for help,” he said. On May 3, after the flooding, Bittle drove into work from his home, which is located in an area that wasn’t hit as hard by the flooding. “I didn’t realize how bad it was,” he said. When he got to work, Bittle called Rochford immediately and said the credit union needed to help flood victims. “If there ever was a place for credit unions to step up and use the philosophy of people helping people, this was it,” he said. Within a matter of days, the credit union assembled a plan to help, including:
* A “People Helping People” flood relief fund of up to $1,000--with 0% interest--to be repaid by payroll deduction of $100 over 10 months; * A one-month deferral of all payments on credit union loans; and * An appliance loan of up to $5,000 for 24 months at 9.9% interest to replace lost appliances.
The credit union also made $250,000 available to members for losses and is working with members who lost their cars in the flood. Also, the credit union will offer services such as a home owner equity line of credit, a personal line of credit and a signature advance personal loan. The credit union itself did not have any damage except for a little water under the windows in Bittle’s office. However, the credit union’s building had some water in the basement. “If [the water] had got into the electrical system, we would have had to move,” Rochford said. “It’s caused us to revisit our emergency response plan.” Some members lost everything. Others had water in the basement or living areas, and had to rip out carpets and replace drywall. Smaller credit unions like Vanderbilt that took action are “a shining example of getting it right,” Rochford said. “This is an example of what [credit unions have] always been about.” “What’s right about America right now--credit unions,” he added. Nashville as a city also has demonstrated the credit union movement philosophy as well as anyone could have. “We’re doing what we’re supposed to be doing,” Rochford said. “[Nashville] is a giving community and a caring community.” Another small Nashville credit union, the $29-million-asset Employees CU, will offer an unsecured loan of $2,500 with liberal underwriting. It also will offer 100% financing to members who have mortgages. “We’re going to offer whatever it takes to get the house habitable,” said Phillip Elam, Employees CU's CEO. Members can make penalty-free share certificate withdrawals and Employees CU will replace checks, cards and other items that may have been destroyed in the flood. It also will liberally look at fees charged to members and will grant two- to three-month-extensions on all loans. Elam said he learned that 90% of people whose homes were affected had no flood insurance. Most people had basement flooding, and many lost everything inside of their homes. Some houses had three to six feet of water and the drywall needed to be stripped out. Employees were impacted, also, he said. Two employees had flooded basements, and some employees struggled to get to work after the flood. “Getting to work was an issue on Monday after the flooding,” Elam said, noting that many of the roads were flooded or washed out. The credit union didn’t experience any damage itself. While members are coping with damage to their homes, the credit union expects to also deal with members who lost their cars. Because so many cars were swept away, rentals are at a premium, Elam said. “There are no cars to be had here,” he said.

Fitch affirms ratings of eight corporates

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MADISON, Wis. (5/17/10)--Fitch Ratings has affirmed the long- and short-term Issuer Default Ratings (IDRs) at “A+” (high credit quality) and 'F1+' (highest short-term credit quality), respectively, of eight major corporate credit unions. The Rating Outlook is Stable. The affirmation of the IDRs is based on the National Credit Union Administration's (NCUA) continued support for these companies, Fitch said in a press release. Recently, NCUA extended a waiver that permits corporate credit unions to operate below minimum regulatory capital requirements. Also, NCUA is in the process of developing a plan to remove roughly $50 billion of problem securities from the corporate credit union system, Fitch said (Business Wire May 13). The IDRs reflect the companies' '1' support and 'A+' support floor ratings, which acknowledge NCUA’s support and emphasize the importance of government support in assessing probability of default. “Given this continued support, Fitch said it believes that the existing support ratings, support floors, and IDRs remain appropriate at this time. As such, the Outlook is Stable,” it said. Also, Fitch said the corporates will continue to benefit from the planned restructuring of the corporate credit union network and the implementation of new regulations. However, Fitch said a restructuring of the network could potentially lessen the level support provided to these companies in the future. The Individual ratings of the corporate credit unions rated are at “E”, reflecting that these companies still have serious capital challenges and largely operate below regulatory capital minimums, Fitch said. With the exception of Eastern Corporate FCU (EasCorp) and Mid-Atlantic Corporate FCU (Mid-Atlantic), the corporate credit unions operate with total capital ratios below mandatory regulatory requirements necessitating regulatory forbearance from the NCUA. Constitution Corporate FCU is operating under special regulatory assistance related to its depleted capital position. Fitch said some institutions have a heightened risk of regulatory intervention due to the corporate credit unions’ weak capital position and the prospect of future losses in their investment book. Should any institution require regulatory intervention, Fitch said it would expect the level of governmental support for the company to remain unchanged. For a complete list of ratings actions for each of the eight corporates, use the link.

INewsdayI In turbulent times more turn to CUs

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MADISON, Wis. (5/17/10)--More U.S. consumers are turning to credit unions amid a troubled economy that’s creating mounting frustration with banks, Newsday.com said Thursday. Credit union lending was up for several types of loans, while bank lending was down at the end of 2009, the Credit Union National Association (CUNA) told Newsday. “And for the first time in recent years, credit union deposits grew at a faster pace than bank deposits,” the publication said. “The difference was stark, too: Credit union deposits were up 10.3% last year, but bank deposits rose only 2.1%.” “We’ve seen a huge influx in savings in the last 18 months,” Pat Keefe, CUNA vice president of communications and media outreach, told Newsday. Where is the money coming from? “It’s coming from banks,” Robert Allen, president/CEO of Farmingville, N.Y.-based Teachers FCU, one of the largest U.S. credit unions, told Newsday. Troubled banks need to re-establish their financial stability by cutting their lending and downsizing their deposits. So when customers turned away by those institutions search for a new place to conduct financial business, credit unions become more attractive, Allen added. Meanwhile, Municipal CU in Manhattan has experienced balance transfers on the credit union’s Visa cards. They’ve tripled to $600,000 in March from $200,000 in January, which indicates consumers are departing banks, Geraldine Light, a vice president at Municipal CU, told Newsday. Kam Wong, Municipal president/CEO, noted that those transfers are a reaction to how banks often raise interest rates when consumers have late payments or exceed their credit limit. Credit unions generally don’t implement that type of “penalty pricing,” he told Newsday.

Rep. Heinrich Dont make CUs pay for banks misdeeds

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ALBUQUERQUE, N.M. (5/17/10)--Credit unions and small community banks should not bear the same regulatory burden as large national banks, U.S. Rep. Martin Heinrich (D-New Mexico) told the Credit Union Association of New Mexico (CUANM). Heinrich recommends an approach to financial regulation that would impose different restrictions on large national financial institutions than on credit unions and community banks. Furthermore, credit unions and small community banks should not suffer because of the misdeeds of large national financial institutions, he told CUANM in a recent interview. “We’ve got to take a smart approach to regulation that goes after what the problems are,” Heinrich told CUANM. “We shouldn’t blame or hold accountable credit unions and community banks for some of the problems Wall Street banks created. We need to come up with policies that treat small community institutions differently than national institutions. That is the smart and correct approach to regulation.” Heinrich is co-sponsoring H.R. 3380 in Congress to raise the amount of member business lending permitted for credit unions from the current federal cap. He recently wrote a letter to Speaker of the House Nancy Pelosi and House Majority Leader Steny Hoyer urging them to raise the cap on credit union business lending to 25% of total assets from 12.25%. “My wife and I have been credit union members for a long time,” Heinrich told CUANM. “Right out of college we joined New Mexico Educators [CU] and it has served us well. I find credit unions know their customers. You can walk in and talk to a real person. You don’t get that kind of generalized treatment you sometimes receive from big national banks. “I think credit unions do a good job of meeting the needs of their individual members and I think that makes a difference,” he added. To read the interview, use the link.

NYIB conference offers CUs youthful outlook

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COLUMBIA, S.C. (5/14/10)--The National Youth Involvement Board’s (NYIB) annual conference in St. Louis July 26-29 is being billed as “Your Gateway to the Next Generation.” The conference aims to offer insight and peer exchange to support participants in their outreach to future members and consumers. Speakers on the agenda include:
* Brent Dixon, Filene Research Institute adviser on young adults; * Matt Davis, Filene adviser on innovation; * Claudine Oriani, chief creative officer with As If Productions; * Ron Galloway, director of the documentary “Why Wal-Mart Works and Why That Makes Some People Crazy”; and * James Robert Lay, social and viral campaigner, and founder of PTP New Media.
Dixon also is hosting a pre-conference workshop, “Design Thinking: A Human-Centered Approach to Innovation.” Sessions include:
* Becoming Younger Members’ Financial Advocate; * Truly Connecting with the Youth Market; * Youthful Products for a Younger Membership; * Top 12 Technology Trends for 2010; * Top of the Class Techniques; * Rocking the Vote or Rocking the Boat? Gaining the Influence of Youth through Economic Democracy; * Leadership Skill that Get Results; * What a Trip! A Tour of Mad City (Money); * Advancing Relationships after High School; and * Approaching Decision Makers for Favorable Results.
For more information, use the link.

CU System briefs (05/14/2010)

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* WARNER ROBINS, Ga. (5/17/10)--Robins FCU is among the financial institutions in the Warner Robins, Ga., area being forced to reissue credit and debit cards because a local, unidentified merchant was breached. Robins FCU said in a press release reported by the Macon Telegraph (May 14) that about 2,000 of its debit and credit cards were affected. Its card processor notified the $1.3 billion asset credit union that a merchant, whose name was not released, experienced a payment processing breach that compromised the cards of members and other customers who had conducted business there. Robins immediately blocked the cards and notified the accountholders via e-mails and letters and will be issuing new cards with new numbers and expiration dates ... * LAKE FOREST, Calif. (5/17/10)--Twelve Southern California credit
Click to view larger image Click for larger view
unions and the CO-OP Network donated one million bags to "Stamp Out Hunger," the National Association of Letter Carriers' (NALC) food drive. The contributions helped promote the food drive and increase donations, according to Eagle Community CU, a participant. This year, more than 268,000 pounds of food--the second largest collection on record--were collected in Orange County. Last year credit unions donated 650,000 bags and helped prompted the most successful drive, said Eagle Community CU CEO Bill Birnie. "We really appreciate the support of our local credit unions," said Paula Miller, NALC Region One Food Drive coordinator. "The bags they donate are the only advertising we get that can double or triple donations," she said. Eagle's employees--including Eagle Internal Auditor Nancy Powers, shown here--also volunteered at five local post offices to unload and sort incoming donations. They processed 20% of the donations in the county. Other participants included: Priority One, CUT, Camino FCU, Southern California Postal CU, USC CU, CalCom FCU, LA Healthcare FCU, South Bay CU, Mattel FCU, City of Downey FCU, San Gabriel Valley Postal CU, and California Agribusiness CU. (Photo provided by Eagle Community CU) ... * HUNTSVILLE, Utah (5/17/10)--Employees of Weber State FCU, Ogden, Utah, participating in a twice-a-year highway cleanup program have contests over who can find the most unusual item beyond the typical cigarettes and beer cans. They've discovered bones, windshields and old toys. But on May 13, they found something that brought good news to Centerville resident David Davis: his wallet, which had been missing for nine months. In it were his driver's license, credit and debit cards, certification cards and more than $170 in cash. It took some legwork to find Davis, who was ecstatic. He told Weber State's marketing manager, Dustin Allen, that he had lost it in August after stopping at a gas station to gas up his watercraft. He set the wallet on top of the watercraft and forgot about it. It fell off to the side of the road. Davis had searched for it for hours. The credit union reunited Davis with the wallet on May 10 (Standard-Examiner May 13) ... * DES MOINES, Iowa (5/17/10)--A member of Tradesmen Community CU, Des Moines, Iowa, lost $392 in a cell phone phishing scam when someone in Dublin, Ireland, used an ATM to withdraw money from his credit union account in two thefts. George Lawrence told people someone sent a recording to his cell phone informing him his debit card had been deactivated. To reactivate it, he had to key in his account number and card expiration date on the phone. Lawrence said the request sounded reasonable because someone had used his debit card number to pay for six calls to sites he did not authorize in April. He notified the credit union of the fraudulent charges; the credit union told him he would not have to pay the amount stolen (The Des Moines Register May 12) ... * PHOENIX (5/17/10)--The former manager of the now-defunct Marian Miami FCU, which was based in Miami, Ariz., has been sentenced in a U.S. District Court in Phoenix to more than four years in federal prison for embezzling more than $860,000. Marlene Aquilera Pena, 46, also was ordered to pay restitution of nearly $1.2 million and to serve five years of supervised release after the prison term. She had pleaded guilty to three counts of embezzlement. Court documents said that she admitted taking funds for herself and her family by creating 141 fictitious loan accounts. The credit union was closed in 2006 after the embezzlements were discovered (The Arizona Republic May 14) ... * HARRISBURG, Pa. (5/17/10)--Walter Shanabrough, who served for 20 years as the board chairman of Blue Chip FCU in Harrisburg, Pa., died Tuesday, according to the Pennsylvania Credit Union Association (Life is a Highway May 14). He was 85. He served as chairman of the credit union from 1986 to 2006, stepping down to become chairman emeritus. A memorial service will be held May 28 at Chapel Hill United Church of Christ in Camp Hill, Pa. He is survived by his wife, two sons, a daughter, a brother and sister, and three grandchildren(Patriot-News May 14) ...

Constitution Corporate 1Q financials reported

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WALLINGFORD, Conn. (5/14/10)--Constitution Corporate FCU reported its unaudited financial results for first quarter 2010, with a year-to-date net income totaling $708,000, which includes investments other-than-temporary impairment (OTTI) charges of nearly $1.16 million. This compares with a net loss of $31.17 million for the same period in 2009. The improvement in earnings was attributed to nearly a $30.56 million decline in OTTI charges from $31.72 million in 2009. Constitution Corporate is operating with special regulatory assistance under a Prior Undivided Earnings Deficit (PUED). Constitution ended 2009 with a PUED of $25.2 million, which was reduced to $24.5 million as of March 31, as a result of net income recorded for 2010. Year-to-date core earnings, or earnings before OTTI charges, totaled nearly $1.9 million, an increase of $1.3 million from $549,000 reported during first quarter 2009. The return on average assets before OTTI charges rose to 59.9 basis points from 15.8 basis points as a result. Constitution Corporate attributed the increase in core earnings to a $913,000 increase in net interest income and a $439,000 reduction of operating expenses.

Colorado CU association meets with Her Majestys CU

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DENVER (5/14/10)--An An alleged phoney credit union based in the Virgin Islands with an office in Colorado continues to stir up concern among credit union organizations and regulators. In light of the recent publicity over Her Majesty's CU (HMCU), which has a back-office processing office in Denver, the Credit Union Association of Colorado (CUAC) issued a statement, saying it had met with the credit union this week. John Dill, CUAC CEO, said the association "continues to review the reports surrounding Her Majesty's CU with concern." News Now had posted an article Thursday about state and federal regulators' attempts to determine whether the credit union was legitimate. The credit union's CEO is the CEO of an organization that had sponsored another credit union in Georgia that had failed eight months after it opened in 2005 (News Now May 13). Representatives from CUAC met Wednesday in Denver with Stan Roberson, CEO of HMCU "in response to HMCU's website, which suggested that certificates of deposit could be obtained by non-members," Dill said. "It was the intent of CUAC to determine if HMCU was operating as a deposit-taking financial institution within Colorado," he added. The meeting "occurred approximately two years after a May 29, 2008, HMCU meeting with CUAC to petition for membership in the association. HMCU did not receive CUAC membership because, per CUAC bylaws, the credit union did not have a member service 'brick and mortar' location within the state of Colorado," Dill said. "After the Wednesday meeting, CUAC felt that Mr. Roberson provided inconsistent information regarding the background of HMCU and [CUAC] remains concerned about various inconsistencies uncovered in our visit," Dill said. Some of the inconsistencies include:
* "Roberson stated to CUAC that HMCU was the only credit union in the U.S. Virgin Islands. Upon review, CUAC staff members found five federally chartered credit unions located in the U.S. Virgin Islands," said Dill. * "Roberson stated that a federal charter and the National Credit Union Share Insurance Fund was not available to credit unions chartered in the U.S. Virgin Islands. CUAC staff has determined that the other five credit unions chartered in the U.S. Virgin Islands do have federal charters and NCUSIF insurance," Dill added. * "Roberson stated that HMCU was once a member of the Credit Union Association of New York (CUANY). CUAC staff has determined that HMCU has not been a member of CUANY." * "Roberson stated that HMCU was a member of the Credit Union National Association (CUNA), and the CUNA logo was displayed on the HMCU website. CUNA now informs us that HMCU is not a member of our national association."
"The CUAC is vitally interested in protecting the strong reputation of credit unions in Colorado as well as across the nation, and we continue to have extreme concern over HMCU and the veracity of this organization," Dill said. "As appropriate, CUAC will continue its vigilance of HMCU on behalf of Colorado consumers and credit unions," he added. The CUNA logo referred to is the "America's Credit Unions" trademark. News Now checked HMCU's website Thursday and found the brand displayed prominently on the site's home page. "The credit union has ignored CUNA's requests to remove the America's Credit Union trademark and slogan, 'where people are worth more than money' from its website," said Linda L. Lilledahl, vice president and association general counsel at CUNA. She told News Now that the marks are used by CUNA members and available to nonaffiliates that obtain a license from CUNA. "This credit union has no license," she said.

NCUA sues defunct-CU members on real estate sales

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SALT LAKE CITY (5/14/10)--The National Credit Union Administration (NCUA), in its role as liquidating agent for Utah-based Heritage West FCU, has succeeded in substituting itself for the credit union in several lawsuits against members who defaulted on construction loans tied to a failed real estate venture in Salt Lake City. NCUA also succeeded in removing the cases from a state court to a federal court. In three suits, which are now in the U.S. District Court for the District of Utah, Central Division, in Salt Lake City, NCUA maintains that the members defaulted on their speculative real estate loans then bought the properties back during foreclosure sales at a hefty discount. In separate suits, NCUA is seeking the discount amounts--$112,000 from Brent R. Preece; $219,000 from Warren B. Shaw and Martina Shaw; and $215,000 from Randal B. Rasmussen and Carma L. Rasmussen. A fourth suit, involving several dozen members and full of a number of claims and counter claims, alleges that the credit union and the real estate developer, Castle Stone Homes, violated a number of laws, including federal and state securities and exchange laws and the state Uniform Fraudulent Transfer Act. Court documents allege that dozens of members invested in construction loans for a project developed and built by Castle Stone. The members allege that between 2005 and 2007, the developer promised them high returns on their investment property. Heritage West FCU, formerly Tooele FCU, partnered with Castle to finance the construction of the houses to be built, marketed and sold by Castle Stone. However, the project unraveled about 14 to 24 months after the construction began, with homes only 50% to 75% complete. Castle Stone negotiated extra loans with the credit union for all the investors to complete the homes. Thirty-six months after construction started, the homes still were not complete, the court documents said. Heritage West never recovered from the venture, a situation similar to Colorado-based Norlarco CU and Michigan-based Huron River Areas CU. Those credit unions also financed real-estate projects that failed in Florida. In 2009, NCUA negotiated a purchase and assumption agreement for Heritage West with Chartway FCU.

