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On the Tube Freedom CU launches YouTube channel

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WARMINSTER, Pa. (6/29/10)--Freedom CU has launched its official YouTube channel as part of an overall social networking initiative aimed at educating and bringing value to its members. The page will provide both promotional and educational videos, said the Warminster, Pa.-based, $400+ million asset credit union. By becoming part of the YouTube community, Freedom is accessible to existing and prospective members as a trusted online source of financial education and advice, the credit union added. Members can become followers of Freedom on YouTube and have instant access to the latest video contest by visiting the link and subscribing to the channel. In addition to the YouTube channel, Freedom CU also can be found on Facebook and Twitter. On, go to the Facebook link and search for Freedom CU, look for a green and white logo representing "Freedom CU in PA," and become a fan. To follow Freedom on Twitter, go to

Crooks transfer denial-of-service attacks to phones

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WASHINGTON (6/29/10)--Denial-of-service (DOS) attacks--where computer hackers take down websites by flooding them with huge waves of traffic--have been around a while. But criminals recently have transferred their DOS activities to telephones as a diversionary tactic so they can raid victims' banking accounts. The criminals use automated dialing programs and multiple accounts to overwhelm the phone lines of unsuspecting phone owners, said the Federal Bureau of Investigation (FBI). The agency noted that individual consumers and small- and medium-sized businesses are especially targeted. While the lines are tied up, the criminals masquerade as the victims and raid their accounts at the credit union or banks as well as their online trading or other money management accounts, said the FBI. Credit unions should tell members how this activity works so members are alerted to the scams. Here's how the scams work:
* Weeks or months before the phone calls begin, a criminal uses social engineering tactics or malicious software to mine personal information--such as account numbers and passwords--that a financial institution would keep about the victim. Perhaps the victim responded to a bogus e-mail phishing for information, inadvertently gave out personal information during a phone call, or put too much personal information on social networking sites trolled by criminals. * Using technology, the criminal floods the victim's phone lines, essentially denying the victim the phone service. * Then the criminal either contacts the financial institution pretending to be the victim or pilfers the victim's online bank accounts via fraudulent transactions. Normally the institution calls to verify the transactions, but the DOS attack means it can't reach the victim over the phone. * If the criminal can't make the transaction, he may sometimes pose again as the victim and re-contact the financial institution, asking for the transaction to clear. Or the criminal adds her own phone number to the victim's accounts and just waits for the bank to call. * By the time the financial institution or victim realizes what has happened, it's too late.
The FBI noted one victim lost $400,000 through a DOS attack on his phones, and said there "has definitely been a noticeable surge" in the attacks, with numerous incidents reported in several Eastern states. The FBI is teaming with the Communication Fraud Control Association, comprised of security professionals from communications providers, to analyze the patterns and trends of the attacks, educate the public, and identify and prosecute the criminals. The agency urged consumers and businesses to take these precautions:
* Never give personal information to an unsolicited phone caller or via e-mail; * Change online banking and automated telephone system passwords frequently; * Check account balances often; and * Protect computers with the latest virus protection and security software.

OTTI projections improve at Members United Corporate

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WARRENVILLE, Ill. (6/29/10)--Members United Corporate FCU saw an improvement in its other-than-temporary-impairment (OTTI) figures as of May 31, according to its unaudited financials posted this week. The corporate did not record any OTTI charges during May, said the financial statements posted on Members United's website. OTTI charges to date total about $600 million and consist of $562 million of charges related to residential mortgage-backed securities (RMBS) and losses related to Lehman Bros. corporate notes. Actual cash losses range from $85 million to $95 million, depending on the ultimate treatment of the implied losses in calculation of cash loss reporting. This includes the $40 million cash losses from the Lehman corporate notes. OTTI in excess of current loss projections ranges from $35 million to $60 million, depending on the accounting model selected. "Said differently, the long-term OTTI projections have actually improved for a few investments," said Members United's financial statement. "However, under current accounting rules Members United is not able to record the benefits of these improved projections as a one-time gain in the income statement." Instead, the improved projections must be recovered over the life of the investment as an adjustment to the interest yield. Members United noted the accounting treatment is similar to how a company would account for a discount on an investment. "Once OTTI calculations stabilize for a couple of quarters, Members United will evaluate adjusting the net interest income yield to recapture the $35 million to $60 million difference," said the financial report. OTTI is recorded as the net present value of estimated credit losses. The future value of credit losses is about $70 million more than the OTTI losses recorded to-date. The next OTTI review is expected to be completed by August. If that review requires any additional OTTI, those charges would be included in the July financial results, which will be published at the end of August. For the month ended May 31, Members United earned $8.4 million, increasing total capital to $22.2 million. It also "recorded extraordinary gains of $7.7 million, while core operations generated $0.7 million in income, said the financial statement.

