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Two NYIB deadlines around the corner

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COLUMBIA, S.C. (7/1/10)--Two deadlines are approaching for members of the National Youth Involvement Board (NYIB) related to reporting their classroom presentations and registering for the hotel at the next NYIB 2010 Annual Conference on July 26-29 in St. Louis. Credit unions have until Tuesday to report all their classroom presentations data to the NYIB website (see link) for NYIB's official 2009-2010 figures, said Brandon Pugh, NYIB chairman and director of communications and public relations at the South Carolina Credit Union League. Credit unions who make financial education presentations in classrooms enter the data on NYIB's website. The data are used in NYIB awards, annual report and media releases. Pugh noted that NYIB is close to its goal of reaching 400,000 students. For each presentation, a credit union selects the venue (school) from the list of locations, and enters the number of students under these eligible topics:
* National Endowment for Financial Education (NEFE) High School Financial Planning Program; * Biz Kid$ (companion curriculum); * Money management; * Credit union careers; * General credit union background; * Credit; and * Other.
"From each user's input, we get a total number of presentations and students reached, and we recognize top performers including those who show the largest percentage increase from one year to the next," Pugh told News Now. "We're also going to add team recognition this year since some credit unions report aggregate rather than individual data," he said, adding that NYIB encourages individual data. The second deadline, July 9, is extended cutoff date for making reservations for the Renaissance Grand Hotel in St. Louis to attend NYIB's 2010 Annual Conference. The conference rate is $119/night.

Texas CUs ready for contingencies from hurricane

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MADISON, Wis. (7/1/10)--While credit unions in Texas battened down their hatches, the Texas Credit Union League, the National Credit Union Administration (NCUA), and CUNA Mutual Group took measures Wednesday to ensure credit unions were prepared for Hurricane Alex, which hit landfall at 9 p.m. CT in northern Mexico, about 110 miles south of Brownsville, Texas. The Category two hurricane packed 100 mph hour winds at landfall and continued to move inland at about 10 mph, said weather.com last night. It was the first Atlantic Basin hurricane of this year's hurricane season. It also was the first to hit during the month of June in more than 15 years--since Hurricane Allison in 1995, and the first to make U.S. landfall in June since Hurricane Bonnie in 1986, said weather.com. "Past hurricanes have taught us the criticalness of being prepared for a hurricane's arrival, especially in the area of communications before, during and after the storm," Dick Ensweiler, president/CEO of the Texas league, said Wednesday. "We are keeping a close watch on Alex, and are doing our best to keep our credit unions in the potentially affected areas informed. Should Texas be impacted by Hurricane Alex, we will be ready to respond to the needs of our credit unions and their staff," Ensweiler said. On Tuesday, the league e-mailed credit unions in the Tri-Chapter area (Coastal Bend, Magic Valley and Texas Crossroads) to let them know the league was actively monitoring Alex's progress, said Linda Webb-Manon, director of public relations at the league. The league attached a 21-page Disaster Planning Guide that outlines the planning process and plan development. The guide also emphasized the importance of awareness, preparation communication and mitigation, as well as recovery steps and checklists including an Emergency Plan Checklist and Credit Union Disaster Preparedness Operations Checklist, she told News Now. The league's Disaster Preparation website (see link) provided resources and a storm tracker so credit unions could monitor the storm's path. "We do have a disaster recovery team in place, and this team is monitoring Hurricane Alex," Webb-Manon said Wednesday afternoon. NCUA, in anticipation of the potential impact, Wednesday advised credit unions and members in the storm's potential path to "prepare for all contingencies, including the possible interruption of some credit union operations." Members impacted by Hurricane Alex can call an emergency toll-free hotline, which would be activated as needed, said NCUA. It also will have information, including the operating status of credit union branches, on its website (use the link). NCUA will distribute a public service announcement to news media in the states affected with information for consumers about federal deposit insurance coverage for credit unions and how to access their funds. Credit unions in the area were advised to review their contingency of operations plans and business continuity procedures so they could provide financial services for their members. In an evacuation, NCUA encouraged credit unions to take these actions:
* Identify alternate sites and prepare them for potential activation; * Back up systems with backup data stored in a secure location that is accessible outside the impacted area; * Notify the NCUA regional office with the location(s) of the alternate site(s), telephone numbers, and management emergency contact telephone numbers; * Identify any deploying employees and prepare them to take necessary data and/or equipment to the alternate site location; and * Test their backup systems to ensure proper operation.
In addition, credit union staff and members may wish to document important personal family and financial information, NCUA said. See the U.S. Department of Homeland Security link. CUNA Mutual Group also was making preparations for the hurricane, said Phil Tschudy, media relations manager. "As a precaution, CUNA Mutual has contacted policyholder credit unions in Brownsville that carry our property and casualty coverages," he told News Now. "We provided the credit unions with our emergency claim contact information, and we have obtained theirs." "We advised them we will continue to monitor the storm and asked them to contact us if they sustain any damages. Our toll-free disaster hotline (800-637-2676) is answered 24/7. We plan to follow up with the credit unions once the storm passes," Tschudy said.

IU.S. NewsI and ITimeI bloggers among those touting CUs

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MADISON, Wis. (7/1/10)--Bloggers for U.S. News and World Report and Time magazine, as well as a CNNMoney.com item and a segment on a 24-hour news channel in New York, all posted articles extolling the virtues of credit unions Tuesday. The four media hits include:
* Alpha Consumer, the U.S. News and World Report money blog. Blogger Kimberly Palmer noted her bank is ending its free checking accounts and suggested consumers shop around for the best options on fees. She quoted Bargaineering.com, which said that "consumers might also want to take a closer look at credit unions" for lower fees. The story pointed readers to websites to locate a credit union, including findacreditunion and the Credit Union National Association (CUNA) website. The article also appeared on Yahoo! Finance. * Time's money blogger, Brad Tuttle, who wrote that overdraft fee restrictions and tightened credit card regulations have prompted banks to start charging more fees. "But consumers shouldn't roll over and give up on free checking just yet," he said, noting "plenty of resources" to assist in switching to financial institutions that still offer free checking. He referred to a recent Los Angeles Times article, "Dumping your Bank? How to find a new one," which made the case for doing business with credit unions. * CNNMoney.com article Wednesday on "Spending smart when the euro is cheap." Consumers traveling on the continent and wanting to save on credit card fees can avoid paying transaction fees with a low-fee card. "Credit unions and niche banks often levy lower fees..." said the author, Veronica Crews. * NY1.com, New York City's 24-hour newschannel on the Web, which featured "Credit Unions Offer Intimate Alternative to Big Banks." Writer Shazia Khan said that "for some, a credit union beats out a bank as the right solution for one's financial needs." The segment discussed the benefits of membership and noted credit unions' low or no minimum checking and savings accounts. "While it is always good to compare fees and interest rates, they tend to be more agreeable at credit unions," said the article.
For the full articles, use the links.

Members United Corporate roundtable looks at trends

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ALBANY, N.Y. (7/1/10)--Members United Corporate FCU hosted three, one-day CFO Roundtable events in Worcester, Mass., Garden City, N.Y., and East Windsor, N.J., bringing together credit union CEOs, chief financial officers (CFO) and chief information officers. The CFO Roundtable featured presentations from National Credit Union Administration (NCUA) representatives who shared NCUA’s perspective on economic trends and areas of focus during future examinations by the agency. Presenters included:
* Marcia Sarrazin, associate regional director, NCUA; * Terrence Adam, supervisory examiner, NCUA; * Mark Cantor, supervisory examiner, NCUA; * Roy Gray, supervisory examiner, NCUA; * Steve Simon, supervisory examiner, NCUA; * Paul Richard, executive vice president/CFO, Webster First FCU; Worcester, Mass.; * Benjamin Dubbrin, manager, business development, Altisource Portfolio Solutions; and * James Zeldin, senior vice president, mortgage services and business development, Altisource Portfolio Solutions; * John J. Almeida, senior director, Financial Product Sales, Balance Sheet Solutions LLC; * James Mathews, senior analyst, Investment Advisory, Balance Sheet Solutions LLC; * Gregg Perry, account executive, Balance Sheet Solutions LLC;
Members United will host another roundtable event Oct. 14-15 in Verona, N.Y.

WOCCU Spanish Immersion Program early deadline Sunday

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MADISON, Wis. (7/1/10)--The World Council of Credit Unions’ (WOCCU) Spanish Immersion Program is offering a discounted early bird registration rate. Credit union staff can save $100 by registering on or before Tuesday. The Spanish Immersion Program, which begins Oct. 2, is a total immersion experience that provides participants insight into the language and culture of the Hispanic market. This year’s program is in San Jose, Costa Rica, and includes four hours each day of Spanish language instruction at a certified language school, with an emphasis on business and financial terminology. Participants can apply what they learn from language classes while living with pre-screened Costa Rican host families. The host family will provide a private room and all meals. Along with the experience of being a part of a Hispanic family, participants also will intern at a Costa Rican credit union. Participants can choose a one- or two-week session priced at $1,700 and $2,500, respectively. Prices are good through Tuesday. The program is one of the four qualifying steps in the International Credit Union Development Education training. For more information, use the links.

Calif.Nevada leagues reach high affiliation rate

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ONTARIO, Calif. (7/1/10)--This year, the California Credit Union League has achieved a 76% affiliation rate, and the Nevada Credit Union League has reached an 82% affiliation rate. The high rates are significant given the effects of the recession, which has severely impacted California and Nevada credit unions, the leagues said. Eleven new members have either re-joined or joined the leagues this year. Some--such as Cooperative Center FCU in Berkeley, Calif.; Downey FCU in Downey, Calif.; Los Angeles Electrical Workers CU in Pasadena, Calif.; Media City Community CU in Burbank, Calif.; and Northern Redwood FCU in Arcata, Calif.--had been away for a number of years, the leagues said. The leagues also noted an increase in the number of associate members--those headquartered out of state that provide services or have branches locally. There are 17 new members in 2010, an increase from 14 during a typical year. Alaska USA FCU, Anchorage; Credit Union 1, Rantoul, Ill.; Self Help FCU, Durham, N.C.; and Mountain America CU, West Jordan, Utah; became associate members after merging with a California or Nevada credit union. The Ontario, Calif.-based California and Nevada leagues represent more than 360 credit unions in the two states. More than 10 million California and Nevadan residents are credit union members.

CUs banks expect online-lending growth but barriers exist

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MEQUON, Wis. (7/1/10)--Credit unions, which take one-fifth of their mortgage applications online, said they expect their online applications to grow to 31% of total volume--a 55% increase--according to a survey Mortgagebot released Wednesday. The survey, conducted earlier this year by Lieberman Research Group, analyzed 330 American financial institutions--including 79 credit unions--regarding online lending technology. It confirmed that online mortgage application volume is expected to more than triple by 2013, Mortgagebot said. While 18% of lenders surveyed said they offer an online application, about 82% of credit unions surveyed said they are very or somewhat familiar with online lending technology. Roughly 71% of institutions said they envision needing to offer the technology to borrowers, and 46% said they are actually evaluating or planning to evaluate the applications. Two-thirds said they would implement a solution before 2012. The survey results contradict traditional attitudes that view the Internet as a poor substitute for personal service, Mortgagebot said. Among the lenders surveyed that already offer or are planning to offer a smart, interactive mortgage application, well over half--and nearly two-thirds of those with $500 million or more in assets--said their primary reason for going online is to better serve borrowers. The need to improve efficiency came in a distant second, Mortgagebot said. “Today’s borrowers prefer the Internet as a delivery channel for financial services, including mortgages,” the company added. “Lenders that are fully engaged with their borrowers realize that to compete in 2010 and beyond, they must meet borrowers at their preferred point of sale.” The survey also verified the importance of providing a consistent “borrower experience” by using a single technology solution to integrate all of a lender’s mortgage point-of-sale channels. About 56% of credit unions said they see point-of-sale mortgage technology playing an “extremely important” role in their mortgage businesses soon. Several barriers exist to using online lending technology, according to American Banker (June 30). Credit unions and banks cited concerns about the cost of adopting such technology, the fact they are dealing with a number of regulatory issues and protecting borrowers’ security. Mortgagebot, Mequon, Wis., provides mortgage lending solutions to financial institutions such as credit unions. Those surveyed were not Mortgagebot clients and represented institutions having more than $100 million in assets.

