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Ohio Vermont CUs Interchange will cut income service

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CLEVELAND, Ohio, and BURLINGTON, Vt. (6/28/10)--Credit unions were in the media last week in Ohio and Vermont, discussing the impact of the interchange amendment to the financial regulatory reform act that survived the conference committee in Congress. Their conclusion: the amendment will cut into their income and force them to cut services, according to Crain's Cleveland Business (June 21). John Magill, senior vice president for legislative affairs at the Credit Union National Association, noted in the article that retailers pay roughly 1.5% of a purchase in interchange fees. Part of the amount goes to the issuer (credit union), some goes to the card processor (such as Visa) and the rest is kept by the retailer. The fees pay for maintenance of the card system, raud and other losses. Under the amendment, fees would be slashed to cover the cost of only the transaction. Magill estimated the interchange amendment could cost credit unions between $35 and $50 per card per year. Crain's interviewed seven credit unions in the Cleveland area. Russ Fisher, CEO of the $21 million asset PEF FCU, Highland Heights, Ohio, told Crain's Cleveland Business (June 21) that his credit union collects about $3,000 a month in interchange fees. "Because we're so small, we don't have other sources of income that can easily absorb interchange fees," he said in the article, adding, "This is big." At least 500 of PEF FCU's 2,500 members have debit cards. Fisher said he worries the credit union will lose members if the debit card convenience is removed. "It puts us at a disadvantage [vs. banks]," he told the publication. Most credit unions that offer both credit and debit cards said they make a slight profit on credit card offerings but just break even on their debit cards. For Ohio Educational CU, Cleveland, interchange fees are about 5% of total gross revenue or $380,000 a year, said CEO Jerome Valco. Roughly 17% of income at Eaton Family CU, Euclid, comes from fees for debit and credit cards, said Mike Losneck, CEO, who predicted the amendment's impact would be "pretty significant." Loss of fees would inhibit the credit union's ability to pay members a dividend and might end free checking and free debit cards. At Cleveland-based Faith Community United CU, CEO Rita Haynes told the publication merchants should take responsibility for fraud and other costs of doing business with plastic. "We could be locked out. They could just not accept our debit cards." Community United CU, Strongsville, CEO Julia Gee said the amendment would mean re-evaluating the credit union's fee schedule or offering less favorable loan rates to keep debit cards as an option. In Vermont's Times Argus (June 25), Joe Bergeron, president of the Association of Vermont Credit Unions, said that the carve-out provision, which exempts financial institutions with less than $10 billion in assets, is well-meaning but puts credit unions and community banks at a disadvantage. "There's nothing in the wording of the legislation that would mandate Visa and MasterCard to have a two-tiered system like that, a different system of interchange rates [on debit card fees] for institutions under $10 billion versus those over $10 billion," Bergeron said in the article. What like will happen, he said, is that smaller banks and credit unions will see the fees they receive from MasterCard and Visa reduced, and that would force credit unions to pass on higher costs to their members. For the entire articles, use the links.