Fitch announces ratings for U.S. Central

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NEW YORK (5/14/10)--Fitch Ratings affirmed the long- and short-term Issuer Default Ratings (IDR) for U.S. Central FCU (USC) at “AA” (very high credit quality) and “F1+” (highest short-term credit quality), respectively. Fitch also has removed USC’s Individual Rating of “F” (default or would have defaulted without external support) and assigned new Individual rating of “E” (a bank with very serious problems, which requires or is likely to require external support). The rating outlook is stable (Business Wire via MarketWatch May 13). The affirmation of the IDRs is based on the National Credit Union Administration’s (NCUA) continued support of USC while the company operates under NCUA conservatorship. Fitch said NCUA will continue to support the ongoing operations of USC to maintain the stability of the corporate credit union system. To that end, NCUA is developing a plan to remove roughly $50 billion of problem securities from the corporate credit union system, much of which will be lifted out of USC. USC’s IDRs reflect the company's current support rating of “1” (a bank for which there is an extremely high probability of external support) and the support floor of “AA,” which Fitch still considers appropriate at this time. Given that USC’s long-term IDR is at its support floor, the Rating Outlook is stable. However, Fitch said a restructuring of the corporate credit union network could lessen the support provided to USC in the future. Fitch said that USC will continue to benefit from government support throughout the planned restructuring of the corporate credit union network and the implementation of new corporate credit union regulations. The removal of the “F” Individual rating (assigned Feb. 2, 2009) reflects the temporary nature of the rating, which is assigned to signify a company that has defaulted or, in Fitch’s opinion, would have defaulted if it had not received external support. USC was placed under conservatorship on March 23, 2009. The assignment of the “E” Individual rating is Fitch’s reassessment of the company on a standalone basis and reflects that the company continues to operate under NCUA conservatorship and with substantial external support.

Youth Savings Challenge deposits total 25M

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MADISON, Wis. (5/14/10)--This year’s National Youth Saving Challenge saw young credit union members depositing roughly $25 million into their saving accounts and share certificates.
Click to view larger image U.S. Rep. Kathy Dahlkemper (D-Pa.) helped Erie (Pa.) FCU teach a group of fifth grade students about the importance of saving during April to help celebrate Financial Literacy Month. (Photo provided by Erie FCU)
Participating credit unions used the seventh annual challenge to motivate children, teenagers and their parents to start and maintain a saving habit by opening accounts and making deposits. This year, about 350 credit unions reported receiving deposits from 168,438 young members, including 10,385 who opened new accounts. This year’s results average out to $147 deposited per child. Last year’s more than $26 million savings total averaged $190 deposited per child, up from $87 per child in the 2004 inaugural year. “Get in the Savings Game” was the theme for the recently concluded National Credit Union Youth Week held April 18-24. Credit unions hosted lobby and off-site events, contests, tours, in-school presentations and sports-themed giveaways. A Web page illustrating activities for each state will be posted on the Credit Union National Association’s (CUNA) Web site in July. 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:
* Dover (Del.) FCU, Dover; * MaPS CU, Salem, Ore.; * Unison CU, Kaukauna, Wis.; * Central Communications CU, Independence, Mo.; * Daviess County Teachers FCU, Owensboro, Ky.; * America’s CU, Garland, Texas; * Susquehanna Valley FCU, Camp Hill, Pa.; * Sterling-Van Dyke CU, Sterling Heights, Mich.; * Sunflower UP FCU, Marysville, Kan.; and * Gateway regional CU, St. Louis.
“Once again, our young members are telling us that they want to start and maintain a saving habit--and they want to do it at a credit union,” said Dan Mica, CUNA president/CEO. “Last year’s recession saw a record deposit of more than $26 million. We’re encouraged that youth are still committed to saving as the economy shifts upward again, and this should inspire us to continually find ways to reach and teach the young population so important to our future.”
Click to view larger image Oregon Community CU, Eugene, Ore., hosted activities during Youth Week, including field trips and prize drawings. Credit union staff also visited local schools to teach financial literacy courses. Pictured are two children who received piggy banks from the credit union to help them save their money. (Photo provided by Oregon Community CU)
"Credit unions are in a unique position to grow their own loyal members,” said Lin Standke, CUNA’s Youth Week manager. “The Saving Challenge is an event with a big payoff for everyone. Kids learn to save, parents see the credit union as ‘their trusted financial adviser,’ and staff have fun celebrating with youth.” Youth Week began as an opportunity for credit unions to focus on the financial needs of young people and to provide financial literacy education. The event has become a focal point for teaching the benefits of saving and goal setting. U.S. Rep. Kathy Dahlkemper (D-Pa.) visited Burton Elementary School with Erie (Pa.) FCU to support April as Financial Literacy Month. She helped the credit union teach the importance of saving and how to budget to a fifth grade class. “By showing how small savings over time results in big gains, we can help them understand the rewards and the importance of saving,” Dahlkemper said. “If we can get kids saving now, they can put money away for college and give themselves a real financial advantage down the road.” Erie FCU offers a Save-Up School Financial Literacy Program, providing each student with a $5 certificate to open their new account. “Results from mid-year financial literacy testing of our efforts have shown a 27% increase in financial literacy test scores from September 2009 through January 2010,” said Garrett Tadda of Erie FCU. “So we know our program is working.” Linn-Co FCU, Lebanon, Ore., celebrated Youth Week with an education carnival on April 22. The credit union has booths on CUNA’s Googolplex--a program aimed at teaching financial literacy to elementary through high school students--writing checks, saving and budgeting, cash counting and ATM safety. Youth receive a savings game bag with prizes and a Money Matters quiz, which has five questions. Youth can find the answers to the questions at each booth. Linn-Co also partnered with the local Boys’ and Girls’ Club to hold an early carnival for club members and then another carnival that was open to anyone in the community. Oregon Community CU, Eugene, Ore., offered a number of activities for youth. The downtown branch arranged for a second grade class to visit the branch, where youth were given a tour of the credit union and could try out the coin counter. Some of the youth also helped run the drive-up window. Gateway Metro CU, St. Louis, offered seven 25-minute classes on saving, earning and spending money. Youth also could practice writing checks on a large dry-erase board (The Missouri difference May 5). Beaver Valley FCU, Beaver Falls, Pa., offered youth a contest to win four $100 savings bonds, and a hoop and golf contest. Handouts included activity books, flyers, bookmarks, memo pads and snacks. TruMark Financial CU, Trevose, Pa., gave away $9,200 in scholarships to three high school seniors through the credit union’s Financial Jeopardy competition, which coincided with Youth Week. In addition to the top three winners, six other contestants each received $200 scholarships deposited into accounts opened in their names.

PCUA Calif. study errs on payday loan program

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HARRISBURG, Pa. (5/14/10)--The Pennsylvania Credit Union Association (PCUA) says the conclusions of a California study of credit unions as alternatives to payday loans are erroneous. The study, “Are credit Unions Viable Providers of Short-term Credit?” by Victor Stango of the Graduate School of Management at the University of California, Davis, focuses on credit unions as potential competitors to payday lenders. It maintains that national data on credit unions’ payday loan offerings indicate “that very few credit unions currently offer a payday loan alternative. Industry reports suggest that those credit unions offering such loans seem unwilling or unable to undercut substantially the prevailing prices set by payday lenders.” The study said that the short-term loans offered by credit unions “generally carry greater restrictions on approval and repayment, meaning that risk-adjusted prices for credit union payday loans may not be lower at all.” Stango said that current prices and features for credit union payday loans are not competitive; that most current payday borrowers prefer higher-priced but less restrictive standard payday loans to lower-priced but more restrictive alternatives offered by credit unions. “The combined demand- and supply-side evidence suggests that credit unions are probably not viable providers of short-term credit for consumers who currently use payday loans,” the study concluded. In its rebuttal statement to the study, PCUA said: “First and foremost, credit union programs are designed to be an alternative to payday lenders. As alternatives, these credit union programs offer longer repayment terms and lower rates and fees. Further, the researcher, Professor Victor Stango, inaccurately cites cost attributes of Pennsylvania’s Credit Union Better Choice loan program.” The Credit Union Better Choice loan program offers consumers a loan up to $500 for up to 90 days at an 18% interest rate with a one time $25 application fee, PCUA added. The consumer then makes payments on the loan in weekly, biweekly, or monthly installments instead of a one-time payment at the end of a two-week period, as is the practice of payday loans. In Pennsylvania, payday lenders charge $15 or more per $100 borrowed every 14 days. Using those figures, the total cost for a $500 loan over 90 days is $450. By comparison, a 90-day Credit Union Better Choice loan at the maximum rate and application fee costs that same borrower only $40.09, PCUA said. “[The program] is not simply designed to be a less expensive payday loan option,” PCUA added. “Rather it is intended to break the cycle of debt that typically traps payday borrowers by transitioning them from wealth-stripping products like payday loans to wealth-building products typically offered by mainstream financial institutions. “In addition to providing a lower cost alternative to payday loans, the Credit Union Better Choice program has a required savings component and requires credit unions to provide financial education/coaching to Credit Union Better Choice borrowers,” PCUA said. PCUA concluded: “Since the inception of the Credit Union Better Choice loan program in October 2006, Pennsylvania credit unions have issued more than 28,000 loans totaling $13.4 million, which saved borrowers more than $10 million over traditional payday lenders and also put more than $1.3 million into borrowers’ savings accounts. Quite frankly, these statistics speak for themselves and directly refute the U.C. Davis study.” To read the PCUA statement, use the link.

Latest study adds to list of satisfied CU members

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NEW YORK (5/14/10)--Credit unions provide the most satisfying online banking experience, according to a survey conducted by ForeSee Results. Credit unions garnered an aggregate satisfaction score of 84. The top five banks provide the least satisfying experience, but still have an average score above 80, ForeSee said. Highly satisfied online banking and credit union members report an overall bank satisfaction score that is 32 points higher than dissatisfied customers. “As has been the case in every year of the study, credit unions provide their customers with the most satisfying experience,” the study said. “Credit unions also produced the highest trust score at 87.” The five biggest banks--Bank of America, Citi, Chase, PNC and Wells Fargo--scored the lowest with scores ranging from 78 to 83. Although credit unions scored high in online satisfaction, overall satisfaction with online banking dipped to 81 from an all-time high of 83 last year. “Financial services companies should care about online customer satisfaction for more reasons than just public image,” the study said. “Highly satisfied online customers report by a wide margin that they are more likely than less satisfied customers to purchase more services, open more accounts, use the [institution’s] website as a primary channel, and recommend both the company and its website.” ForSee suggested that credit unions understand how online satisfaction drives multichannel behavior and loyalty. To increase satisfaction, they must understand which elements have the greatest impact on satisfaction, the Ann Arbor, Mich.-based company said. The survey was conducted among 3,000 respondents in April. Survey respondents included subscribers to Forbes.com and online panelists from FGI Research.

WOCCU names two Distinguished Awards recipients

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MADISON, Wis. (5/14/10)--Credit Union National Association (CUNA) Board Vice Chair Harriet May, president/CEO of GECU in El Paso, Texas, and Credit Union Executives Society (CUES), the Madison-based credit union professional development organization, have received World Council of Credit Unions’ (WOCCU) Distinguished Service Awards (DSA) for 2010.
Click to view larger image Credit Union National Association Vice Chair Harriet May, president/CEO of GECU of El Paso, Texas, received an individual 2010 World Council of Credit Unions Distinguished Service Award. (Photo provided by the World Council of Credit Unions)
The winners will be honored along with Lech Kaczyñski, the late Polish president whose DSA honor was announced last month. They will be recognized during a special ceremony at The 1 Credit Union Conference, July 11-14 in Las Vegas. Kaczynksi died with 95 others in a plane crash last month. “DSA honors are bestowed by our board of directors only when candidates of worth present themselves,” said Pete Crear, WOCCU president/CEO. “Both CUES and Harriet May have a long history of promoting and supporting global credit union development at its most intrinsic level, and I am thrilled that our board chose to honor them this year.” May, nominated by the Texas Credit Union League, was originally scheduled to be honored during WOCCU's 2009 World Credit Union Conference in Barcelona, Spain, but was unable to attend. The WOCCU board voted to approve her award as part of the 2010 event. May has helped financial cooperatives work beyond state and national borders to meet the needs of members worldwide. In the 1990s, she was instrumental in helping WOCCU develop and launch IRnet, its international remittance program enabling workers in the U.S. to cost-effectively send money home--primarily to Latin American countries--through a network of credit unions. She also has worked to extend the influence and service of the Texas league by initiating the league’s formal Texas/Mexico Credit Union Relationship Committee in 1999. She helped Texas credit unions address the emerging Hispanic market and has worked with Vicente Fox, former president of Mexico, to develop cross-border relationships. CUES, the 2010 institutional honoree, has educated and served international credit union leaders since its inception in 1962, and financially supported WOCCU’s development and relief initiatives for two decades. The organization in 1990 pledged $10,000 to support credit union development in Eastern Europe, became an inaugural WOCCU Supporter in 2000 and continues to support WOCCU’s goals and objectives annually. In 2005, CUES donated $100,000 to help rebuild Sri Lanka credit unions that were devastated by the tsunami. Earlier this year, CUES contributed $15,000 to WOCCU's Haiti Earthquake Relief Fund, and last month CUES President/CEO Fred Johnson traveled with a credit union delegation to witness the devastation Haiti and its credit unions had suffered. Also, CUES continues to host many educational programs at international locations with the goal of broadening participants’ perspectives to better understand the global credit union movement. The 1 Credit Union Conference is a one-time event that combines CUNA's America's Credit Union Conference with WOCCU’s World Credit Union Conference. The conference's early bird registration deadline is May 20, after which registration fees will increase. For more information, use the link.

Local. Trusted. Serving You. is new ICU Day theme

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MADISON, Wis. (5/14/10)--This year’s International Credit Union Day theme--“Local. Trusted. Serving You”--focuses on credit unions’ trusted, community-focused approach to member service, said the World Council of Credit Unions (WOCCU).
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ICU Day is Oct. 21. This year’s theme was developed by Amanda Vester, marketing coordinator at Indiana State University FCU in Terre Haute. Vester’s submission was selected from multiple entries by an international committee representing WOCCU, the Credit Union National Association (CUNA), Credit Union Central of Canada, the National Cooperative Business Association (NCBA) and the Canadian Co-operative Association. In the U.S., cooperatives celebrate Co-op Month in October and for the first time, NCBA and its cooperatives will join credit unions and Canadian co-ops to share a common theme and graphics. In Canada, ICU Day coincides with the country’s Co-op Week, Oct. 17-23. Canada’s Co-op Week theme for this year, “Experience the Co-operative Difference,” was adopted as the tagline for ICU Day and the Co-Op Week poster will use the same graphics as the one for ICU Day. ICU Day has been celebrated annually on the third Thursday of October since 1948. The celebration of Co-op Week the same time in Canada became a national event in 1982. WOCCU President/CEO Pete Crear reflected on the importance of ICU Day amid economically tough times. “At a time when the public’s trust is repeatedly compromised by large commercial banks, credit unions’ commitment to their local communities and to providing trustworthy member service could not be more important,” Crear said. “This October, let us all celebrate these fundamental credit union qualities that offer tremendous opportunity for growth of financial cooperatives worldwide.” CUNA President/CEO Dan Mica said, “As the credit union movement both here and abroad continues to grow stronger, we can see that it is the intrinsic characteristics of credit unions and many financial cooperatives that give them their strength and allow them to survive, and even thrive in tough economic times.” For more information, use the link.

Four CU CEOs elected to CUSOs board

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ST. PETERSBURG, Fla. (5/13/10)--Member-owner credit unions of PSCU Financial Services, a credit union service organization based in St. Petersburg, Fla., elected four board members to three-year terms April 29 during the CUSO's 2010 Senior Leadership Workshop and Member Forum. New board members are:
* Susan Adams, president, Entrust FCU, Richmond, Va.; * Hubert Hoosman, president/ Vantage CU, Bridgeton, Mo.; * Jeff March, president, Citadel FCU, Thorndale, Pa.; and * Kyle Markland, president, Affinity Plus FCU, St. Paul, Minn.
More than 500 people attending heard presentations from former Speaker of the House Newt Gingrich, former Secretary of the Treasury John Snow, and Dennis Dollar of Dollar & Associates and former National Credit Union Administration chairman. The forum also included sessions on best practices and new ideas for effective credit union management. Visa's Bill Sheedy, president of The Americas, announced that PSCU Financial Services was the first CUSO to implement its near-real-time alerts for Visa transactions. PSCU Financial Services' board officers are:
* Chairman, Craig Esrael, president of First South CU, Bartlett, Tenn.; * Vice chairman, Michael Valentine, president of Baxter CU, Vernon Hills, Ill.; * Treasurer, Jane Watkins, president of Virginia CU, Richmond, Va.; and * Secretary, Susan Adams, president of Entrust FCU, Richmond.

Ireland league withdraws support on easing lending limits

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DUBLIN (5/13/10)--The Irish League of Credit Unions board met last weekend to discuss possibly reversing the league's position on changes to rules that aim to ease lending limits. The rules have been criticized by some credit unions as containing too many burdensome conditions (Sunday Tribune May 9). The league initially welcomed the government's proposed changes to Section 35, which would allow credit unions to lend up to 30% of their loan portfolios in loans with terms longer than five years. The change aimed to reduce each loan payment--by spreading the payments over a longer period--for members with financial problems. However, the changes proposed also include tough rules on impairments that would hurt borrowers, said some credit unions. They said one missed payment on a rescheduled loan would require an immediate impairment for 100% of the loan's value, making it too risky for credit unions to help borrowers in trouble. That would be the opposite of what Finance Minister Brian Lenihan said was the goal behind the changes, the publication said..

PCUA monitoring state sales tax expansion proposal

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HARRISBURG, Pa. (5/13/10)--The Pennsylvania Credit Union Association (PCUA) is monitoring Gov. Edward Rendell’s budget proposal to expand the state’s sales and use tax to include 74 categories of tax exemptions. So far, credit unions’ exemption is intact. Pennsylvania State Sens. Mike Stack and Larry Farnese, both democrats from Philadelphia, held a roundtable discussion about the proposal Tuesday in Philadelphia. Sens. Stack and Farnese opposed expanding the sales tax, said PCUA (Life is a Highway May 12). Several representatives from the business community voiced concerns about applying the sales tax on currently tax-exempt professional services. Such a tax, they said, would result in: double-taxing the consumer; driving low- and moderate-income individuals out of the legitimate banking system; effecting negative consequences on small businesses and start-up companies; and becoming detrimental to job preservation and creation. There was no mention of credit unions or a suggestion to look to them for a revenue source, PCUA said. Christine Seitz, PCUA director of political affairs and fundraising, attended the roundtable.

Suspicious auto insurance claims rising CUNA Mutual says

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MADISON, Wis. (5/13/10)--Auto insurance scams contributed to a 46% increase in the number of suspicious claims submitted to insurers last year, according to a National Insurance Crime Bureau (NICB) study. CUNA Mutual Group, which works with Liberty Mutual and Progressive insurance carriers, says this increase is consistent with what its insurers have seen, and can lead to higher auto insurance premiums for consumers. While the overall number of injury claims dropped by 17.1% from 2007 to 2009, the number of claims resulting from suspected staged accidents jumped by 46% during the same period, said NICB’s research. Car insurance rates also increased 4.3% in the first quarter of 2010--a total increase of 24% in the last three years (WalletPop.com May 10). Auto insurance scams often involve staged auto accidents. In a staged auto accident, an individual can fake an injury to collect from an insurance policy, said Lois Zajac, CUNA Mutual director of product management. An example of a staged accident would be a driver slamming on the brakes to cause an accident, such as a rear-ender. The driver then tries to collect from the other driver’s insurance policy by claiming to have whiplash. Claims involving injuries are what CUNA Mutual and its insurers are focusing on the most. “Our bodily injury claims have increased because of fraud,” Zajac said. A bodily injury claim, unlike a vehicle repair, can take a long time if the victim requires physical therapy or misses work, she added. The staged auto accidents are sometimes carried out by criminal rings. The rings also may target a particular insurance company. “They’ll move around if they see an insurer tighten up. The criminals are very smart,” Zajac said. Criminals also may have certain doctors they work with to “prescribe” treatment for the fake injuries, she said. Most of the bogus claims are in Florida, New York, California, Texas and Illinois. The cities with the most claims are New York City, Tampa, Miami, Orlando and Houston, said NICB. CUNA Mutual encouraged credit unions concerned about the fraud to work with trusted insurance partners. Overall, insurers, law enforcement and the NICB are working to keep the fraud under control, Zajac said. “We’re all victims,” Zajac said. “We’re all being ripped off, which leads to higher [insurance] premiums. It’s definitely a problem that we all pay for.”