GCUAs Mercer says no to interchange in op-ed

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ATLANTA and DULUTH, Ga. (6/30/10)--"A controversial [interchange] provision in the financial reform bill pending in Congress should be a big concern for consumers and needs to be taken out," said Mike Mercer, president/CEO of Georgia Credit Union Affiliates, in a pro-and-con op-ed published Monday in the Atlanta Journal Constitution. Referring to the interchange amendment in the bill pending before Congress, the publication had asked, "Should the Fed regulate 'swipe fees' for debit cards?" "No, the fees offset risks born by card issuers and lower fees will mean fewer debit card issuers," said Mercer. The amendment "should be separated from the bill and debated on its own merits" because there are "too many unaddressed and unanswered questions in this hastily prepared add-on," he wrote. Networks currently setting interchange fees "must balance the interests of the merchants and financial institutions: Charge too much and stores will not accept the cards; charge too little and financial institutions will not offer cards to consumers," Mercer wrote. "What factors will the Fed use to set the interchange rate? Will it cover all operating costs such as fraud, card issuance and call center operations?" he asked. Merchants benefit from accepting debit and credit cards because they are immediately paid at the point of sale and do not have to handle cash and bounced checks or wait for a check to clear. Nothing in the law requires merchants to pass their savings to consumers, Mercer said, adding, "What safeguards exist to ensure that consumers will benefit?" "The interchange fee helps credit unions offset the operational expenses and risk of an electronic payment system that supports popular products consumers want, need and enjoy. As not-for-profits, credit unions generally offer lower-priced card services," he said. "The interchange amendment may destroy the ability of small issuers, such as credit unions, to provide debit card services to their members," he said, adding, "The very real possibility is that the amendment will actually increase payment costs and decrease convenience for consumers." The "Yes" viewpoint was presented by the Georgia Retail Association President John Heavener, who argued that swipe fees hurt small retailers and drive up costs for consumers. For the full opinions, use the link.

Consider CU to avoid checking account fees--IUSA TodayI

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NEW YORK (6/30/10)--Consumers worried about new checking account fees can take several steps to avoid them. One step: consider opening an account at a credit union. So says USA Today columnist Sandra Block in her Your Money column. Entitled "How to steer clear of checking account fees on the horizon," the article notes that it has been years since consumers have had to worry about checking account fees. Most financial institutions offered free checking that was subsidized by overdraft coverage fees and revenues from interchange fees paid by retailers for their customers' use of debit cards. But with overdraft and interchange regulations on the horizon, "this means banks are looking elsewhere for revenue," said Block. She noted recent disclosures by Wells Fargo and TCF Financial of plans to start charging fees for customers under the minimum balance required. In telling consumers to consider credit unions, Block cites a Bankrate.com survey that found 39 of the 50 largest credit unions offer free checking. Only three require a minimum balance to avoid a checking fee. For the full article, use the link.

CU System briefs (06/29/2010)

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* ORLANDO, Fla. (6/30/10)--Three men have been arrested after a takeover robbery at a branch of Orlando-based McCoy FCU Monday morning in which the credit union manager was beaten. Five armed men stormed the building after 9 a.m., ordered employees to the ground, jumped a counter to the teller area and opened cash drawers (South Florida Sun-Sentinel.com June 28). Several news accounts said the manager was "badly beaten," while others said the manager was "battered." Police said the group left with an undisclosed amount of money in a red Dodge but then switched to a black Pontiac GTO and a purple Grand Am. Police on patrol spotted one of the vehicles and arrested Marcell A. Stalling, 20; Kyle Sawyer, 20; and Michael Holliday, 19. They are charged with armed robbery with a firearm/mask, aggravated battery with a firearm and armed kidnapping. The other robbery suspects were still at large (WDBO.com June 28) ... * SACRAMENTO, Calif. (6/30/10)--The Golden 1 CU has launched its Golden 1 app for iPhone and iPad users, announced President/CEO Teresa A. Halleck. The application provides members using the devices with a way to manage everyday banking needs on a single, safe and secure platform, said the $7.6 billion asset credit union. The new Golden 1 app is available for free download at the iTunes App Store. "With nearly 700,000 members, we know that we will have many members who will be able to take advantage of this new service," Halleck said ...

Woods is interim CEO at Arrowhead CU

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SAN BERNARDINO, Calif. (6/30/10)--Kay Woods has been named interim CEO of San Bernardino, Calif.-based Arrowhead CU, the $876 million asset credit union that was placed into conservatorship by the National Credit Union Administration (NCUA) Friday. Woods was formerly a CEO at Las Vegas-based Weststar CU but left years ago to become a consultant. She has experience as a conservatorship manager, according to John McKechnie, director of congressional and public affairs at NCUA. NCUA placed the credit union's senior management on paid administrative leave so it can conduct an ongoing review of the credit union's operations, McKechnie confirmed to News Now. Those on leave include Arrowhead CEO Larry Sharp; Daniel Marciante, chief financial officer; Gene Shabinaw, senior vice president of lending; and Ray Messler, senior vice president of strategic development (San Bernardino County Sun June 29). Income derived from last weekend's sale of four of Arrowhead's branches to Alaska USA FCU was not enough to remedy Arrowhead's poor financial condition, McKechnie said. "The credit union was not reversing negative trends and was not on a trajectory to return to profitability," he added. NCUA board is conducting a thorough review of Arrowhead's operations and will make a determination about the credit union's future when the review is completed, McKechnie said. Located in an area hard hit with high unemployment and sharp declines in the housing market, Arrowhead reported losses totaling $47.1 million in 2009 and $28.6 million in 2008, said the newspaper. In April, its net income was $3.7 million and fourth quarter profits were at $1.7 million. It reported $20.1 million in delinquent loans in March. More than 1,562 members had filed for bankruptcy by December.

CO-OP THINK PRIZE calls for entries

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RANCHO CUCAMONGA, Calif. (6/30/10)--CO-OP Financial Services is calling for entries for the CO-OP THINK PRIZE, which is giving a $10,000 grand prize award for the best idea on how to grow the credit union movement. The new, annual contest is designed to inspire and reward innovative, shareable ideas. The competition will proceed in three rounds, with Oct. 15 as the deadline for round one. Entrants will complete a simple questionnaire that serves as a program proposal establishing the idea and its merits to the industry. With replies of between 25 and 100 words per question, the round one questionnaire asks participants to:
* Describe the idea; * Tell how it benefits credit unions; * List the benefits to credit union members; * Expand on how it exemplifies credit union values; * Detail how the idea will propel the credit union movement forward; and * Explain how it can be shared with other credit unions.
Round one entries judged to be among the best will be invited to participate in a second round. They will be asked to develop a business plan for the idea. The second round deadline is Dec. 31. In the third round, three finalists will present their ideas at the THINK 2011 Conference in May 2011 in Anaheim, Calif. The winner will be determined by conference attendees, online viewers and a panel of experts from the Filene Research Institute and CO-OP. “The THINK Conference was created to excite, energize and inspire new ways of thinking, and the CO-OP THINK PRIZE aims to encourage innovative thinkers in the industry to share their ideas for changing the credit union movement for the better,” said Stan Hollen, president/CEO of CO-OP Financial Services. “Our judges will be looking for ideas that help credit unions be nimble, progressive, innovative and smart, while upholding their fiscally conservative values and personal member service experience.” In addition to the $10,000 in seed money, the winning entrant will also receive pledges of financial support and business services from THINK 2011 sponsors and the Filene Research Institute. Credit unions or individuals employed by them can participate. The three finalists will be notified around Jan. 31. For more information, use the link.

CU volunteers help man wildfire command center

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PHOENIX (6/30/10)--Arizona State CU, based in Phoenix, has helped with efforts in fighting a huge wildfire in the Coconino National Forest. It provided employee volunteers to help answer phones at a nearby command center and aided helpless animals affected by the fire. “We assisted in moving an animal shelter [from the path of the fire] and provided cash contributions to that agency to help it set up a makeshift facility for the animals,” Paul Stull, senior vice president of marketing for the $1.29 billion-asset credit union, told News Now. “We can’t fight the fire; we’re not experts at that, but we certainly can help the people that do,” Stull said. “This is really good time for the credit union to show its commitment to the community.” Fire crews are working toward full containment of the Schultz fire four miles north of Flagstaff, Ariz. The U.S. Forest Service said the fire is 75% contained after burning 15,075 acres. Tuesday’s crew work included checking on hot spots and rehabilitating areas that burned (KSWT.com via Associated Press June 29). The cost of fighting the wildfire is more than $7.6 million. The person or persons who set the wildfire after leaving an abandoned camp fire remain at large. Pam Leffel, who manages an Arizona State CU branch near the fire zone, has been in the forefront of the credit union’s efforts to help. “She has led a response mostly because we are involved in the community,” Stull said. “But also because many of our members have been evacuated from their homes. "We have responded to wildfires in the past to aid those who were evacuated and to help firefighters save homes; it’s a pretty important thing,” he added. “Our view of it is--that during really tough times--a credit union can show its brand value very well.”

Federation expands consulting tech assistance for CDCUs

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NEW YORK (6/30/10)--Responding to stress in the credit union community and the growing opportunities to access federal resources, the National Federation of Community Development Credit Unions has announced an expansion of its consulting and technical assistance services for community development credit unions (CDCUs). “There is growing alarm among small credit unions that the expenses for corporate stabilization and the Share Insurance Fund will increase pressure to merge or liquidate them,” said federation President/CEO Cliff Rosenthal. “Even small credit unions that are well-capitalized and present minimal risk to the fund are running scared. “To address this, the federation will be supporting several initiatives, including the ‘We Care’ program spearheaded by Joy Cousminer of Bethex FCU and our Spirit Network of faith-based credit unions, as a way to proactively reach out to some of our smallest CDCUs,” he added. Also, Brian Gately, formerly director of technical assistance, will serve as the federation’s senior consultant for small and emerging credit unions, leveraging his experience to help small credit unions meet their regulatory and compliance requirements. Terry Ratigan will continue as lead consultant for the federation’s CU Breakthrough service, which has worked to get a record number of credit unions certified as community development financial institutions and designated low-income. Both credentials are necessary for various federal resources, Ratigan explained. “We’re expanding CU Breakthrough to meet the growing demand for expertise in reaching underserved markets,” Rosenthal said. “Credit unions have never received enough recognition and resources for their work to serve the underserved. We aim to change that.”

