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Fitch affirms ratings of corporate CUs

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MADISON, Wis. (6/23/10)--Fitch Ratings has affirmed the investment-grade, long-term ratings for all retail corporate credit unions at A+, and at AA at U.S. Central FCU. Fitch also affirmed strong short-term ratings of F1 at all the rated corporates. In its recent ratings report, Fitch explained that corporates have been under significant stress during the recent financial market turmoil, and that these new ratings were predicated upon the support the corporates currently receive, and are expected to continue receiving, from the National Credit Union Administration (NCUA). Uninsured deposits in corporates with maturities of up to two years are currently guaranteed under the Temporary Corporate Credit Union Share Guarantee Program (TCCUSGP) through Sept. 30, 2012. This program can be extended, quarterly, until as late as December 2014 under its authorizing statute. Individual ratings of the eight corporate credit unions are at “E,” which reflects that the credit unions have serious credit and/or capital challenges, Fitch said. The corporates are:
* Central Corporate CU (CenCorp), Southfield, Mich.; * Constitution Corporate FCU, Wallingford, Conn.; * Eastern Corporate (EasCorp) FCU, Auburn, Mass.; * First Corporate (FirstCorp) CU, Phoenix; * Mid-Atlantic Corporate FCU, Middletown, Pa.; * Members United Corporate FCU, Eagan, Minn.; * Southeast Corporate FCU, Tallahassee, Fla.; and * Southwest Corporate FCU, Plano, Texas.
Except for Eastern Corporate FCU (EasCorp) and Mid-Atlantic Corporate FCU, the major corporate credit unions operate with total capital ratios below mandatory regulatory requirements. Constitution Corporate FCU is operating under special regulatory assistance related to its depleted capital position. In the report, Fitch said it believes that the corporate credit unions will continue to benefit from government support throughout the planned restructuring of the corporate credit union network and the implementation of new regulations. Under new proposed capital rules, the NCUA plans to strengthen capital requirements for corporate credit unions. For more information, use the link.

NCUF and Federation help NJ CUs serve disabled

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WASHINGTON (6/23/10)--New Jersey credit unions are exploring how best to serve the estimated 1.8 million people with disabilities that are unbanked by participating in the Building Economic Strength Together (BEST) program, an internship program for young people with disabilities. The partnership between host credit unions and their interns is possible through collaborative efforts of the National Federation of Community Development Credit Unions, the Kessler Foundation, the National Credit Union Foundation’s (NCUF) REAL Solutions Program, Allies Inc., a New Jersey based training group for people with disabilities, the New Jersey Credit Union League, and the National Disability Institute (NDI). Pamela Owens, the federation’s director of education and training who is coordinating the program for the federation, said that this is a tremendous opportunity for the interns and the credit unions who agree to host them. “The BEST Internship Program serves as a way to reach out to this large and predominantly underserved population in a meaningful way,” Owens said. “For credit unions, this is a major opportunity to grow their membership while making a positive impact on the interns’ lives.” The BEST program came to the attention of credit unions when NDI, the federation and Allies Inc. obtained a grant from the Kessler Foundation to conduct the internship program. NCUF provided a $7,500 grant through its signature program REAL Solutions to assist the New Jersey Credit Union League in recruiting credit unions to host interns and conduct workshops exploring strategies for credit unions to better serve people with disabilities. “The BEST program is a fantastic opportunity for the participating credit unions to explore and develop strategies to better serve people with disabilities,” said Lois Kitsch, REAL Solutions program director. “The promising outcome is to be able to replicate the BEST program and the best practices that result from it so that credit unions throughout the country can tap into this emerging market.” REAL Solutions Field Coach Mark Lynch is facilitating the three workshops in which each group of interns along with representatives from participating credit unions will discuss products, programs and partnerships that credit unions would need to establish to serve the disability community. Part of the REAL Solutions grant is to produce a formal report based on the findings that come from the workshops. This report will be released to the media and will be available on the REAL Solutions Impact Center later this year. The first of three internship cycles has already seen results, NCUF said. The five interns participating in the pilot cycle are completing their six-week internships that included work on information technology, member service and marketing projects. “The BEST intern program has opened my eyes to the persons with disabilities community both from an employer perspective as well as from a customer perspective,” said Tracy Sussmann, president/CEO of Mid-State FCU, Carteret, and a participant in the BEST Program. “We are now looking at offering products and services to assist the disability community.” The other participating credit unions are: Local 1233 FCU, Newark; New Community FCU, Newark; and NJ Gateway FCU, Monmouth Junction. By the end of the year, an additional 20 interns will be placed in New Jersey credit unions during the second and third cycles.