CU System briefs (06/28/2010)

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* HARRISBURG, Pa. (6/29/10)--The Pennsylvania Credit Union Association's payday lending alternative, Credit Union Better Choice, was cited as an example of a successful alternative to payday lenders by the Federal Deposit Insurance Corp. (FDIC) in a report last week on the final results of FDIC's small-dollar loan pilot program. The pilot, launched in 2008, was a two-year case study aiming to show how banks can profitably offer affordable small-dollar loans as an alternative to high-cost credit products such as payday loans and fee-based overdraft programs (Life is a Highway June 28) ... * POUGHKEEPSIE, N.Y. (6/29/10)--Two branches of Putnam FCU will open Thursday as Hudson Valley FCU (Poughkeepsie Journal June 26). Putnam's board voted to merge with the Poughkeepsie, N.Y.-based Hudson Valley, effective Thursday. The branches are located in Carmel and Brewster. Putnam former chairman Albert R. White said it was increasingly apparent that small financial institutions can't keep up with members' evolving needs for additional products and services. Putnam had about $51.5 million in assets and 7,232 members. Hudson Valley FCU has about $2.8 billion in assets and 226,671 members ...

Illinois LSC helps collectors connect compete

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NAPERVILLE, Ill. (6/29/10)--More than 50 credit union representatives attended collectors roundtable events hosted by Creditors Resource Services (CRS), a division of the Illinois Credit Union League Service Corp (LSC). CRS has conducted the events for the past 11 years. "These meetings are an extreme benefit for the recovery specialists in our state to network," said Sheila O'Leary, manager of CRS. "They discover their situations are the same, no matter their location, and learn how to deal with their members in a unique way to be successful." This year's roundtable discussions centered on bankruptcy, foreclosure checklists and remarketing of vehicles. When the roundtables aren't in session, LSC hosts an active listserv so collectors around the state can network and seek advice on issues they may face in their credit unions. About 150 people representing more than 100 credit unions of all sizes use the listserv. The roundtables and listserv act as support for the group and help foster the sharing of techniques. The dialogue also helps participants benchmark their efforts against what is happening in the marketplace, helps raise the profile of how collections contribute to a credit union's bottom line, and move past the perception of dubious tactics used in collections in the past, said the LSC.

The Golden 1 announces 0 state budget payroll loans

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SACRAMENTO, Calif. (6/29/10)--With a possible California state budget impasse looming, The Golden 1 CU announced its plans to once again provide State Budget Payroll Loans with rates as low as 0% annual percentage rate (APR). The loans are for its members who are state legislative staff--including gubernatorial and constitutional appointees--provided they have a Golden 1 checking account with direct deposit of their state payroll checks by Wednesday. “Golden 1 was founded nearly 77 years ago by California State employees under the concept of people helping people,” says Teresa A. Halleck, Golden 1 president/CEO. “This philosophy is still paramount to our credit union and, as the state budget resolution continues, we intend to support our state employee members.” State workers could see their pay cut to minimum wage until the state government reaches a budget accord this summer, according to a memo from Gov. Arnold Schwarzenegger's administration sent Wednesday. Schwarzenegger is seeking the pay cut as yet another overdue state spending plan is pending (The Los Angeles Times June 24). In 1992, Golden 1 pioneered 0% annual percentage rate State Budget Payroll Loans to help state legislative employees whose paychecks were deferred during periods of budget impasse. Current and new Golden 1 members who are legislative staff and who sign up for direct deposit after Wednesday, will be eligible for a State Budget Payroll Loan with a 4.99% APR. “Golden 1 has a legacy of giving back to its communities during times of need,” Halleck said. “Our members who are state employees have our assurance that Golden 1 will be there for them with assistance should they need us during this state budget impasse.” The Golden 1, based in Sacramento, has $7.3 billion in assets.

Southeast Corporate elects officers

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ORLANDO, Fla. (6/29/10)--Southeast Corporate FCU announced the results of its election of directors and board officers during its annual meeting in Orlando June 17. Tim McMurry, president/CEO of PowerNet CU, Tampa, Fla., and Ralph Crockett, president/CEO of BrightStar CU, Fort Lauderdale, Fla., were each re-elected to serve three-year terms on the board. During its reorganization meeting the board elected these officers, who will serve until the 2011 annual meeting:
* Chairman, McMurry; * Vice chairman, Jim Mitchell, president/CEO, Army Aviation Center FCU, Daleville, Ala.; * Financial officer, Crockett; and * Secretary, Debbie Jones, president/CEO, UT FCU, Knoxville, Tenn.
Other board members include:
* Robert Fertitta, chief financial officer (CFO), Navigator CU, Pascagoula, Miss.; * William Marquardt, president/CEO, City County CU, Fort Lauderdale, Fla.; and * Richard Tolar, senior vice president and CFO, Kessler FCU, Biloxi, Miss.