Texas league monitoring Alex seasons first hurricane

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FARMERS BRANCH, Texas (6/30/10)--The Texas Credit Union League was tracking the progress of Tropical Storm Alex as it neared hurricane status, the league said Tuesday morning (LoneStar Leaguer June 29). At 10 p.m. Tuesday, the weather service declared Alex as the first hurricane of the season. As of 10 p.m. Alex was about 255 miles to the southeast of Brownsville, Texas. It was moving west-northwest at 12 mph with winds of 75 mph. The weather service said the hurricane likely will strengthen as it crosses the warm Gulf water (weather.com June 29). It was expected to make landfall tonight, possibly as a category 2 hurricane. Hurricane warnings extend from Buffin Bay, Texas, to La Cruz, Mexico. Heavy rains could flood areas in southern Texas and northern Mexico. Credit unions can track the storm on the league's website with its disaster preparation page. The league "will keep readers and visitors updated as the storm moves along its path with news and online updates." Also, the Texas Credit Union Foundation will be ready to activate its Disaster Relief Fund if necessary. Alex is the first Atlantic Basin hurricane during the month of June in more than 15 years--since Hurricane Allison in 1995, said weather.com. A hurricane has not made a U.S. landfall in June since Hurricane Bonnie in 1986. Given the projected path, it appears that streak will remain intact, with Alex hitting land on July 1. This year's hurricane season is expected to be a heavy one, with more named tropical storms and hurricanes and more major hurricanes. Credit unions already have been reviewing and updating their disaster plans since hurricane season began in May. The season is over at the end of November.

Feds OK Michigans funds for foreclosure help

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LANSING, Mich. (6/30/10)--The U.S. Treasury Department and the Department of Housing and Urban Development have approved Michigan Gov. Jennifer Granholm’s plan to distribute $154.5 million beginning July 12 to help more than 17,000 Michigan households avoid foreclosure. Credit unions should begin preparations to use the funds, which are designed to help members facing mortgage problems from job loss or other financial struggles, said the Michigan Credit Union League (MCUL) (Michigan Monitor June 28). The Michigan State Housing Development Authority (MSHDA) was selected as one of the five state Housing Finance Agencies (HFAs) to share in the Hardest-Hit Fund investment with an award of $154.5 million. The other four participating states are Arizona, California, Florida and Nevada. Michigan will be the first of the U.S.’s five state HFAs to implement the plan. MSHDA will use the time between now and the July 12 launch to hire and train staff, provide information to potential applicants statewide about the program and educate participating credit unions about the application process, said MSHDA Executive Director Keith Molin. “Banks and credit unions will play an integral role in the success of the new program because they will work with homeowners to determine eligibility criteria and best available option,” Molin said. “The smartest advice we can give potential applicants is to contact their mortgage servicers to ensure they make an informed decision.” The program is on a first come, first-served basis; when the money is gone the program will close. Credit unions that want to be proactive in securing assistance for their members should quickly sign on to the program, MCUL said. Michigan’s Hardest-Hit Fund plan is designed to help homeowners who are currently receiving unemployment compensation, who have fallen behind in their mortgage payments or taxes due to a temporary layoff or medical emergency, and who can no longer afford their mortgage payments due to lower income. The plan was developed in partnership with the MCUL and other state organizations. Nationally, more than 57% of mortgage delinquencies can be attributed to job loss, MCUL said. MSHDA’s decision to focus most of its efforts on the problems facing Michigan's unemployed is the proper strategy to pursue, according MCUL President/CEO David Adams. “Michigan is in the midst of an historic remaking of our economy,” Adams said. “Our state’s biggest challenge is sustaining homeownership for unemployed and underemployed borrowers. This plan provides a blueprint on how Michigan credit unions, banks and policymakers can work together to help those who need assistance while transitioning to the 21st century economy.”

N.Y. foundation presents Desjardins awards

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ALBANY, N.Y. (6/30/10)--The New York Credit Union Foundation has awarded first place Desjardins Youth Financial Education Awards to three credit unions.
Click to view larger image Three New York credit unions placed first in the state's 2010 Desjardins Youth Financial Education Awards. From left are: Ray Grossman, board member, Teachers FCU; Jessica Burch, Karen Reardon, Melissa Cummings and CEO Bill Sweeney, CORE FCU; and Marsha Brauer, CEO, Clarence Community & Schools FCU. (Photo provided by the New York Credit Union Foundation)
First place awards went to:
* Clarence Community & Schools FCU, Clarence, in the under $35 million asset category. The credit union was recognized for its youth savings programs offered in all six K-12 schools in its district. * CORE FCU, East Syracuse, $35 million to $75 million. CORE was honored for its "Students as Educators" program, which incorporates a student-run branch at ESM high school, a K-8 school banking program, annual teen finance forums for high schoolers and adult education seminars. * Teachers FCU, Farmingville, $250 or more in assets, which garnered an award for its use of the National Endowment for Financial Education's (NEFE) Basics of Banking module, interactive smart boards and several session of BizKid$, the PBS program on financial literacy. Together, the programs helped motivate young adults to make and manage their money.
An honorable mention was presented to Visions FCU, Endicott, for its success with the promotion of the foundation's Kid's Cash Kit & Caboodle program, which distributes kits that teach children ages five-12 how to manage money using three concepts: saving, spending and sharing. "Improving the financial literacy of our children and youth is more important than ever," said Diane LaVigna-Wixted, foundation executive director. "With all the ups and downs in today's economy, it's essential to equip them with the financial knowledge they'll need to manage their finances while they work toward a sound financial future."

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 Facebook.com, 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 twitter.com/FreedomCUinPA.

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 ABCNews.com 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 ABCNews.com 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 vbreunig@woccu.org. 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.

PSCU Financial Services President Serlo dies at 63

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ST. PETERSBURG, Fla. (6/28/10)--David J. Serlo, president/CEO of PSCU Financial Services and a pioneer in the organization of credit union service organizations (CUSOs), died Friday from complications caused by cancer, according to the company. He was 63. Serlo had been on medical leave since the fall of 2009 but continued to be accessible to company executives. Serlo had nearly 40 years' experience in the credit union industry. He was a pioneer in promoting the philosophy that credit unions should be served by CUSOs and other companies that equip individual credit unions--and the industry as a whole--to compete with much larger financial services providers. PSCU Financial's board will continue its oversight of the company and will spearhead the search for a new company president, said Board Chairman Craig Esrael, president of First South CU, Bartlett, Tenn. Earlier this year, the board named Mike Yatros as interim CEO and formalized a management team of group executives that includes Chuck Fagan, Tom Gandre and Steve Salzer. "PSCU Financial Services is positioned for continued growth using the Serlo stylebook that has long been embraced by the leaders of this company," Esrael said. "His visionary contributions to this industry will impact credit unions and their members for decades to come." Serlo began his career as an examiner with the National Credit Union Administration (NCUA). He spent 13 years learning the movement and in 1983 became the first full-time employee of Payment Systems for Credit Unions, which evolved into PSCU Financial Services, the nation's largest CUSO. The cooperative now provides services to more than 1,500 financial institutions and has more than 1,700 employees. Serlo served on the board of NACUSO and Credit Union Miracle Day Inc. and on numerous advisory councils of the industry. He was a member of Visa's Card Operations Risk Executive Council and funded industry research through his commitment to Filene Research Institute. He spearheaded the PSCU Financial's role as lead corporate sponsor of the annual Credit Union Cherry Blossom Run in Washington, D.C. He recently was awarded the Ernst & Young Florida Entrepreneur of the Year award for accomplishments fostered at the CUSO and recently received the Distinguished Alumni Award from Indiana University of Pennsylvania. He also actively supported organizations such as Children's Miracle Network. Serlo is survived by his wife, Tina, and his children, Adam, Mark and Katie. Funeral services will be held in Tampa and will posted on the company's website at www.pscufs.com.

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.

Text message phone call scams crop up in several states

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MADISON, Wis. (6/25/10)--Credit unions in at least six states the past two weeks have reported automated calls and texts to cell phones that attempt to capture members' and non-members' debit card and personal identification numbers (PINs). In Washington, EvergreenDirect CU, Olympia, and Our Community CU, Shelton, were targeted in fraudulent automated calls to cell phones that claim the member's debit card was deactivated due to a billing error. Cardholders were prompted to enter their card number and PIN. The accounts were then accessed through ATM activity in Spain (The Olympian June 23). In Wisconsin, Shipbuilders CU, Manitowoc, and a local bank were targeted by automated calls to members' and non-members' cell phones whose numbers began with 901.The block of numbers making the calls was hacked from an answering service and also was used in other areas of the state and country. Phone numbers making the calls were from a variety of 800 numbers and some had area codes from other states (Harold Times Reporter June 17). In Neenah and Menasha, Wis., a large number of residents received computer-generated scam phone calls saying their account with Lakeview CU had been compromised or canceled. They were told to "dial 1" to speak to the credit union's security department. The calls originated from an 817 area code and the name on the caller ID changes. Even residents on "Do Not Call" lists and those with unlisted or unpublished numbers received the calls (wbay.com June 16). In Johnstown, Pa., members and non-members of USSCO Johnstown FCU who have AT&T cell phones received the text message appearing to be a credit union security from mobilealert@usscofcu.org that instructed them to call a secure phone line in an 814 area code. The credit union posted a notice on its website and e-mailed members it would not request personal information through a text message nor distribute cell phone numbers (Life is a Highway June 16). In International Falls, Minn., fraudsters identified themselves as representatives of a number of local financial institutions, including TruStar FCU. The callers dialed numbers in the 283 and 285 local exchange and some cell phone numbers. Both members and non-members were contacted. Dale Johnson, president/CEO of TruStar, told International Falls Journal (June 16) that law enforcement officials believe there were thousands of calls in the area. A number of employees and their families also received the fraudulent message. TruStar was in the process of converting its ATM and debit card systems to a different processor when the calls hit but the calls will have no effect on the conversion process. A similar scam in West Texas used the name of an unaffiliated Midland, Texas-based credit union and the Credit Union National Association (CUNA). The credit union received about 68 calls from people who received the text message and learned that three or four had followed instructions in the text messages and provided the information. Normally during a vishing or phishing scam, the credit union receives three or four calls, said local media (NewsWest9.com June 17). Similar calls were also received in California in Chico (STAR Community CU) and a credit union in Woodland. In Bloomington, Ill., IAA CU was targeted. The credit unions warned their members and the public that financial institutions do not make unsolicited calls and ask for information they already have.

Ireland Central Bank proposes stabilization plan for CUs

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DUBLIN (6/25/10)--A consultation paper for Ireland's Central Bank has proposed six options for the Irish League of Credit Unions' Savings Protection Fund (SPF) that legislators could consider to address what the bank terms as increasing financial pressures on that country's credit unions. Ireland's registrar of credit unions, James O'Brien, commented in a consultation paper for the Central Bank that the Irish credit union movement has "significant stresses" from loans in arrears. However, the league says credit unions are well-placed to withstand the economy (Irish Independent and The Irish Times June 24). The league's protection fund has about 1% of total assets of Ireland's credit unions, said the Times, which outlined two problems: the amount is inadequate in a widespread economic downturn, and the league's plan is not available to nonmembers of the league and those credit unions don't contribute to the fund. Options discussed include keeping the status quo, providing an external solvency support mechanism to provide short-term support to credit unions in difficulty, and various statutory and voluntary proposals. The Central Bank said it favored the external solvency mechanism, adding that the SPF could act as a "bailout" fund for all credit unions. The league said credit unions had losses on investments, but the vast majority had written off their investment losses in their accounts last year, according to the Independent. Although credit unions have seen an increase in loans in arrears, they take a "responsible approach" with "prudent loan provisions and increased reserves." That means "credit unions are well placed to withstand the current and future difficult economic times," the league told the publication.