Fraud stategies need summer brush up

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DES MOINES, Iowa (6/23/10)--Financial institutions, including credit unions, need to gear up for summertime fraud by reviewing and updating their fraud strategies, Karen Postma, card risk senior manager for TMG (The Members Group), advises in the final chapter of her three-part miniseries on fraud. In “Card Fraudsters Get Tricky with Travel,” Postma counsels financial institutions to look for travel-specific strategies from their card providers to help fight fraudsters looking to take advantage of irregular spending patterns to hide their criminal activities. “A good travel strategy is a collection of sub-strategies that will analyze transactions for multiple types of fraud versus a simple suspend strategy that may increase an account’s vulnerability,” Postma said. Vacationing cardholders typically leave a trail of unusual spending transactions in their wake, and this is exactly what fraudsters are counting on. Knowing that financial institutions will be faced with a series of odd transaction reports throughout the summer months, criminals prey on issuers with an inability to distinguish fraudulent activity from typical travel-time spending, especially with purchases made at high-traffic destination locations, she said. “The unusual spending patterns of vacationers could cause a well-meaning card services representative to suspend an account at an extraordinarily inconvenient time for the cardholder,” Postma said. “A tiered-approach to a fraud strategy can help eliminate some of this kind of confusion.” Postma also noted that preventing travel-related fraud requires a cooperative effort between the card-issuing institution and the cardholder, and she outlines several methods the cardholder can employ. “The cardholder is always the first line of defense in fraud prevention,” Postma said. “But financial institutions should not take it for granted that their cardholders are fraud-savvy. They need to continue to talk with their customers about how to stay alert to fraudulent activity and the importance of making the financial institution a part of their summer travel plans.” For more information, use the links.

Vermont CUs continue to grow

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BARRE, Vt. (6/23/10)--Membership in Vermont’s credit unions grew 3.1% last year to 290,105, compared with 1.4% nationwide, according to a Sunday article in the Vermont Times-Argus. Joseph Bergeron, president of the Association of Vermont Credit Unions, said credit unions have benefited from public anger and concern over the financial debacle on Wall Street. Bergeron said that’s resulted in consumers moving their savings from large out-of-state institutions to the safe haven of the state’s credit unions. Credit union deposits in Vermont totaled $2.1 billion at the end of 2009, up 16% from $1.8 billion in 2008, according to the state banking division. Thomas Candon, deputy commissioner of the Department of Banking, Insurance, Securities and Health Care Administration, said the state’s credit unions are “doing well, particularly compared to credit unions in other parts of the country.” The article also noted VSECU, formerly Vermont State Employees CU, Montpelier, and Green Mountain CU, South Burlington, have experienced growth. Vermont has 29 state and federally chartered credit unions with $2.4 billion in assets. The 21 state chartered credit unions have $875 million in assets as of the end of 2009, the newspaper added. To read the article, use the link.