IL.A. TimesI A CU might be your best bet

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LOS ANGELES (6/29/10)--Consumers who are tired of large banks should check out credit unions, the Los Angeles Times said Sunday. “If you're a regular consumer seeking an alternative to the big banks, a credit union might be your best bet,” wrote E. Scott Reckard in an article titled, “Dumping your big bank? How to choose a new one.” “Consumer banking is what credit unions do,” Edward J. Carpenter, an Irvine, Calif., investment banker who has advised hundreds of start-up banks, told the Times. The article mentioned the situation of a Los Angeles area couple--Mark and Roberta Maxwell--who left their bank, the former Washington Mutual, which was taken over by Chase. The Maxwells moved their account last year to Musician’s Interguild CU, Los Angeles, because the bank assessed too many fees and lost its personal touch, they told the newspaper. “Even in online banking, which is dominated by large banks, a survey this year awarded the highest satisfaction ratings to credit unions,” the paper said. The article also noted that credit union members can access 25,000 surcharge-free ATMs nationwide. To read the article, use the link.

IABC NewsI Youve GOT to find a way to join a CU

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NEW YORK (6/29/10)--Consumers need to find a way to join a credit union to be able to enjoy all the great resources they offer, said an ABC News correspondent Monday. “I was once again reminded what phenomenal resources credit unions
Click to view larger image New Jersey Credit Union League President Paul Gentile (right), ABC correspondent Elizabeth Leamy (center) with her book, Save Big, and Shawn Gilfedder, CEO of McGraw-Hill Employees FCU are shown here after a "Good Morning America" taping of a segment featuring the New Jersey credit union helping a local couple save big on an car loan. The segment is expected to air soon. (NJCUL photo)
are,” said Elisabeth Leamy, ABC News consumer correspondent, in an posting titled, “Save Big Money on Home and Car Loans: Go to Credit Union for Auto Financing.” Leamy recently completed taping a segment at McGraw Hill FCU about its work to help a New Jersey save big on an auto loan. The segment is expected to be aired soon. The posting continued, “In fact, if you are in the market for a car, you have GOT to find a way to join a credit union, if you're not already a member. You can find one you are eligible for at Find a Credit Union. “Credit union auto financing is generally such a great deal that I'm going to issue a rule here: never shop for a used car at a dealership without first getting outside financing quotes, especially from a credit union,” she added. Leamy then compares car loan interest rates at her credit union with those of area banks. To read the segment, use the link.

New Jersey league monitoring state budget negotiations

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TRENTON, N.J. (6/29/10)--The New Jersey Credit Union League is monitoring negotiations between the governor's office and the state Legislature on final details of the state's Fiscal Year 2011 budget. There are two budget-related areas of concern to credit unions, the league said in its newsletter, The Daily Exchange (June 28):
* A potential payroll tax increase to replenish the state's insolvent Unemployment Insurance Fund that would average $400 per employee; and * Abandon property and dormancy fee changes to payment instruments such as travelers checks (three years), money orders (three years) and gift cards (one or two years). Abandon property proposals would prohibit dormancy fees on gift cards during the first year and limit them to $2 per month for travelers checks and money orders. The changes would become effective immediately.
July 1 is the deadline set by the state's constitution for final passage of the budget to avoid a state government "shut-down" similar to one in 2006. No one expects a shut down, but lawmakers are still making last minute efforts on pet projects, said the league.

NY bill passes lets insurance cos. work with CUs

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ALBANY, N.Y. (6/29/10)--The Credit Union Association of New York has secured passage of state legislation that allows insurance companies to deposit their funds in New York State credit unions. The legislation (S.3499-A/A.8557A) reverses a ruling of the New York State Insurance Department that prohibited insurance companies from investing in credit union share certificates, even though the companies routinely place money in bank certificates of deposit. The legislation was sponsored by state Sen. Neil Breslin, chairman of the Senate Insurance Committee, and Joseph Morelle, chairman of the Assembly Insurance Committee, and was unanimously supported in both chambers. The next step is for the bill to be sent to Gov. David Paterson for his approval. If approved by the governor, insurance companies--other than life insurance companies--will be able to invest up to $250,000 in share certificates with credit unions where they are eligible for membership. "This bill is another example of how fighting for credit union parity with banks benefits consumers," said association President/CEO William J. Mellin. "Now insurance companies will be able to put their money where they can get the best return on earnings." "The strong leadership of both chairmen in guiding this bill through the legislative process was essential to the bill's passage," Mellin continued. "And the fact that so many members supported the bill shows that credit unions are an important constituency." The association worked closely with the New York Insurance Association, which had been contacted by members that wanted to work with credit unions but were prevented from doing so under the current legislation.