Jamaican finance minister lauds CUs for aiding small biz

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KINGSTON, Jamaica (6/25/10)--Jamaica's Finance Minister praised credit unions for assisting small businesses with low interest rates and urged commercial banks to lower their rates to private sector investors, according to a report in a Jamaican newspaper. The comments by Finance Minister Audley Shaw were made during his keynote address as the 33rd Annual General Meeting and Awards Ceremony of the Hanover Cooperative CU Ltd. in Lucea, Hanover (Euclid Infotech---Banks and Financial Institutions News (June 22). He said he supports investment at lower interest rates and questioned why the country's interest rate on loans is as high as 20%-25%, when people all over the world are borrowing at 6% and 7%. He noted that "it cannot go [on] like that." Shaw added that he strongly believes in the credit union movement and what it offers to members, and lauded the Development Bank of Jamaica for its support for credit unions. The bank has been mandated to bring the credit union system under greater regulation while not stifling credit unions' initiative or enterprise, he said.

NY lawmaker CUs promote bill to ban debit surcharges

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ALBANY, N.Y. (6/25/10)--The Credit Union Association of New York and organizations representing consumers and seniors in the state are trying to ban surcharges on debit cards, which are used for consumer purchases and access to government benefits. The organizations joined New York State Sen. Eric Schneiderman (D-31) to call for passage this week of a bill he sponsors (S.7267-B) and similar legislation in the state Assembly. The groups also called for the Senate and the Assembly to agree on surcharge legislation and to pass it into law before the end of the session. “Aside from using cash, debit cards are the most financially responsible means for consumers to avoid debt through making purchases they can’t afford,” said Amy Kramer, vice president for government affairs for the Credit Union Association of New York. “In today’s economic climate, the legislature should follow the credit unions’ lead and do all it can to encourage thrift among New York’s consumers. “Our 451 not-for-profit credit unions and their 4.4 million members are also concerned that merchants will discriminate against debit cards issued by smaller financial institutions, resulting in higher costs and less consumer choice,” she added. In 1984, New York banned surcharges on credit cards, but not debit cards, since debit cards were not commonly used. Legislation is needed to close this loophole now that debit cards have become an increasingly common form of payment, according to a release from the press conference. Maine and Kansas have already banned debit card surcharges, and other states are considering similar legislation. “It is a fundmental principle of consumer protection that merchants can’t advertise one price and then charge a higher price at the checkout counter,” Schneiderman said. “But that’s exactly what’s happening when consumers are stuck with a fee just for using a debit card. State law doesn’t allow surcharges on credit card purchases, and it shouldn’t allow them for debit cards either. “Seniors and other consumers are under enough economic stress already: they shouldn’t have to pay another tax just to access their benefits or buy the everyday goods they need to get by,” he added. Debit cards are now used by many New Yorkers to access government benefits like unemployment and public assistance. Social Security payments will be accessed by debit cards beginning in 2013. The bill makes clear that offering discounts to induce customers to pay by cash or check is not prohibited, because this does not present an issue of consumer deception. The Senate bill also permits surcharges if a consumer receives cash back after making a debit card purchase, but only on the cash received, not the entire purchase. State Rep. Audrey Pheffer (D-23) has sponsored a similar bill (A.10430-A) in the Assembly, the press release said.

ICNNMoney.comI IFox BusinessI tout CUs

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MADISON, Wis. (6/25/10)--CNNMoney.com and Fox Business both advised consumers to join a credit union to take advantage of better rates and fees. Fox noted that consumers should “strongly” consider getting a credit union credit card because credit unions charge a lower late fee--a median of about $20--compared with $39 at banks. Large banks tend to charge higher fees, Fox said. The segment discussed how the Credit Card Accountability, Responsibility and Disclosures Act will affect consumers and what they need to know about the act, which was enacted in May. CNNMoney mentioned that credit unions offer better interest rates and rates on share certificates, savings accounts and money market accounts. The article, saying that credit unions offer a “popular alternative to large banks,” also noted the Credit Union National Association’s credit union locator--creditunion.coop. For more information, use the links.

Shared branches growing among CUs

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BATON ROUGE, La. (6/25/10)--The practice of shared branching at credit unions continues to grow, according to a Baton Rouge, La., newspaper. Nationwide, 1,650 credit unions offer shared branching with 4,000 branch locations. Credit unions are the fourth-largest branch network in the U.S., said The Baton Rouge Advocate (June 17). In Louisiana, where the publication is based, there are 62 credit unions that participate in shared branching. Shared branching in the state was boosted after Hurricane Katrina. Credit unions that participate in shared branching can then take the money they save from not having buildings and staff costs to offer members loans with lower interest rates and certificates of deposit with higher interest rates, the newspaper said. Credit unions also are not “in your face competitive” like banks, according to William Staats, a Baton Rouge banking consultant. It would be hard to find two banks sharing offices, he told the newspaper. He also predicted that technology will reduce the need for physical branches, and mobile banking will increase. The article also noted that the number of credit union locations and the number of credit union members have doubled since 2006, according to the Credit Union National Association.

Women leaders young pros regulators also featured at The 1

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LAS VEGAS (6/25/10)--The growing importance of women’s leadership in credit unions in both developed and developing countries will be highlighted during special sessions at The 1 Credit Union Conference July 11-14 in Las Vegas. The conference is a combined event sponsored by World Council of Credit Unions (WOCCU) and the Credit Union National Association. The Global Women’s Leadership Network, a WOCCU initiative that promotes peer-to-peer networking among women credit union leaders worldwide, will hold its second annual forum July 11 in conjunction with the conference. Scholarships provided through the network and other credit union sources will allow 11 women from eight countries to join the more than 50 attendees for the open forum discussion and networking activities. Scholarship recipients represent credit unions in Belarus, Brazil, Kenya, Macedonia, Malawi, Mexico, Russia and Uganda. “Through our development work we have seen how important women have become in helping sustain and build credit union movements not only through their institutional involvement, but through participation in savings and lending groups that help support their families and strengthen their communities,” said Brian Branch, WOCCU executive vice president and chief operating officer. “Our goal is to support those current and potential women leaders and help bring their commitment and expertise to new levels of achievement,” he added. “The network provides women with an international network that engages them in professional and personal development.” The WOCCU Young Credit Union People (WYCUP) program also provides special educational and networking opportunities for more than 30 credit union professionals age 35 years and younger. WYCUP, in conjunction with this year’s conference, brings together participants from the U.S., Australia, the Bahamas, Barbados, Brazil, Canada, Guatemala, Ireland, Kenya, Poland, Singapore, and Trinidad and Tobago. Five participants will be selected to receive scholarships to attend WOCCU’s 2011 World Credit Union Conference in Glasgow, Scotland. Financial regulatory issues will dominate the opening general session July 13, as a panel of global experts discusses current issues and future trends in financial regulations. Regulators from the U.S., Australia and Canada will address common themes and unique challenges in their individual markets, and how regulatory trends are affecting financial institutions worldwide. A second session will follow with economic experts from Australia, the European Union and the U.S. to address corresponding trends.

CU System briefs (06/24/2010)

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* BOULDER, Colo. (6/25/10)--The Filene Research Institute, which focuses on research and innovation to further the credit union movement, has appointed Gerry Agnes, president/CEO of Boulder, Colo.-based Elevations CU, to its Research Council. The council is composed of credit union president/CEOs who play integral roles in the continued advancement of the movement. Agnes will attend an extended conversation and workshop with Filene Fellows about the future of consumer finance and research directions in October. "When searching out new candidates for the research council, we look for credit union leaders with a clear track record of innovation," said Mark C. Meyer, CEO of the Filene Research Institute, based in Madison, Wis. Recently, Agnes also was named to the board of directors of the Credit Union Association of Colorado (News Now May 27) ... * SALEM, Ore. (6/25/10)--The Oregon State Senate has confirmed Rosemary Pryor as a new member of the Oregon Workforce Investment Board (OWIB). Pryor is vice president for marketing and strategic planning at Oregon Community CU, a more than $912 million asset credit union based in Eugene. She has more than 35 years of experience in marketing, communications and strategic business planning. Pryor is also outgoing chair of the Lane Workforce Partnership, the local work force investment board for Lane County. Her first OWIB meeting will be today at noon to 4 p.m. in Salem ... * MADISON, Wis. (6/25/10)--Joyce Wessley, former meeting planner and events coordinator for the Credit Union National Association and for CUNA Mutual Group, died June 18 after a five-year battle with cancer. She was 72. She also worked with the University of Wisconsin Foundation in Madison, Wis., until her retirement in 1994. She then became a realtor for 12 years. She is survived by her husband, Dan; four children; nine grandchildren; two sisters and two brothers (Wisconsin State Journal June 20) ...

SECU agrees to place first ATM on tribal grounds

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RALEIGH, N.C. (6/25/10)--State Employees’ CU (SECU) and the Haliwa-Saponi Indian Tribe in North Carolina recently reached an agreement to place a SECU Cash Points ATM on tribal grounds in Hollister, N.C. The agreement marks the first scheduled installation of a SECU ATM on the Indian tribe’s property, with activation slated for July. The Haliwa-Saponi Indian Tribe has more than 3,800 enrolled members, with more than 70% residing within a six-mile radius of Hollister. The tribe was recognized by North Carolina in 1965 and is governed by an 11-member tribal council elected by its citizens, with Rev. Ronald Richardson currently serving as chief. The mission of the Haliwa-Saponi Tribe is to provide the community with economic, cultural, social, and educational advancements and benefits. The tribe has worked to establish an ATM as part of its ongoing efforts to provide services in the Hollister area. “Our tribe recently celebrated the 45th anniversary of state recognition at our annual Haliwa-Saponi Powwow, the largest such event in the state,” said Richards. “This Powwow event attracts thousands of visitors each year, ranging from tribal representatives from around the nation to North Carolina families and citizens interested in experiencing our culture,” he added. “A SECU no-surcharge ATM will provide convenient access to funds not only for our residents, but also those who visit our tribal community.” Toretta Snipes, SECU senior vice president in Butner, N.C., notes that, “as the tribe works to help develop services in the Hollister area, SECU is happy to assist.”

CUNA announces blockbuster pro award winners

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WASHINGTON (6/24/10)--State leagues and associations were honored for excellence in public relations, marketing and advertising during the American Association of Credit Union Leagues' (AACUL) 2010 Communicators/GAPS Conference, held this week in Washington, D.C. Credit Union National Association's CUNA Blockbuster awards recognize two segments: advertising and marketing efforts for state level organizations, and advertising and marketing for credit unions. CUNA Pro awards recognize the best public relations, publications and online communication efforts. The California and Nevada Credit Union Leagues took the "Best of Show" Pro award for the public relations' efforts on "CA Credit Unions Still Accepting IOUs." First place winners of CUNA Blockbuster awards include:
* Best Print Materials: Louisiana Credit Union League's 2009 Annual Convention Brochure; * Best Campaign (for a budget of $10,000 or less): Maine Credit Union League's "There's More for You"; and * Best Credit Union Ad: Georgia Credit Union Affiliates for "Atlanta City Employees CU--Vacation Loan."
2010 CUNA Pro Award first place winners include:
* Blow Your Own Horn: Pennsylvania Credit Union Association for "CU Now"; * Best Public Relations Project: California and Nevada Credit Union Leagues, "CA Credit Unions Still Accepting IOU"; * Best League Piece on the Uniqueness of Credit Unions, Wisconsin Credit Union League's Wisconsin Credit Unions 2008 Annual Report; * Best Website: Louisiana Credit Union League at www.lcul.com; * Best On-line Publication: New Jersey Credit Union League, The Daily Exchange; * Best Use of Social Media: New Jersey Credit Union League, "Hip Advertising."