FBI targets cyber money mules for prosecution

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WASHINGTON (5/13/10)--The Federal Bureau of Investigation (FBI) is planning a major effort to break up and prosecute “money mule” operations that cyber criminals use to turn funds stolen online into cash. Several credit unions have encountered “money mules”--people who receive transfers of stolen funds in their bank accounts--hired by cyber rings. The FBI is targeting the mule operation--the end of the criminal supply chain--to heighten public awareness and discourage people from becoming mules, said Patrick Carney, acting chief of the FBI’s Cyber Criminal Section (The Wall Street Journal May 11). “We want to start to get some attention on this issue,” Carney said at a Federal Deposit Insurance Corp. forum on banking and cyber crime in Arlington, Va. “We think a good way to drive that home would be to prosecute them.” Mule operations are a key component of cyber crimes, the Journal said. When cyber thieves loot a credit union or bank account, they transfer the stolen money to a mule’s account to make the transaction seem legitimate. The mule then withdraws the funds and sends them to criminal associates--mostly overseas in countries such as Russia, Ukraine and Moldova, the Journal added. Earlier this year, five credit unions in Florida were targeted by one fraud and identity theft ring involving 42 people who stole more than $200,000 over three years (News Now March 26). Vanessa Rideau, 41, allegedly recruited people--money mules--to open accounts at a local credit union. When the recruits received their ATM cards, they would sell the cards and personal identification numbers to her for a fee. Then Rideau would deposit a fraudulent check or empty envelope into the account via an ATM--and immediately withdraw cash. Later, the check didn’t clear and the credit union would contact the account holder, who would say the card had been stolen. The frauds occurred from 2005 to 2008 and targeted: Insight CU, Martin FCU, Central Florida Educators FCU, McCoy FCU and Fairwinds FCU.

CU System briefs (05/12/2010)

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* CARTHAGE, Mo. (5/13/10)--An employee's pickup truck caught fire in the parking lot of Great Plains CU's Carthage, Mo., branch at about 8 a.m. Tuesday. Employee Kelly McCoy had just arrived to work 10 minutes earlier in the 2001, three-quarter ton truck. The truck was engulfed in flames, and a front left tire exploded as firefighters approached, but no one was injured. Firefighters pried open the hood and sprayed water on the engine. They said the damage was too severe to tell what caused the fire but that it started in the engine. The truck was a total loss (CarthagePress.com May 11) ... * VANCOUVER, Wash., and ONTARIO, Calif. (5/13/10)--The 2010 Oregon and Washington Credit Unions for Kids Wine Auction raised more than $135,000 for children's hospitals in the Children's Miracle Network. "Our goal was $125,000, and frankly we weren't sure we could achieve that this year," said Roger Michaelis, CEO of Vancouver, Wash.-based iQ CU, the event's main sponsor. The event attracted 150 attendees, with Michaelis and Sarah Canepa Bang, president/CEO of Financial Service Centers Cooperative Inc., serving as co-hosts. Over the years, the auction has raised more than $1 million. Other sponsors were: Co-Op Financial Services, Southwest Corporate CU, Columbia CU, CUNA Mutual, BECU, OnPoint Community CU and Allied Solutions. The national Credit Unions for Kids program originated in Oregon, Southwest Washington and Texas and raises funds for 170 hospitals. The Northwest Wine Auction is one of the program's largest events, with the city of Portland, Ore., as the nation's No. 1 fundraiser for Credit Unions for Kids ... * HANSCOM AFB, Mass. (5/13/10)--Hanscom FCU touted its charitable successes during its 56th annual meeting, announcing that its
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biggest contributions for 2009 were checks for $16,892 to Children's Hospital Boston and $10,093 to the Massachusetts Coalition for the Homeless. It noted its support for the military population it serves, including serving as a major sponsor of Hanscom Heroes Homecoming, which honors troops returning from Iraq and Afghanistan. Volunteers also assisted patients at Veterans Hospitals at Jamaica Plain and Brockton and contributed to Homes for Our Troops, which builds specially adapted homes for severely injured military members. Pictured at the check presentation to Children's Hospital Boston is from left, David Sprague, president/CEO, Hanscom FCU; Jane Melchionda, president/CEO of EasCorp; Andy Martin, Children's Hospital patient partner; and Ray Phillips, Hanscom FCU board member. (Photo provided by Hanscom FCU) ...

CU based in Virgin Islands gets regulators scrutiny

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DENVER and WASHINGTON (5/13/10)--A credit union chartered in the U.S. Virgin Islands with a Denver back office is promoting 6%-7% certificates of deposit in an ad on Google. And that has caught the eye of state and federal regulators, who are trying to determine if the credit union is legitimate or if it is a fraud. The CD rate of Her Majesty's CU (HMCU) is much higher than the typical credit union range of 3% to 4%, according to the Credit Union National Association's (CUNA's) economics and statistics. "The credit union is domiciled in the U.S. Virgin Islands, with a corporate back office or processing center in Colorado," confirmed Commissioner Chris Myklebust of the Division of Financial Services, Denver Office of Regulatory Agencies (DORA). "It is not a legitimate Colorado credit union," he said. "Under Colorado law, to be state-chartered, the credit union must have insurance with the National Credit Union Administration['s National Credit Union Share Insurance Fund]." That means the credit union "cannot solicit Coloradoans. The attorney general's office here recognizes HMCU as a back office," because HMCU filed a "doing business as" form with the Secretary of State, he told News Now. Myklebust said he has had a number of calls from credit unions all over asking about its legitimacy because the credit union is seeking alliances with other credit union organizations. The credit union was formed by Stan Roberson, CEO of Jilapuhn Inc., of Denver, formerly of East Point, Ga. Roberson's company was the founding sponsor of another credit union--Jilapuhn Employees FCU in East Point, Ga., which was formed in January of 2005 but liquidated by the NCUA eight months later. NCUA liquidated that credit union on Aug. 26 after "determining the credit union had an impaired capital position and was experiencing irresolvable problems in the areas of capital adequacy, cash management, record keeping and management," NCUA said in a press release on Aug. 29, 2005. The credit union had less than $150,000 in assets and served fewer than 200 members, the agency said. In a decision related to an appeal of NCUA's liquidation actions, NCUA stated that the asset management and assistance staff members acting as its agents were "pursuing an investigation of the financial dealing and potential fraud involving federal credit union staff and owner/CEO Jilapuhn Inc., the federal credit union's sponsor organization." Roberson said that the new credit union is not chartered or insured by the NCUA. "We are chartered by the U.S. Virgin Islands and insured through Lloyds of London. We have membership with the New York Credit Union League," Roberson said in an e-mail obtained by News Now. However, the Credit Union Association of New York (the former New York Credit Union League)--which works with affiliated credit unions in the Virgin Island--said that is not the case. "We were approached in 2008 by people starting up the credit union, but all that has been filed is a d.b.a. notification," Bonnie Sklar, public relations coordinator at the New York association, said. "In 2009, we declined membership to the organization because it was not insured by the NCUSIF and because it is not a credit union chartered in the U.S.," Sklar told News Now. CUNA's statistics department contacted another credit union in the Virgin Islands, which verified that HMCU exists there but could not confirm whether it is a legitimate credit union there. When its staff tried to contact HMCU, no phone number was listed under HMCU's name. "They may be trading under a different trade name," the credit union said in an e-mail. The credit union also contacted Virgin Islands' Banking & Insurance office in the Lieutenant Governor's office to ask whether one can charter credit unions under the U.S. Virgin Islands (USVI) law. The individual who answered the phone at USVI did not know, but the supervisor was out of the office. Colorado's Myklebust said his office has been in contact with the USVI regulator and the state's securities office has been alerted. HMCU membership is open only to Virgin Island residents and military and defense department members, but its website indicates it will open a CD for anyone. Its application page is not a secure page for financial transactions. Jilapuhn's company website is still active and now provides a Colorado contact address. The company's site says it is a telecommunications reseller. No one has proved the credit union isn't legitimate. Due to a loophole, the state of Colorado has no legal standing to shut the credit union down. NCUA has no standing either. "This is a Virgin Island-licensed, uninsured entity," said John McKechnie, NCUA director of public and congressional affairs. "They call themselves a 'credit union' and Virgin Island authorities are apparently unable to do anything about this. They aren’t advertising as federally insured and [make] no references to NCUA so, we have no authority," he told News Now.

Bankrate.com CUs viable option on low-rate credit cards

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NEW YORK (5/13/10)--Low-interest-rate credit cards from credit unions are a viable option for consumers who are not looking for the rebates and rewards of major bank credit cards, Bankrate.com said Wednesday. “Credit unions generally offer lower interest rates and fees, so if you carry a balance, they may be cheaper,” the financial news outlet said. Penalty rates on credit union cards also are lower--or may not even exist, Bankrate said. Because credit unions are owned by their members, major rate hikes on the cards and other changes are not as likely as they would be at banks, the news outlet said. The Bankrate article, “Low interest rate credit cards,” encouraged consumers to seek out low interest rate cards that best fit their lifestyle. “If you plan to pay the balance in full, then you might be better off with a rewards card that doesn’t charge an annual fee,” Bankrate said. To read the article, use the link.

Seeking Young and Free spokesperson Miss. CUs sweeten deal

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JACKSON, Miss. (5/12/10)--In addition to a $30,000 one-year contract, a MacBook Pro notebook computer, an HD Canon digital video camera and an iPhone, the person hired as the Young & Free Mississippi spokesperson will have the use of a 2010 Honda Fit Sport for the term as spokesperson. "We want this person to easily get around and connect with the 25-and-under age group throughout our state," said Charles Elliott, CEO of the Mississippi Credit Union Association (MSCUA). "This is critical to finding out how our credit unions can serve them better," he said. "And to show our potential applicants we're serious, we're supplying them with the use of a new vehicle. There will be no doubt on the road or at events who this person is, and the fact that Young & Free Mississippi is for them." The spokesperson will be reimbursed for all related vehicle expenses monthly and be expected to keep the vehicle in good running condition. The vehicle will be used to travel to communities throughout Mississippi, college campuses and youth-related events to spread the word about the Free2B Account, a youth account free for youth 25 and under. Also it will be used to learn what Mississippi youth need from their financial institution and to educate youth about Mississippi credit unions. "We want to hear from youth," Elliott said. "We want to learn the best way to put the most needed products and services in their hands." The program offers the 25-and-under set:
* Information to assist in managing their finances independently; * A voice for members through a hired spokesperson; * A head start in the form of a free checking account with features called Free2B; * A dedicated website where the spokesperson creates fun and entertaining blog posts and videos with helpful advice and financial tips.

The 1 contest winners chosen early discount ends May 20

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MADISON, Wis. (5/12/10)--A contest for a free registration to the upcoming The 1 Credit Union Conference received so many entries that the conference's co-hosts--the Credit Union National Association (CUNA) and The World Council of Credit Unions (WOCCU)--decided to award two grand prizes as well as second- and third-place prizes. The conference's "early bird" discount of $200 ends May 20. The conference is July 11-14 in Las Vegas and MGM Grand Hotel. The grand prizes--a complimentary conference registration--went to Carol Wight from Holy Rosary CU, Kansas City, Mo., and Michelle Jacinta Pierre-Devenish from Trinidad and Tobago Police CU. Wight's contest response said, "As I have reviewed the different credit union events to attend, this one stood out as the one event that I need for the growth of my credit union." Pierre-Devenish's response explained she is new to credit unions and as operations manager, she is excited to "make a major contribution to the operational effectiveness of my credit union." Second prize winner of two free hotel nights at the MGM Grand during the conference is Dave Schurman of FirstOntario CU, Hamilton, Ont., Canada. Taking third prize and winning an Executive Series book set is Connie Miller, CEO of Icon CU, Boise, Idaho. For more information about the conference, including the complete speaker lineup and agenda of the sessions, use the resource link. All registrations must be received by May 20 to qualify for the early bird rate. Optional day tours still have space available. For evening entertainment, attendees can purchase tickets to three stage shows: Barry Manilow, The Beatles LOVE Cirque du Soleil and Viva Elvis Cirque du Soleil. Tickets range from $135 to $150 and can be purchased online after completing conference registration. Attendees from more than 60 countries are expected for the event, which combines CUNA's America's Credit Union Conference and WOCCU's World Credit Union Conference for this year only. Registration questions can be directed to Allison McCarty, conference specialist, at 608-395-2095.

Georgia CU Affiliates honor seven leaders for service

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DULUTH, Ga. (5/12/10)--Seven individuals were acknowledged for outstanding service to their communities and to the credit union industry at the annual convention of Georgia Credit Union Affiliates (GCUA) held last week in Savannah, Ga. Each year, the state trade association honors credit union management and volunteers with the Moses C. Davis awards, highlighting those who have contributed consistently to furthering the “People Helping People” philosophy of credit unions. GCUA also presented the Lifetime Achievement Award to honor one credit union leader whose accomplishments exemplify extraordinary leadership and commitment. “We take great pride in honoring individuals who have helped further the work of credit unions,” said Mike Mercer, GCUA president/CEO. “Much of that effort includes assisting Georgia residents to enhance their financial literacy, particularly in this challenging economy.” This year’s Lifetime Achievement Award was presented to Janet Davis, CEO of TIC FCU in Columbus, Ga. Davis began her career with TIC in 1983 and has assisted the credit union in its growth to become the ninth-largest credit union in Georgia. Davis has held several board positions at the state and national levels. Honorees who received the Moses C. Davis awards in the professional category are:
* Brian Akin, CEO, North Georgia CU, Toccoa. The credit union has grown in Akin’s nine-year tenure and has expanded membership eligibility to more than 100 select employer groups and residents of Stephens and Franklin Counties. Akin is vice president of the Northeast Credit Union Chapter. * Gail H. Chandler, CEO, Regional Members FCU, Columbus. Under Chandler’s leadership, the credit union expanded several new products and services for members. Chandler is active statewide in the credit union movement and with local community organizations. * Defarra “Dean” Gaymon, CEO, Credit Union of Atlanta. Gaymon’s leadership focuses on staff development and implementing products to meet the needs of low- to moderate-income individuals, while helping to improve their financial literacy. Gaymon is on the board of the Greater Atlanta Credit Union Chapter.
Honorees who received the award in the volunteer category are:
* Charles F. Grant, board member with Augusta (Ga.) Metro FCU. During his years on the board, Grant has been an advocate for members and staff. He was instrumental in the development of the credit union’s new “dialog branch,” helping create more personalized interaction with members. * Peggy Martin, board member with Members United CU, Columbus. Martin helped form the credit union in 1981 and has held several board positions. She is active in credit union grassroots efforts and is involved with several organizations in her community. * Marlene Cooper Stiggers, board member with First Choice CU, Atlanta. Stiggers is chair of the marketing committee, where her efforts led to exposure of the credit union in a prominent statewide business publication. She is a long-time supporter of the national African American Credit Union Coalition.

Consumer credit up 1 in March down at CUs

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WASHINGTON (5/12/10)--Consumer credit in the U.S. increased at an annual rate of 1% in March to $2.45 trillion from $2.44 trillion in February, according to the Federal Reserve’s March 2010 Consumer Credit report. However, it decreased from $2.54 trillion during first quarter 2009. The projected March figures indicate that revolving credit decreased at an annual rate of 4.5% to $852 billion from February’s $855.8 billion, and compared with $935 billion in first quarter 2009. Revolving credit increased at an annual rate of 4% to $1.598 trillion from $1.593 trillion in February, compared with $1.6 trillion in first quarter 2009. Consumers borrowed from credit unions a total of $229 billion in March, compared with $233 billion in first quarter 2009 and $231.6 billion in February. Revolving credit at credit unions was $34.2 billion in March, compared with $34.4 billion in February and $32.2 billion in first quarter 2009. Nonrevolving credit was $194.9 billion from $197 billion in February, compared with $201 billion in first quarter 2009.

IUSA TodayI For auto loan rates shop your CU

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MADISON, Wis. (5/12/10)--Consumers looking for the best deal on auto loan rates should check out credit unions when they shop around, USA Today said Monday. In a column titled, “Car dealers’ loans often aren’t the best deal, so shop rates first,” Sandra Block, USA Today personal finance columnist, mentions that consumers also should consider MoneyAisle.com. “[MoneyAisle is] an auction site that allow consumers to solicit bids from financial institutions for certificates of deposit and high-yield savings accounts,” Block wrote. “Last week, MoneyAisle added loans on new and used autos. To solicit bids, plug in your ZIP code and the make and model of the car you want to buy. If you see a bid you like, you can contact the bank or credit union.” So far, more than 75 credit unions and banks have signed up with the company to offer auto loans. MoneyAisle expects to have 200 participants by the end of July, Block added. “The Center for Responsible Lending, a consumer advocacy group, estimates that consumers spend more than $20 billion a year in excess interest by borrowing through dealerships instead of through a bank or credit union,” Block wrote. To read the article, use the link.

Calif. Nev. leagues form search committee for CEO

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RANCHO CUCAMONGA, Calif. (5/12/10)--A search committee has been appointed to select a successor to California and Nevada Credit Union Leagues President/CEO Bill Cheney. Last week, Cheney was chosen to replace Credit Union National Association (CUNA) President/CEO Dan Mica. California Credit Union League Board Chairman Jeff York, CEO of CoastHills FCU in Lompoc, Calif., appointed the committee. The California League board intends to fill its position in time for the leagues’ Annual Meeting and Convention, Nov. 15-17 in Anaheim. Cheney will step down from the leagues July 4, and will assume his new role at CUNA July 5. No determination has been made about a potential interim appointment. The leagues selected San Francisco-based O’Rourke and Associates to conduct the search. Candidates should apply directly to the firm. The search committee has begun developing criteria for the position. Top candidates selected from the applicant pool will be presented to the executive committee of the California league board of directors for interviews. The executive committee will then recommend a final candidate to the board for approval. Search committee members represent credit unions of various asset sizes and locations throughout California and Nevada. Members are:
* Brett Martinez, CEO, Redwood CU, Santa Rosa, Calif., committee chairman and immediate past chairman of the California league; * Eileen Rivera, CEO, SkyOne FCU, Hawthorne, Calif., and current first vice chairman of the California league board; * Ron Seaman, chairman of the North Highlands, Calif.-based SAFE CU board and member of the California league board; * Rudy Hanley, CEO, SchoolsFirst FCU, Santa Ana, Calif.; * Jon Hernandez, CEO, CalCom FCU, Torrance, Calif., City of Downey (Calif.) FCU and Mattel FCU, El Segundo, Calif.; * Wally Murray, CEO, Greater Nevada FCU, Carson City, Nev., and chairman of the Nevada League; and * Benson Porter, CEO, Addison Avenue FCU, Palo Alto, Calif.

CU System briefs (05/11/2010)

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* LANSING, Mich. (5/12/10)--Michigan state Sen. Randy Richardville (R-Monroe), left, received the Michigan Credit Union League's 2009 State Legislator of the Year Award last week from CP FCU CEO John Crist, right, during a Jackson Chapter legislative breakfast . The Jackson Citizen Patriot was present to capture the event and interview Richardville. Twenty-eight people attended, including Richardville; his district director, John Manor; and Greg Moore, legislative director for Sen. Mike Nofs (R-Battle Creek). Discussion focused on an array of state issues. The breakfast was hosted by CP FCU in Jackson (Michigan Monitor May 10). (Photo provided by the Michigan Credit Union League) ... * MADISON, Wis. (5/12/10)--Royal Oak CU, a $1 billion asset credit union in Eau Claire, Wis., will buy 11 branches from struggling AnchorBank, based in Madison, by July if regulators approve, said Anchor Bank in the Wisconsin State Journal (May 8). Anchor also plans to sell four Green Bay-area branches in its cost cutting. That would leave it with 58 locations, a cut of 20% ... * AMES, Iowa (5/12/10)--Greater Iowa CU, based in Ames, Iowa, has presented a $100,000 multiyear gift to the Iowa State University College of Business to fund an annual business lecture through the university lectures program, according to The Des Moines Register (May 11). The gift's goal is to underscore the credit union's relationship with Iowa State and to advance financial literacy in the community, said Greater Iowa CU President Shazia Manus ... * REDWOOD CITY, Calif. (5/12/10)--During May, San Mateo CU is offering international wire transfers at no charge through Vigo, a worldwide provider of electronic money transfers. Members and nonmembers and those who use the Vigo service will receive a free $5 phone card. They are allowed one free transfer, up to $100, and one free phone card per person, while supplies last. SMCU promoted it as a cost-efficient gift for Mother's Day. Vigo operates in 50 countries, specializing in Latin America and Caribbean destinations, said the credit union ...

