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CU System briefs (06/05/2014)

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  • CLEARWATER BEACH, Fla. (6/5/14)--Organizers are inviting credit union leaders to attend this year's Combined Council of America's Credit Unions annual conference. Slated for Sept. 10-13 at the Hyatt Regency Clearwater Beach Resort and Spa in Clearwater Beach, Fla., council leaders encourage those from credit unions with a focus on the automotive industry to attend. The combined council is the association for automotive industry credit unions, including Daimler Chrysler, Ford, GM and International ...
     
  • SACRAMENTO, Calif. (6/5/14)-- The California and Nevada Credit Union Leagues have hired Lindsey Freitas as its new manager of grassroots advocacy ( In the News June 3). Before joining the leagues, Freitas worked for the American Lung Association and the California Professional Firefighters, where she helped advance the legislative and political goals of firefighters from throughout the state ...
     
  • BROOMFIELD and BOULDER, Colo. (6/5/14)-- Community Financial CU, Broomfield, Colo., with $146 million in assets, and Boulder (Colo.) Municipal Employees FCU, with $65 million in assets, announced this week they will merge ( Boulder County Business Report June 3). While both credit union boards have approved the plan, the merger still awaits a vote of their memberships and approval by regulators. "There is tremendous competition in our industry, and this move will allow us to grow and ensure long-term value for our members," said Ann Babiak, Boulder Municipal president/CEO. The new credit union, which will retain the Community Financial name, will serve more than 18,000 members and hold more than $200 million in assets. . . 

One more stop for Ill. league-backed balanced-exam law

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NAPERVILLE, Ill. (6/5/14)--Both chambers of the Illinois General Assembly last week overwhelmingly passed an Illinois Credit Union League-backed bill that would provide consistency in the regulatory examinations of state-chartered credit unions.
 
House Bill 5342 was sponsored by longtime credit union supporters Deputy Majority Leader Rep. Lou Lang (D-Skokie) and Sen. Dave Koehler (D-Peoria). The Illinois league worked with the state Department of Financial and Professional Regulation to draft guidelines that ensure all state regulatory examinations are conducted in a procedurally and substantively consistent manner. 
 
"This measure will help ensure we maintain a consistent exam protocol in Illinois for the benefit of all parties concerned," said Stephen Olson, league executive vice president/general counsel. "There will now be standards that state-chartered credit unions can reference and rely upon with respect to the entire regulatory examination process."
 
League President/CEO Sean Hession said, "The contents of the bill, as well as the rules and guidelines to promulgate it, are cause for celebration and will serve as a model across the country for state and federal regulators."
 
The bill passed in the Illinois House by a vote of 109-0-1 on March 21 and then in the Senate 56-0 on May 28. It is awaiting signature by Gov. Pat Quinn.
 
Key elements of HB 5342 include:
  • Board members must have a basic understanding of the credit union's financial statements, services and products offered to the membership, operational risks and internal control structures;
     
  • Supervisory committee members must receive annual training with respect to their statutory duties;
     
  • Authorization for credit unions to forego the burden of procuring a new appraisal in connection with a mortgage loan renewal, refinancing or restructuring, when no new money is advanced (other than closing costs).
     
  • By written agreement, credit unions can share daily operational services, correspondent services and fixed assets to achieve improved economies of scale.
     
  • Establishment of charitable donation to buttress credit union charitable giving efforts in the current low-yield environment. These accounts, which may include otherwise impermissible investments, will give a credit union the opportunity to achieve a higher yield provided that at least 51% of the return from the account is donated to a recognized charity.

Hawaii league installs board officers

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HONOLULU (6/5/14)--The Hawaii Credit Union League announced its board officers and executive committee during its 76th annual meeting, held May 17.
 
The executive committee is:
  • Chair: Alan Arai, director, Valley Isla Community FCU, Kahului, with $106 million in assets;
  • Vice chair: Clayton Fuchigami, president/CEO, Maui FCU, Kahului, with $59 million in assets;
  • Secretary: Cheryl Weaver, assistant vice president, CU Hawaii FCU, Hilo, with $242 million in assets; and
  • Treasurer: Scot Tsuchiyama, manager, Kekaha FCU, with $19 million in assets.
Other board members are Mel Chiba, president/CEO, $360 million-asset Kauai Community FCU, Lihue; Jeanine Morse, president/CEO, $547 million-asset University of Hawaii FCU, Honolulu; and Gordon Sam, chair, Pearl Harbor FCU, Waipahu, with $337 million in assets.
 