Estonia and Virginia form central banking system company

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LYNCHBURG, Va. (6/24/10)--The Virginia Credit Union League and the Estonian Union of Credit Cooperatives took historic steps Wednesday toward ensuring the long-term viability of credit cooperatives (credit unions) in the Baltic nation.
Click to view larger image Partners in the new Baltic Services Co. pose after signing an agreement forming a new corporation to establish a clearing system so credit unions in Estonia and possibly elsewhere have access to Eastern Europe's central banking system. Partners include Juri Valdov, far left, retired CEO of Northwest FCU; Andrus Ristkok, second from left, executive director of the Estonian Union of Credit Cooperatives; Erki Pisuke, second from right, Tartu University (Estonia) credit union board member; and Rick Pillow, far right, Virginia Credit Union League president. (Photo provided by the Virginia Credit Union League)
The two associations are working together to restore and build the non-profit cooperative financial system in Estonia. In their most significant step toward that goal, they joined with information technology company Mindware, three Estonian credit cooperatives, and two individuals to form the Baltic Services Co.(See related News Now story, "Va. league, Baltic CU Systems sign agreement.") The company's mission will be to establish a clearing system to provide credit cooperatives in Estonia, and possibly elsewhere, with access to the central banking system in Eastern Europe. With such access, credit cooperatives will be better positioned to offer checking, ATM and card services, and eventually expand into online banking, the league said. Juri Valdov, retired CEO of Herndon, Va.-based Northwest FCU was elected chairman of the new corporation. Andrus Ristkok, who currently heads the Estonian Union of Credit Cooperatives, was named CEO. Valdov praised the group for its vision, saying the new company will provide services essential to the growth and future viability of Estonia’s credit cooperatives. Ristkok arranged a Baltic summit held Tuesday, where leaders of credit cooperatives in Latvia and Lithuania met to discuss joining the Baltic Services Co. Estonia's small but growing credit cooperative system presented the technology plan, which led to the formation of the Baltic Services Co., during a visit to Virginia last year. Representatives of Estonian credit cooperatives noted that access to Eastern Europe's central banking system was essential if they were to compete against the Scandinavian banks that currently dominate the Estonian market. Members of the Virginia league's Partnership Committee are visiting Estonia this week for a series of meetings about the company; partnership initiatives between credit cooperatives in Estonia, Latvia and Lithuania; and on-site visits to four Estonian credit cooperatives. The league and the Estonian Union of Credit Cooperatives have been partners since 2008 through the World Council of Credit Unions' International Partnerships Program, which brings together credit union movements from around the world to exchange ideas and technical expertise with the goal of building stronger institutions to benefit their members. The first financial cooperatives were founded in Estonia in 1902, pre-dating the American movement. At its height in 1939, the Estonian movement boasted 184 financial cooperatives and had a 52% market share. After the Soviets occupied the nation in 1940, credit unions were abolished. During Perestroika, credit unions were again legalized, and the first new Estonian credit union was formed in 1990. At present, the nation boasts 18 credit cooperatives, which hold $16 million (U.S. dollars) in shares.

Va. league Baltic CU systems sign agreement

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LYNCHBURG, Va. (6/24/10)--The Virginia Credit Union League has signed an agreement that encourages information sharing between the league and the credit unions serving the Baltic nations of Estonia, Latvia and Lithuania.
Click to view larger image Representatives of the Virginia Credit Union League's Partnership Committee celebrate the signing of the league international agreement to encourage information sharing between the league and the credit union systems in Estonia, Latvia and Lithuania. From left are Joe Thomas, CEO, Fairfax County FCU; Alison DeTuncq, CEO of the UVA Community CU; Juri Valdov, retired CEO of Northwest FCU and chairman of the committee; and Rick Pillow, league president. (Photo provided by the Virginia Credit Union League)
The first Baltic Summit, held June 22, brought together credit union leaders from all three Baltic nations for a series of presentations on growing the credit union movement in the region and how best to share resources and information to better penetrate each market. Topics discussed included the newly formed Baltic Services Co., a venture spearheaded by the Estonian Union of Credit Cooperatives, three of its member institutions, the Virginia league and others to provide Estonian credit unions with access to the central banking system for Eastern Europe. The company could serve credit unions in Latvia and Lithuania. (See related News Now story "Estonia, Virginia form central banking system company.") "This agreement better positions our partner credit unions in Estonia for success, ensuring they're able to learn from the successes of credit unions in Latvia and Lithuania, while also being able to cooperative work toward solutions to shared challenges," said league President Rick Pillow. The league and the Estonian Union of Credit Cooperatives have had a formal partnership since 2008 through the World Council of Credit Unions' International Partnerships Program. The new information-sharing agreement among the league and the three Baltic nations' credit union systems marks the first formal international agreement between such organizations signed in Eastern Europe, said the league. The league said the partners hope the agreement will lead to positive legislation and regulation for the credit unions in the three nations, training for credit union staff, new marketing opportunities, and more efficient operations.

Utah CU regulator re-accredited by NASCUS

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ARLINGTON, Va. (6/24/10)--The National Association of State Credit Union Supervisors (NASCUS) recently re-accredited the Utah Department of Financial Institutions (DFI). This is the fourth consecutive re-accreditation for Utah. It was first accredited in 1995. The Utah agency is responsible for the examination and supervision of 52 natural person credit unions with combined assets of more than $1.8 billion. NASCUS’ 28 accredited states supervise more than 85% of the nation’s state-chartered credit union assets. The accreditation is valid for five years subject to annual review. The annual review process enables the accredited agency and the NASCUS Performance Standards Committee to measure progress and improvement. To earn NASCUS accreditation, a state supervisory agency must demonstrate that it meets accreditation standards in department administration and finance, personnel, training, examination, supervision and legislative powers.

IHuff PostI CUs hang tough see deposits surge

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MADISON, Wis. (6/24/10)--U.S. credit unions are outperforming big banks and are quickly gaining market share, said a Huffington Post blogger Tuesday. The Credit Union National Association (CUNA) is featured prominently in the article. “In the perilous aftermath of one of the worst financial disasters in U.S. history, one might expect credit unions--which, after all, are mostly tiny by the standards of the banking industry and operated on a cooperative, not-for-profit basis--to be struggling,” wrote Stacy Mitchell, senior researcher, News Rules Project’s Community Banking Initiative. “But data from the last 18 months show that the country’s 7,600 credit unions are, in fact, outperforming big banks and rapidly expanding their market share,” she added. Credit unions have added more than 1.5 million new members since the start of 2009, and credit union deposits grew by 10% and are on course to grow even more this year, Mitchell noted. “Most remarkable, while big banks slashed lending in 2009, credit unions actually made more loans, particularly to small businesses,” she added. “As giant banks shut off the flow of credit to small business, shrinking their overall business lending by 22%, credit unions expanded lending to small businesses by 10%.” However, challenges do exist for credit unions, especially with the recession impacting low-income neighborhoods and severely affecting some states in the housing market,” Mitchell noted. “We were not involved in the creation of the subprime mess, but we have been collateral damage in some respects,” Mike Schenk, senior economist with CUNA, told Mitchell. “Our asset quality has declined somewhat and our earnings have declined markedly.” Mitchell noted that bankers posit that credit unions enjoy an unfair advantage because they don’t pay federal income taxes. However, credit unions are subject to several restrictions that do not apply to banks: they cannot trade in exotic derivatives, and cannot devote more than about 12% of their lending to business loans. Most notable, they cannot raise capital from investors--or generate profits for them, Mitchell added. “We’ve said to banks: if you think it’s so advantageous, join us and become credit unions,” Mark Wolff, CUNA senior vice president of communications, told Mitchell. “No bank has ever taken us up on the offer.” Mitchell also mentioned Hughes FCU, Tucson, Ariz., and Westerra CU, Denver, in the blog. To read the blog, use the link.

Missouri CUs landscape HFOT home

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COLUMBIA, Mo. (6/24/10)--More than 40 credit union employees rolled sod, and planted shrubs, trees and flowers to make Staff Sgt. (SSG) Robert Canine’s house look more like a home as part of the Homes for Our Troops (HFOT) project in Missouri.
Click to view larger image Credit union volunteers plant flowers and shrubs at Staff Sgt. Robert Canine’s house as part of a Home for Our Troops Project in Missouri. (Photo provided by the Missouri Credit Union Association)
Missouri credit union representatives’ families and friends met last Saturday to landscape Canine’s yard in Columbia, Mo., before the key ceremony occurs Saturday (The Missouri difference June 23). Credit union representatives from Anheuser-Busch Employees’ CU, St. Louis; Employment Security CU, Jefferson City; River Region CU, Jefferson City; Rolla (Mo.) FCU; United CU, Mexico; and the Missouri Credit Union Association (MCUA) took part in the event. “My wife likes to garden and her brother is serving in Afghanistan, so this hits close to home,” Bill Mustain, Employment Security president, told the MCUA. “We’re happy to support this cause.” “The soldiers give a lot for us and our freedom, so this landscaping day seems like nothing,” said Susan Schmitz, Anheuser-Busch Employees’ CU accounting manager. “This shows what credit unions can do when they pull together in the community.” The Canine family, lawmakers and media will be present when Missouri credit unions and HFOT hand over the keys to the first specially adapted HFOT home in Missouri on Saturday. Credit unions in several states have worked with HFOT, which builds specially adapted houses for severely wounded soldiers.

Maine congressional members tout MBL at league annual meetings

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PORTLAND, Maine (6/24/10)--More than 600 representatives from 53 of Maine’s 65-member credit unions attended the Maine Credit Union League’s 72nd annual meeting and convention June 18-19 in Portland, Maine, where congressional representatives touted the benefits of raising the cap on member business lending.
Click to view larger image Attendees at the Maine Credit Union League’s annual meeting and convention include (from left) Leon Laffley, board member at Atlantic Regional FCU, Rep. Mike Michaud (D-Maine), and John Murphy, league president. (Photos provided by the Maine Credit Union League)
Click to view larger image U.S. Rep. Chellie Pingree (D-Maine) addressed attendees at the Maine Credit Union League Annual Meeting and Convention.
Speakers at the event included Brian Branch, chief operating officer and executive vice president of the World Council of Credit Unions; and U.S. Reps. Mike Michaud (D-Maine) and Chellie Pingree (D-Maine). U.S. Sen. Olympia Snowe (R-Maine) sent a video message and a staffer from U.S. Sen. Susan Collins’ (R-Maine) office spoke at the event. Pingree advocated for raising the cap on member business lending (MBL) and praised Maine’s credit unions for being involved and engaged in helping members. Snowe and Collins also said they favor raising the MBL cap to 25% from 12.25% of credit unions’ assets and recognized “the great service and value credit unions provide to nearly half of Maine’s entire population.” Michaud, who said he opposed having an interchange provision in the financial reform bill without a formal hearing, received a standing ovation from attendees. He thanked Maine’s credit unions “for having a vital role in serving your communities and members.” The Credit Union National Association (CUNA) and many credit unions oppose the interchange provision because it would make it more difficult for credit unions to offer card products and services, CUNA has said. Mark Sievewright, senior vice president at Fiserv, outlined the changes occurring in the financial services industry and called the next decade “unprecedented.” Credit unions must continue to be proactive and adapt to the changing landscape of financial services to remain relevant, vibrant and strong in the next 10 years. The needs of consumers demand that credit unions implemented new delivery channels and technology, he said. John Murphy, league president, said: “Despite all of the challenges of the past two years, credit unions have thrived and grown because we have not turned our backs on consumers as so many other financial institutions opted to do. That philosophy continues to give us many opportunities for continued success in the future.”