Youth video contest urges Get Educated

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ALBANY, N.Y. (6/23/10)--Covera Card Solutions is sponsoring a youth video contest to help participating client credit unions reward teens for being “carducated,” or educated about responsible debit, credit and ATM use. The contest helps credit unions reach young members with prizes, such as a $5,000 college scholarship. “Credit unions are always looking for ways to help our youth become more financially aware,” said Kimberly Ploof, Covera chief operating officer. “Covera wanted to create a new and unique way to help them with that goal, hence the creation of Get Carducated. Get Carducated encourages teens to educate others on the responsible use of debit, credit and ATM cards.” “Today’s young people are constantly online, which makes this video contest the perfect venue by which to share the Get Carducated message,” she added. “Students can have fun tapping into their creative side while spreading a more serious message about conscientious card use.” Covera offers debit, credit and ATM programs, providing service to more than 300 credit unions. The Get Carducated video contest is open to members of participating credit unions between the ages of 16 and 21 who are in college or will be college-bound by October 2012. Applicants are asked to create a short video about responsible debit, credit and ATM card use--why it’s important, lessons they’ve learned, or any other pertinent angle they come up with. All submissions will be uploaded to the Get Carducated YouTube channel. The three videos with the most views will win. Contest participants will be encouraged to forward or share their videos with friends to generate news. By so doing, they will also be spreading the word about sensible card use. Covera has created free customizable materials for participating credit unions, including a statement insert, lobby poster, flyer, e-mail and website text, and a newsletter article template. Covera also has designed a special website, which credit union members and other interested parties can visit to get more information about the contest, eligibility and entries. The website features an introductory video, contest details, forms, and a closer look at the contest mascot, Carducator. The grand prize is a $5,000 college scholarship. The second-place winner will receive a MacBook and a $500 textbook credit. An iPhone and a $250 textbook credit will go the third place winner. Also, the first 25 participants to submit an eligible video will win a $25 iTunes gift card. Entries will be accepted until Oct. 31, with winners to be determined Nov. 1. For more information, use the link.

CU gets creative to benefit Childrens Miracle Network

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FARMERS BRANCH, Texas (6/23/10)--United Heritage CU, Austin, Texas, has raised $20,342 with the Austin Chapter of Credit Unions to benefit Children’s Miracle Network through a raffle--including one for a new car--and several branch competitions. Funds raised by Heritage CU and the chapter contributed to a total $147,000 donated to Dell’s Children’s Medical Center of Central Texas. Raffle tickets were sold for $1 at all Austin, Texas-area branches. Members had the opportunity to win a new TV, airline tickets, or a 2010 Dodge Caliber. To build momentum for the raffle, the Heritage operations team created multiple branch competitions (LoneStar Leaguer June 21). In the “Sewn with Love” competition, each branch competed to sell a certain number of tickets needed to purchase items from a “store” hosted on the credit union’s intranet to sew a decorative heart “stuffed” with love. As branches reached different ticket-sale levels, they were able to purchase new items to complete their hearts. The more tickets each branch sold, the larger their hearts became. Other competitions, including “UHCU’s Most Wanted” and “Dart Throw,” also were created. For “Most Wanted,” one staff member from each branch was selected to hide out at another branch for the day. The individual was considered an outlaw and was there to steal the hearts of other branches members’ by selling them Children’s Miracle Network raffle tickets. The goal of the deputies in the outlaws’ hideout was to outsell the outlaw. In “Dart Throw,” each location received a dart board and darts, and eligible staff could take one shot for each 25 tickets sold to win a prize. United Heritage CU has $610 million in assets.

CU System briefs (06/22/2010)

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* ALBANY, N.Y. (6/23/10)--Robyn Young, CEO of OPCS FCU, Orchard Park, N.Y., was elected to the New York Credit Union Foundation’s board of trustees during a recent board meeting. She will join 17 trustees to help improve financial literacy and independence of New Yorkers while promoting the credit union difference, the foundation said. Young has 25 years of experience in the credit union movement. She joined OPCS FCU, as chief financial officer then was promoted to CEO in 2004. (Photo provided by the New York Credit Union Foundation) ... * JACKSONVILLE, N.C. (6/23/10)--Dozens of people from Hope for the Warriors and Marine FCU, Jacksonville, N.C., gathered in Jacksonville to welcome the bike riders of Team Little Guy, who were raising money to benefit the Hope for the Warriors, according to the North Carolina Credit Union League’s Weekly Update (June 22). Team Little Guy, which included John Radebaugh, North Carolina league president/CEO, rode 230 miles in three days to raise money for Hope for the Warriors. The team raised $161,000 in nine months of rides, according to the North Carolina league. The league kept a blog detailing the three-day ride ...