CUANY urges support of compromise municipal deposits bill

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ALBANY, N.Y. (6/28/10)--The Credit Union Association of New York (CUANY) Friday called on the State Legislature to support a new compromise bill on municipal depository choice that will allow New York’s local government entities to deposit funds into credit unions. The compromise “same as” bills, sponsored by Sen. Kevin Parker (S.8296-A) and Assemblyman Harvey Weisenberg (A.11538-A), are similar to previous versions but would now cap municipal deposits in credit unions at the federally insured limit of $250,000 per deposit. “We support this compromise legislation, which is a reasonable approach to ensuring local government leaders have a choice in where they are allowed to deposit our tax dollars and have a new way to find savings in these tight fiscal times,” said William J. Mellin, president/CEO of the association. Municipal depository choice allows local government entities such as cities, towns, counties, school districts, fire districts and public libraries the option of depositing tax dollars in local credit unions or community savings banks. The law already allows deposits in commercial banks, which currently have a monopoly on municipal tax deposits, said the association. The proposed flexibility for local government and free market approach will result in the best possible rates of return and lower fees for municipalities, which could save state taxpayers millions of dollars, said CUANY. Local government organizations throughout New York State continue to support municipal depository choice. These include the New York State Conference of Mayors and Municipal Officials (NYCOM), the Association of Towns of the State of New York, New York State Association of Counties (NYSAC), the Fireman’s Association of New York (FASNY), the New York School Boards Association, and the New York Library Association (NYLA). Supporters have included Gov. David Paterson, key state legislators, New York City Mayor Michael Bloomberg and other state and city officials throughout the state. Credit unions play a significant role in communities throughout the state by investing locally and paying property taxes to the same local governments that would benefit from municipal depository choice, said CUANY. “Municipal depository choice is about reforming a nearly century-old antiquated law, which fails to reflect current financial conditions or offer local governments the flexibility they need to manage declining revenues and growing deficits,” said Mellin. “This much-needed reform allows local governments something they don’t currently have--the freedom to deposit their tax dollars where they can save revenue, encourage more local investment, and create more opportunities for New Yorkers.” A 2006 study by former Assembly economic advisor Brian P. O’Connor indicated that allowing credit unions to work with local governments could save taxpayers $18 million to $24 million. “The savings for taxpayers is clear and significant and the time for municipal deposit reform is now," Mellin said.

LSCU.coop targeted by text scam

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TALLAHASSEE, Fla., and BIRMINGHAM, Ala. (6/28/10)--The League of Southeastern Credit Unions (LSCU) alerted credit unions in Alabama and Florida Friday that a texting scam is using the address: LSCU.coop. LSCU learned about the scam Friday. It told credit unions they may want to notify their members about the scam and inform them not to key in any information when they receive the text. "The scam is in the form of a text from LSCU.coop, indicating the recipient should call 866-510-8703," the league said. The text message says: "accountalert@lscu.coop (SCU) Southeastern Credit Unions Security Notice. For more details, please contact our secure phone line at 866-510-8703. Thank you." "The LSCU and its servers are NOT sending out these messages," said the league. "A third party is attempting to collect account info by people calling this number." Credit unions were also advised to tell their members that if they receive such a message to report the text messages to their cell phone carrier so the carrier can take action against those sending the messages. "Also, remind members to always use a known published number when contacting their credit union (or other financial institution) rather than a number provided in e-mail or text message."

Chatfield named interim presidentCEO of Calif.Nevada leagues

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ONTARIO, Calif. (6/28/10)--Former California and Nevada Credit Union Leagues President /CEO David Chatfield has been named interim president/CEO of the leagues, effective July 6. He will replace current President/CEO Bill Cheney when Cheney becomes president/ CEO of the Credit Union National Association (CUNA). Chatfield has nearly 40 years of credit union experience. He was president/CEO of the California league for 15 years and president of the Nevada league for nine years. He also served on the National Credit Union Administration (NCUA) Board under Presidents Ronald Reagan and George H.W. Bush. He is expected to serve as interim leader for several months. Concurrently, the leagues' search committee is conducting an extensive search for a permanent president/CEO. The committee plans to have a new leader in office before the leagues’ annual meetings, scheduled for mid-November. "Dave is a seasoned league executive, a living credit union legend, and will provide steady leadership that will help the league continue its model of excellence during this transition period,” said Cheney. “With nearly four decades of credit union experience, Dave is exactly the type of leader who can guide a seamless transition. He has been a significant help to me, and I know he’ll be of great assistance to the next president/CEO of the leagues.” Chatfield first joined the credit union movement as a volunteer elected official in 1965. His career includes positions with CUNA’s Washington office, in field management for the CUNA Mutual Group, in management at the New York State and Alaska Credit Union leagues, in senior management at Alaska USA FCU, and as executive director of the Filene Research Institute. “He is an excellent leader and will be a great resource to our board as we enter this important transition.” said Jeff York, California league chairman and CEO of CoastHills FCU, Lompoc, Calif. “Dave Chatfield understands our movement,” said Nevada league Chairman Wally Murray, CEO of Greater Nevada CU, Carson City, Nev. “He not only is a veteran CEO, but understands our needs at the state level...," he added. Chatfield received the Herb Wegner Memorial Award in 1997 and was inducted into the Credit Union Executives Society Hall of Fame in 1998. He received the Eagle Award in 2004 and the Eugene H. Farley League Leadership Award in 2005, both from the American Association of Credit Union Leagues.