The directors also serve on the board of the league's wholly owned subsidiary, HCU Services Corp.

Okla. gov. signs CU-backed tow-truck bill

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OKLAHOMA CITY (6/5/14)--Oklahoma Gov. Mary Fallin Tuesday signed into law legislation that addresses questionable business practices among the state's tow truck operators, marking the final hurdle for a bill drafted on behalf of Oklahoma credit unions.
 
SB 0582 requires towing companies to notify lien holders when a vehicle is towed.
 
The legislation was supported by the Oklahoma Credit Union Association--a subsidiary of the Cornerstone Credit Union League (Leaguer June 4).
 
"Getting this bill passed was a long haul, and extremely contentious, but in the end, credit unions have persevered," said Nate Webb, association president. "This isn't just a victory for credit unions. It's also a victory for our members who own their credit union."
 
Oklahoma credit unions have reported instances in which operators will tow a vehicle and store it without timely notification to the lien holder. In cases in which notification was not sent in a timely manner, storage fees accrued and, in many instances, the cost of recovering the car reportedly was more than the collateral.

S.F. reality fair seeks ACUC volunteers

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MADISON, Wis. (6/5/14)--Learning is a given for attendees of America's Credit Union Conference, but this year, the Credit Union National Association's summer event is giving attendees a chance to teach as well. The conference will be June 29-July 3 in San Francisco.
 
More than 50 students from the San Francisco area will have an opportunity to take part in the June 30 reality fair, presented by the National Credit Union Foundation and the Richard Myles Johnson Foundation.
 
The "Bite of Reality" financial education fair needs volunteers to set the stage for the simulation where students learn to navigate the challenges of work, home, family and budgets.
 
During the registration process, interested attendees can select the volunteer option, which is free but has limited space.
 
CUNA's Governmental Affairs Conference also has offered Washington, D.C.-area high schools, credit unions and conference attendees a chance to take part in a reality fair.

Summer finance academy keeps high school students in the books

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SANTA ROSA, Calif. (6/5/14)--Redwood CU is partnering with the Sonoma County Office of Education and Santa Rosa City Schools to offer a free financial academy for California high school students.
 
This is the 11th time the $2 billion-asset, Santa Rosa-based credit union has offered the program ( North Bay Business Journal June 2).
 
Using the high school financial planning program created by the National Endowment for Financial Education, the 16-hour program includes topics such as budgeting, financial planning, saving and investing, credit and debt management and other life skills related to managing money.
 
Teens come together to work on group activities and are also given presentations from Redwood CU experts in their respective fields.
 
The six modules included in The Summer Banking and Finance Academy program are:
  • Money Management: Control Your Cash Flow;
  • Borrowing: Use--Don't Abuse;
  • Earning Power: More Than a Paycheck;
  • Investing: Money Working for You;
  • Financial Services: Care for Your Cash; and
  • Insurance: Protect What You Have.
The four-day program will be held June 17-20 at the Redwood CU administrative offices in Santa Rosa. While past academies have been limited to high school juniors and seniors, eligibility has been extended to include students entering their sophomore year at any Sonoma County high school.

Registration now open for July's NYIB conference

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MADISON, Wis. (6/5/14)--Registration is now open for this year's National Youth Involvement Board (NYIB) Conference, set for July 30-Aug. 1 in Grand Rapids, Mich.
 
Keynote speaker Ted Beck, president/CEO of the National Endowment for Financial Education, will discuss successes in financial education and the importance of teacher training.  As a member of the new President's Advisory Council on Financial Capability for Young Americans, Beck also will address the need for a national evaluation program.
 
Other sessions will cover technology, leadership, best practices for school programs and how to reach markets such as young families and college students.
 
For more than 40 years, NYIB has collected and shared information regarding youth and credit unions. Today it is a resource for credit unions and their youth financial literacy programs, tracking the hundreds of educational opportunities delivered to students nationwide.

Data security concerns empty shoppers' online carts

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SAN FRANCISCO (6/5/14)--Security breaches at Target and eBay and other large entities have apparently caused consumers to think twice before entering card data and other personal information to make purchases online, according to a USA TODAY survey.
 
