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Federation Leadership Pilot Extends Deadline To Apply

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NEW YORK (6/25/13)--The National Federation of Community Development Credit Unions has extended the application deadline for its Cooperative Finance Leaders for America to July 1.

Cooperative Finance Leaders for America (CFLA): Developing the Future of Credit Unions is an initiative to recruit, train and support 15 new and emerging professionals to be placed in leadership positions in credit unions providing credit and safe banking services to low- and moderate-income communities.  

Participating credit unions will gain a source of staff, drawn from recent college graduates, graduate students, returning veterans and displaced financial workers, the federation said. The  paid fellowship is for six months.

The CFLA's training program will include a two-week summer institute--one week in person and one week online--in August and ongoing support throughout the fellowship.

Also, CFLA alumni will receive long-term support, toward becoming the next generation of credit union CEOs and leaders. Fellowships will begin in September and continue through February.

For more information, use the link.

For questions, contact Pamela Owens, vice president of programs at 212-809-1850, ext. 215, or powens@cdcu.coop, or Jason Chang, program associate at ext. 205 or jchang@cdcu.coop.

NWCUF Opens Nominations For Summit, CUNA Awards

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FEDERAL WAY, Wash. (6/25/13)--The Northwest Credit Union Foundation is taking online nominations to recognize outstanding credit unions and professionals during the 2013 awards season.

The entry deadline is July 19 for nominations for the state Summit Awards honoring individuals as well as Credit Union National Association's awards recognizing credit unions' positive community impact. Awards will be presented during Amplify, the Northwest Credit Union Association's annual convention Oct. 8-10 in Portland, Ore.

The Summit Awards recognize outstanding achievement in three categories:

  • Young Credit Union Professional, for professionals 35 and younger;
  • Innovation and Impact, a new category showcasing an individual's positive impact on the credit union movement during the past three years; and
  • Lifetime Achievement Award, for a credit union professional whose leadership documents social impact, embracement of the credit union philosophy, effective advocacy and community improvement. Candidates are selected by NWCUA's executive leadership and board, with senior credit union leaders invited to vote if more than one candidate is selected.
State and regional winners of the Dora Maxwell Social Responsibility Community Service Award, the Desjardins Youth and Adult Financial Education Awards, and the Louise Herring Philosophy in Action Member Service Awards, move on to the national stage to compete nationally in CUNA's awards program.

Texas Supreme Court: Regulators Went Too Far On Home Equity

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AUSTIN, Texas (6/25/13)--The Texas Supreme Court, in a partial reaffirmation and partial reversal of a lower appeals court decision, said Friday that the Texas Credit Union Commission and the Finance Commission overstepped in their interpretations of the State Constitution's home equity provision regarding forced sales.

Texas home equity law is unusual because, unlike other states that have protections based in state statutes, Texas' State Constitution protects homesteads from forced sales. A 2003 amendment to the Constitution authorized the legislature to delegate a state agency--in this case the Finance Commission and the Credit Union Commission--under Section 50 of Article XVI  the power to interpret certain of its provisions on home equity lending.

"A homestead may be subject to forced sale to repay a home equity loan only if the loan meets the requirements of Section 50, alterable only by a vote of the people," the ruling said. "The constitutional amendment did not provide for implementing legislation or for administrative interpretation or rule-making."

Once the amendment passed, the two commissions finalized their interpretative rulings, effective Jan. 8, 2004, said the ruling document. Three weeks later, six homeowners challenged several interpretations. A trial court invalidated many of the interpretations..

At issue before the Texas Supreme Court were three interpretations:

1.  Whether the term "interest," which was excluded from the 3% of principal cap to fees to originate, evaluate, maintain, record, insure or serve the extension of credit, means the same thing as interest in the Texas Finance Code, which includes fees paid to the lender, thus removing lender fees from the cap. The commissions maintained it did. However, the court disagreed.

"The fatal difficulty with the commissions' interpretation is that it does not merely adopt the substance of the statute at the time of the interpretation became effective; it adopts whatever definition of 'interest' the legislature may enact from time to time" through amendments," said the high court.  "The commissions' interpretation of the fee cap, tying its meaning to a statute, utterly defeats the clear purpose of constitutionalizing it, which was to place the limitation beyond the legislature's power to change without ratification by the voters. For this reason alone, the commissioners' interpretation is invalid," the court said. 

The court concluded that "interest" as used in the provision means the amount determined by multiplying the loan principal by the interest rate.