Delaware league elects two board members presents awards

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NEW CASTLE, Del. (5/12/10)--The Delaware Credit Union League elected three board members at its 52nd annual meeting Saturday and honored several individuals for their contributions to the credit union movement. Board incumbents Cheryl Chilcutt, Louviers FCU, Newark; Allen Riley, Sussex County FCU, Seaford; and Joel Romaine, DPL FCU, Newark, were re-elected to serve three-year terms.
The Delaware Credit Union League Saturday, honored, from left: Dona Palermo as Outstanding Credit Union Professional, George Leathrum with the Spirit of Service award and Russell McCready as Outstanding Credit Union Volunteer. (Photos provided by the Delaware Credit Union League)
Chairing the board will be Jerry King, DEXSTA FCU, Wilmington. Romaine will be vice chair; Sharon Schaeffer, Delaware First, Wilmington, secretary; and Chilcutt, treasurer. The league also honored Russell McCready, past chair of Dover FCU, with the 2009 Outstanding Credit Union Volunteer award. Dona Palermo, training coordinator, Dover FCU, received the 2009 Outstanding Credit Union Professional award. The league also presented George Leathrum, Peninsula Methodist FCU, with the Spirit of Service award.

CUs announce mergers in three states

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MADISON, WI. (5/11/10)--Six credit unions in three states announced mergers or intentions to merge in the past few days. In Wausau, Wis., members of Wausau City Employees CU (WCECU) voted Thursday in favor of merging with Connexus CU, effective June 1. "The upcoming retirement of WCECU's president [Judy Westphal] as well as an overall desire to offer our members a more robust line of products and services prompted this decision," said Barb Schmidt, WCECU's board chair. "Connexus has a 75-year history of working with select employee groups and providing customized solutions and outstanding service," she said, adding that "Connexus was the obvious choice." WCECU was founded in 1961 to serve city of Wausau employees and their families. It has 820 members and $3 million in assets. Connexus, founded in 1935 to serve employees, retirees and families of Wausau Insurance Cos., has strong partnerships with Liberty Mutual Insurance and Northcentral Technical College, among others. It has 23,000 members and more than $312 million in assets. In Utah, Mountain America CU announced last week that members of the $1.8 million IFA Employees FCU based in Salt Lake City have voted to merge into the $2.8 billion Mountain America, which is based in West Jordan, Utah. IFA's 410 members will join the 341,000 members of Mountain America, said the larger credit union in a press release. Mountain America has 65 branches in four states and offers increased convenience for members, the IFA board had determined when it proposed the merger. In Saginaw, Mich., Generations Family FCU and the Saginaw Veterans Administration Hospital FCU merged, effective May 1 (Michigan Monitor May 10). The combined credit union will keep the Saginaw Veterans Administration Hospital FCU name. The merger means Generations now has three branches in Saginaw, including one in the hospital.

IOpEd NewsI Moving money to CUs in consumers best interest

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DENVER (5/11/10)--Despite the movement to move money from big banks to credit unions and community banks, one writer in OpEd News (May 10) is "amazed at how many friends don't know the benefit of banking with credit unions." Lee Patton, a writer based in Denver, wrote the article, "In Our Best Interest: Let's Move Our Money From Big Banks to Credit Unions." "Credit union membership helps shield the community from powerful commercial banks now hoarding our money after a decade of gambling with it," he wrote. "For most of us, it's in our public and self-interest to transfer savings and checking accounts from big national banks to local credit unions--first thing tomorrow." Patton lists the often-cited benefits of credit unions such as the not-for-profit structure and notes that credit unions represent democracy in action. "If we all transfer our collective wealth to our local credit unions, we will not only be well-served while paying and/or earning equitable interest rates, we will help our neighbors. When we make a deposit at our credit union, we won't be helping some big-bank CEO buy his or her sixth 'second home' in Aspen. Our savings will finance Fred and Ethel's new windows, Alice's new restaurant, Bart's first car, and Lisa's college tuition."

N.J. bill includes CUs in banking development district program

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TRENTON, N.J. (5/11/10)--State legislation that would create a New Jersey Banking Development District (BDD) Program was reported favorably from the state's Assembly Financial Institutions and Insurance Committee last week. Credit unions are included in the bill's definition of "bank," according to the New Jersey Credit Union League. The league has gone on record supporting the bill, said Chris Abeel, league government affairs director. "We believe it's a good thing credit unions are included in the bill. We think it helps build momentum for Government Unit Depository Protection Act (GUDPA) reform," Abeel told News Now. The latest bill, called the Bank Development District Act (A-1458), is sponsored by Assemblyman John Wisniewski (D-19), a co-sponsor of A-1597, which would enable local government entities to use credit unions as depositories, according to the league's The Weekly Exchange (Week of May 3). The state's Division of Banking would administer the program, to encourage establishing bank branches in underserved areas. A municipality, in conjunction with a bank, would submit an application to the commissioner of Banking and Insurance for the designation of a BDD. The state treasurer and municipalities in which a BDD has been designated would have the authority to select a BDD bank as a depository, subject to an agreement for a fixed rate of interest at or below the bank's posted rate. BDDs would still have to meet the state's GUDPA requirements to be eligible as a municipal depository. While the bill includes credit unions, credit unions continue to be excluded from GUDPA and would be eligible only for state funds under this legislation, said Abeel. "Legislation was enacted last year that temporarily expands the range of allowable investments available to the director of investments for state cash management (municipal monies on deposit with the state) and pension funds to include federally insured instruments offered by community banks and credit unions," Abeel added. "This was the first time the National Credit Union Share Insurance Fund insurance was given parity with the Federal Deposit Insurance Corp. in New Jersey law." "GUDPA was enacted before credit union deposits became federally insured. The more New Jersey law recognizes the equality of credit union deposit insurance, the harder it becomes to argue against GUDPA reform," Abeel concluded.

Bay Federal receives governors volunteer service medal

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SACRAMENTO, Calif. (5/11/10)--Bay FCU, Capitola, Calif., has received the 2010 Governor and First Lady’s Medals for Service award in recognition of its community support efforts.
Bay FCU representatives accept the California’s Small Business Volunteer Program of the Year award. From left are Angelica Reyes, community outreach manager; Tonée Picard, executive vice president and chief marketing and development officer; Carrie Birkhofer, president/CEO; and Laura Owen, branch manager.(Photo provided by Bay FCU)
Carrie Birkhofer, Bay Federal president/CEO, accepted the award for California’s Small Business Volunteer Program of the Year from Gov. Arnold Schwarzenegger, First Lady Maria Shriver, and Volunteering Secretary Karen Baker. It was one of seven awards honoring the state’s top service and volunteering leaders. Also, Bay Federal was nominated for California’s Small Business Volunteer Program of the Year by the Volunteer Centers of Santa Cruz County. “We work with a lot of local businesses and 100% employee participation is just amazing,” said Karen Delaney, executive director of the Volunteer Centers. “In this economy, it’s important that businesses choose to keep community activities as part of what they’re doing. We are grateful to Bay Federal and all the businesses that do so much for our community.” For seven consecutive years, 100% of Bay FCU employees have volunteered their time and donated money to more than 49 local nonprofits. The credit union’s employees have served in a wide range of volunteer roles to support people, schools, and organizations; everything from providing pro bono assistance with marketing, education and outreach; orchestrating fundraisers; collecting necessities and supplies; and working at community events. Some of their accomplishments include:
* Hosting Italian-style pasta lunches in the employee break room to raise money for Big Brothers and Big Sisters; * Helping to design and launch the “Give A Little, Feed A Lot” campaign for the Second Harvest Food Bank; * Holding an employee head-shaving extravaganza to raise money for the Children’s Miracle Network; and * Coordinating the collection of coats for kids, cell phones for soldiers, and supplies for schools.
"Today, we are paying tribute to some true California heroes, seven honorees that are pioneers in service, who have demonstrated a commitment to expanding service in their own unique way and in giving something back,” Schwarzenegger said.

Montana CUs declare VITA sites a success

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HELENA, Mont. (5/11/10)--During this past tax season, nearly 3,000 Montana taxpayers took their W-2s and receipts to credit union Volunteer Income Tax Assistance (VITA) sites in Montana to take advantage of free tax-preparation and e-filing services.
Mary Buck (left), a first-year volunteer with the Volunteer Income Tax Assistance (VITA) program, works with Joe Corbitt, a nine-year volunteer at a VITA site sponsored by credit unions in Butte, Mont. (Photo provided by the Montana Credit Union Network)
For the fifth year, Montana Credit Unions for Community Development (MCUCD) has partnered with credit unions, the Internal Revenue Service (IRS), and local volunteer tax preparers to bring IRS VITA sites to Montana communities. “It’s such a good program,” said Bertie Turville, who has served five years as a volunteer tax preparer in Fairfield, Mont. “And people are so happy with it, to not have to go somewhere else and pay money.” Twenty credit unions sponsored 17 VITA sites. This season, they filed 2,620 returns, returning more than $2.5 million in federal refunds back to the communities. Also, credit union sites dispensed more than $407,000 in state refunds. MCUCD began supporting credit union tax sites in 2006, with two VITA sites completing just 92 returns. Sponsor credit unions provide space, supplies, equipment and management for the VITA program. MCUCD provides financial support and technical assistance for the volunteers and credit unions. But local volunteers and credit unions are key to the program’s success. “This is my first year as a site coordinator,” said Jessica Helm, site coordinator for the Rimrock CU site in Billings. “The feeling of helping someone in need and seeing their reaction is more than enough to understand how important this service is. I believe this made a difference in many people’s lives.” Lincoln County CU, Libby, Mont., has made VITA a credit union and community affair. Amy Bennett, site coordinator, recruited four volunteer tax preparers in its first year. The credit union dedicated a large office for the program. “It’s great. The credit union has gone out of its way to provide for us,” said volunteer tax preparer Charlie Lawrence. VITA sites can’t serve everyone, said the Montana Credit Union Network. The IRS certified volunteers are trained to do uncomplicated returns for people who earn $49,000 or less. For clients served in Montana’s credit union sites, the average adjusted gross income was $16,900. The Montana credit union VITA program received financial support from the IRS, the National Credit Union Administration and the National Credit Union Foundation for the 2009 tax season. Montana Credit Unions for Community Development is the charitable arm of the Montana Credit Union Network.

Idaho league announces awards new board chair

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BOISE, Idaho (5/11/10)--The Idaho Credit Union League announced the recipients of its volunteer and professional of the year awards, and its new board chair during the league’s 74th annual meeting in Coeur d’Alene last week. Chris Martson, board member of Potlatch No. 1 FCU, Lewiston, won the league's 2009 Outstanding Volunteer of the Year Award. He has worked for Potlatch Corp./Clearwater Paper for 33 years, and has served on the credit union’s board for the past 26 years. He also chaired the board for eight years. Brad Swartzentruber, president/CEO of Northwest Christian CU in Nampa and Boise, was named the 2009 Outstanding Credit Union Professional of the Year. He became CEO at Northwest Christian CU in 1999 and has worked in the credit union movement for 19 years. Swartzentruber also is vice president of the board of directors for the Southwest Chapter of Credit Unions in Idaho. Denay Moles, CEO, Idadiv CU, Nampa, was elected board chair. Former chair Glenda Hart, CEO of Latah FCU, Moscow, completed her one-year term and is preparing for her retirement. Moles has been CEO of Idadiv CU since 2002 and has been employed by the credit union since 1979. She has served on the board for the past four years and also has served as its secretary/treasurer. She was elected during the Idaho league's annual meeting.

Maine league Auto dealer yanks ad misrepresenting CUs

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AUGUSTA, Maine (5/11/10)--An auto dealer’s unauthorized ad insert that misrepresented some Maine credit unions and ran in several editions of the Portland Press Herald last week will no longer run, according to the dealer’s attorney. The ad for Yankee Ford in South Portland, Maine, had a lead headline that said in bold print, “ATTENTION ALL CREDIT UNION MEMBERS,” said the Maine Credit Union League. The ad implied that 0% financing options were available at 12 credit unions it listed without obtaining authorization to use their names. It also made several mistakes, including misspelling of TruChoice FCU--listed as True Choice. The ad listed cPort CU twice--once as Seaport--and two other credit unions that have limited or no operations in Maine--Navy FCU and GTE FCU. The ad had solicited a quick rebuke from the Maine league and the Maine Bureau of Financial Institutions. “The Maine league got a response Friday from the Yankee Ford attorney, and he said the dealership would cease the practice of running unauthorized ads,” Jon Paradise, league manager of governmental and public affairs, told News Now. After conferring with the credit unions listed in the ad, the league found that none had approved the use of their names or inclusion in the ad, according to league president John Murphy. “The credit union brand and reputation was not only misrepresented but was done so in a misleading manner that attempts to capitalize on the strong and positive image of credit unions without their permission,” Murphy said. “With a nearly half a million dollars committed to our statewide awareness campaign this year, the league and member credit unions have made a significant investment in the credit union brand so we certainly have an obligation to protect these types of unauthorized actions.” In a letter to the owner of the dealership, the league's counsel, Rod Rovzar, wrote: “Your ad is violative of both state and federal (Lanham Act) law. The ad falsely represents an association, and at a minimum gives the public the perception of an association between Yankee Ford and the named credit unions and moreover, it falsely suggests that the credit unions have approved of their inclusion in the piece. The ad is an unfair (deceptive) trade practice.” Rovzar noted that several credit unions had received calls from members asking for the 0% financing. “This caused unnecessary confusion and embarrassment to the credit unions.” The ad also got the attention of the Bureau of Financial Institutions as a violation of Reg. Z “as terms were not actually at all creditors listed and of a new Maine Law that prohibits the unauthorized/deceptive use of financial institutions’ names by non-financial institution entities.” The bureau also sent a letter expressing its concerns to the dealership, the league said.

WOCCU teaches lobbying in Lat. America Caribbean

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PANAMA CITY, Panama (5/11/10)--Executives from the World Council of Credit Unions (WOCCU), the Iowa Credit Union League (ICUL) and the Credit Union Association of New York (CUANY) combined efforts earlier this month to bring lessons in effective lobbying to credit union and association executives and volunteers from eight Latin American and Caribbean countries.
Click to view larger image Effective lobbying requires one voice, said Brian Branch, left, World Council of Credit Unions’ executive vice president and chief operating officer. Branch and Patrick Jury (right), Iowa Credit Union League president/CEO, offered counsel to Hector Cordova, CEO of FEDECACES, El Salvador’s credit union trade association.
“Your lobbying success will hinge on presenting a single message in a unified voice that represents the goals of all credit unions in your country,” said Brian Branch, WOCCU executive vice president and chief operating officer, to 55 participants in the two-day Panama Advocacy and Lobby Training workshop in Panama City. “By following a ‘one message, one voice’ strategy, your credit unions will demonstrate both a strength and solidarity that will make a positive impression on lawmakers and illustrate your commitment and capability to serve your members.” Seminar participants learned to build coalitions and marshal grassroots support for credit union issues, and how to craft and present an effective message that emphasizes key benefits of credit union development. Presenters also offered case studies of effective lobbying efforts in the U.S. to participants, who represented credit unions and their organizations in Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Mexico, Panama and Puerto Rico. “Through our WOCCU Panama partnership, we’ve come to realize that lobbying and regulatory challenges facing credit unions in Panama
Click to view larger image “Credit Unions Are Here to Serve YOU” was the headline of the first industry-wide advertisement for Latin American and Caribbean credit unions in La Prensa, Panama’s daily newspaper.
are common among Latin American countries,” said Patrick S. Jury, president/CEO of ICUL, which maintains a relationship with Panama’s credit union trade group, Corporación Fondo de Estabilización y Garantía de Cooperativas de Ahorro y Crédito de Panamá, R.L. (COFEP), through WOCCU’s International Partnerships Program. “This inaugural Latin American lobbying conference allowed us to focus on common public policy issues that can improve the financial lives of credit union members.” ICUL also joined COFEP and WOCCU to purchase the first industry-wide ad to appear on behalf of Panama’s credit unions in La Prensa, the country’s daily newspaper, which was published during the seminar. The ad’s headline - “Credit Unions are here to serve YOU”--characterized the “one message, one voice” concept and illustrated the effectiveness of simplicity in reaching out to Panama’s consumers nationwide. Special consideration was given to the importance of ethical lobbying practices, since such efforts are not regulated by law in most Latin American countries to the degree they are in the U.S.
Click to view larger image Participants of the two-day Panama Advocacy and Lobby Training workshop in Panama City, Panama, read an ad touting credit unions in the nation’s newspaper, La Prensa. (Photos provided by the World Council of Credit Unions)
Participants also were presented with specific credit union scenarios and asked to design personalized lobbying initiatives to overcome the challenges in their countries. A panel of presenter-judges, including Mike Lanotte, CUANY senior vice president and general counsel, critiqued the proposed initiatives, noting strengths and weaknesses in individual plans. “There was a real need and genuine interest in creating a credit union advocacy program among the countries that participated,” said Lanotte, whose league maintains a relationship with Puerto Rico’s credit unions. The workshop opened with a presentation on the challenges facing cooperatives overall by Ana Giselle de Vallarino, director of the Panama Cooperative Institute. Representatives from several participating countries asked for similar presentations that would help bring the advocacy message to their credit unions, and these requests are currently being considered.

CU System briefs (05/10/2010)

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* PANAMA CITY, Fla. (5/11/10)--Bay CU, based in Panama City, is suing two men who were accused of robbing the credit union, as well as the Springfield, Fla., Police Department, to recover some of the loot confiscated during the men's arrest (The News Herald May 8). Among the items found during the arrest was about $25,000 in cash. The criminal robbery charges against Freddy Thomas and Darrell Grady were dropped when DNA evidence in the case did not conclusively prove it was Thomas who robbed the credit union's Springfield branch in December and January. A criminal case requires that prosecutors prove a defendant guilty beyond a reasonable doubt. A civil case requires only a "preponderance of the evidence" to prove guilt. The police department is named in the suit because it is the location where the money is being held, said the newspaper ... * KANSAS CITY, Mo. (5/11/10)--A former branch manager at Media First CU (now First Financial CU in Jefferson City, Mo.) pleaded guilty in federal court Friday to embezzling about $400,000 from the credit union, said the U.S. Attorney for the Western District of Missouri. Joyce Buchanan, 55, of Kansas City is charged with theft from a credit institution and bank fraud. The credit union served employees of The Kansas City Star and is located in Kansas City, Mo. She admitted that she embezzled $198,553 by making false loans from Dec. 9, 2002, to Jan. 16, 2007. She faces up to 60 years in federal prison, plus a fine of up to $2 million. The sentencing date is pending a pre-sentence investigation, said the press release from the U.S. Attorney for the Western District of Missouri (Targeted News Service May 7) ... * ROCKVILLE, Md. (5/11/10)--Rockville, Md.-based MCT FCU donated $2,500 toward the annual closing cost award given by the Affordable Housing Conference of Montgomery County as part of its "Break the Barrier to Home Ownership" contest. Three residents in the county received a total of $22,500 to help them purchase their first home at the 19th annual Affordable Housing Summit on May 3. MCT's donation directly benefited Ana Bolanos, left, an administrative support specialist with NIST-Department of Commerce in Germantown, shown here with her daughters, and Lise Tracey, executive director of Affordable Housing Conference. The contest asked applicants to state in 200 words or less what homeownership means to them. More than 100 people applied for the award this year. "Helping a local resident achieve her dream of homeownership aligns with MCT's values of supporting our local community and helping local residents and our members achieve financial success," said Robin Bates, MCT vice president of lending. (Photo provided by MCT FCU) ... * TORRINGTON, Conn. (5/11/10)--The Credit Union League of Connecticut partnered with the Leadership NW Group through the Northwest Connecticut Chamber of Commerce for a Financial Reality Fair May 5. The fair allows high schoolers to experience the reality of living on their own as young adults and being responsible for their own living expenses. More than 300 students from 12 high schools attended. Twelve Connecticut credit unions participated, providing 30 volunteers to manage the booths with 60 Chamber member volunteers. The Reality Fair is a REAL Solutions program through the National Credit Union Foundation. Students moved from table to table trying to figure the best deal for the least cost to come in under their projected monthly budget. A Wheel of Reality randomly doled out windfalls or unexpected expenses. In the photo, a student found the right car within her budget. (Photo provided by the Credit Union League of Connecticut) ...