Mid-Atlantic Corporate board election held

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MIDDLETOWN, Pa. (6/24/10)--Mid-Atlantic Corporate FCU announced the results of its board election during its 34th annual meeting June 18 in Harrisburg, Pa. These incumbents were re-elected to serve three-year terms:
* Brian J. Vittek, Destinations CU, Baltimore; * David B. Whitehead, Merck Sharp & Dohme FCU, Chalfont, Pa.; and * Virginia F. Williams, Jersey Shore FCU, Northfield, N.J.
At Mid-Atlantic Corporate’s board reorganization meeting, table officers were elected:
* Chair--Richard C. Burtnett, Pennsylvania Grange FCU, Camp Hill, Pa.; * Vice Chair--Michael P. Pastirik, United Community FCU, West Mifflin, Pa.; * Treasurer--Joan M. Moran, Department of Labor FCU, Washington, D.C.; and * Secretary--Vittek.
Appointed to the Supervisory Committee were: Dennis Flickinger, First Capital FCU, York, Pa.; Jerry King, DEXSTA FCU, Wilmington, Del.; and James F. McCaw, Viriva Community CU, Warminster, Pa.

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 ...

IWSJI others note CUs stance on interchange fees

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MADISON, Wis. (6/22/10)--Several media outlets, including The Wall Street Journal, noted credit unions’ stance on interchange fees. A House-Senate conference committee, which is hammering out a final financial regulatory reform package, is expected to take up the interchange issue today. The Credit Union National Association (CUNA) opposes a plan that would require the Federal Reserve to set interchange fees. The articles noting credit union efforts in opposition of the interchange plan are:
* The Wall Street Journal on Saturday, which said: “Local community banks and credit unions are likely to hang onto free checking longer than their bigger rivals. That is because such institutions will see less of a financial impact from some of the new regulations, and therefore may be under less pressure to add fees. Smaller banks often promote themselves as being customer-friendly, with products that are less complicated than those offered by big banks. One downside to smaller institutions is that they usually don’t have extensive ATM or branch networks. That means consumers who travel often could get stuck paying out-of-network fees for cash withdrawals if they use another bank’s machines. Such fees can add up quickly.” * Crains Cleveland Business (June 21-27), which mentioned that John Magill, CUNA senior vice president for legislative affairs, said retailers pay about 1.5% of a purchase in interchange fees. “Some of that money goes to the issuer--a credit union or bank," Crains said. "Some goes to a processor, such as Visa, and some is kept by the retailer. Those fees are meant to pay for maintenance of the card system. Fraud and other losses, under the new proposal, fees would be reduced drastically to cover only the cost of the transaction itself. Mr. Magill said that could cost credit unions between $35 and $50 per car per year.” * The TimesRecordNews of Wichita Falls, Texas, on Saturday, which reported opinions on interchange from the Texas Credit Union League. “While groups representing small businesses advocated for the amendment as a way to cap interchange rates and reduce costs to merchants, banks and credit unions are pushing back,” the newspaper said. “They claim that, despite a clause excluding institutions with less than $10 billion in assets, they will be severely affected by regulation. The exclusion includes 99% of banks and all credit unions ...” Winter Prosapio, spokeswoman for the Texas Credit Union League, told the newspaper, “Midsize and small banks and credit unions’ debit card programs often just break even. Small (card) issuers don’t gain the benefits of scale.”
The House on Monday offered alternative language on interchange for the final regulatory reform package. (SEE RELATED STORIES: New interchange language, same concerns, says CUNA; CUNA reviews House interchange alternative; urges CU opposition.) To read the articles, use the links.

INY TimesI Its smart to join a CU

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NEW YORK (6/22/10)--It’s smart for consumers to join a credit union, The New York Times said Friday. In an article titled “Credit Unions Are Beckoning with Open Arms,” columnist Ron Lieber wrote that credit unions provide good value on financial services. “Today, credit unions often (but not always) offer lower interest rates on credit cards and better deals on auto and other loans than most banks …” Lieber wrote. “One way to become a member is through occupational classification, where credit union members work for the same employer or perform the same job,” he added. “The second is a community credit union, where members must live in the same ‘well-defined’ region.” Lieber noted that in the early 1980s, members of associations were permitted to join credit unions as an element in a push to include populations that banks were not reaching. “The idea was to get credit union service to people who wanted it from people who wanted to give it to them,” said Wendell A. “Bucky” Sebastian, who worked for the federal credit union industry regulatory body at the time and now is executive director of the National Credit Union Foundation. Now some questions and disputes abound about field of membership issues, particularly from bankers, Lieber added. “What representatives of the American Bankers Association find particularly objectionable, though, are the big credit unions that have their own associations for what appears to be the express purpose of signing up people and then making them eligible for credit union membership,” Lieber wrote. However, Sebastian thinks bankers’ arguments are hiding another issue, Lieber added. “It’s all camouflage for the fact that they don’t like that there are institutions that are willing to work on a nonprofit basis,” Sebastian said. “When you don’t have to call Wall Street every quarter and cut rates on savings and raise fees so you can suck even more money out of customers’ pockets and put it in shareholders’ pockets, well, they can say anything they want. But at the end of the day, their goal is to take as much money from customers as possible and give it to stockholders.” Although Lieber said he doesn’t know who is right, he sees a bottom line for the consumer. “So many people haven’t gotten the message yet, that it’s worth repeating again, once more, with feeling,” Lieber concludes. “Anyone can join a credit union. And until the industry regulator stops allowing many of the biggest credit unions to offer services to anyone who shows up or logs in, you’d be foolish not to check out a few the next time you need financial services.” USA FCU, San Diego, also is mentioned in the article. To read the article, use the link.

IL.A. TimesI more media feature CUs letters on interchange

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LOS ANGELES (6/22/10)--Continuing the push against an interchange amendment in the Senate version of the financial regulatory reform bill, a number of credit unions’ letters to the editor were published in media nationwide. Among the most prominent is a letter to the editor from Melia Keller, president, Mid-Cities Financial CU in Compton, Calif., that was published in The Los Angeles Times Sunday. Credit unions and the Credit Union National Association (CUNA) have opposed the interchange amendment because it would make it more difficult for credit unions to offer card products and services. Credit union supporters continue to contact their representatives, with the number of phone calls and emails to D.C.-based legislators totaling over 600,000 as of last Friday (News Now June 21). CUNA also hosted a “fly-in” where credit union representatives met with their constituents about the interchange amendment. In the letter, “An unlevel playing field for little banks,” Keller wrote, “The amendment opens the door to preferential pricing for certain customers. There will no longer be a level playing field of flat pricing for customers of all sizes.” Other letters to the editor published recently include:
* “Amendment to reform bill will harm consumers,” published in The Dayton Daily News Friday by Douglas Fecher, president/CEO of Wright-Patt CU, Fairborn, Ohio; * “On regulatory relief, base argument on fees on actual merits,” by Michael J. Kurish, president/CEO, Associated School Employees CU, Youngstown, Ohio, in The Warren Tribune; * “Consumers, credit unions losers in bill,” by Michael J. Kaczenski, president/CEO, Sun East FCU, Aston, Pa., in The Delaware County Times; and * “Costly amendment,” by Greg Olmsted, president of North Alabama Educators CU, Huntsville, Ala., in The Huntsville Times.
Kaczenski noted that “the irony of all this is the very consumer friendly institutions with the fairest pricing structures will be forced out of the debit card business, thus eliminating choices for consumers.” The House on Monday offered alternative language on interchange for the final regulatory reform package. (SEE RELATED STORIES: New interchange language, same concerns, says CUNA; CUNA reviews House interchange alternative; urges CU opposition.) To read the articles, use the links.

Filene report addresses CU implications of living trusts

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MADISON, Wis. (6/22/10)--Credit unions looking to capitalize on trends regarding living trusts should focus marketing on high-income and high-asset members older than 50, according to a new study from the Filene Research Institute. “Credit Union Implications of Living Trusts” offers a look at trends in trust creation and detailed breakdowns of who is most likely to open trust accounts. Credit unions are advised to consider the needs of women in establishing trusts and target members with significant assets in defined contribution plans. In 1980, 84% of workers at medium to large companies were eligible for defined benefit plans from their employers, but by 2008, just one-third of such workers had access to the plans. As access to the plans disappear, trust accounts are being replaced by defined contribution plans--like 401(k) and individual retirement accounts, Filene said. The study found that about one in 10 U.S. households with an adult at least 50 years old has a living trust. The average trust holder is 72 years old with 14 years of formal education, $1 million in nonhousing wealth and three children. As more retirees receive retirement benefits as lump-sum rather than annuity payments, more have an opportunity to set up living trusts--through credit unions. “As financial partners of choice for many of today’s retiring workers, credit unions should take a hard look at offering trust services, which can keep valuable relationships and valuable assets at the credit union,” Filene added. The study was authored by Jinkook Lee, Filene research fellow and senior economist at RAND Corp.; Arie Kapteyn, senior economist at RAND; Jung-Seung Yang, a PhD candidate in economics at Seoul National University in South Korea; and Christopher Sharon, a doctoral fellow at the Pardee RAND Graduate School and assistant policy analyst for the RAND Corp.

Tornado damages CU in Minnesota

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WADENA, Minn. (6/22/10)--A tornado last Wednesday reportedly wiped out Wadena (Minn.) FCU. “The credit union was destroyed,” Pete Skaalen, executive vice president of the Minnesota Credit Union Network, told News Now Monday morning. “The roof was blown off and the windows blown in and ruined. We don’t know the exact extent of the damage at this point. We know nothing further than we did last Friday.” State and National Credit Union Administration (NCUA) regulators worked through the weekend “to get the operation up and running,” he added. “We don’t at this time know if it is up and running yet,” Skaalen said. “It was about a $10 million asset credit union with about two full-time employees. We will try to communicate with other credit unions to see if there are any other needs that have arisen.” Also, the offices of Woodco FCU, located in Lake High School in Millbury, Ohio, southeast of Toledo, were destroyed along with the school during a tornado on June 6. The credit union, led by CEO Juanita Zunk, immediately activated its disaster recovery plan and had the credit union running within days in a temporary space at CanDo CU, three miles away in Walbridge, Ohio (e-Lumination Newsletter June 16). Back-office operations are set up in CanDo CU’s conference room, and front-line services are operating out of a vacant position on the teller line and dedicated drive-thru lane. Despite the overwhelming circumstances, the disaster recovery plan is so detailed that it’s guiding the staff and board through every step they need to take, Mark Sommer, CEO of CanDo CU, told the Ohio Credit Union league. The NCUA, Ohio Credit Union Foundation, and several credit unions throughout Ohio are offering assistance to Woodco FCU.

First Carolina Corporate elects board

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PINEHURST, N.C. (6/22/10)--First Carolina Corporate CU elected its board of directors June 14 at its annual meeting. Chuck Purvis, executive vice president of Coastal FCU, Raleigh, N.C., was elected to the board for a three-year term. Lucile Beckwith, president/CEO of Palmetto Trust FCU, Columbia, S.C., and Scott Woods, president/CEO of South Carolina FCU, Charleston, S.C., were re-elected to three-year terms. Scott Weaver, president/CEO of Carolina Foothills FCU, Spartanburg, S.C., was elected to a one-year term on the board. The board also elected Woods as chairman, Purvis as vice-chair, Steve Harkins as treasurer and Randall Crawford as secretary. Harkins is president/CEO of South Carolina Telco FCU, Greenville S.C., and Crawford is president/CEO of WNC Community CU, Waynesville, N.C. Outgoing chair Jack Braswell, president/CEO of Members CU in Winston-Salem, N.C., recognized outgoing director Anne Shivers, president/CEO of Carolina Collegiate FCU, in Columbia, S.C. Shivers volunteered with First Carolina for nine years. She served as treasurer, ALCO chairman and credit committee chairman. Other continuing board members include Braswell; Bob Bruns, president/CEO of Charlotte (S.C.) Metro FCU; and Jim McDaniel, president/CEO of Heritage Trust, Charlotte, S.C. First Carolina, Greensboro, N.C., has $1.7 billion in assets.

