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Higher credit scores more apt to see ID theft

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COSTA MESA, Calif. (6/18/09)--Consumers having a high credit score are more likely to become victims of identity theft, because fraudsters using their identities find it easier to get credit, according to a new study from Experian. There is a "significant connection" between high credit scores and becoming a victim of identity thieves, with the occurrence rate of identity fraud rising dramatically as credit scores increase, said the Costa Mesa, Calif.-based credit bureau's fraud and identity solutions group, which conducted the study. The findings "should herald a warning for consumers and businesses alike," said Hiq Lee, senior vice president and general manager of Experian's fraud and identity solutions group. "Identity fraud can damage an individual's finances as well as a company's bottom line and reputation with consumers" (LoneStar Leaguer June 17 and Credit Card News June 9). Experian has no data that suggest thieves specifically target high scorers. Instead, the credit bureau explained that consumers with high credit scores tend to get approved for accounts on a more regular basis. Then, when fraudsters use their identification, they too are more apt to be approved for credit because of their victims' scores. The higher score means easier credit for the fraudsters; lower credit scores mean the fraudster's application is more likely to be rejected. The top 20% of borrowers--who had ratings of 815 and above on the VantageScore 501-990 scale--were victims of 48% of all self-reported identity theft cases. Consumers in the average-to-very good credit ratings--762 to 814--were victims in an additional 13% of fraud cases. Those with lower scores accounted for less than half the fraud cases, while those in the lowest 20% made up 4% of fraud cases. The credit bureau examined about 800,000 fraud cases reported in 2007 and 2008. It parsed the data by victims' VantageScores. VantageScore is an Experian rating system. The more popular FICO scores were not surveyed. Data was provided by bank card issuers, retail card issuers, retail banks, mobile phone providers and utility companies.

Montana CUs VITA sites deemed a success

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HELENA, Mont. (6/18/09)--Nearly 2,215 Montana taxpayers took their W-2s and receipts to credit union VITA sites in Montana during the past tax season to take advantage of the free tax preparation and e-filing services offered there. For the fourth consecutive year, Montana Credit Unions for Community Development (MCUCD)--the charitable giving arm of the Montana Credit Union Network--has partnered with credit unions, the Internal Revenue Service (IRS) and local volunteer tax preparers to bring IRS Volunteer Income Tax Assistance (VITA) sites to Montana communities. Thirteen credit unions sponsored 16 VITA sites in the state, said MCUCD. This past season, they filed 1,886 returns worth over $1.3 million in federal refunds back to the communities. Also, more than $300,000 in state refunds was received at credit union sites. This is an increase from 2008, when many nontraditional and elderly tax payers filed to receive the Economic Stimulus payment. MCUCD began supporting credit unions' tax sites in 2006, with two VITA sites completing 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. The IRS certified volunteers are trained to complete uncomplicated returns for people who earn $42,000 or less. For clients served in Montana's credit union sites, the average adjusted gross income was $16,900. Montana's 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.

Kansas association announces SFS board officers

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WICHITA, Kan. (6/18/09)--The Kansas Credit Union Association board of directors recently appointed several members to the board of directors of its service corporation, Shared Financial Solutions (SFS). Members appointed to serve a one-year term on the SFS board were:
* Jim Holt, CEO, Mid American CU, Wichita; * Angie Miller, manager, Emporia (Kan.) State FCU; * Vickie Hurt, president, CU 1 of Kansas, Topeka; and * Robert Corwin, president, Meritrust CU, Wichita.
Three members of the SFS board were elected to serve on the executive committee:
* Chairman Larry Damm, manager, Cessna Employees CU, Wichita; * Vice Chairman Garth Strand, president, Hutchinson (Kan.) CU; and * Secretary/Treasurer Erich Schaefer, president, Golden Plains CU, Garden City.