WesCorp plaintiffs oppose NCUA substitution as plaintiff

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SHERMAN OAKS, Calif. (6/28/10)--Seven credit unions who sued Western Corporate FCU's (WesCorp) former and current directors and officers for investments losses that resulted in the corporate credit union's conservatorship filed papers Monday opposing a motion by the National Credit Union Administration (NCUA) to substitute itself as the sole plaintiff in the case. Their motion was filed in the U.S. District Court for the Central District of California. It argued that NCUA "is hopelessly conflicted regarding the failure of WesCorp and cannot be expected to diligently prosecute all claims that may belong to WesCorp." It asks that NCUA's intervener's motion to substitute be denied and that the court find that plaintiffs continue to have standing to continue to prosecute their claims. The motion said NCUA "is not the only party that may assert derivative claims against defendants" and alleges WesCorp defendants "breached duties owed directly to plaintiffs--not just duties owed to WesCorp. As a result of those breaches, plaintiffs suffered injuries that are distinct from the harm that defendants also inflicted on WesCorp. Only plaintiffs, and not the NCUA, have standing to assert those direct claims. As a result, the NCUA is not the real party in interested with respect to those claims." Late last year NCUA moved to intervene as a plaintiff in the lawsuit brought by the credit unions, which are members of WesCorp. The Los Angeles Superior Court granted NCUA's motion to intervene as a party on Feb. 24 but did not rule regarding whether NCUA should replace the credit unions as the plaintiff. On March 5, NCUA filed a notice of removal with that court and succeeded in moving the case from state court to federal court (News Now Dec. 31 and March 11). The seven credit union plaintiffs include: 1st Valley CU, Cascade FCU, Glendale Area Schools FCU, Kaiperm Northwest FCU, Northwest Plus CU, Stamford FCU and Tulare County FCU. Their civil action alleges negligence and breach of fiduciary duties in connection with WesCorp's substantial investments in residential mortgage-backed securities and collateralized debt obligations.

ELLy CU training awards seek entries

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MADISON, Wis. (6/28/10)--Credit union training programs and trainers will be recognized for their outstanding staff development achievements during this year’s Experience Learning Live (ELLy) Training Awards program, sponsored by the Credit Union National Association (CUNA). The ELLys are the only national awards presented to credit union trainers. Awards will be presented in two asset divisions--less than $250 million in assets, and $250 million in assets or above--in each of the five categories:
* Chi Phi Delta X II Award--Represents the best development of a credit union university, and its effect on staff learning and performance, using CUNA’s Center for Professional Development products as the foundation; * eLearning Award--Demonstrates how technology-based training was incorporated into, and enhanced, credit union training programs; * Training Champion Award--Singles out senior management staff who go beyond the call of duty to support and develop their credit union’s training program; * Training Professional of the Year Award--Honors exceptional achievements in performance and learning by a credit union training professional or department; * WOW Award--Marks the credit union with the best overall training curriculum or best training event that energizes, empowers and excites participants.
Entries must be received by Aug. 6. Awards will be presented at the 2010 Experience Learning Live conference Oct. 21-23 in San Diego. For more information on CUNA’s trainer awards and collateral materials, use the resource link or call 800-356-9655, ext. 4249.