Quirky signs help member win C-Note photo contest

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MADISON, Wis. (5/11/10)--An Oklahoma teenager’s eye for quirky ambiguity led to a $100 win in the most recent C-Note national youth photo contest, which sought examples of funny signs. The contest was hosted by the Credit Union National Association (CUNA).
Cody C., 15, a member of Tinker FCU, Oklahoma City, won the Credit Union National Association’s C-Note’s most recent photo contest, which sought images of funny signs. Cody won $100. (Photo provided by CUNA)
Cody C., 15, a member of Tinker FCU in Oklahoma City, photographed a road sign that said, “Lodging: Next Right” with another sign for “State Prison” underneath. Cody’s take on the suggested accommodation was, “Hey, let’s stay at the jail! Sounds like fun!” Credit union members age 13 to 19 can participate in the photo contest. Winners are chosen by online votes. Participants can submit their photos to the themed contests year-round to compete for $100, and at the end of the year, winners compete for a $1,000 grand prize. C-Note is a part of CUNA’s Googolplex, which offers three customizable website for youth with interactive games, videos and stories that deal with money matters and life issues. Each site is intended for a specific age group--5-spot for elementary school-aged children; A-J’s for middle-school aged children, and C-Note for high schoolers. For more information, use the links.

CU System briefs (05/07/2010)

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* KNOXVILLE, Tenn. (5/10/10)--UT FCU in Knoxville, Tenn., has created an account so members can donate funds for the storm recovery efforts in Middle and West Tennessee. Nashville and Clarksville and other cities were hit with floods after a storm stalled over the Southeast last weekend (The Knoxville News Sentinel (May 7). The credit union said it also will accept donated items such as canned food and water at all its branches to help victims of the flooding. Donated funds will go to the American Red Cross's Disaster Relief Fund. Items donated will go to the Salvation Army in Knoxville for distribution to centers in Nashville, said the newspaper ... * BELLINGHAM, Wash. (5/10/10)--GaPac Community FCU in Bellingham, Wash., has saved the day for the Bellingham Kids' Festival. The $51 million asset credit union signed up for a $10,000 sponsorship for the festival, which will take place after all this summer (The Bellingham Herald May 7). The city's Parks and Recreation Department had announced earlier this spring that the 20-year-old event would be canceled by budget cuts and staff constraints. GaPac Community CEO Katie Zowada, presented the idea to help to her board and received unanimous approval. The event will be the first Saturday in August. Parks department recreation coordinator Cori Kauk told the newspaper: "The community and GaPac stepped up. They've always supported the Kids' Festival. If they didn't step up and take on that sponsorship role, it wouldn't be happening." ... * PENSACOLA, Fla. (5/10/10)--A man entered a Pensacola, Fla., bookkeeping business Tuesday and kidnapped a woman after roughing up her husband and tying him up in an office. Then the robber forced the woman at knifepoint to leave the business and drive to the Pen Air CU, where she was forced to cash a check. A surveillance camera at the credit union captured the robber, wearing a ball cap and talking on a cell phone, standing behind the woman as she cashed the check. They then drove back to the business, where the robber fled with the money. The woman went inside, untied her husband, and called the Sheriff's Office. Deputies had not yet apprehended the man and did not announce the amount stolen (Pensacola News Journal and Escambria.com May 5) ... * DUBLIN, Ohio (5/10/10)--Julia Gee, CEO of Community United CU, Strongsville, Ohio, has been named to the Board of Trustees of the Ohio Credit Union Foundation. She was appointed to a vacant at-large category position. Gee will serve the remainder of the term, which expires in 2013, according to the Ohio Credit Union League (eLumination Newsletter May 5) ...

Dump that sucker for a CU says ICBS MoneyWatchI

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SAN FRANCISCO (5/10/10)--CBS MoneyWatch has the latest media report of customers' dissatisfaction with banks and their migration toward credit unions. In a segment entitled, "Hate Your Bank? Dump That Sucker for a Credit Union!" MoneyWatch (April 26) asks in its online blurb for the video: "Are you sick and tired of the shenanigans? Don't want to play the games anymore? Then break up with your bank and join a credit union." In the video, MoneyWatch's editor-at-large, Jill Schlesinger, reports, that Seth Rosenblatt, a customer at Washington Mutual Bank when it collapsed a year and a half ago, was "so outraged he gave up on banks altogether and joined a credit union." Rosenblatt tells why he joined--he didn't want his money to be part of banks' shenanigans. Schlesinger reports that credit unions are seeing "their fastest growth in seven years due to public dissatisfaction with big banks." She lists the benefits of joining a credit union, compares rates on new car loans (4.82% at credit unions and 6.08% at banks). In the segment, Nate Burns of San Francisco-based Patelco CU, notes that "We pay attention to the members...they're not just a number." Schlesinger concludes that "credit unions offer a viable alternative" for consumers who want to break up with their bank. To view the video, use the link.

League letter in Iowa paper Help CUs help biz

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CEDAR RAPIDS, Iowa (5/10/10)--A letter in the Cedar Rapids Gazette last week from Iowa Credit Union League President/CEO Patrick Jury addresses member business lending (MBL) and appeals to Congress to "help credit unions help business." Congress' efforts in the bipartisan legislation "would support credit unions' ability to jump-start lending to small businesses by $10 billion in the coming year," at no cost to taxpayers, said Jury's letter (Gazette May 3). H.R. 3380, the Promoting Lending to America's Small Businesses Act, and S. 2919, the Small Business Lending Enhancement Act, would give the country's more than 8,000 credit unions more capacity to make small business loans to their members, Jury said. During the credit crunch, "Iowans are turning to credit unions for more of their lending needs. Last year, small business loans made by credit unions grew more than 17%. Iowa credit unions are in a position to do even more, allowing for greater capital expenditures, greater economic activity and job creation," the letter said. "However, as Iowa credit unions reach the 12.25% cap, they are forced to turn away qualified business owners in need of access to capital," he added. Raising the cap to 25% would make roughly $10 billion of additional, reasonably priced credit available to the nation's small businesses in the first year while generating more than 100,000 jobs, Jury wrote. "In Iowa, this would amount to approximately $137 million in new lending and more than 1,400 jobs," said Jury. "Credit unions offer a viable solution to the credit crunch small businesses are experiencing. Our industry supports this bipartisan legislation to help small business owners. We urge Congress to seize this opportunity and provide a common sense reform in the midst of this economic crisis for small businesses," Jury concluded.

Parity reg would enhance Massachusetts CUSOs

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BOSTON (5/10/10)--Massachusetts state-chartered credit unions and credit union service organizations (CUSOs) would receive new powers--perhaps by August at the earliest--under the state’s parity regulation. “This is an ongoing process that goes on every year to review the parity regulation,” Rob Kimmett, senior vice president of marketing and public relations for the Massachusetts Credit Union League, told News Now. “There were no major changes this year, just series of developments.” New authorities for credit unions would include providing:
* Additional types of employee benefit plans and authority to make investments to fund employee benefit plans that would otherwise be impermissible; * Correspondent services to foreign as well as state- and federally chartered credit unions; and * Payroll services.
New authorities for CUSOs would include:
* Purchasing an insurance agency; * Engaging in credit card loan origination, including the authority to purchase credit unions' credit card portfolios and retain them within the credit union affiliated structure; * Offering payroll processing, employee leasing services and stored value products; * Introducing two amendments to clarify that CUSOs may buy and sell loan participations, such as student, consumer and so-called member business loans that they are currently authorized to originate; and * Offering check cashing and money transfer services to certain nonmembers within the credit unions’ fields of membership.
The legislative approval process must be completed within 90 days, Kimmett said. Then the amendments of the regulation are sent to the Secretary of State for publication. In the best-case scenario, the regulation would be in place by Aug. 20, he added. “By working together, the credit union industry and the banking division can fine tune the regulation--going back and forth--and make it more efficient,” Kimmett said.

MoDOT CU bill not on hearing schedule

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ST. LOUIS (5/10/10)--A bill that would allow 10 highway department credit unions to remain in Missouri Department of Transportation (MoDOT) facilities has not been placed on the state Senate’s hearing schedule, according to the Missouri Credit Union Association. “It wasn’t placed on the hearing schedule, so HCR 70 won’t make it out of committee,” Amy McLard, vice president of public and legislative affairs, told News Now. “There is always the possibility it could be placed onto another bill in the last days of session, but not likely.” The credit unions were told Jan. 21 that they would be required to leave their locations by Sept. 30 and would no longer be able to process payroll and benefits through MoDOT after that date. Credit union employees were on MoDOT’s salary and benefits plan, but credit unions reimbursed the department for the costs. The department has since extended the date credit unions must leave to Dec. 31, 2012. The bill was assigned to a committee, but MCUA was told other bills of more importance took precedence (The Missouri difference May 7). It is sponsored by Rep. Mike Cunningham (R-District 145). Cunningham has no credit unions in his district. “He supported us and got the bill filed because he felt it was the right thing to do,” the association said.

Prime Financial CU resumes independent operation

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CUDAHY, Wis. (5/10/10)--Prime Financial CU has officially resumed independent operations with a new board of directors, a more stable market position and a clear path to build additional strength in the future, the credit union announced Thursday. The Cudahy, Wis.-based credit union had been in conservatorship and under the control of the Wisconsin Office of Credit Unions since March 2009. Christine Dawe, who was appointed by the state as interim CEO of Prime Financial last year, will continue to lead the credit union as it returns to normal operations. "We have worked hard--in partnership with the National Credit Union Administration (NCUA), the state, our employees and our members--to strengthen Prime Financial's overall position and performance," Dawe said. "Resuming independent operations with a new member board is a significant milestone." Board members include:
* Harry B. Staffileno, chairman; * Christine Timm, vice chairman; * Eric Moore, secretary; * Ralph DeVito, treasurer; and * Steven Bejma.
Suzanne Cowan, director of the Office of Credit Unions within the state Department of Financial Institutions, said her office "would work closely" with the credit union to ensure it continues "to operate in a safe and sound manner." The credit union was chartered in 1923 as the first credit union chartered in Wisconsin. It is a full-service $144 million asset credit union serving more than 32,000 members. All deposits are insured to $250,000 by NCUA.

Two Madison Wis. CUs to merge

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MADISON, Wis. (5/10/10)--Two Madison, Wis.-based credit unions have announced plans to merge. Madison News CU (MNCU) and Dane County CU announced they intend to merge Oct. 1, pending approval from MNCU’s members and regulators (The Wisconsin State Journal May 7). MNCU has 895 members and $7.7 million in assets. Dane County CU has 11,000 members and $105 million in assets. If approved, MNCU members will be members of Dane County CU. MNCU’s one location at Capital Newspapers in Madison would remain open and staff would be retained, the newspaper said.

NCCUL touts raising MBL cap in newspaper

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GREENSBORO, N.C. (5/10/10)--John Radebaugh, president/CEO North Carolina Credit Union League, voiced support for raising the cap on credit union member business loans in a Wednesday letter to the editor of the Greensboro News-Record. The letter cites the need for increased credit to small businesses and the limits of the current 12.25% member business lending cap (Weekly Update May 7). Radebaugh touted the major benefits of raising the cap, including increased capital to small businesses, job creation and the fact that raising the cap would not cost taxpayers. “Credit unions are seeing a noticeable increase in the demand for small-business credit,” Radebaugh wrote. “Yet some are unable to satisfy this demand, not because they are unwilling to lend, but due to the limits of this arbitrary cap.” He also called attention to North Carolina’s unemployment rate and the impact of raising the cap on joblessness. “If Congress raises the cap on small-business loans, more than 108,000 jobs would be created nationwide in the first year,” Radebaugh wrote, citing projections from the Credit Union National Association. “With more than 500,000 North Carolinians looking for work, I encourage Congress to raise the cap on lending to small businesses. Credit unions stand ready to help businesses create jobs.” Bills in both houses of Congress (H.R. 3380 and S.2919) would raise the business lending cap to 25% of assets. To read the letter, use the link.

CU testifies at Pa. ATM-surcharge hearing

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PHILADELPHIA (5/10/10)--Lee MacMinn, Pennsylvania Credit Union Association (PCUA) Governmental Affairs Committee member and president/CEO of Freedom CU, Warminster, testified Thursday about ATM surcharges on behalf of Pennsylvania credit unions before the State House Commerce Committee.
Lee MacMinn (right) of Freedom CU, Warminster, Pa., testifies before the State House Commerce Committee during a hearing in Philadelphia on ATM surcharging. (Photo provided by the Pennsylvania Credit Union Association)
The hearing was held at the Wharton School of Business in Philadelphia to gather input from stakeholders about ATM surcharging and disclosure, and preauthorized electronic fund transfers (Life is a Highway May 7). Although Regulation E provides a safety network for consumers, the hearing allowed MacMinn to explain what credit unions do for their members in these areas, PCUA said. MacMinn provided the committee with an overview of how credit unions have proactively responded to the issue of surcharging by joining networks like CU$, CO-OP Network, Allpoint, and Shared Branching, so members can access ATMs. State Rep. Rosita Youngblood (D-Philadelphia), the sponsor of the ATM surcharging bill and longtime credit union member, said she and her family feel that they all have a stake in their credit union and recommended that other financial institutions look at implementing programs such as CU$ for their customers. Payday lending and overdraft protection also were discussed at the hearing because some committee members have been hearing concerns from their constituents, said PCUA. State Rep. Curtis Thomas (D-Philadelphia), the sponsor of the electronic funds transfer bill, thanked credit unions for being the best weapon to combat predatory loans. Christina Mihalik, PCUA vice president of governmental affairs, also attended the hearing.

McNaught new CUDL board chair best practices awarded

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LAS VEGAS (5/10/10)--CUDL announced that it re-elected Marge McNaught as chairman of its board during the Auto and Mortgage Lending Symposium in Las Vegas last week. It also presented its best practices awards. McNaught, senior vice president, lending and support services, Premier America CU, Chatsworth, Calif., was re-elected for a second term as chairman. She has served on the board since 2003. CUDL also re-elected three individuals to three-year terms:
* Larry Wilson, president/CEO, Coastal FCU, Raleigh, N.C.; * John Lund, executive vice president, America First CU, Ogden, Utah; and * Joe Brancucci, executive vice president and chief operating officer, BECU, Seattle.
Terry Halleck, president/CEO of The Golden 1 CU, Sacramento, was elected vice chairman. Brancucci was elected secretary and Lund was treasurer. The board also recognized Jim Jordan, president/CEO of Schools Financial CU, Sacramento, for his service to CUDL. He served on the board for 12 years and was chairman from 2007 to 2009. At an awards ceremony during the symposium, CUDL also honored credit unions for best practices. Hermantown (Minn.) FCU; Texans CU, Richardson, Texas; and Tulsa (Okla.) Teachers CU (TTCU) received the CUDL Best Practice Award. OnPoint Community CU, Portland, Ore., and Security Service FCU, San Antonio, received awards for best practices in portfolio growth and risk management. The Golden 1 CU and Citadel FCU, Exton, Pa., received the Diamond Award for success in advancing their auto lending programs. Erie (Pa.) FCU and TTCU were recognized for marketing CUDL’s AutoSMART to members. AutoSMART provides credit unions with a vehicle shopping and research site they can customize for their members.

Iowa CUs serve the underserved via remittances outreach

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MADISON, Wis. (5/10/10)--Three Iowa credit unions that acted as money transfer agents for Hispanics through the World Council of Credit Unions’ (WOCCU) International Remittances Network (IRnet) recently documented their guidelines and recommendations in a report, “Reaching the Hispanic Market through Remittances.”
Click to view larger image Greater Iowa CU hired bilingual staff to better serve the Hispanic community. From left, teller Kristie Hollingsworth helps Jose A. Ayala send money home. (Photo provided by Michael Adams and the World Council of Credit Unions)
The institutions developed their Hispanic outreach strategies through WOCCU’s Credit Union Remittances Outreach Program (CUROP). The credit unions--Family CU, Davenport; Greater Iowa CU, Ames; and Village CU, Des Moines--were selected by WOCCU, the Iowa Credit Union League (ICUL), and Coopera Consulting, a subsidiary of the league. Initial results indicate that two of the three CUROP credit unions had higher volumes of remittance transactions during the program’s first year than a sample average of 21 other credit unions offering remittances through IRnet. The credit unions also benefited by cross-selling products and services to remittance senders. “By actively engaging with the Hispanic community, CUROP credit unions learned how to best tailor their services, and the community gained access to a host of financial services beyond remittances,” said Brian Branch, WOCCU executive vice president and CEO. “With ICUL and Coopera’s expertise, these credit unions became shining examples of what is possible with dedication, planning, marketing and follow-through.” With funding from the U.S. Agency for International Development, WOCCU designed CUROP to develop and implement a community outreach plan for membership extension and expansion to remittance-sending, underserved populations. The one-year program ended in March. WOCCU created IRnet in 2000. It is now working with the Texas Credit Union League to pilot an alternative remittance program that will expand the number of remittance providers for credit unions and foster competition to lower prices among firms and to benefit members. The Credit Union National Association (CUNA) has encouraged Senate Banking Committee Chairman Christopher Dodd (D-Conn.) to exempt credit unions or transactions routed through remittance programs administered by major central banks in the proposed regulatory reform bill. The definition of remittances in the recently introduced Senate financial regulatory reform package is “overly broad” and “would essentially make it impossible for credit unions to continue to offer any form of international electronic fund transfer services to their members,” CUNA and WOCCU said in a March 25 letter to Dodd. The language will affect any form of international electronic fund transfer services credit unions offer their members, whether or not those transactions are truly "remittances" sent by an immigrant home to his or her family, CUNA added.