Lifting MBL cap a way to help small biz--IWall St. JournalI

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NEW YORK (6/22/10)--Small businesses, despite the recovery, are still struggling to land credit, said The Wall Street Journal (June 21). It notes several proposals and programs that could assist, including the proposal to lift credit unions' member business lending (MBL) cap to 25% of assets from 12.25%. Most of the government programs created to address the credit crunch and help small businesses focus on Small Business Administration loans, which are less than 10% of overall lending to small businesses, said the Journal. Banks say loan volume is down because demand is down and regulators are pressuring them to curb lending and stiffen underwriting. Regulators say the banks are making regulators a "convenient excuse" for banks who don't want to tell borrowers they can't loan. In 2009 small business loan portfolios dropped at big banks 9% from the previous year, more than double the drop for their entire lending portfolios, the Journal said, citing statistics from a recent Congressional Oversight Panel report. At the smallest banks, small business lending dropped 2.7%, while overall portfolios declined 0.2%. However, credit unions have seen growth in their lending. "Another proposal targets credit unions, which have boosted their lending through the recession. Legislation in both the House and Senate would let these nonprofits lend 25% of their assets, up from 12.25% under current law," the Journal added.

Mortgage fraud sweep includes CU cases

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WASHINGTON (6/21/10)--A nationwide government mortgage fraud sweep called Operation Stolen Dreams has resulted in 191 civil enforcement actions and the recovery of more than $147 million, said the interagency Financial Fraud Enforcement Task Force Thursday. The sweep has credit union ties, namely the now-defunct U.S. Mortgage Corp. and its subsidiary, Credit Union National Mortgage. Nineteen credit unions, Fannie Mae and others lost about $140 million in the fraud involving the two Pine Brook, N.J.-based companies that provided mortgaging services to credit unions. The companies filed for a Chapter 11 bankruptcy in February 2009 in Newark. The filing documents listed more than $200 million in debts to Fannie Mae and credit unions. Michael McGrath, president, and Leroy Hayden, the servicing manager of the companies pleaded guilty to conspiring to fraudulently sell credit union loans to Fannie Mae and use the proceeds to finance U.S. Mortgage's operations as well as investments for himself and the company (News Now June 12, 2009). They are awaiting sentencing. The case is one of seven examples in the announcement made by President Barack Obama's task force. Operation Stolen Dreams targeted mortgage fraudsters throughout the country and is the largest collective enforcement effort ever in confronting mortgage fraud, said Attorney General Eric Holder, Federal Bureau of Investigation (FBI) Director Robert Mueller, Housing and Urban Development Inspector General Kenneth M. Donohue and other members of the task force. Since it began on March 1, Operation Stolen Dreams has involved 1,215 criminal defendants nationwide, including 485 arrests, who are allegedly responsible for more than $2.3 billion in losses, said the group. So far, 673 indictments have been made in 135 complaints, with 336 convictions. About 206 of the fraudsters have been sentenced. Total dollars seized during the investigation is $10.7 million. In civil cases, the sweep had dealt with roughly 395 defendants, 191 enforcement actions that included cease and desist orders, and $196.7 million recovered. However the amount includes some judgments that have been suspended based on the defendants' inability to pay, said the task force. Unlike previous mortgage fraud sweeps, Operation Stolen Dreams focused not only on federal criminal cases but also on civil enforcement, recovering money for victims, and increasing cooperation with state and local partners. "From home buyers to lenders, mortgage fraud has had a resounding impact on the nation's economy," said FBI's Mueller. "The last several years have seen enormous and damaging developments in the mortgage and housing markets, and the government has stepped in to bolster unstable marketplaces and devastated communities," said Donohue. Other examples in Operation Stolen Dreams include:
* A builder bailout scheme in Chico, Calif., that involved a large-scale builder buyout fraud. Anthony G. Symmes has pleaded guilty to mail fraud conspiracy and money laundering. * Miami mortgage fraud targeting the Haitian-American community, in which Yolette Antoine and Constance Powell are charged with executing false quit-claim deeds transferring title to The Antoine Investment Group. * Detroit "ghost loans" mortgage fraud scheme in which Ronnie Edward Duke and about 70 co-conspirators allegedly defrauded 61 financial institutions throughout the U.S. by recruiting straw buyers for 500 mortgages on 180 properties totaling more than $100 million. The group placed multiple "ghost loans"--unrecorded loans--on one residential property without the other lender's knowledge. * Duluth, Minn., loan modification scheme involving former mortgage broker Michael Fiorito, who was sentenced to 270 months in federal prison for the equity skimming scheme that stole about $400,000 from homeowners who believed they were only refinancing their homes, not selling their homes without their knowledge. * The $108 million Countrywide settlement in which two Countrywide mortgage servicing companies settled charges that they inflated fees on cash-strapped homeowners whose mortgages were serviced by Countrywide, made false or unsupported claims about amounts owed by borrowers in bankruptcy, and charged fees to borrowers that were not disclosed until the companies tried to collect the fees after the borrowers' bankruptcy. * Reverse mortgage scheme in Atlanta, Ga., that targeted the elderly. The case is the first prosecution involving alterations to a Multiple Listing Service routinely relied on by appraisers, realtors, tax assessors and others in the mortgage industry to establish accurate property valuations. Kelsey Hull and Jonathan Kimpson pleaded guilty in the scheme, They allegedly profited from the corruption of a Federal Housing Administration-insured program for older homeowners by faking down payments, arranging inflated appraisals to create bogus equity up to $100,000 in the properties securing the reverse mortgage loans, and diverting the proceeds to themselves.

ISmartMoney.comI Free checks harder to find check CUs

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NEW YORK (6/21/10)--Banks are preparing new fees on basic banking services to recoup revenue losses from the financial crisis and from new regulations. Free checking may become harder to find. But consumers can turn to credit unions to mitigate the fee hikes, said two national finance publications last week. Articles in SmartMoney.com (June 17) and Bankrate.com (June 18) pointed out that banks are starting to charge for checking accounts, especially for low activity or balances below a minimum. Some will offer tiered fees, based on how much a consumer uses their services. "Credit unions, online banks and smaller community banks will continue to be viable alternatives either for free checking accounts, or very low cost accounts--with low hurdles to avoid fees," said Greg McBride, Bankrate.com senior financial analyst, in the Bankrate article. Bankratesaid that "for banking customers simply looking for an inexpensive place to park cash from time to time, smaller banks and credit unions may offer a banking experience more in line with their lifestyle." "As Bankrate recently found, 39 of the 50 largest credit unions offer free checking accounts," said the article. "And that will continue to be a viable alternative for consumers looking to obtain free checking or avoid fees that may be instituted on their current checking account relationships," said McBride. In SmartMoney.com, McBride noted that credit unions and smaller community banks are more likely to offer free checking with fewer strings. Consumers must keep in mind that "if you think you can't join a credit union, you may be wrong about that," said Linda Sherry, spokeswoman for Consumer Action, a financial literacy advocacy group. The article pointed readers to the website for the Credit Union National Association (CUNA) and linked to CUNA's CU Locator site. MoneyRates.com data indicate that the average minimum balance required for a free checking account has been creeping up to $4,621.05 as of January--a 7.85% increase in the past six months, said the SmartMoney article. It advises consumers faced with increased fees for checking to: shop around, move money out of savings into checking to increase their balance, bundle services with one financial institution; and bank online and use debit cards, which cost less to process. To review the articles, use the links.

Auditor responds to NCUA suit in New London failure

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NEW HAVEN, Conn. (6/21/10)--The auditors of the defunct New London (Conn.) Security FCU have filed a response to an amended lawsuit by the National Credit Union Administration (NCUA) in which NCUA alleges an unqualified auditor failed to act on a fraudulent situation for years before the credit union collapsed in 2008. The defendants in the suit--filed in the U.S. District Court, District of Connecticut, New Haven--are the credit union's former auditor, Beller, Shepatin & Co. P.C.; an employee at the firm, Robert Shutsky; and Ed Lorah & Associates LLC, a firm that is successor in interest to the Beller firm, which Lorah bought in 2007. In the response filed on June 11, the defendants' attorneys Marisa Lanza and Andrew F. Pisanelli denied NCUA's allegations of professional malpractice and breach of contract in performing audits and reviews of the credit union's financial statements. NCUA's suit alleges that Shutsky was unqualified and lacked the proper and necessary training and knowledge to perform auditing and review services, according to its amended complaint filed April 8. "As a result of the defendants' professional malpractice, and breach of contract, the credit union's investment in a fraudulent investment account went undetected for many years," said the complaint. "As a consequence of the defendants' professional malpractice, and breach of contract, the credit union was unable to prevent or mitigate the damages caused by the fraudulent investment account, ultimately losing virtually all of its assets," NCUA had charged. The fraudulent activity centered on assets in A.G. Edwards & Sons, which became Wachovia Securities (now Wells Fargo) in 2007. A.G. Edwards' employee, Edwin Rachleff, allegedly embezzled $12 million in funds from the credit union through numerous false account statements he filed between 1998 and 2008, the complaint said. NCUA found the credit union insolvent and placed it into involuntary liquidation in July 2008. Rachleff died the day the credit union was shut down. As a result of the liquidation, NCUA's National Credit Union Share Insurance Fund (NCUSIF) paid out about $9.7 million to members of the credit union on their insured shares, said the complaint. The agency is seeking reimbursement of more than $10 million--the $9.7 million NCUSIF payment, about $570,000 in uninsured shares that members of the credit union lost as a result of the liquidation, and administrative costs associated with the liquidation.

Russell Simmons Interchange amendment hurts underserved

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WASHINGTON (6/21/10)--More opposition to the interchange amendment in the Senate version of the regulatory reform legislation is being voiced by Russell Simmons, co-founder of hip-hop recording label Def Jam and advocate for the "poor, the voiceless and the underserved"--this time in a letter to the members of the financial reform conference committee. Simmons, writing in Huffington Post (June 18) to the committee, said he is "increasingly concerned that the central issue, the effect on the most vulnerable in our country is not fully appreciated by those making the decision." He has studied the amendment, spoken to members of Congress and "spoken to groups that have no hidden agenda: the community banks and credit unions--the good guys in the financial system," he wrote. The amendment, which would allow government intervention in setting interchange fees, is strongly opposed by the Credit Union National Association (CUNA) and the nation's credit unions. Last week hundreds of credit union representatives hiked Capitol Hill in Washington, D.C., while credit union grassroots supporters made about 600,000 contacts with congressional representatives to deliver the message: "No interchange amendment." Simmons' article pointed out what is at stake: "Debit cards are the entry point for millions of Americans into the American financial system. Debit cards are what keep the under-served--including minorities, immigrants, the poor, soldiers, veterans and students--from the claws of payday lenders and check cashers, from humiliated lines waiting to cash their paychecks and then more lines to pay their bills." Simmons owns a debit card company and maintains the amendment will have comparatively little and possible a positive effect on my particular business," but said "this is about ensuring that within our desire to create financial reforms, we do not do so at the expense of the poor." He noted his support of the "Move Your Money" campaign that supports community banks, credit unions and specialist providers of debit card services. Simmons has "received assurances" that new language in the amendment will come. "However, until I see action behind the words, I will continue to fight for the needs of poor people," he said. The article was the second this month Simmons had written for the Huffington Post in opposition to the interchange language. In the earlier article, he cited a joint letter that CUNA and the Independent Community Bankers of America wrote on the inadequacy of a carve out in the bill for smaller institutions as an influence on his decision to speak out against the amendment (News Now June 8).