Bradford named superintendent of Ohio DFI

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COLUMBUS, Ohio (6/28/10)--Carolyn Bradford was named the new superintendent of the Ohio Division of Financial Institutions, Kimberly Zurz, director of the Ohio Department of Commerce, announced Thursday. Bradford has worked with banks and businesses for more than 30 years and most recently served as CEO of a community bank in Southwestern Ohio. She succeeds John Reardon, who left May 7. “The Ohio Credit Union League is excited about the opportunity to share the positive impact Ohio’s 175 state-chartered credit unions have on their members,” Paul Mercer, president of the Ohio Credit Union League, told News Now. “Ms. Bradford’s strong and varied background in banking and business should serve her well in this new role.” The Division of Financial Institutions is responsible for the examination, supervision, and regulation of Ohio-chartered banks, savings and loan associations and savings banks, credit unions, money transmitters and trust companies. It also is responsible for licensing pawnbrokers, mortgage brokers, loan originators, credit service organizations, check cashing services, precious metal dealers, premium finance companies, short-term lenders, small-loan-act lenders and mortgage-loan-act lenders. Bradford will officially join the division July 12, but will be introduced to members of the banking industry during Ohio Bankers’ Day June 30 in Columbus.

CU System briefs (06/25/2010)

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* FARMERS BRANCH, Texas (6/28/10)--Randall Dixon, president/CEO of Energy Capital CU, Houston, has been appointed to the Texas Credit Union Foundation's Board of Trustees. He was appointed by Texas Credit Union League President/CEO Dick Ensweiler, president of the foundation, and unanimously ratified by the board of trustees during its June meeting. Dixon has served in the credit union movement since 1977. Before joining Energy Capital CU, he became president of the then-financially unstable News Media CU in Houston, which he helped get back on its feet. He helped establish three credit union service organizations, including Credit Union Alliance, Credit Union Companies of Texas and Credit Union Acceptance Co., which now serve more than 150 credit unions in five states. Dixon also serves on the league's International Relationship Committee ... * PORTLAND, Maine (6/28/10)--Dave Libby, executive vice president, has been named interim president/CEO of Town & Country FCU, a $198 million asset credit union based in Portland, Maine. He succeeds Chris Daudelin, who left the credit union to explore other opportunities after 23 years of service. In its announcement, the board thanked Daudelin for his "many years of dedicated service and accomplishments during his tenure." The board said a search process has begun to name a permanent president/CEO (Maine Credit Union League Weekly Update June 25) ... * NEENAH, Wis. (6/28/10)--
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Evergreen CU is helping its community by hosting a farmer's market in its parking lot every first Saturday of the month. Evergreen members and their families can participate either as a vendor or a buyer of fresh produce, plants, home-made baked goods, preserves and crafts, said the credit union. The credit union said the event is an opportunity to promote "work from home" businesses because the events are open to the public. Evergreen CU is a $26 million asset credit union based in Neenah, Wis. (Photo provided by Evergreen CU) ... * KALAMAZOO, Mich. (6/28/10)--
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Consumers CU has raised more than $15,000 for the American Cancer Society, one of four major charities it supports. Fundraising began in mid-April for the Kalamazoo, Portage, Lawton, South Haven and Holland offices for the cancer society's Relay for Life, which took place May 22-23 at the Kalamazoo County Fairgrounds. Pictured are Consumers CU staff who participated. More than 50 employees have participated in various Relay for Life events across West Michigan this year. (Photo provided by Consumers CU) ...

CUNAs Hampel explains interchange impact in IN.Y. TimesI

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NEW YORK (6/28/10)--Some retailers may discriminate against small debit-card issuers, including credit unions, when new interchange provisions, which are part of the overall federal financial regulatory reform package, potentially go into effect, Bill Hampel, chief economist for the Credit Union National Association (CUNA), told The New York Times Friday. Both houses of Congress are slated to vote on the financial reform bill in the next few days, wrote Rob Lieber and Tara Siegel Bernard in an article titled, “From Card Fees to Mortgages, a New Day for Consumers”--a rundown of the financial reform bill. Because cards from small issuers such as credit unions do not provide retailers with as much interchange income, retailers could be less inclined to accept them, the Times noted. “It is not clear what the Fed will do or how the big banks and Visa and MasterCard will react,” said the Times. “This could take a few years to play out, or many years if lawsuits start flying. Some merchants may try to play fast and loose with the rules too.” Hampel told the Times that small retailers might happily accept debit cards with the names of big banks that they recognize and then ask shoppers with cards from no-name institutions to use cash or some other card. To read the article, use the link.