Corporate One releases financial statements for March

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COLUMBUS, Ohio (5/7/10)--The $3.7 million asset Corporate One FCU reported its unaudited financial statements for the three months ended March 31, noting that it remains in a positive Reserves and Undivided Earnings (RUDE) position at $25.7 million, with its members' capital shares and paid-in capital intact. Earnings for the quarter totaled $2.17 million, exceeding the Columbus, Ohio-based corporate's budget by $1.42 million. Net interest income was roughly $481,000 more than budgeted, and net settlement income was $143,000 greater than budgeted, largely due to better-than-expected sales of its off-balance sheet products, namely SimpliCD, the corporate said. The financials are on its website. Operating expenses were roughly $403,000 under budget. Corporate One's coverage ratio, which measures the amount of gross settlement expense and total operating expenses covered by gross settlement income, was 87.1% for the period, the corporate said. During first quarter, Corporate One recorded other-than-temporary-impairment (OTTI) charges of $1.56 million related to credit loss on nine mortgage-related securities. Total capital was $169.3 million--which includes the $25.7 million in RUDE, membership capital shares of $117.9 million and paid-in capital (PIC) of $25.7 million. Capital decreased about 20% or $43.2 million since March 31, 2009. That decrease was due to $44.1 million in OTTI charges related to securities, as well as $15.1 million in charges related to U.S. Central FCU capital investments. Corporate One's financial statement noted that if it had classified members' share accounts as liabilities, in accordance with generally accepted accounting principles, members equity as of March 31 would have been at a $159.8 million deficit. Its mortgage-related securities have a book value of about $549.9 million as of March 31, representing 14% of the book value of Corporate One's total investable portfolio. Monoline insurers have accounted for OTTI charges. Corporate One has placed reliance on Financial Security Assurance Inc. and MBIA Inc., which are paying principal and interest claims. Deterioration of these insurers could result in additional OTTI charges, the corporate said. Because monline insurer Ambac has a temporary moratorium on claims payments while it undergoes a plan of rehabilitation, the corporate said it would "continue to place reliance on Ambac for full repayment. However, the realization of surplus note proceeds is subject to many factors including a minimum capital requirement, which in turn is a function of the ultimate performance of Ambac's insured exposures." The corporate noted that since 2008, it recorded total OTTI, or unexpected credit losses, of $52 million. "To date, we have had principal shortfalls of approximately $4.60 million," Corporate One's report said. Its regulatory capital ratio was nearly $169.3 million, with a regulatory capital ratio of 4.53%, while reserves and undivided earnings totaled $25.7 million for a retained earnings ratio of 0.69%.

Southwest Corporate announces March 2010 financials

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DALLAS (5/7/10)--The $9.9 billion asset Southwest Corporate FCU has released its unaudited financials as of March 31. Net income for first quarter totaled $6.69 million, an increase of $525,000 over first quarter 2009. Actual year-to-date net operating expense for the quarter was nearly $1.14 million, under budget by $48,000. Total net loss on investments for first quarter was $697,000. The Dallas-based Southwest Corporate's exposure to monoline insurers, which have been impacted by the same events that caused loss projections on the corporate's mortgage-based securities, totals nearly $474.6 million (par value) or $456.5 million (amortized cost) or a fair value of nearly $243.2 million, according to the financial report. The corporate's largest monoline insurer is Ambac Financial Group, which is undergoing a rehabilitation plan. The corporate had placed a reliance on Ambac to pay future principal or interest shortfalls at 90%. However, because detailed financial information about Ambac's rehabilitation plan and collateralized debt obligation (CDO) exposures are limited and ongoing, the corporate has not yet determined if it needs to make any revision to its expectation on Ambac's ability to pay claims, the report said. It cited court filings in which Wisconsin Insurance Commissioner Sean Dilweg states that "full payment to policyholders remains possible even in spite of Ambac's presently troubled financial condition." "Southwest Corporate will be better able to assess the overall impact of the various Ambac developments as additional information becomes available in the coming months. At March 31, 2020, assuming no further payments from Ambac are received for principal and interest shortfalls, the possible additional other-than-temporary impairment could be $43,869,000," said the financial report. Southwest Corporate's capital ratio at March 31 is 1.36%, while its retained earnings ratio (retained earnings over net average assets) is 0.08%. In accordance with NCUA guidance letter 09-CU-10, the corporate depleted members' capital accounts in January by $134.6 million to cover the retained deficit that existed at Dec. 31, 2009. After the depletion actions taken in October 2009 and January 2010, membership capital shares have been depleted by nearly $293.4 million or 72.68%.

NACUSO What industry does now will echo in eternity

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LAS VEGAS (5/7/10)--The National Association of Credit Union Service Organizations (NACUSO) 2010 Annual Conference featured speakers with outside-the-industry perspectives at this year’s conference in Las Vegas, April 25-28. NACUSO CEO Tom Davis, who hosted the event, encouraged credit unions to embrace the unknown. “What we do in this industry now will echo in eternity,” he said. Credit union and CUSO executives, board members and vendors participated in applied workshops and breakout sessions focused on embracing and achieving a meaningful and transformative level of sustainability through collaboration and the networked business model. Jeff Russell, president/CEO of TMG Financial Services, quoted William Gibson, saying began his presentation with the words “The future is already here… It’s just unevenly distributed.” A main theme of the event was “Collaboration will be most beneficial when we can leverage the collective balance sheets of credit unions to benefit consumers--to collaborate with capital,” he said. Russell challenged participants to set aside everything they know about capital and business growth and the traditional credit union mindset, become an entrepreneurial visionary, and consider the impact of a new networked business model on the credit union industry. Sarah Canepa Bang, CEO, Financial Service Centers Cooperative, presented “The New Customer Facing Technology: Using Self Service Kiosks for Member Convenience and Continuity.” She provided some statistics about changing habits of consumer spending. Forty-seven percent of consumers report they will ‘always’ or ‘usually’ use self-service when choosing between a person or a self-serve option. This number jumps to 60% for consumers under the age of 35, according to a 2009 Self-Service Consumer Survey. Other speakers at the event included Jack M. Antonini, former vice chairman and president/CEO of USAA Federal Savings Bank, and Joe Batista, director and chief creatologist, Hewlett-Packard Company. For more information, use the link.

CU System briefs (05/06/2010)

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* DENVER (5/7/10)--Credit Union of Colorado is the official sponsor for the 2010, 2011 and 2012 soccer seasons for the Colorado Rapids. It will exclusively sponsor the "Rapids Rookie for a Day" program, which recognizes student-athletes who are well-rounded representatives of their school and communities. Ten winners will be selected throughout the season to participate in an official Rapids practice. They will receive a Rapids jersey and tickets to a Rapids home game and be recognized at halftime at five games. The credit union also will sponsor the "Community Coach" program recognizing youth soccer coaches who go beyond their day-to-day coaching responsibilities to make a difference in their players' lives. Two winners will be recognized at Rapids home games. The sponsorship also includes naming a field within Dick's Sporting Goods Park as "Credit Union of Colorado Field" ... * COLUMBUS, Ohio (5/7/10)--Today is the last day of John Reardon's service as superintendent of the Ohio Division of Financial Institutions with the Ohio Department of Commerce. He has served since his February 2007 appointment by then-Gov. Ted Strickland. Ohio Credit Union League President/CEO Paul Mercer noted that Reardon was proactive, accessible and supportive of Ohio's financial institutions. "The league is grateful for Superintendent Reardon's close attention to and strong support of the credit union movement in general and Ohio's state-chartered credit unions specifically, and we wish him success in his future endeavors," Mercer said. He added the league would be in close contact with the administration during the transition and will advocate for consideration of potential successors with demonstrated understanding of and support for Ohio's credit unions (eLumination Newsletter May 5) ... * WYOMISSING, Pa. (5/7/10)--One of Discovery FCU's billboards located in the outfield of the Reading (Pa.) Phillies baseball team was prominently displayed in a photo in The New York Times (April 27). The story was about last year's No. 1 draft pick--Harrisburg Senators pitcher Stephen Strasburg (Life is a Highway May 6). In the photo with the credit union's billboard, Strasburg was shown performing warm-ups before a game against the Reading Phillies last week. Strasburg has since moved up a level to Syracuse. The $129 million asset credit union is based in Wyomissing, Pa. To see the photo, click on the link ...

Private student loan delinquency down in 4Q

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CHICAGO (5/7/10)--Private student loan delinquency--the ratio of student loans 90 days or more past due--decreased about 4.9% in the fourth quarter, according to an analysis of student loan trends by consumer credit reporting agency TransUnion. That figure is down from a high of 6.34% in third quarter 2009. The quarterly decrease represents a reversal of a five-quarter trend that began in second quarter 2008 (Marketwire via Comtex April 27). Thirty-day student loan delinquency rates experienced a 6.6% drop, down from a high of 8.06% in the third quarter. However, year-over-year for the fourth quarter, the 30- and 90-day delinquency rates are up from 2008 (10.4% and 11.67%, respectively) and from 2007 (16.93% and 15.52%, respectively). The average national private student loan debt per loan on active accounts for the quarter was $17,754. The average account balance for delinquent student loan accounts 90 days or more past due was $13,033. States with the highest volume of new private student loans during the quarter were California, Texas, New York, New Jersey and Minnesota, representing 38% of all new loans for the country. The analysis is based on information culled from TransUnion’s U.S. consumer credit database and proprietary analytic capabilities focused on student lending. Of the student loans contained in the database, roughly 20% are estimated to be private loans, also known as “alternative” loans, and 80% are estimated to be federal or government-backed loans--Stafford, Perkins, PLUS and GradPLUS. The highest private student loan delinquency rates, defined as 90 days or more past due, were in Florida (9.44%), Mississippi (9.09%) and Tennessee (9.07%). The lowest delinquency rates were found in Vermont (3.28%), New Hampshire (3.60%) and North Dakota (3.75%). Areas showing the greatest percentage drop in delinquency from the previous quarter were Mississippi (14.45%), Alabama (12.41%) and Kentucky (10.84 %). While the U.S. experienced an 11.67% increase in private student loan 90-day delinquency from the previous year, state-level increases are varied. For example, areas showing the greatest percentage increase were, for low student loan volume states, Vermont (29.80%) and Idaho (24.66%). For higher loan volume states, Illinois (20.32%) and Massachusetts (21.75%) ranked at the top. Of the 50 states, only three showed a decrease year over year: Alabama (0.50%), Michigan (0.56%) and Louisiana (4.47 %). A number of credit unions have recently entered the private student lending market. CUNA Strategic Services has an alliance with one such loan provider, Fynanz. For more information, use the link.

Ohio CUs commit 150M to private student lending

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COLUMBUS, Ohio (5/7/10)--A collaboration of Ohio credit unions has stepped forward to commit $150 million in affordable student lending to college-bound Ohioans in response to the rapidly increasing gap between federal student loans and the cost of higher education.
Click to view larger image Ohio Credit Union League President Paul Mercer (right) presents a check from Ohio credit unions to Ohio college students for $150 million. Lori Jablonski, a mother of two college students from Toledo, and Miami University students Robert Hendricks and Chris McMillan accept the check. (Photo provided by the Ohio Credit Union League)
Ohio Student Choice is an alliance of 11 Ohio credit unions that each committed at least 1% of their assets to student lending. The alliance was officially introduced Thursday at the Ohio Statehouse before state leaders, credit union supporters, parents and college students. The combined fields of membership of the participating credit unions encompass the entire state, said the Ohio Credit Union League. “If you are familiar with the credit union movement, then you know collaboration is something we do very well,” said league President Paul Mercer during a news conference at the Ohio Statehouse. “The lack of private student lending in the market is forcing Ohio’s future leaders to delay or even vacate their goal of earning a college degree. As lending institutions with capital on hand, credit unions cannot sit idly by.” In 2010, the average college student will receive $7,800 in federal loans while attending a public institution, according to the College Board. However, the average cost of tuition is $15,200, leaving students a gap of $7,400 to fill. For private institutions, that gap jumps to more than $35,000. The result is a funding gap increase of 57% for public institutions and 42% for private institutions since 2002. Adding to the problem is the demand for loans and the lack of private lending in the marketplace. The total combined amount lent to college-bound students in the U.S. in 2009 was $112 billion. In 2012, that is expected to rise to $135 billion. With banks scaling back their lending due to financial and regulatory pressures, the supply of loans will not equal the demand, said the league. “With many lenders pulling out of the secondary market, credit unions started asking themselves, ‘Where are these students going to turn,’” said Sharon Custer, CEO of BMI FCU, Dublin. Ohio Student Choice loans will feature competitive interest rates, zero origination fees, flexible repayment options--including deferment while in school--the ability to secure financing during students’ entire undergraduate career, and electronic loan delivery and disbursement. CU Student Choice, a credit union service organization based in Washington D.C., will assist the Ohio credit unions with loan processing. However, students interested in the loans should apply directly at one of the participating credit unions. Participating credit unions include BMI FCU, Cinco Family Financial Center CU, Cincinnati; Directions CU, Sylvania; Day Air CU, Kettering; Kemba CU, Cincinnati; Kemba Financial CU, Gahanna; Seven Seventeen CU, Warren; Ohio Educational CU, Cleveland; MidState Educators CU, Columbus; Midwest Community CU, Defiance; and Wright-Patt CU, Fairborn.

The 1 conference offers networking entertainment

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MADISON, Wis. (5/7/10)--Attendees of The 1 Credit Union Conference have access to additional events before, during and after the July 11-14 meeting in Las Vegas. The conference, co-hosted by World Council of Credit Unions (WOCCU) and Credit Union National Association (CUNA), offers a full educational program for the four-day event at the MGM Grand Hotel. Also, day tours in and around Las Vegas, tickets to stage shows, an executive breakfast series and a golf tournament are available to attendees at an additional cost. The 1 Credit Union Conference combines WOCCU’s World Credit Union Conference and CUNA’s America’s Credit Union Conference for this year only. The synergy has led to the inclusion of additional events on this year’s agenda. During the conference, six day tours will be offered for a fee. Participants can go on a Las Vegas city tour or travel to the nearby Hoover Dam and Lake Mead. Those interested in a “backstage view” can tour the set of Jubilee! to see the inner workings of a Las Vegas production show and meet the performers. For evening entertainment, blocks of tickets have been purchased for three stage shows: Barry Manilow, The Beatles LOVE Cirque du Soleil and Viva Elvis Cirque du Soleil. Tickets range from $135-$150 and can be purchased online after completing the conference registration.
Click to view larger image Bryce Canyon in Utah is featured as part of The 1 Credit Union U Conference post-tour in July. (Photos provided by the World Council of Credit Unions)
Conference attendees also can travel to Utah and Arizona for the National Parks and Route 66 post-conference tour. During the July 15-18 tour, participants can see Zion and Bryce Canyon national parks, Lake Powell and the Grand Canyon--all before following Route 66 back to Las Vegas. The conference will feature a learning and networking series for credit union CEOs and executives consisting of three breakfast sessions (July 13-15), featuring well-known business authors. The Executive Series focuses on credit union leadership issues. Each participant will receive presenters’ books as part of the program. A new event, the T-Up FORE WOCCU Golf Tournament, will debut in Las Vegas on July 10. The charity golf event will benefit The Global Women’s Leadership Network, a new WOCCU initiative designed to alleviate poverty through the empowerment of women around the world. The entrance fee of $250 per golfer includes continental breakfast and boxed lunch at Bear's Best Golf Course in Las Vegas. For more information, use the links.

Blanchard inducted into Cooperative Hall of Fame

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WASHINGTON (5/7/10)--Larry Blanchard was inducted Wednesday into the Cooperative Hall of Fame by the Cooperative Development Foundation during a dinner and induction ceremony at the Washington, D.C., Press Club.
Click to view larger image Larry Blanchard, right, who worked for every major credit union organization in the U.S., receives a standing ovation as he is inducted into the Cooperative Development Foundation's Cooperative Hall of Fame by CUNA Mutual Group President/CEO Jeff Post, left. Blanchard was the nominee of the Credit Union National Association and its Cooperative Alliance Committee. (Photo provided by CUNA Mutual Group)
Blanchard, who retired in 2008 as senior vice president for special projects from CUNA Mutual Group, was one of four people inducted and the only credit union industry representative. He now serves as a consultant for corporate and legislative affairs at CUNA Mutual. "I was so floored. I had no clue. To be nominated for such a prestigious award by the Credit Union National Association (CUNA) and its Cooperative Alliances Committee was an honor. I'm blown away," Blanchard told News Now. Blanchard was head of communications in CUNA's Washington, D.C., office during the late 1980s and early 1990s before going to CUNA Mutual Group. His nomination was approved by the CUNA Board. He is considered by many in the movement as a shaper of today's credit union landscape, according to the foundation. He was an employee and organizer of credit unions who worked for every major credit union organization in the U.S. He also was a credit union development educator who helped guide the evolution of the Campus Credit Union Council. He also was a leader of Operation Grassroots--an effort to maintain regulatory independence for credit unions. Others inducted were Glenn English (rural utilities), Werqu Mekasha (agriculture) and David Thompson (general).

WYCUP deadline draws near

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MADISON, Wis. (5/7/10)--The deadline for applications to participate in this year’s World Council of Credit Unions’ (WOCCU) Young Credit Union People (WYCUP) scholarship program is June 7. Five recipients will be recognized at The 1 Credit Union Conference, July 11-14 in Las Vegas. Recipients will receive all-expenses-paid trips to WOCCU’s 2011 World Credit Union Conference in Glasgow, Scotland. The program seeks individuals who have contributed to the development of their credit unions or the credit union movement, and who demonstrate the potential to employ their talents at the international level. Credit unions and credit union organizations that are WOCCU members can nominate leaders for the scholarship, WOCCU said. Nominees must be sponsored by a credit union or credit union organization to attend the conference, be 35 or younger on Jan. 1, and submit a completed nomination form with supporting materials to WOCCU. All nominees will be formally recognized in Las Vegas and invited to participate in events and networking sessions organized throughout the conference for participants under 35. Conference registrants under age 35 also qualify for a discounted registration fee, regardless of whether they compete for the scholarship. For more information, use the link.

Anderson Bordelon receive CDCUs highest honor

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NEW YORK (5/7/10)--The National Federation of Community Development Credit Unions announced the recipients of its 2010 Annie Vamper “Helping Hands” Award, its highest honor for community development credit union (CDCU) staff and volunteers. This year’s recipients are Rebecca “Becky” Anderson, board secretary and supervisory committee chairman, Northwest Baptist FCU, Seattle, and Marcus Bordelon, president/CEO, Appalachian FCU, Berea, Ky. They will receive their awards June 11 during the federation’s Annual Conference on Serving the Underserved in Pittsburgh. Anderson joined the credit union movement in the 1980s, when she was a member and leader of the Mount Zion Baptist Church Sojourner Truth Circle, a church women’s leadership group for young adults. When Northwest Baptist FCU expanded its charter in 1990 and 1994, Anderson helped gather support from other churches to join Northwest Baptist FCU’s field of membership. She has served on the credit union’s board of directors and supervisory committee, helped create the Youth Credit Union Program (YCUP) in 1993, and volunteered with the federation’s Youth Credit Union Network, serving as chairman of the task force responsible for coordinating the network's yearly youth conferences. Bordelon became president/CEO of the Central Appalachian Peoples’ FCU, now Appalachian FCU, in 1990. Under his tenure, Appalachian FCU grew to become a nearly $18 million CDCU serving more than 2,200 low- and moderate-income residents in rural Appalachia. Bordelon helped expand the credit union’s consumer lending into real estate and business loans. He also pushed for Appalachian FCU to become a member of the Federal Home Loan Bank and spearheaded the credit union’s predatory lending alternatives, developing underwriting policies so the credit union could offer affordable car loans and payday loan alternatives. Since 1993, the federation has honored 45 credit union staff and volunteers with the “Helping Hands” award. Vamper began her credit union career at College City Elks Lodge FCU in 1958. She worked for the Bureau of Federal Credit Unions and the National Credit Union Administration’s CDCU division. Vamper helped rebuild the federation with current President/CEO Cliff Rosenthal. Vamper served as chief financial officer, a regulatory analyst and on the federation’s Capitalization Program staff.