2. Whether a loan may be "closed only at the office of the lender, an attorney at law, or a title company," which the commissions argued was intended to prohibit coercive closing of an equity loan at the home of the owner.  The commissions said the provision allowed a borrower to mail a lender the required consent to have a lien placed on the homestead and to attend the closing through an attorney-in-fact.

"The court of appeals concluded that the use of mail to transmit documents and a power of attorney to facilitate execution are so commonplace that had the framers and ratifiers of Section 50 intended to preclude these practices, they would have said so with more specificity …But it is precisely the common use of the mail and powers of attorney in closing transactions that give rise to the danger of coercion" that the section "was intended to prevent," said the Supreme Court. It concluded the commissions' interpretations "contradict the purpose and text of the provision and are therefore invalid."

3. Whether section 50 requires that a loan not be closed before the 12th day after the lender "provides" the borrower the prescribed notice. The commissions interpreted the law to permit a rebuttable presumption that notice is received, and therefore provided, three days after it is mailed. The homeowners maintained that the lender must establish actual receipt of notice in each case.

"But the commissions' interpretation does not impair the constitutional requirement; it merely relieves a lender of proving receipt unless receipt is challenged," said the higher court. "We agree with the court of appeals that the interpretation is but a reasonable procedure for establishing compliance" with the section.

A Year Later: National Convention Leave-behind Project Generates More Good

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GREENVILLE, S.C. (6/25/13)--Building on credit unions' cooperative efforts during leave-behind projects at the 2012 National Presidential Nominating Conventions, the Carolinas Credit Union Foundation (CCUF) will invest equally in a South Carolina children's hospital nearly a year after raising funds in Charlotte, N.C.

North and South Carolina credit unions raised $300,000 for the hospital project in Charlotte in the Credit Union National Association's leave-behind project. 

CCUF is in the process of raising another $300,000 to renovate the lobby area off Greenville (S.C.)  Health Systems Children's Hospital--one of four Children's Miracle Network Hospitals in South Carolina, said the North Carolina League. As of June 20, about $150,000 has been raised (The Weekly Conversation June 21).

The groundbreaking is set for July 10 in Greenville, S.C.

That renovation follows the remodeling of the rooftop garden area of Levine Children's Hospital in Charlotte. CUNA's leave-behind projects honored the cities holding the National Conventions. The Democratic National Convention was held at the end of last summer in Charlotte.

The CCUF board--representing the North Carolina and the South Carolina Credit Union Leagues--decided the foundation would be a key part of the Charlotte project, helping raise the $300,000 needed for the Charlotte Children's Miracle Network Hospital.

One hundred percent of the funds raised by credit unions in both North Carolina and South Carolina, business partners and individuals--was used for the Levine project, said the North Carolina league. Other organizations involved included the National Journal Group, CUNA Mutual Group, CO-OP Financial Services and others (News Now Sept. 5).

At Levine Children's Hospital in Charlotte, the project has converted a rooftop space on the hospital's 12th floor into a play space that includes a touch-activated light and color "bubble wall," outdoor play equipment, and environmental improvements.

A similar leave-behind project was completed during the Republican National Party Convention in Tampa, Fla.

E-Scan: Will Gen Y Alter Housing Market?

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NEW YORK (6/25/13)--Generation Y will be a "game changer," especially in the housing market, according to the 2013-2014 CUNA Environmental Scan Report published by the Credit Union National Association.

CUNA E-Scan's June 14 newsletter noted research by the Urban Land Institute that suggests the millennial generation--people from 18- to 34 years old--prefers living downtown, renting, and having access to public transportation.

Some say their tastes will change once they start earning more income and become parents, but that may not translate to moving to the suburbs.  ULI is predicting this group will move to a more compact, metropolitan development pattern. And it may be because they have no choice: they can't afford the large homes that Baby Boomers have.

How big an impact will this have? One of E-Scan's authors, Chris Braccia, director of product management with Harland Financial Solutions, said Gen Y will be a "game changer," which is one of the reasons Gen Y is "the Holy Grail of progressive credit unions." Currently, the U.S. has 80 million baby boomers and 69 million Gen Xers, while Gen Yers total 100 million.

For more information about the E-Scan, about the Gen Y demographic and what strategies credit unions can use to woo this group, use the links.

Delaware Governor Signs Children's Credit Freeze Bill At CU

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DOVER, Del. (6/25/13)--Delaware Gov. Jack Markell has signed House Bill 64--which allows parents and guardians to freeze their children's credit until they are 16 years old, prohibits a consumer reporting agency from releasing the child's consumer record or report and prevents anyone from opening a line of credit using the child's Social Security number.