Successionleadership development have merger roles

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MADISON, Wis. (6/18/09)--The role of succession planning and leadership development in successful credit union mergers is discussed in the first of two new CUNA Councils white papers. “Converging Executive Teams: The Role of Leadership Development and Succession Planning in Successful Credit Union Mergers” by the CUNA Councils offers a glimpse into credit union mergers, and approaches for bringing together a leadership team, depending on the scope and circumstances of the merger. Current merger trends and the reasoning behind proposed consolidations, along with the potential impact of a lack of succession planning, are addressed. The paper concludes with three credit union merger case studies detailing how they selected a chief executive, brought together an executive team, and created a leadership development program to ensure the merger strengthened the continuing organization and member ties. A second new white paper examines strategies for customizing collections to fit a credit union’s membership and market. “Collections: Not a Cookie-Cutter Operation” by the CUNA Lending Council examines program structure, industry trends, and working with collections agencies. It also looks at collections philosophies related to helping members versus managing numbers. Dana Rawlings, lending council executive committee member and senior vice president and chief operations office for Smart Financial CU in Houston, said that collections objectives should echo credit unions’ “People Helping People” philosophy. “So many credit unions focus on how many calls you make, and on keeping [delinquency and charge off rates] down,” Rawlings said in the paper. “But if you help members, the numbers will take care of themselves. And those members will send others to your credit union.” For more information, use the links.

MCUA teams up with state on fin ed efforts

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ST. LOUIS (6/18/09)--The Missouri Credit Union Association (MCUA) teamed up with the Missouri Council on Economic Education and Operation Outreach to help train the state’s educators to teach personal finance to students. During difficult economic times, it’s more important than ever for students to learn the basics of finance--from saving and budgeting to money management, MCUA said. Missouri state law requires that all high school graduates take part in a personal finance course prior to graduating. Local organizations are stepping in to help teachers reach students on financial issues. The Personal Finance Workshop for Teachers took place June 11 in Cape Girardeau, Joplin, Kirksville and Poplar Bluff. About 40 teachers participated. The workshop is designed to help teachers find curricula aligned with Missouri’s requirements, provide guidance on how to incorporate all content in one semester and show how to recognize when students master personal finance concepts. “MCUA has been involved for many years in helping Missouri’s educators obtain the tools that they need to teach young people about financial education,” said Julie Schulte, MCUA education and training director. Schulte and MCUA trainer Andrea Janek addressed teachers about money management, budgeting, spending and saving, and investing.

CO-OP gives 30000 to e-payments coalition

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RANCHO CUCAMONGA, Calif. (6/18/09)--CO-OP Financial Services is providing $30,000 on behalf of its member credit unions to the Electronic Payments Coalition (EPC) to support its efforts to inform legislators surrounding interchange while opposing changes to the current interchange fee structure. EPC is a Washington, D.C.-based organization funded by more than 60 credit union, bank and payment systems organizations. The organization is leading the opposition against legislation proposed on interchange fees, such as a bill proposed by Rep. John Conyers (D-Mich.) that would allow merchants to negotiate credit card transaction fees with financial institutions. Interchange revenue is derived from the payment by a retailer’s bank to a member’s credit union when the retailer chooses to accept that member’s credit or debit card for payment. It provides revenue for credit unions to partially reimburse merchants as card issuers for the activities they perform and the risk they take on each transaction, CO-OP said. If the interchange fee is lowered, smaller financial institutions such as credit unions would have to either raise fees or stop offering credit and debit cards, said CO-OP CEO Stan Hollen. “Ultimately, of course, the consumer will be harmed in terms of restricted payment choices,” he added. The Credit Union National Association also supports EPC. CO-OP Financial Services is a credit union service organization that offers ATM network access, debit processing, ATM processing, shared branching, check imaging and mobile payments.

