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Hannaford breach judge sets meeting with lawyers

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PORTLAND, Maine (6/19/08)--A federal judge in Portland, Maine, has set a meeting July 10 with lawyers in the class-action data-breach lawsuits filed against grocery store chain Hannaford Bros. U.S. District Judge D. Brock Hornby will meet with attorneys before deciding which of two groups will be lead plaintiffs in the case (Business Digest June 18). About 23 lawsuits were filed in four states over the breach, which affected customers of more than 300 stores in New England and Florida. Those cases are being consolidated under the federal court's multi-district litigation program in the Maine court (News Now June 11). The lawsuits stem from a breach from Dec. 7, 2007, to March 10, which allowed hackers to steal the credit and debit card numbers of 4.2 million Hannaford customers while they swiped the cards for authorization of purchases at grocery stores. It was the first major breach of a system that was compliant with industry standards. Credit union members were among those whose cards were compromised. In Maine, about 68 credit unions reissued more than 100,000 credit and debit cards to try to limit the amount of fraud (News Now March 24).

CIF investors will be featured in ad campaign

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WASHINGTON (6/19/08)--Starting next month, the National Credit Union Foundation (NCUF) will premiere a series of advertisements intended to build awareness of how the Community Investment Fund (CIF) supports programs and grants that impact people’s lives. The first ad will feature Harriet May, CEO, GECU, El Paso, Texas. May received the 2008 Herb Wegner Memorial Award. Her ad will debut in the July issue of Credit Union Magazine and the July 1 issue of America’s Credit Union Conference Daily. Each ad will feature photos and quotes to show the connection between credit union leaders supporting CIF and their communities.

Helber elected chairman of Florida league

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ORLANDO, Fla. (6/19/08)--Rich Helber, executive vice president and chief financial officer, GTE FCU, Tampa, has been elected the new chairman of the Florida Credit Union League’s (FCUL) board of directors. He was elected during FCUL’s 74th Annual Convention and Exposition. He succeeds John Hirabayashi, president/CEO, Community First CU of Florida, Jacksonville. Helber also is chairman of the Florida Credit Union Foundation and serves on the National Credit Union Foundation Finance and Audit Committees. He formerly held positions as president/CEO of Central Corporate CU and vice president of financial operations and services, U.S. Central CU, Lenexa, Kan. Also elected were the FCUL board’s executive officers:
* Chairman-Elect: Mary O. Wood, president/CEO, Florida West Coast CU, Brandon; * Treasurer: Brent E. Lister, president/CEO, First Florida CU, Jacksonville; * Secretary: Tom Randle, CEO, Sarasota (Fla.) Coastal CU; and * Executive Officer-at-Large: Anice Prosser, senior vice president, human resources, Envision CU, Tallahassee.

CUNA Mutual offers 60-day grace period for flood victims

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MADISON, Wis. (6/19/08)--CUNA Mutual Group has placed 60-day moratoriums on company-initiated cancellations and non-renewals of any in-force insurance policies for policyholders in four states hardest hit by June floods--Illinois, Indiana, Iowa and Wisconsin. The company announced it also is waiving any penalties for late-premium payments for policyholders in these states for the same period. The actions were effective as of Wednesday. Other states that experience widespread and damaging floods may be added in the future. “Flood waters have been at historic levels this month, and thousands of individuals and businesses have been severely impacted,” said CUNA Mutual President/CEO Jeff Post. “Taking steps to help policyholders affected by the flooding is good business.” CUNA Mutual’s moratoriums cover policyholders throughout the four states and are not restricted to counties declared disaster areas. The moratoriums are only for nonpayment of premium for in-force policies. New policies will be required to pay premium at inception, or as otherwise required. The moratoriums apply only to policies underwritten by CUNA Mutual.