Six and more reasons to attend The 1 CU Conference

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LAS VEGAS (6/28/10)--There are several reasons why credit union representatives should attend The 1 CU Conference in Las Vegas July 11-14, according to the Credit Union National Association (CUNA). The conference is a one-time joint event held by CUNA and the World Council of Credit Unions. It is the first time CUNA and WOCCU have joined forces to host the only international conference for credit unions and financial cooperatives worldwide. Credit unions who attend will:
* Hear Bill Cheney speak for the first time as CUNA's new president/CEO. Cheney, who will succeed Dan Mica in the position, begins his term with CUNA on July 5. * Learn from speakers such as author Jim Collins (July 12) and Kevin Carroll (July 14). Collins is author of Good to Great, Built to Last, Beyond Entrepreneurship and other best-selling business books. Carroll is author of Rules of the Red Rubber Ball and a consultant to Nike, Starbucks, Walt Disney, Proctor & Gamble and other Fortune 500 companies. * Participate in more than 50 educational and networking sessions led by dozens of international financial experts, regulators and consultants focused on improving credit union performance. * Meet with 2,200 credit union leaders, and executives and volunteers from 57 countries; * Visit with 170 products and services providers in the exhibit hall; * Rub elbows with other credit union decision makers who are meeting the challenges of spending wisely while growing their membership.
Some of the breakout sessions focusing on hot topics in the movement include:
* How Interchange Will Affect Your Credit Union; * Redefining Your Role as a Board Member While Your Credit Union Grows; * Your Business Brickyard: Getting Back to the Basics; * Youthful Products for a Younger Membership; * The Current Economy and Future Trends: An Industry Update; * You're in, I'm in: Participatory Lending--What it is, the benefits and pitfalls; and * Leadership Lessons from Leading Credit Union CEOs.
For more information, use the link.

N. Carolina league announces board officers

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GREENSBORO, N.C. (6/28/10)--The North Carolina Credit Union League (NCCUL) announced election results and 2010-2011 officer selections for the league’s board of directors on June 16 at the 75th Annual Meeting of the NCCUL in Pinehurst. Mark Twisdale of State Employees’ CU (SECU), Raleigh, was elected to the board (Weekly Update June 24). Twisdale was elected to a three-year, at-large term. He replaces Bobby Hall of SECU, who decided not to run for re-election. Patty Idol of Mountain CU, Waynesville, was elected as the Western Chapter representative. Idol has served as an at-large director for the past several years. She was elected by the chapter in the spring to replace Rick Hayes of Enka (N.C.) Community CU. Hayes, like Hall, decided not to run for re-election. Idol’s term will run three years. The board appointed Bob Donley of Members CU, Winton-Salem, to serve out one of the two remaining years of Idol’s term as an at-large director. Donley’s term will be followed by an open election in 2011 to choose the director who will serve the remaining year. The 11-person board also elected its officers. Maurice Smith of Local Government FCU, Raleigh, was elected as chairman. Smith, who served previously as vice chair, replaces Ben Hill of Blue Flame CU, Charlotte. Hill, the chairman for the past four years, elected not to run for re-election as chairman, but retains his position on the board. The board also elected Idol as the vice chair; John McGrail, Lion’s Share FCU, Charlotte, as the secretary; and Jeff Jones of Freedom FCU, Rocky Mount, as treasurer. Bill Flowers of Carolinas Telco FCU, Charlotte, was re-elected officer for the upcoming year.