WOCCU charity auction goes online at The 1

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LAS VEGAS (6/29/10)--The Worldwide Foundation for Credit Unions, the charitable and gift-receiving arm of World Council of Credit Unions (WOCCU), has taken its annual auction online this year. Shoppers worldwide will bid online on contributed auction items to help raise funds for global credit union development work.
Click to view larger image World Council of Credit Unions’ charity auction co-chair Judy Ensweiler (center) examines an autographed photo of Muhammad Ali, one of the nearly 100 auction items available, as Worldwide Foundation for Credit Unions Executive Director Valerie Breunig (left) and foundation Specialist Jeri Davis (right) look on. (Photo provided by the World Council of Credit Unions)
The auction, traditionally part of WOCCU’s World Credit Union Conference, will be held this year at The 1 Credit Union Conference, the joint event sponsored by WOCCU and Credit Union National Association (CUNA) that will convene July 11-14 at the MGM Grand Hotel in Las Vegas. Conference participants may examine items up for bid in person, then go to one of the computer terminals in the auction hall and place bids (use the link). Individuals who are not attending the conference may also bid on items at the same Web address. “In the past, only conference attendees could bid on the auction items, but this year the auction is open to everyone,” said Judy Ensweiler, wife of Texas Credit Union League President/CEO Dick Ensweiler. She is co-chairing the auction this year with Crissy Cheney, wife of incoming CUNA President/CEO Bill Cheney. “WOCCU works every day to improve the lives of those less fortunate by developing credit union systems around the globe,” she added. The auction site became available for viewing Monday, enabling bidding to begin. The bidding ends at the closing of the conference trade show July 13 at 1:45 p.m. Winning bidders will be notified via e-mail. A live auction will be held during the conference’s closing event July 14, with auctioneer Dick Ensweiler presenting the auction’s premier items for bidding. Bidders may register online with a credit or debit card (no cash will be accepted) and bid any time until July 13. For more information about the auction, contact Valerie Breunig, Worldwide Foundation executive director, at 608-395-2055 or For more information, use the links.

CUNA Mutual forms retirement plan investment committee

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MADISON, Wis. (6/29/10)--CUNA Mutual Group has formed its Retirement Plan Services Investment Committee to provide enhanced due diligence support for plan sponsors offering its Choice 401(k) program.

The committee provides research, analytical studies and monitoring for due diligence reporting behind every investment option available in the Choice retirement program, said Tom Eckert, CUNA Mutual vice president of Retirement Plan Services. “We provide the reports and recommendations of the committee to our plan sponsors so they will have thorough information for their due diligence files.” The five-person committee will meet quarterly and be comprised of experienced CUNA Mutual investment professionals. Members include investment analysts, investment strategists and chartered financial analysts (CFAs) who understanding ERISA regulation of retirement plan investments and financial product development and management. They include:
* Scott Knapp, director of investment strategy and committee chairman; * Thomas J. Merfeld, senior vice president and chief investment risk officer; * Scott Powell, managing director for general account investments; * Christopher J. Copeland, vice president and corporate treasurer; and * Thomas M. Preusker, investment analyst for Retirement Plan Services.
The Choice 401(k) product uses a low-cost group annuity platform and offers more than 75 different sub-account choices from a variety of well-known investment managers, Eckert said. “We want our plan sponsors to know that every investment option available in their plan has been thoroughly screened and monitored.” In addition to traditional screens for investment quality and consistency, the committee has integrated unique behavioral screens into its analysis. “The goal of a behavioral screen is to identify funds that make it easy for participants to decide to save, save enough, and achieve adequate diversification,” said Knapp. “We're doing our best to encourage optimal decision making, which we believe is far more important than achieving eye-popping fund returns. This supports our outcome-based approach.” CUNA Mutual has engaged Mesirow Financial to provide an independent review and certification of its enhanced retirement platform due diligence process. "At the top of our priorities is helping our plan sponsors meet their obligations as fiduciaries. Our engagement with Mesirow Financial takes us a long way down that path,” Knapp said. Mesirow Financial will evaluate CUNA Mutual’s investment manager screening, evaluation, reporting and monitoring processes and provide an independent certification that CUNA Mutual’s processes meet or exceed industry standards. CUNA Mutual manages 4,000 credit union retirement plans representing $6 billion in assets under administration.