California Nevada CUs grew in 07

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RANCHO CUCAMONGA, Calif. (6/19/08)--Despite challenges from the economy, credit unions in California and Nevada experienced areas of growth in 2007, according to a new report. The California and Nevada Credit Union Leagues recently released the 2008 WestScan economic activity report for credit unions in Nevada and California. Among the economic trends projected to affect credit unions in the states:
* Credit union loan growth showed impressive resiliency with 6.54% growth in 2007, slightly off 2006’s growth of 7.83%. Despite the lagging real estate market, first mortgage loans grew $5.3 billion in the fourth quarter, with 2007 loans of more than $20 billion, a 15.21% jump; * Return on average assets (ROA) was down 0.18 percentage points to 0.65% at year-end 2007 from 2006’s ROA of 0.83%. Credit unions nationwide also watched their net interest margin slip slightly, to 3.12% in 2007 from 3.17% in 2006; and * A modest 1.67 percentage point increase over 2006’s 84.03% in deposits indicates that while loan dollars continue to grow, credit unions currently should have sufficient deposit dollars to meet liquidity needs.
In California, gross income to average assets grew in 2007 to 6.98%, from 6.49% in 2006, according to the report. Assets for California credit unions grew by 3.93% in 2007--down a 0.57 percentage point from the previous year reading of 4.50%. Membership growth accelerated to 1.64% in 2007 from 1.04% in 2006, its highest increase since 2004. Mortgage lending grew at 13.03% and other real estate lending at 8.87%. In Nevada, first mortgage lending grew at 13.34%, credit cards grew at 27.39%, and unsecured lending grew at 24.32%. Membership growth accelerated to 0.30% in 2007 from 0.14% in 2006. Although down 3.55 percentage points from 2006’s 4.14% gain, assets still grew 0.59. WestScan is an annual financial report--with quarterly updates--that examines economic, financial, demographic, and other trends affecting credit unions in the two states.

Pa. Supreme Court quashes banks tax claims

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HARRISBURG, Pa. (6/19/08)--In a unanimous decision, the Pennsylvania Supreme Court ruled Monday that the Pennsylvania Bankers’ Association and other banker plaintiffs are not entitled to appeal a lower court’s dismissal of several claims against two credit unions and the Pennsylvania Department of Banking. The two credit unions are Trumark Financial CU, based in Trevose, and Freedom CU, Warminster. The Pennsylvania Credit Union Association (PCUA) had intervened on behalf of the credit unions. “The Supreme Court’s ruling this week is a positive development for the credit union defendants because it confines the case to the remaining claims in the Commonwealth Court," said PCUA General Counsel Rick Wargo. Credit Union National Association (CUNA) General Counsel Eric Richard agreed, adding, “We thought all along this banker appeal was questionable, and the court has agreed.” The Pennsylvania Supreme Court agreed with the credit union defendants and ruled that the earlier order from the lower court was not final and thus, not appropriate for the banker appeal. In essence, because several of the claims have not been resolved, the lower court’s opinion did not decide the case, “but merely narrowed the scope of the banks broader” claims, the court said. In January 2005, the banker groups brought suit in the Pennsylvania Commonwealth Court to overturn the state banking department’s decision to permit the two credit unions to convert to community charters. The banks also challenged their dismissal by the banking department from the regulatory proceedings. In the Commonwealth Court, the bankers raised other claims, including the claim that the credit union tax exemption violated Pennsylvania and U.S. constitutions. The lower court dismissed several of the constitutional tax issue claims, and it was the dismissal of those claims that the bankers sought to appeal to the Pennsylvania Supreme Court. However, one tax challenge remains pending in the Commonwealth Court. The claims regarding the field of membership changes have been argued in the Supreme Court, and the credit unions are awaiting an opinion from the Court on those claims. It is unclear when the remaining issues will be decided. In its decision, the Supreme Court concluded, “at this juncture we still have no idea if the Commonwealth Court will ultimately enter a judgment for or against the banks."