CU System briefs (05/05/2010)

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

Aranjo loses appeal on CDCU fraud case

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

CU crashers next stop Las Vegas

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

Illinois Foundation provides grants scholarships

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

SECU launches two-way texting alerts

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

Deadline to report Saving Challenge results extended

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

IUSA TodayI features student loans Ohio alliance formed

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

Cheneys experience good for CUNA CEO post

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

Iowa league Greater unity will help Panamas CUs

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

Current future economy topic at The 1 CU Conference

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MADISON, Wis. (5/5/10)--Attendees at The 1 Credit Union Conference next month will hear from several experts from the Credit Union National Association (CUNA) during breakout sessions on two of the hottest challenges facing credit unions: the economy and the growing compliance burden. The conference is set for July 11-14 in Las Vegas. It is the one-time-only combination of the Credit Union National Association's (CUNA) America's Credit Union Conference and the World Council of Credit Unions' (WOCCU) World Credit Union Conference. The Current Economy and Future Trends: An Industry Update will be provided by CUNA's economists--Bill Hampel, senior vice president of research and chief economist, and Mike Schenk, vice president of economics and statistics. The global recession, the greatest economic crisis since the Great Depression, has changed the political and financial landscape and has altered consumer behavior for what may be generations to come. In the session, which will be simultaneously interpreted into Spanish, Hampel and Schenk will share how the shifts and the changing economic outlook will shape credit union operations going forward. They also will look at how credit unions can continue to provide stellar member service in tomorrow's challenging environment. In another session, Coping with a Growing Compliance Burden: What Credit Unions Need to Know, Kathy Thompson, CUNA senior vice president and associate general counsel for regulatory compliance, will discuss the latest regulations' effects on day to day operations of the credit union. As an added feature, conference attendees will have the option to purchase show tickets for three special events:
* Barry Manilow, $135 per ticket; * The Beatles Love Cirque du Soleil, $135; and * Viva Elvis Cirque du Soleil, $150.
Show tickets may be purchased online through the conference registration system once the registration form is completed. For individuals who have already registered and would like to add show tickets, tours or other events, use the link and enter the confirmation number in the registration confirmation email. Use the links for more information.

CUs tax filing programs yield impressive results

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MADISON, Wis. (5/5/10)--Credit unions are reporting some impressive results--saving their members millions of dollars--from their efforts to assist members with the tax-filing season, especially in North Carolina and Michigan. In Raleigh, N.C., the State Employees' CU (SECU) completed its third year of providing tax-preparation services to members. SECU chalked up a 41% increase in its free Internal Revenue Service (IRS) Volunteer Income Tax Assistance (VITA) program, preparing more than 35,000 member returns. In its introductory season of paid tax-preparation services, SECU also assisted more than 2,100 members whose incomes thresholds surpassed VITA guidelines. Between the two tax-preparation programs, SECU helped members claim more than $26.2 million in tax credits, including $15.2 million in Earned Income Tax Credits. The credit union also helped members receive $52.8 million in tax refunds and saved them more than $5.4 million in tax preparation fees. SECU also provided a low cost 12% annual percentage rate (APR) Tax Refund Express loan, but strongly encouraged members to avoid any refund anticipation loan costs by simply waiting on the quick electronic refund. "Two years ago, SECU completed 16,000 tax returns in its first year as a VITA partner, and this year, it's completed more than 35,000. To be completing that number of tax returns with such dedication of resources is impressive," said Julie Garcia, director of Stakeholder Partnerships, Education and Communications (SPEC) with the IRS. "By next year, SECU will have a VITA site in every county in North Carolina. We are hoping to replicate the SECU model in other states across the U.S.," Garcia said. Roger Burton, territory manager for IRS SPEC, said that SECU developed "an effective training program that allows it to train nearly 1,000 VITA preparers with help from only two IRS employees. By replicating this model, we can improve outreach to an even greater number of players." Josh Kelly, SECU senior vice president of tax preparation services, said the success SECU had is "a direct reflection of the dedication and teamwork exhibited by credit unions staff. In another state, the Michigan Credit Union League's Just File It! free tax-preparation service saw a large increase in the number of tax filers and amount of tax credits and refunds returned to Michigan credit union members, according to the league (Michigan Monitor May 3). Roughly 125 Michigan credit unions provided nearly $13.7 million in refunds and credits to nearly 5,000 individuals. This year's numbers topped last year's refund and credit totals by more than $1 million. The league said that when adding the totals from credit union participants with non-credit union partners, Just File It! returned nearly $21.8 million--a record--to Michigan residents.

La. league defends CUs vs. banks misinformation

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BATON ROUGE, La. (5/5/10)--Credit unions earn their tax exemption every single day, said the Louisiana Credit Union League in a letter in Monday's The Baton Rouge Advocate. The letter is in response to one of two recent bankers' attacks in the media. The other attack was featured in the San Antonio Express-News April 21. The Louisiana letter, from Anne Cochran, president/CEO of the Louisiana league, responded to an April 26 letter, "Banker rips credit union tax breaks," in which banker Preston Kennedy calls credit unions' tax exemption "a drain on the economy." Kennedy's letter responded to a credit union's letter on the government's proposed Consumer Financial Protection Bureau ("Legislation could hurt credit unions," The Baton Rouge Advocate April 9). The banker's "assertions about credit unions in his April 26 letter are misleading and shortsighted," said Cochran (The Baton Rouge Advocate May 3). She noted that credit unions were granted a tax exemption based on their unique structure as nonprofit cooperatives, with volunteer boards. "Unlike other financial institutions," Cochran wrote, "credit unions exist to maximize service to their member-owners." At another point, she wrote, "Credit unions are exempt from paying corporate income taxes because earnings are returned to members, who are taxpayers themselves. They are not share-holders." As for the bureau legislation, "credit unions will continue to place the highest priority on service to their members. Credit unions are right for looking upon it with a cautious eye, out of their desire to ensure their members' interests are served," Cochran said. "During these times of economic uncertainty, credit unions in the Greater Baton Rouge area are emerging as quality, effective financial institutions for individuals and businesses to put their hard-earned money. They remain accountable to their members and are focused on investing in the neighborhoods where they do business, live and bring our kids to school. "Credit unions do not stop behaving like cooperatives once they reach a certain size," Cochran said. "Whether big or small, every credit union shares the same not-for-profit structure and orientation toward member service. Because of this structure, unchanged over the past 75 years, credit unions earn their tax exemption every single day." Earlier in the month, in the San Antonio newspaper, Steve Mack, CEO of a San Antonio-based bank, wrote that "taxpayers are subsidizing the credit union industry" because of their tax exemption" (San Antonio-Express-News April 21). His letter responded to an article written by David Hendricks urging Congress to expand credit unions' role (San Antonio Express-News April 7).

CU operating normally after cease and desist order

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TAMPA, Fla. (5/5/10)--Bay Gulf CU, Tampa, Fla., is operating normally after the Florida Office of Regulation issued a cease and desist order to the credit union April 29. The order was issued to the credit union because of a difference in the interpretation of accounting principles regarding some troubled debts, Bill DeMare, president/CEO, told News Now. It has since been resolved, and there have been no changes in management. The credit union has excess liquidity, and member deposits are safe, he added. The credit union has acted on much of the order, and has submitted a plan to raise its reserves. As of March 31, Bay Gulf’s net worth was 5.24% of total assets. Adequately capitalized credit unions are required to have at least 6%. The credit union submitted a capital restoration plan to regulators that will help it reach 7% net worth as of September 2012. The National Credit Union Administration is reviewing the plan, he said. “We are moving along,” DeMare said. “We’re not finished with April yet, but we’re expecting a strong quarter.” The credit union reported a $823,706 loss for the first quarter of 2010. DeMare noted that Bay Gulf modified about 700 consumer loans--including car and home loans. More than 80% have been paid off (Tampa Bay Business Journal May 3). “We thought we were doing the right thing,” he said. “We helped a lot of people. We don’t regret that.” The credit union has $140.7 million in assets as of March 31.

Filene i3 seeks 17 new members

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MADISON, Wis. (5/5/10)--The Filene Research Institute's i3 group is seeking 17 new members who are passionate about the credit union system. Deadline for applications is noon CT June 13. Candidates will be selected and notified by July 16. The group, which focuses on ideas, innovation and implementation, is not only developing ideas, but it is also developing an innovation competency for the next generation of credit union CEOs. The positions are available beginning in the fall. Applicants are recruited from natural person credit unions in the U.S. and Canada that are Filene Research Institute members New this year, CEOs of credit unions under $50 million in assets are eligible to apply. Those applying should:
* Agree to one two-year term,; * Obtain support from their CEO to be involved in the group; * Secure credit union commitment to cover travel and hotel expenses for two national meetings per year (or a total of five meetings); * Attend four two-to-three day meetings in the spring and fall: * Make a monthly time commitment to i3-related projects beyond the national meetings; * Gain support from their credit union to pilot and test at least one Filene i3 idea; and * Consent to the i3 participant agreement.
For more detail and for an online application, use the link.

Dangerous floods damage CUs in Tennessee

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NASHVILLE, Tenn. (5/5/10)--Several credit unions reported water damage and branch closings after historic floods in Tennessee killed at least 18 people statewide and swept away homes and vehicles over the weekend. About 27 deaths reported in the Southeast as of Tuesday were caused by the flooding. More than 13 inches of rain fell at the Nashville airport, with higher totals reported elsewhere in the region. Tennessee’s Cumberland River is receding, but the city of Nashville faces a long recovery from the historic flooding, said CNN.com (May 4). Many Tennessee residents also faced power outages, blocked highways, and evacuation from their homes, and were required to conserve water. Cynthia Dunn, research specialist at the Tennessee Credit Union League, said several credit unions reported damages. Old Hickory (Tenn.) CU closed all six of its branches Monday. One branch remained closed on Tuesday. That branch sustained water damage, Dunn told News Now. Leaders CU, Jackson, experienced two to three inches of water in 60% of the interior of the credit union. The credit union was drying out and had ripped out its carpet, Dunn said. Fort Campbell CU, Clarksville, sustained water in its parking lot but no damage. LMPCO Employees Credit Association, Lexington, had water under its front door but no damage. The Tower Branch and Goodlettsville branch of Southeast Financial CU, Franklin, closed Monday due to flooding, according to the credit union’s website. Tennessee Employees CU, Nashville, was not affected by the flooding. It is located in a state office building with a generator so it did not have a power outage. None of the credit union’s employees had damages at their homes, said Sherrie Brooks, CEO. “Everyone seems to be okay,” she told News Now. “We’re very fortunate.” However, one of the credit union’s members called Tuesday saying that she had lost her home and car. “We’re trying to get her financing for a new car,” Brooks said. The Opryland Hotel, located in Nashville, was evacuated as a result of the flooding. The hotel has hosted credit union conferences in the past, including those of the Credit Union National Association. News Now also contacted the Tennessee Department of Financial Institutions. The department said it did not have an exact count of credit unions that were closed, but credit unions with affected branches have been doing a good job of letting their members know which branches are open.

Michigan league announces annual award winners

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LANSING, Mich. (5/5/10)--The Michigan Credit Union League (MCUL) announced the winners of its annual awards--including several new additions. The awards will be formally presented at the MCUL Annual Convention and Exposition, May 20-22 in Detroit (Michigan Monitor May 3). The 2010 winners are:
* Distinguished Service Award--Robert Mackay, retired CEO of Berrien Teachers CU, Saint Joseph; * Credit Union Professional of the Year--Thomas Miller, president/CEO of Affinity Group CU, Pontiac; * Outstanding Credit Union of the Year--Michigan State University FCU, East Lansing; * Chapter Effectiveness Award--Lansing Chapter; * Young Professional of the Year--Lori McCloud, Monroe County Community CU, Monroe; * Credit Union Youth Advocate of the Year--RuthAnn Albus, DFCU Financial, Dearborn; and * Award for Excellence in Consumer Education--Susan Young, CP FCU, Jackson.

Iowa CUs small biz owners discuss MBLs with Rep. Braley

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DUBUQUE, Iowa (5/5/10)--More than 20 Iowa credit union representatives from four credit unions met with U.S. Rep. Bruce Braley (D-Iowa) Friday in Dubuque to discuss how the state's credit unions continue to serve members at a time when members need it the most.
Click to view larger imageNortheast Iowa credit unions and the Iowa Credit Union League are shown with U.S. Rep. Bruce Braley (D-Iowa). From left: John Koppes, Dupaco Community CU; Matt Dodds, Dupaco; Joe Gonzalez, Alliant CU; Bob Hoefer, Dupaco; Julie Vande Hoef, Iowa Credit Union League; Russell Kuennen, Du Trac Community CU; Andy Hawkinson, DuTrac; Denise Dolan, Dupaco, Braley; Dr. Greg Crowley, chiropractor and Dupaco member; Ron Mussehl, convenience store chain owner and Dupaco board member; Mike Maroney, Alliant CU; Jonathon Miller, Dubuque Teachers CU; Joe Hearn, Dupaco; and Gregg Liddle, Dupaco. (Photo provided by Dupaco Community CU)
Credit unions attending were Dupaco Comunity CU, which hosted the event; DuTrac Community CU; Alliant CU; and Dubuque Teachers CU. Also attending was a representative from the Iowa Credit Union League. Dupaco Community CU CEO Bob Hoefer told how the credit union provided more than 3,000 loans of under $2,500 each in the past year. "These small dollar loans are an alternative to payday loans and help our members in a short-term pinch," he said. Two small businesses explained to Braley how they were helped by local credit unions. Ron Mussehl, convenience store chain owner and Dupaco Community board member, said his business saved money from lower fees, compared with local bank fees, while processing business transactions. Dr. Greg Crowley told Braley his credit union provided a loan to establish his chiropractic practice after graduation. He said that many medical school students struggle to find access to similar capital from other financial institutions. "Small businesses need more options for capital--not fewer," he said. They thanked Braley for his co-sponsorship of H.R. 3380, which would increase credit unions' member business lending cap to 25% of assets from the current 12.25%. "Iowa credit unions are continuing to serve their members in this challenging economy," said Patrick S. Jury, president/CEO of the Iowa league. He thanked the congressman for "taking time to learn more about the important role of the credit union industry in the financial marketplace."

Governor praises CUs at Mich. small-business event

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LANSING, Mich. (5/5/10)--Michigan Gov. Jennifer Granholm again promoted Michigan credit unions’ small-business lending efforts during a 2010 Michigan Celebrates Small Business event Friday in Lansing.
Michigan Gov. Jennifer Granholm addresses attendees of a Michigan Celebrates Small Business event Friday in Lansing, Mich. The event helps promote credit unions’ small-business lending efforts. (Photo provided by the Michigan Credit Union League)
The Michigan Economic Development Corp. also recognized Michigan small businesses and entrepreneurs that excelled the past year in their innovation, revenue growth and ability to employ Michigan workers (Michigan Monitor May 3). “We’ve had to create a whole spectrum of help for entrepreneurs in order to be successful,” Granholm told a group of several hundred at the Lansing Center. “We have 12 Small Business Technology and Development Centers (SBTDCs) around the state ... and we also linked up with credit unions all across Michigan. “This year at the State of the State [address], I announced that credit unions chipped in $43 million to be able to work with the SBTDCs to take 1,000 entrepreneurs from start to finish,” she added. “We’re very excited about being able to support entrepreneurs, startups and those who need technical assistance.” Michigan credit unions were represented at the event by Michigan Credit Union League staff. Fifty small businesses were honored as “Companies to Watch,” while several individual business owners received awards.

CU System briefs (05/04/2010)

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SACRAMENTO, Calif. (5/5/10)--Thanks to the efforts of The Golden 1 CU Director of Internal Audit Kara Giano and the Sacramento Institute of Internal Auditors (IIA), May has been proclaimed International Internal Audit Awareness Month by Sacramento Mayor Kevin Johnson. The recognition is important for internal auditors, said Giano, because they "work tirelessly to help organizations meet their objectives by monitoring risks and ensuring controls in place are adequate to mitigate risks." Golden 1 President/CEO Teresa A. Halleck noted that the credit union's internal audit team's "hard work ensures that our business practices remain top notch." IIA was established in 1941 and is based out of Altamonte Springs, Fla. California has 11 IIA chapters serving more than 5,600 members. The Sacramento Chapter has 484 members, some of them shown here after the proclamation ceremony (Photo provided by The Golden 1 CU) ... * WASHINGTON (5/5/10)--Richard Allen, retired accountant at the National Credit Union Administration (NCUA) died April 4 at a nursing home in Boynton Beach, Fla., reported the Washington Post (May 3). He was 75 and had Parkinson's disease. Allen was an accountant and auditor for the Navy Department before joining NCUA. He retired in 1999. He is survived by his wife, three children, three granddaughters and two brothers ...

Two new NASCUS Board members appointed

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ARLINGTON, Va. (5/5/10)--Mary Hughes, Idaho credit union regulator, and Kathy Stewart, Kentucky regulator, have been appointed to the National Association of State Credit Union Supervisors (NASCUS) Board of Directors. The announcement was made by Tom Candon, Vermont regulator and NASCUS chairman. Hughes will take the unexpired seat--which runs until September 2012--filled by past Chairman George Reynolds, who retired. Stewart, a Kentucky regulator, will fill Hughes current one-year term on the board, which expires in September. Linda Jekel, Washington’s director of credit unions, will return to the past chairman officer position in Reynolds’ place. This will be Stewart’s first term on the NASCUS board. She serves as director of the Division of Financial Institutions for the Kentucky Department of Financial Institutions. Hughes, the Financial Institutions bureau chief of the Idaho Department of Finance, was appointed to the board in 2008.

CU asks for essays on how to cut costs for the prom

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EAST LANSING, Mich. (5/5/10)--Michigan State University (MSU) FCU kicked off its “Cash for the Bash” contest, asking high school juniors and seniors to explain how they are reducing the costs of going to the prom. Students submitted essays and videos about how to cut costs. Popular ideas included potluck dinners instead of restaurant meals, and using the family car instead of renting a limo. Alexis Cavazos-Kottke from Waverly High School submitted the winning essay. She will win a prom dress, dinner for two at a local restaurant, a boutonniere and corsage, and $250 deposited in her savings account at the credit union (Michigan Monitor May 3). “The essays and videos submitted were truly heartfelt,” said MSU FCU President/CEO Pat McPharlin. “We are all aware that the economy has tightened many families’ wallets and the essentials for program may not be what they once were. This contest allowed us to partner with local businesses to provide one lucky teenager with a fantastic prom package.” MSU FCU has $1.8 billion in assets.

NEW Bill Cheney named next CUNA CEO

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WASHINGTON (Filed at 11:50 a.m. ET 5/5/10)--William "Bill" Cheney has been named the successor to Dan Mica as president/CEO of the Credit Union National Association (CUNA), CUNA's chairman announced today. Cheney, 49, is currently president/CEO of the California/Nevada Credit Union Leagues. “After an exhaustive search, in which nearly 100 highly qualified candidates were considered, the CUNA Board has unanimously accepted and certified the executive search committee’s recommendation of Bill as the next chief executive of our association,” said Kris Mecham, CUNA Board chairman. “Bill’s long service to credit unions, as both a financial institution executive and association leader, ensure our association will not miss a beat in advocating for credit unions.” Mecham said Cheney, who has been the California/Nevada Leagues president since 2006, will take the reins of CUNA July 5. “I am honored that the CUNA Board has the confidence in me as their selection for this position, given the very extensive search that was conducted by the committee,” Cheney said. “I am ready for the challenge and excited about the opportunity. Dan Mica has built a great team and I look forward to leading it in continued pursuit of critical credit union goals.” Harriet May, CUNA vice chairman and leader of the executive search committee, said Cheney’s background in credit unions was a key factor in the search group’s recommendation of his hiring. “While we in fact considered candidates from both inside the credit union movement and outside of it-- and nearly all who possessed compelling professional and personal achievements-- we ultimately recommended Bill for the job because of his peerless and extensive background as a credit union professional and as a professional advocate for credit unions. He knows us--and we know him.” Current CUNA CEO Dan Mica said he fully concurred with and applauded the board’s selection. “He has the resume and the real experience to do the job brilliantly,” Mica said. “His many visits to Capitol Hill and the relationships he has built, his tireless work with the regulator, his bonds with his California and Nevada members, his knowledge of credit unions and of business in general makes him the ideal candidate. I anticipate an absolutely seamless transition from my tenure to that of the new leader of the credit union movement.” Mica added that the transition is already underway, and that he will be working with Cheney until the new CEO’s official start date in early July. Mica said he will remain available to Cheney for counsel through the remainder of the year.