Almost a quarter of U.S. consumers have at least temporarily stopped buying online because of concerns about security, according to the survey.
 
About 24% of those surveyed said they had stopped making online purchases in recent weeks because they were concerned about the safety of information they might put online.
 
Another 56% said they limited the number of Internet sites they used and were visiting the sites of large, well-known companies they deemed safe.
 
Consumers are logging online to keep tabs of their money. About 55% of respondents said they are checking banking, investment and credit card sites more often to verify that no one had accessed their accounts.
 
Whether the more cautious behavior will necessarily last is another question. Cameron Camp, a security expert with ESET, a San Diego-based security and antivirus company, likened the online purchasing freeze to a diet. "You're on good behavior for a while and then you return to whatever you were doing before," Camp told USA TODAY .
 
People with less education and lower incomes were more likely to stop buying anything online, according to the USA TODAY poll. Respondents with more education and higher incomes were more likely to have changed passwords and limited the sites they visit.
 
Thirty percent of people who had not attended any college had stopped buying online, compared with 16% of those with college degrees.
 
Of people with incomes under $30,000, 34% had stopped buying online compared with 15% of those with incomes of $75,000 or more.
 
About 64% of those surveyed said they had changed a password in the wake of security breaches.
The USA TODAY poll of 790 internet users was conducted May 29-June 1 by Princeton Survey Research, with a margin of error of plus or minus four percentage points.
 
And consumers are likely to be even more cautious with their online information after American Express announced Wednesday in a letter to the California Attorney General's Office that 76,608 people in the state will get a breach notification letter after some of their data was published by Anonymous Ukraine earlier this year ( CSO June 4).
 
In March, Anonymous Ukraine released more than 7 million records as part of a protest against the financial firms that helped "enslave" people the world over.
 
"AXP was informed by law enforcement that several large files containing personal information were posted on internet sites by claimed members of Anonymous, a worldwide hacking collective. The source(s) of the posted data is/are not currently known. The posted records contained varying data elements, but AXP has identified, and is providing notice via mail to, 58,522 California residents whose names and corresponding AXP account numbers were involved," the company's letter to the attorney general explained.

CU to pilot payday-loan consolidation program

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MANHATTAN BEACH, Calif. (6/5/14)--A California-based credit union is one of five institutions to begin piloting a type of small-dollar loan program whose creator, the Center for Financial Services Innovation (CFSI), hopes will lead to better financial health for millions of borrowers.  

Kinecta FCU, Manhattan Beach, Calif., with $3.2 billion in assets, as part of the Small-Dollar Credit Test and Learn Working Group, will roll out a payday consolidation loan this month that will enable members to convert multiple outstanding payday loans into a single installment loan.

Consumers spent more than $41 million in 2012 on small-dollar credit products such as payday loans, deposit advances and auto title loans, often receiving the loans from predatory lenders who charge unmanageably high-interest rates that can shove borrowers deep into debt ( News Now Feb. 28).

Each of the members of the Working Group, funded by the MetLife Foundation, the Ford Foundation, and the Omidyar Network, will test a different small-dollar loan tool, which harness ideas developed by CFSI's Compass Guide to Small-Dollar Credit, released earlier this year.

"We believe that supporting initiatives like the Test and Learn Working Group will offer critical insights into aspects of financial inclusion that will enhance programs and advance our common goals," said Dennis White, president/CEO of MetLife Foundation. "We know that providing access to quality, affordable products and services for low-income individuals and families is important, but it is equally important to ensure that these programs advance research and deepen knowledge in this area."

Other institutions within the working group will test programs that will allow consumers to borrow money with less funds in their savings accounts; increase usage of a "Save as You Repay" program that incentivizes consumers to contribute additional funds to their savings each time they make a payment on an installment loan; and provide access to an online loan product where consumers can customize their loan terms and monthly payment amounts.

As defined by CFSI's guide, high-quality, small-dollar loans:
  • Are made with high confidence in the borrower's ability to pay;
     
  • Are structured to support repayment;
     
  • Create opportunities for upward mobility and improved financial health;
     
  • Are accessible and convenient; and
     
  • Provide support and rights for borrowers.