Colorado regulators issue cease orders vs. two CUs

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DENVER (6/18/09)--The Colorado State Commissioner of Financial Services issued cease-and-desist orders against two state-chartered credit unions--Longs Peak CU, Loveland, and Saguache County CU, Crestone. Net losses for the year ending Dec. 31 have lowered Longs Peak CU’s net worth by about $1.2 million. This is the fourth year in the past five that the credit union has suffered a net loss, Commissioner Chris R. Myklebust said in the order. The credit union cannot operate after July 31 without developing an achievable operating budget. Saguache County CU’s net worth fell to 6.40% as of March 31. National Credit Union Administration guidelines require credit unions to keep a threshold of at least 7%. The credit union’s operating expenses-to-average assets ratio is 4.65% as of March 31, without accounting for the effects of corporate credit union stabilization-related expenses. Saguache County CU's other-real-estate-owned (OREO) report indicated that it has 14 real estate loans with a value of $1.3 million and a revised appraisal value of $1.1 million. It also has seven problem loans that could result in $40,000 in write offs. The credit union also has $4.6 million, or 23% of its loan portfolio, in subprime loans. Saguache County CU cannot operate after June 30 without developing a capital restoration plan. It also cannot make additional loans to members with credit scores of 650 or less and must sell OREO property.

CU System briefs (06/17/2009)

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* AKRON, Ohio (6/18/09)--The same woman is suspected of being the prolific robber who attempted three heists in less than an hour Monday in Akron, Ohio. What's more, police suspect she also robbed the National City Bank on Friday afternoon. Monday's first robbery occurred just after 3 p.m. at First Merit Bank. That was followed by an attempted robbery at Charter One bank. The final robbery was at BFG FCU, Akron. The woman entered each institution and presented a note demanding money. However, during the two bank holdups, she fled before receiving money. She received an undisclosed amount during the credit union robbery (The Plain Dealer June 17) … * HARRISBURG, Pa. (6/18/09)--Jerry Hittinger, president/CEO of the $92 million asset PPL GOLD CU, Allentown, Pa., will retire on June 30, according to the Pennsylvania Credit Union Association (Life is a Highway June 17). He has held the position more than 20 years. In 1989, he was hired as general manager of PP&L General Office CU. A year later, it merged with PP&L Lehigh Operating Division CU and took the name PPL GOLD CU. Hittinger was also a leader with the Lehigh Valley Chapter for years. Cheryl Bartholomew will succeed Hittinger as president/CEO … * SALT LAKE CITY (6/18/09)--Sterling Nielson, president/CEO of Mountain America CU, West Jordan, Utah, has been named to the Board of Governors of the Salt Lake Area Chamber of Commerce. His three-year term begins in July. Nielson has been president/CEO at the $2.8 billion asset credit union since last fall. He is vice chairman of the Credit Union National Association accounting subcommittee, a director and past chairman of the West Jordan Chamber of Commerce, a director with the Utah League of Credit Unions, chairman of Member Business Lending LLC, and a member of the National Credit Union Roundtable …

CU Center sponsors high school budgeting seminar

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MADISON, Wis. (6/18/09)--Local high school students got a taste of what life will soon be like in the “real world” Wednesday as they participated in a hands-on budgeting simulation at the Credit Union Center in Madison.
During Wednesday's Mad City Money simulation in Madison, Wis., local high school student Sandrea, on right, receives help balancing her checkbook from Heartland CU employee Josie Matuszak, who is posing as an employee of the Mad City CU. (Photo provided by CUNA)
During the Credit Union National Association’s (CUNA) “Mad City Money” simulation seminar, each student received a job with corresponding salary, a family, and debt. Students then visited nine merchants’ shops to shop for and select necessities such as housing, child care, food, transportation, clothing and more. Their options, which ranged from basic to luxury, allowed students to determine between wants and needs while building a budget, writing checks, and balancing a checkbook. The "merchants"--who were volunteers from Heartland CU in Madison, the UW Cooperative Extension, the Wisconsin Credit Union League, and CUNA--were trained to sell their wares to the students, not to assist the students in their decision making process. While making their way from shop to shop, some students received a visit from the Fickle Finger of Fate, who presented them with an unexpected expense or windfall. At the end of the simulation, the students’ goal was to have less than $100 in their checking accounts. Many of the volunteer merchants were surprised that the students chose inexpensive or modestly priced items over luxury items. “I think these kids may have more awareness of the current recession than I had originally thought,” noted one volunteer. For more information about the Mad City Money simulation kit, use the resource link.