CEO Give CUs credit as payday lending solution

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DALLAS (6/19/08)--It’s time to give credit unions the credit they deserve as payday loan solutions, wrote Rita L. Haynes, CEO, Faith Community United CU, in an opinion piece published Monday in The Dallas Morning News. Last week, legislators approved legislation to limit the predatory practices of payday lenders in Ohio. Payday lenders argue that the poor won’t have anywhere else to obtain short-term loans, Haynes said. However, credit unions are a healthy alternative to payday lending, she wrote. Those with community development financial institution status, like Faith Community, can provide the low-wealth individuals with short-term loans. Credit unions are prudent, but do take measured risks to help those in need, Haynes added. “We teach someone how to plan and save and become a good credit risk,” she wrote. “We provide financial education and personalized advice.” Haynes’ credit union recently created a “Grace Loan” program, which provides short-term loans that banks normally do not provide. “We require that the borrowers save a portion of what they would have given to the payday lender in fees, thus teaching them good financial habits and helping build a credit history for their goals,” she wrote.

Largest CUs power outage affects thousands

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VIENNA, Va. (6/19/08)--A power outage at the headquarters of Navy FCU in Vienna, Va., temporarily cut access to the credit union’s website and phone system Tuesday. The website and phone systems were restored Tuesday evening. No financial data was lost in the outage, Jennifer Sadler, Navy Federal public relations manager, told News Now. On Monday night, a storm in Virginia caused Navy Federal to lose power. Generators kicked in, but the credit union’s data center was shut down. The credit union received e-mails and inquiries in its branches from members who couldn’t access the website or make online transactions. Members could still conduct business by visiting their local Navy Federal branch, Sadler said. Navy Federal has $33 billion in assets and three million members.

N. Carolina league announces award recipients

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GREENSBORO, N.C. (6/19/08)--The North Carolina Credit Union League recognized credit unions and credit union professionals with several awards during the league’s 73rd annual meeting, held June 8-11 in Pinehurst, N.C. Two individuals received the Mark of Excellence Award:
* Patty Idol, president/CEO, Mountain CU, Waynesville; and * Clyde Padgett, volunteer, Truliant FCU, Winston-Salem.
The Mark of Excellence Award, one of the highest honors that can be presented to credit union people in North Carolina, recognizes sustained leadership. Eligibility is limited to Ronald J. Hutchins Credit Union Person of the Year Award recipients with 25-or-more years of credit union experience. Two individuals received the Ronald J. Hutchins Credit Union Person of the Year Award:
* Career Person of the Year: Maurice Smith, president/CEO, Local Government FCU, Raleigh; and * Volunteer Person of the Year: John Herrera, chairman, Latino Community CU, Durham.
The Ronald J. Hutchins Credit Union Person of the Year Award is one of the highest honors members of the credit union profession can receive. The award is given each year to an individual in recognition of his/her outstanding accomplishments, time and effort given in support and promotion of the credit union ideal. Receiving the Louise Herring Philosophy in Action Award was Local Government FCU, Smith, president/CEO (over $250 million asset category). Receiving first place in the Desjardins Youth Financial Education Award were:
* State Employees' CU, Raleigh--Jim Blaine, president/CEO (over $250 million asset category); and * Winston-Salem City Employees' CU, Winston-Salem--Tony Ebron, president/CEO ($35 to $75 million asset category).
First place Maxwell Social Responsibility Awards went to:
* State Employees' CU, Raleigh--(over $500 million asset category); * Fort Bragg FCU, Fayetteville--David Elliott, president/CEO ($200 million to $500 million assets); * Members CU, Winston-Salem--Jack Braswell, president/CEO ($100 million to $200 million assets); * Telco Community CU, Asheville--Rita Gentry, president/CEO ($50 million to $100 million assets); * Greensboro Municipal CU, Greensboro--Judy Hurt, interim president/CEO ($20 million to $50 million assets); and * Choice Community CU, Greensboro--Martha Miller, president/CEO ($20 million to $50 million assets).