Click to view larger image Delaware Gov. Jack Martell signed House Bill 64 last week during a visit to Del-One FCU in Dover. Pictured are, from left, Delaware State Rep. Andria Bennet (D-32), prime sponsor of Delaware H.B. 64; Girls State Governor Diana Wilson, who was shadowing Markell for the day; Markell; Del-One Associate Board Member Lisa Strusowski; and Del-One FCU CEO Dion Williams. The bill allows parents and guardians to freeze their children's credit until they are 16 years old. (Photo provided by Del-One FCU)

Markell signed H.B. 64 at Del-One FCU's Downtown Dover branch, the credit union said.  

"The  Delaware Credit Union League was in support of House Bill 64 and we are glad to see it signed into law," Carole Langiu, league communications and governmental affairs director, told News Now. "In addition to helping protect our youth from credit and identity theft, it also will help safeguard our members who are not able to protect themselves."  

Under the law, "protected consumer" means:

  • An individual under 16 years at the time the request for placement of a security freeze is made; or
  • An incapacitated person or a protected person for whom a guardian or conservator has been appointed.
The representative must provide the consumer reporting agency with sufficient proof of authority to act on the behalf of the protected consumer, said the league.  

The law, which goes into effect Jan. 1, will prohibit a consumer reporting agency from releasing the protected consumer's report, any information derived from the protected consumer's report or any record created for the protected consumer, said the league. If the agency receives a request to place a security freeze and does not have a consumer report, it must create a record and apply the freeze.

The security freeze remains in effect until the protected consumer, or a representative, requests it be removed. It also may be lifted due to misrepresentation of fact at the time of request.

Fees, not to exceed $5, to place or remove the freeze do not apply if there is a report of alleged identity fraud against the protected consumer, or if the request is for a protected consumer who is under 16 years at the time of the request and has a consumer report already established at the agency, the league said.

Global Women's Network Spreads The Word In Florida

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ORLANDO, Fla.  (6/25/13)--"Moving up the corporate ladder" was the topic of discussion for more than 60 women credit union leaders convened at a Global Women's Leadership Network luncheon in Orlando last week. The event was held in conjunction with the League of Southeastern Credit Unions Annual Convention and Exposition.

Panelists at the event included network members:

  • Laida Garcia, president/CEO of Floridacentral, Tampa;
  • Pat Wesenberg, board president of the Credit Union National Association and president/CEO of Central City CU, Marshfield, Wis.; and
  • Laurie Maddalena, founder and CEO of Envision Excellence, an executive coaching and organizational development firm.
"From the high degree of participation and positive feedback received, it is clear that the Global Women's Leadership Network is making a positive impact in the lives of program attendees and their members," Garcia said. "Word is spreading about the benefits of connecting with credit union women around the world and of taking advantage of networking opportunities like this one."

The speakers addressed questions related to attaining leadership positions in the credit union industry and provided advice on the professional development of women seeking such responsibilities, including the role of mentoring.

Several participants expressed interest in forming a Global Women's Leadership Network sister society in Florida. Network member Fredda McDonald, executive vice president credit union experience for PSCU, presented the World Council of Credit Unions with funds on behalf of the Florida-based credit union to support further development of regional sister societies and other international networking opportunities through World Council.

The Global Women's Leadership Network connects women from credit union movements around the world and engages them in professional and personal development through social media and educational forums. Sister societies are local groups of the network's members who meet regionally to discuss important issues impacting women credit union leaders and to build local cooperative projects.

There are nine active sister societies in Canada, Fiji, Jamaica, Malawi and across the U.S. For more information, use the link.

Homeownership Month Brings Focus On CDCUs' Programs

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NEW YORK (6/25/13)--The latest issue of The Bridge, the magazine of The National Federation of Community Development Credit Unions, celebrates June as National Homeownership Month.

The entire issue is devoted to the efforts of community development credit unions to provide affordable housing to underserved members.

"Bring the American Dream to the Underserved" shares the experiences of three credit union-sponsored, housing finance services: Marisol FCU, Phoenix; A Shared Initiative Inc., New Orleans; and Border FCU, Del Rio, Texas.

Marisol FCU established the Pay Yourself Mortgage that creates an escrow account for borrowers. Borrowers pay an amount equal to 75 basis points of the loan amount for five years. If after five years they have not defaulted on any payments, the money is used to pay down the mortgage.