Mich. CUs small biz financing alliance ready for biz

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LANSING, Mich. (5/4/10)--Small businesses in Michigan now have a new resource to help them turn their ideas and dreams into reality, and create jobs in the state, said the Michigan Credit Union League. The Michigan Credit Union Small Business Financing Alliance (CUSBFA) is open for business with a new website, www.cusbfa.com, which will help connect entrepreneurs and small businesses with training and tools to apply for credit. As an online resource, the new website provides small businesses access to the CUSBFA counseling form, information on financing from participating credit unions, and additional state and federal programs that will assist entrepreneurs in moving their business forward. There are no loan limits for CUSBFA consideration, and each participating credit union will use its own underwriting standards and policies for loan consideration and approval. Start-up and small business owners can complete the form online, which will assist the league and the Michigan Small Business and Technology Development Centers (MI-SBTDC) in determining the next steps. In February Michigan Gov. Jennifer M. Granholm, in her State of the State Address, announced the partnership among the league, MI-SBTDC and the Michigan Economic Development Corp. to help initiate more loans to small businesses. More than 30 credit unions from the state committed an initial $43 million to benefit more than 2,000 new businesses. MCUL President/CEO David Adams observed that banks have been forced to preserve capital to survive the economic crisis, freezing credit at a critical time when it's needed most to revive Michigan's economy. "As banks have had to cut back on credit in this tough economic climate, credit unions in our state actually increased small business lending in 2009 by nearly 20%," Adams said.

Small CUs hitting MBL ceiling CU tells Mass. paper

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MARLBORO, Mass. (5/4/10)--In Massachusetts, another credit union has saved the day for a small business turned down for a loan by a large commercial bank. But some smaller credit unions are near their member business lending (MBL) ceiling mandated by Congress. Joe Shaker wanted to buy the land he leased for his Mazda auto dealership. But after foot-dragging and "a large disconnect," his bank turned him down, he told a Massachusetts newspaper, Telegram.com (May 2). His lawyer suggested St. Mary's CU in Marlboro, which loaned him the funds to purchase 1.2 acres. The article notes banks have pulled away from business loans and that credit unions are trying to get the cap on MBLs lifted to 25% of assets from the current cap of 12.25%. It cites the Credit Union National Association's statistics that indicate lifting the MBL cap would result in $10 billion in additional loans and 100,000 jobs created. "When credit unions get near that cap, they have to stop lending or put a cap on it," said Daniel Egan, president of the Massachusetts Credit Union League as well as the New Hampshire and Rhode Island leagues. "Given this environment, where so many small businesses need credit, many small businesses are losing their current credit lines or having the notes called by the bank," Egan told the Telegram. The cap is an "arbitrary number," Egan said. "In the economic reality of the day, that cap is inhibiting credit unions from making business loans." He said that in Massachusetts, lifting the cap would mean $490 million more would be accessible for small business loans. The article also quotes John R. Caulfield, president/CEO of St. Mary's CU, which has $3.6 million in its loan portfolio and is not near the cap. Stephen Mackowitz, Digital FCU vice president of commercial lending, said his credit union isn't near its MBL cap, and he's seen "some, but not many" business owners who were turned away by banks. While Digital is a big institution, "a lot of small credit unions are bumping against their cap," he told the newspaper. "They are servicing their small business customers. It would be a shame to have to stop lending." For the full article, use the resource link.

Space Coast Eastern Financial Fla. complete merger

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MELBOURNE, Fla. (5/4/10)--Two Florida credit unions--Space Coast CU and Eastern Financial Florida CU (EFFCU)--this past weekend completed the largest system conversion in credit union history to ensure that EFFCU members had access to their accounts at Space Coast Monday morning as part of a merger of the two credit unions. EEFCU, which was hard hit by the real estate crisis, was acquired by Space Coast on June 30, 2009, and merged into the Space Coast. Space Coast finished installing its signage on the acquired branches this past weekend. The credit union's branches closed at 4 p.m. Friday and reopened Monday morning. Converting systems meant Space Coast's conversion team to quickly learn how to work together to accomplish the conversion in a short time. "Our industry has never undertaken a conversion of this size, so there was no model to follow," Tim Antonition, executive vice president, told Florida Today (April 30). The credit union had to verify tens of millions of records to ensure the data was converted correctly, he said. For example, each element of an account holder's address--street, city, state and ZIP code--had to be linked to the right fields from the old system to the new system. Eastern Financial's system allowed four addresses to be stored, which had to be reduced to two, Antonition said. Another challenge: fields on the different systems were different lengths on every account and every loan. "Nothing was exactly the same," he told the newspaper. The two credit unions, which had many similarities merged their online banking platforms, with the help of 120 employees, Space Coast CU told the South Florida Business Journal (April 30). Space Coast now has 61 branches and 140 ATMs in 17 counties. Its assets total $3.17 billion, nearly double the assets before the merger, and as of March 30, it had 380,911 members. EFFCU was established in 1937 with Eastern Airlines. Space Coast began in 1951 as Patrick Air Force Base CU serving employees of the space program.

IWash. PostI reports on CUs FIs Bank-on-DC effort

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WASHINGTON (5/4/10)--The District of Columbia's Bank on DC program, in which six credit unions have played key roles, grabbed the attention of The Washington Post Monday. In "D.C. program offers fee-free bank accounts to the 'underbanked,'" the Post described how banks and credit unions are helping users avoid an average of $800 a year in check-cashing fees." The program aims to open 10,000 new accounts and establish 10,000 direct deposit accounts for D.C. residents by the end of the year. Credit Union National Association President/CEO Dan Mica and Mike Beall, president/CEO of the Maryland and District of Columbia Credit Union Association, helped unveil the "Bank on DC" program at Credit Union House last week. Participating in the program are Agriculture FCU, District Government Employees FCU, Signal Financial FCU, Treasury FCU, DVA FCU, and HEW FCU. Credit unions were mentioned as a group several times in the article.

Gillibrand at CU to promote MBL bill

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CHEEKTOWAGA, N.Y. (5/4/10)--U.S. Sen. Kirsten Gillibrand (D-N.Y.) promoted increasing access to credit union loans by promoting the Small Business Lending Enhancement Act during an appearance with credit unions Sunday at Cheektowaga (N.Y.) Community FCU. The bipartisan legislation would spur small business growth and create jobs by increasing access to loans from credit unions, she said (BIGNEWS.BIZ May 2). The bill would raise credit unions' member business lending cap to 25% from 12.25%. "This commonsense legislation would free up lending at not-for-profit credit unions in every corner of America to small businesses," said Gillibrand in a press release. Also speaking at the event was Michael S. Vadala, president/CEO of The Summit CU, Rochester, N.Y. "Here in upstate New York, many of the large businesses that used to fuel our economy are gone, and it will be the success of the small business that determines our future," Vadala said. "Adding credit unions as a funding source is critically important to those businesses that are too small to be considered for loans from larger commercial banks." The press released noted the Credit Union National Association (CUNA) reported the legislation would create more than 7,000 jobs in New York without government expenditures and repeated CUNA's estimates that raising the limit would increase small business lending by $10 billion in the first year of enactment and generate more than 100,000 new jobs nationwide. For the full story, use the link.

CU System brief (05/03/2010)

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* BILOXI, Miss. (5/4/10)--Keesler FCU, Biloxi, Miss., contacted the Federal Deposit Insurance Corp. (FDIC) to report that counterfeit checks with the credit union's name are circulating. The counterfeit items display the routing number 265577585, which is assigned to Keesler. The items are printed on blue, green or tan paper. The word “Reference” appears directly below the word “Date” on the right side of the items. A “Memo” line appears in the lower left corner. Keesler’s authentic checks are blue and white with grey borders. The words “CASHIERS CHECK” and a box for the “DATE” are in the top center. A security feature statement, “NOTICE TO CASHIER: BE SURE WATERMARK IS ON REVERSE SIDE BEFORE CASHING,” is embedded within the top border. The words “Authorized Signature” appear below the signature line in the lower-right corner. Keesler FCU has $1.8 billion in assets ...

Carolina Family FCU merges into Self-Help CU

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KINSTON, N.C. (5/4/10)--The membership and managers of Kinston, N.C.-based Carolina Family FCU (CFFCU) agreed to merge with Durham-based Self-Help CU in North Carolina. The official merger date was Saturday. The merger makes CFFCU a division of Self-Help, and brings it into a statewide network of credit unions operating across North Carolina as divisions of Self-Help. Carolina Family joins Cape Fear CU, Scotland Community CU, Wilson Community CU, Carolina Mountains CU, and Choice Community CU as the newest division of Self-Help. “Our mission has been to provide our members with a financially sound organization with quality financial products and services,” said CFFCU branch manager/CEO Brinda Turnage. “We believe that by merging with Self-Help CU, we are reinforcing that mission.” Regionally, CFFCU connects with Self-Help’s full-service Wilson (N.C.) Community CU branch and a mortgage and small-business lending office Self-Help has in downtown Greenville. “The proximity between Kinston and two of our other credit union locations will offer more access and convenience to the members of Carolina Family and the people of the down-east region of North Carolina,” said Self-Help Executive Vice President Romy Parzick.

Illinois league awards announced

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NAPERVILLE, Ill. (5/4/10)--The Illinois Credit Union League’s (ICUL) 80th Annual Convention last week in Chicago honored numerous individuals and credit unions. Desjardins first-place winners were:
* Prairie Trail CU, Joliet, in the $35 million-$75 million in assets category; * Financial Plus, Ottawa, $75 million-$250 million; and * Scott CU, Collinsville, more than $250 million.
Dora Maxwell first-place winner were:
* Streator Onized CU, Streator, $100 million-$200 million: * GCS FCU, Granite City, $200 million-$500 million: and * Great Lakes CU, North Chicago, and Consumers Cooperative CU, Waukegan, more than $500 million.
Two individuals were inducted this year into the Illinois Credit Union Hall of Fame, one with a leadership award, and the other for lifetime achievement. They were Don Reedy, CEO of Olin Community CU; Bethalto, and Vic McCauley, board member of MembersAlliance CU, Rockford. The Illinois Credit Union Foundation recognized two individuals posthumously with memorial scholarships. They included Tony Pellini, collection manager, U.S. ECU, Chicago, and Richard L. Taylor, long-time board member and former chairman of H-F CU, Country Club Hills. Also, a new Perpetual Tribute in the honor of Nina Auskalinis was announced. The award was made on behalf of South Division CU, Evergreen Park. GCS FCU, Granite City, won the Louise Herring Award. Michael Murphy, executive vice president and chief operating officer, Motorola ECU, Schaumburg, received the Spirit of Service, or Employee of the Year Award.

CUNAverse blog launched by CUNA

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MADISON, Wis., and WASHINGTON (5/4/10)--The Credit Union National Association (CUNA) has launched its first organization-wide social media effort with "CUNA*verse," a blog written by CUNA staff in Madison, Wis., and Washington, D.C. covering a range of association and credit union system topics. "We wanted a new opportunity for our members to benefit from the expertise of CUNA staff in an interactive, social media setting," said Mark Wolff, CUNA senior vice president, communications. "CUNA staff have expertise to share, and this is a new avenue for that to shine through," added Christopher Morris, CUNA Councils manager of communications and Web resources, and a project manager for the new social media site. "We hope credit unions will visit the site and take part in the conversation." Among the varied topics CUNA staff will write about are: issues affecting credit unions, articles from CUNA archives in Madison, insights from the Washington office on governmental affairs, and more. The first few posts discuss credit union social media policies, several credit union compliance issues, observations on the dynamics of the 2010 elections, an overlooked contribution by President Herbert Hoover to credit union history, and a chance for readers to win a copy of a new book by Jim Collins, the keynote speaker at the upcoming The 1 Credit Union Conference. The blog also launched a corresponding Twitter feed that will link to blog updates as well as related information from CUNA. To access the blog and the Twitter feed, use the links.

G-20 invites WOCCU input on inclusion methods

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MADISON, Wis. (5/4/10)--The World Council of Credit Unions (WOCCU) will provide input to a Group of 20 (G-20) subgroup to ensure credit unions are represented in G-20’s inclusion policies. Leaders from the G-20 nations would like to see the global poor receive greater access to financial services through safe and sound modes of service delivery administered worldwide, WOCCU said. WOCCU was invited to comment on the G-20’s proposal. At its 2009 Pittsburgh Summit, the G-20 appointed the Access Through Innovation sub-group of its Financial Inclusion Expert Group to examine and recommend new methods to provide the world’s poor with financial services. The subgroup’s co-chairs asked for WOCCU’s input on the draft Principles for Innovative Financial Inclusion, a plan that the organization’s members do not believe fully enables credit unions to effectively fulfill this mission, said Dave Grace, WOCCU vice president of association services. “After consulting with our members, we believe the draft principles don't go far enough to ensure that credit unions worldwide can access critical payment systems, card networks, central bank lending facilities and deposit insurance systems to offer innovative and inclusive products,” Grace said. “WOCCU’s work to expand access to financial services by providing reloadable debit cards, ATMs and mobile banking services to credit unions would be significantly streamlined if credit unions could access these core central banking services,” he added. In an April 28 letter to subgroup co-chairs Paul Flanagan, general manager of the Australian Treasury’s international finance division, and Luis Mansur, deputy head of Banco Central do Brasil's external debt and international relations department, Grace stressed several changes to the proposed nine principles. The principles focus on technology, education and responsible oversight as ways to increase consumer access to financial services. WOCCU’s recommendations better articulate the opportunity for credit unions to participate in providing the services, WOCCU said. In the letter, WOCCU recommends that principle two, which focuses on diversity of products, also contain this clarification to promote diversity of institutional types and credit union involvement (recommendation in Italics): “Implement policy approaches that provide incentives for sustainable financial access through various types of financial institutions, and usage of a broad range of services (savings, credit, payments and transfers, insurance).” WOCCU also advocates for the inclusion of a 10th principle, outlined as follows: Equality: Allow all prudentially supervised institutions to directly access payment systems, lender-of-last-resort facilities, deposit insurance and card networks, which will enable both banking and non-banking financial institutions to offer a broad set of services to the financially excluded. “The addition of this principle will ensure that non-banking financial institutions, which often are the primary providers of services to the financially excluded, can offer safe and sound services comparable to those offered by the banking sector,” the letter explained. “Today, one-third of credit unions globally have direct access to payment systems and less than half have access to deposit insurance systems. Without such access, innovations will be limited, costs will be higher and depositor security will be sub-optimal.” A WOCCU delegation put forward a similar agenda in meetings last month with the Financial Stability Board in Basel, Switzerland. The Access Through Innovation sub-group will present the final Principles for Innovative Financial Inclusion for consideration by the G-20 ministers of finance when they meet June 25-27 in Toronto.

MoDOT Resolution wont change highway CUs plight

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JEFFERSON CITY, Mo. (5/3/10)--The Missouri Department of Transportation (MoDOT) does not believe that a vote by the Missouri House changes the plight of 10 credit unions told to vacate the MoDOT offices within two years because of budgetary considerations. Missouri’s highway credit unions received a vote of support from state representatives last week. House members passed HCR 70 by a vote of 157-0 on April 26. The resolution states that 10 highway credit unions should remain in MoDOT facilities despite MoDOT’s intent to sever ties with the credit unions (The Missouri difference April 30). The bill supporting credit unions was sponsored by State Rep. Mike Cunningham (R-145), and 35 bill co-sponsors. On the Senate side, Sen. Wes Shoemyer (D-18) introduced an amendment to a separate piece of legislation-- H.B. 2111--that would have allowed credit unions to remain in MoDOT facilities. However, the amendment failed by a voice vote. HCR 70 now goes to the Missouri Senate. “A resolution does not have the force of law,” Roberta Broeker, MoDOT chief financial officer, told News Now. “It’s a statement of desire or passion. It’s just the legislature telling us that they would like us to consider their thoughts and intentions. “And we did,” she continued. “We did take into consideration the input of credit unions separating from MoDOT. Originally, they were to leave on Sept. 30, and we extended that date to Dec. 31, 2012. So we took action to allow the credit unions an additional two years and three months to find a new physical space.” The credit unions were originally told Jan. 21 that they would be required to vacate their locations by Sept. 30. They would no longer be able to process payroll and benefits through MoDOT after that date. Credit union employees were on MoDOT’s salary and benefits plan but credit unions fully reimbursed MoDOT for those costs, the Missouri Credit Union Association said (News Now April 20).

Top 10 INews NowI stories for April (05/03/2010)

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MADISON, Wis. (5/4/10)--Leading April’s list of top 10 News Now stories are articles about regulators closing seven banks and a credit union in one day and the U.S. government’s unveiling of a new $100 bill. The top 10 stories are: 10. Fed keeps same rate-policy course, good news for CUs WASHINGTON (4/29/10)--Wednesday’s decision by the Federal Reserve’s policymakers, the Federal Open Market Committee, to continue its course with low interest rates for an extended period is good news for credit unions, according to Steve Rick, Credit Union National Association senior economist. 9. FHA changes net worth, other rules for lenders WASHINGTON (4/7/10)--The Federal Housing Administration earlier this week announced that lenders that take part in FHA lending programs will need significantly higher net worth. 8. Another customer survey ranks CUs above banks ANDOVER, Mass. (4/14/10)--Members/customers at credit unions and community banks continue to show much more satisfaction and better advocacy rates than customers of larger regional or national banks, according to a recent study. 7. NCUA proposes payday loan alternative for CUs ALEXANDRIA, Va. (4/30/10)--The number of federal credit unions that provide payday loan alternatives to their membership may increase if the National Credit Union Administration's proposed changes to its general lending rules are adopted. 6. CUs find ways to cut health care plan costs MADISON, Wis. (4/1/10)--Despite tight budgets from the economy and the escalating costs of providing health care coverage, credit unions continue offering this prized employee benefit. 5. CUNA: New health care extends tax incentives to small CUs WASHINGTON (4/26/10)--Thanks to recent changes to national healthcare policy, many small credit unions should be eligible for the “Employee Health Insurance Expenses of Small Employers” tax credit for small, tax-exempt employers provided by the recently passed legislation. 4. New credit report ad requirements in effect WASHINGTON (4/7/10)--Final rules that prevent deceptive marketing of so-called “free credit reports” by requiring credit report advertisements to contain enhanced disclosures became effective on April 2. 3. SEC v. Goldman Sachs could brush against CUs WASHINGTON (4/20/10)--The U.S. Securities and Exchange Commission late last week charged Goldman, Sachs & Co. and its vice president, Fabrice Tourre, with “defrauding investors by mis-stating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter.” 2. New $100 bill, with security features, unveiled WASHINGTON (4/22/10)--Federal authorities on Wednesday joined to unveil the new hundred dollar bill, a bill that will combine the usual portrait of Ben Franklin, and some previously added security enhancements, with a pair of brand new, advanced counterfeit-deterrent security features. 1. Friday sees one CU, seven banks closed ALEXANDRIA, Va. (4/26/10)--The National Credit Union Administration Friday assumed control of the operations of St. Paul Croatian FCU, headquartered in Eastlake, Ohio. Also on Friday, federal regulators closed seven banks, all in Illinois.

CO-OP board elections officers announced

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RANCHO CUCAMONGA, Calif. (5/4/10)--CO-OP Financial Services elected three new directors and officers to its board during its annual meeting April 19 in Scottsdale, Ariz. Doug Allman, president/CEO of NASA FCU, Bowie, Md., was elected to a one-year term as chairman. Other officers elected include:
* Vice chair Terry Laudick, president/CEO of New Mexico Educators FCU, Albuquerque, N.M.; * Treasurer Doug Ferraro, president/CEO of Bellco CU, Denver; and * Secretary Patsy Van Ouwerkerk, president/CEO of Travis CU, Vacaville, Calif.
New directors elected were:
* Ferraro; * Allan McMorris, president/CEO of Oakland County CU, Waterford, Mich.; and * Jeff Napper, president/CEO of LBS Financial CU, Long Beach, Calif.
Ferraro is a new board member.
CO-OP Financial Services is a credit union service organization that provides Shared Branching and 28,000 surcharge-free ATMs to credit unions.