Border FCU provides home equity loans, land loans and free counseling services. It also partners with several nonprofit organizations for down-payment assistance.

A Shared Initiative is a nonprofit initiative created by ASI FCU, Harahan, La., to more effectively administer the credit union's community development initiatives and combat post-Katrina economic distress in the New Orleans area. Among the services the organization offers is a first-time home buyers program.

Another article, "Manufactured Housing: Good for Your Customers, Good for Your Portfolio," describes the Corporation for Enterprise Development's (CFED) Innovations in Manufactured Homes initiative. The program is designed to recast manufactured housing as a viable asset and wealth-building tool.

"A recent report released by CFED reveals that manufactured home mortgages can perform as well as other mortgages, even when the mortgages are made to borrowers with relatively poor credit and small down payments," wrote Doug Ryan, CFED director of affordable homeownership.

The issue also includes, "Home Sweet Home: Success Stories from the Center for Financial Health (CFH)," a photo essay of families in Lansing, Mich., that have achieved their goal of buying or keeping a home.

The CFH is an affiliate of the federation's network of the U.S. Department of Housing and Urban Development-approved housing counselors. CFH works closely with the Michigan Credit Union League and several Michigan credit unions.

N.Y. CU Foundation Officers Elected

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ALBANY, N.Y. (6/25/13)--The New York Credit Union Foundation has selected board officers and welcomed its new trustees to oversee the foundation's operations and its mission of "fostering the financial independence of New Yorkers through credit unions" for the year ahead.

They were announced June 13 at the foundation's annual meeting. Officers re-elected include:



Four executives joining the board of trustees include:

  • Board Chairman: Vicki O'Neill, ACMG FCU, Solvay;
  • Vice chairman: Robyn Young, CEO of Great Erie FCU, Orchard Park; and
  • Treasurer/secretary: Brian Clarke, chief financial officer of Bethpage (N.Y.) FCU.

During the meeting the group recognized outgoing trustees John C. Gibardi, president/CEO of Entertainment Industries FCU, New York City; Gerard Herrling, principal at CarPort Consulting; James L. Mack, business development executive at Sunmark FCU, Latham; and Bruno Sementilli, president/CEO of Quorum FCU, Purchase.

  • Laurie Baker, vice president/chief operations officer of The Summit FCU, Rochester and board chair of the Credit Union Association of New York (CUANY);
  • Catherine Benson, lending senior vice president, CFCU Community CU, Ithaca:
  • Tristram Coffin, CEO of Alternatives FCU, Ithaca; and
  • Clara Carlevatti, member development coordinator at Great Erie FCU. She is a member of CUANY's Young Professionals Commission and will represent young professionals on the board.

Wire Transfers, Mug Shots, IM Scams Reported

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WASHINGTON (6/25/13)--Wire transfers, mug shot extortions, and a new Trojan virus affecting instant messaging platforms are the latest scam alerts from the Internet Crime Complaint Center (IC3). Credit unions can stay alert to these and warn their members, too.

Businesses reported receiving telephone calls from individuals claiming to be with a wire transfer company's tech support. In one incident, the wire transfer company's name was displayed on the caller ID. 

The callers instruct recipients to go to a website to run an application that allows the caller to remotely access the victim's computer. Once remote access is established, the caller instruct victims to open their wire service program and log in to their accounts so the caller can "update the system," said IC3's alert. The victims are asked to turn off their monitors to avoid interfering with the update. Later, the victims find unauthorized wire transfers made to NetSpend account.

One victim, who became suspicious and turned off the computer, discovered $950 had been loaded on the account's prepaid credit card. Another victim reported transfers to several states and individuals, but was told that no transfers were being processed.

IC3 also received hundreds of complaints from individuals who found their mug shots from arrests--including juvenile arrests under sealed court records--or found false information about them on 20 websites using similar practices. Those demanding removal of the mug shot are told to provide key identification information, such as driver's license, court records or other personal information.Victims are also charged a fee to remove the photo. When victims threaten to report the unlawful practices, the website owners threaten to escalate the damaging information against the victim.

A new Trojan virus called "Liftoh" is infecting computers in Latin America using instant messaging platforms such as Skype, said IC3.  Victims receive a message in Spanish with a shortened URL or web address. The messages appear to come from someone on the user's Skype contact list who is linking to a photo. If clicked, the link redirects users to 4shared.com, which hosts a URL that initiates a weaponized zip file with the Trojan, which can download additional malware.

The IC3 report is based on information from law enforcement and complaints submitted to IC3.