Members United Corporate elects two new board members

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WARRENVILLE, Ill. (6/21/10)--Members United Corporate FCU announced the election June 14 of B. Don Crofut and the appointment of David Mooney to the Warrenville, Ill.-based corporate’s board of directors as of June 9. Crofut, president of South Metro FCU, Prior Lake, Minn., will serve a three-year term. Mooney, president/CEO of Alliant CU, Chicago, most recently served as chair of Members United’s supervisory committee. He was appointed to fill the seat of Ron Linstromberg of DeKalb Financial CU, Auburn, Ind., who announced his retirement. Also, board members re-elected to three-year terms are:
* John R. Caulfield, president/CEO, St. Mary’s CU, Marlborough, Mass.; * Andrew L. Jaeger, president/CEO, Credit Union of New Jersey, Ewing, N.J.; and * Michael Phipps, president/CEO, Evansville (Ind.) Teachers FCU.
New and returning board members include:
* Board Chair--John T. Fenton, president/CEO, Affinity FCU, Basking Ridge, N.J.; * Vice Chair--Kyle Markland, president/CEO, Affinity Plus FCU, St. Paul, Minn.; * Treasurer--Louis H. Jimenez, treasurer/CEO, Montauk CU, New York; * Secretary--Lloyd M. Fredendall, president/CEO, NorthStar CU, Warrenville, Ill.; * Terry R. Brahm, president/CEO, DHCU Community CU, Moline, Ill.: * Donald H. Briggs, president/CEO, NorthEast Alliance FCU, Bardonia, N.Y.; * Gary E. Furtado, president/CEO, Navigant CU, Smithfield, R.I.; and * Nancy Kasprzak-Whitmore, president/CEO, Niagara County’s FCU, Lockport, N.Y.

CU employee saves branch from fire

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FRONT ROYAL, Va. (6/21/10)--A quick-thinking credit union employee saved a Front Royal (Va.) CU branch from a fire that was triggered by faulty wiring connected to an exhaust fan in the bathroom. On Wednesday, around noon, a credit union employee entered the women’s restroom at the credit union and heard a small popping sound when she turned the lights on, said Kim Darr, Front Royal CEO. The exhaust fan caught fire, and the employee used a fire extinguisher to put out the flames. “By doing that, she saved the building,” Darr said. “We’re thankful for her quick response, which saved the credit union. We’re glad nobody was hurt.” The building was then evacuated, and the credit union called 911. Front Royal was closed for the remainder of the day. Members were served at Front Royal’s other branch, located a mile down the road. No members were in the credit union at the time of the fire. About eight employees were in the building, Darr said. The bathroom sustained some damage from the fire, but most of it has been cleaned up, Darr said. Ceiling tiles and linoleum need to be replaced because the fan fell on the floor when it caught fire. “We’re very lucky,” Darr said. “It could have been a lot worse.” Front Royal CU has $46 million in assets.

Sharkey named NEFE HSFPP director

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WASHINGTON (6/21/10)--Susan Sharkey has been named the new director of the National Endowment for Financial Education (NEFE) High School Financial Planning Program (HSFPP), a program popular with credit unions. Sharkey will join NEFE in early August. Sharkey was the curriculum designer who worked with dozens of NEFE’s national network subject matter specialists in 2005 and 2006 to create the current version of the NEFE program. She spent nine years as an instructional design consultant and manager of consulting projects for the Worldwide Instructional Design System (WIDS) in Wisconsin. She began working at WIDS after 14 years as a high school educator. “Susan brings her strong background to NEFE and the HSFPP at a particularly critical time,” said John Parfrey, NEFE HSFPP director. “The need for quality financial education programs is great. And where some programs might have all the right ingredients in place, a true educational program is a well-prepared, exquisitely presented feast of learning, and that is what Susan brings to her role as director of the NEFE High School Planning Program.”

NCUA reaffirms CDCI support at Serving the Underserved

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NEW YORK (6/21/10)--The community development credit union (CDCU) movement’s two top concerns were given strong support from National Credit Union Association (NCUA) Chairman Debbie Matz in her remarks at the 36th Annual Conference on Serving the Underserved in Pittsburgh earlier this month, said the National Federation of Community Development Credit Unions.
Debbie Matz, board chair of the National Credit Union Administration, gave a keynote address at the National Federation of Community Development Credit Unions’ 36th Annual Conference on Serving the Underserved earlier this month in New York.
The Community Development Capital Initiative (CDCI), the Treasury Department's program to invest in financially sound CDCUs that are certified by the Community Development Financial Institutions (CDFI) Fund, has received 111 applications, Matz said. Announced in February by Treasury Secretary Timothy Geithner, the capital initiative will make secondary capital investments of up to 3.5% of assets in eligible low-income credit unions. Applicants are being reviewed for financial soundness by NCUA. Matz assured conference attendees that “no credit union’s application for CDCI will be denied by NCUA staff without [my] concurrence.” Matz restated her commitment to personally review all CDCI applications before final decisions are made. Federation Governmental Affairs Committee Chairman Deyanira Del Río, board president of the Lower East Side Peoples FCU, the largest CDCU in New York City, said, “We feel confident that Ms. Matz’s commitment to this program will allow as many credit unions as possible to make their case and fulfill the president's intent to strengthen community-based financial institutions serving the nation's hardest-hit communities.” Federation President/CEO Cliff Rosenthal praised NCUA for its flexibility and responsiveness. NCUA worked “closely with the federation under tight deadlines to address critical issues in the CDCI program,” he said. “Her assistance has been crucial. By Sept. 30, we are hoping that as many as 100 credit unions will receive a total of more than $100 million in secondary capital.”
Gigi Hyland, National Credit Union Administration board member, addressed attendees of the sixth Latino Credit Union Conference. (Photos provided by the National Federation of Community Development Credit Unions)
Matz and NCUA board member Gigi Hyland, who opened the Sixth Latino Credit Union Conference two days earlier, touched on NCUA supervisory letter: Supervising Low-Income Credit Unions and Community Development Credit Unions (10-CU-01), which drew upon dialogue among NCUA, CDCUs and federation leadership. The letter “emphasizes that CDCUs and low-income credit unions have unique characteristics and challenges that are very different from those of most larger credit unions,” Matz explained. It “reminds examiners that they should take that fact into account when evaluating loan portfolios, funding sources and operating costs.” Examiners’ primary responsibility is promoting viable and sustainable credit union service to their members. “The letter does not mean that we are easing regulatory scrutiny or providing any special exclusion to the rules,” Matz said. “Every credit union must live up to all the fundamental criteria that ensure the safety and soundness of operations.” “We welcome the priority NCUA’s leadership has given to this, and the training and instruction they have given to examiners,” Rosenthal said. “However, we continue to see a gap between board-level policy and the interactions between examiners and CDCUs.” The federation plans to survey its membership to determine the impact of the letter, and will share its findings with NCUA’s board, he added. More than 300 representatives of credit unions, government, and asset-building professionals attended the federation's event, which began on June 9 with the Sixth Latino Credit Union Conference, co-sponsored by the federation and the Network of Latino Credit Unions and Professionals. A large delegation from Mexico attended, as did a representative of a Senegal credit union. Senior officials of the Small Business Administration and the U.S. Department of Agriculture (USDA) were among the featured speakers. An outcome from an address by USDA Deputy Administrator for Cooperative Programs LeAnn Oliver was the federation’s formation of a rural credit union task force, to be chaired by Marcus Bordelon, CEO of Appalachian FCU, Berea, Ky. He also was honored with the federation's 2010 Annie Vamper “Helping Hands” Award--the highest honor given by the federation.

Bergeron Maheux elected to Tricorp FCU board

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PORTLAND, Maine and BURLINGTON, VT. (6/21/10)--Tricorp FCU held its 35th annual meeting in Portland, Maine, last week with 36 member credit unions attending. The corporate elected two board members and its officers, and discussed the corporate's financial status.
Elected to the Tricorp FCU board by acclamation were, from left, Joe Bergeron, president of the Association of Vermont Credit Unions, and Roland Maheux, chief financial officer, Maine State CU, Augusta, Maine. (Photo provided by the Association of Vermont Credit Unions)
New board members elected by acclamation are Association of Vermont Credit Unions (AVCU) President Joe Bergeron and Roland Maheux, chief financial officer of Maine State CU, Augusta, Maine, said AVCU's newsletter, Newslines Express (June 18). Officers elected in the organizational meeting were:
* Chair, Don Casko, Katahdin FCU, Millinocket, Maine; * Vice Chair, Ralph Ferland, Eastern Maine Medical Center FCU, Bangor, Maine; * Secretary, Paul Roy, Bellwether Community CU, Manchester, N.H.; and * Principal Financial Officer, Maheux.
Other directors are Joe Gervais, University CU, Orono, Maine, and Vicki Stuart, Central Maine FCU, Lewiston, Maine. TriCorp CEO Steve Roy reported the financial status of Tricorp as relatively favorable in a sea of uncertainty about new regulation and challenges in the corporate sector. He said Tricorp is working hard to ensure it s long-term viability as a local service provider to its member credit unions.

MnCUN CEOs column Interchange proposal a lose-lose

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ST. PAUL, Minn. (6/21/10)--Mark D. Cummins, president/CEO of the Minnesota Credit Union Network (MnCUN), discussed interchange fee legislation in his monthly column in Finance & Commerce newspaper. In, “Interchange fee proposal a ‘lose-lose,’” Cummins discussed the “toxic” interchange amendment inserted into the Senate’s version of the financial regulatory reform bill. He noted the amendment has financial institutions “gravely concerned over its unintended consequences.” The Senate bill’s interchange language would allow the government to control interchange fees. The Credit Union National Association opposes the amendment, and hundreds of credit union representatives nationwide went to Washington last week to voice their opposition to the interchange changes. More than half a million credit union backers have done the same through phone calls or electronic messages to their elected representatives. “We fully support Congress’ attempts to protect consumers with its financial reform, but including this interchange provision in the final financial regulatory reform bill would actually hurt consumers in the long run,” Cummins said in the article. He referred to a bipartisan congressional letter circulating on Capitol Hill that agrees with credit unions’ viewpoint--that the interchange provision “will devastate credit unions and community banks and harm every consumer that uses debit and credit cards to pay for everyday essentials and large purchases alike … while providing no discernable benefits for consumers.” The letter, delivered Wednesday to conferees tasked with reconciling the House and Senate versions of the bill, was signed by 131 members of Congress. Cummins also cited a report on interchange published by the Government Accountability Office in 2009 that says limiting or decreasing interchange fees could shift the cost from merchants to card holders. “Simply stated? The interchange amendment will hurt consumers by raising the price of basic banking products,” Cummins wrote. MnCUN’s next column is slated to run July 16. For more information, use the link.

CU System brief (06/18/2010)

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* ONTARIO, Calif. (6/21/10)--SchoolsFirst FCU CEO Rudy Hanley and
Click to view larger image Click for larger view
retired Unocal FCU CEO Judy Hurst received the “Unsung Heroes” award from the California Credit Union League. The award honors individuals in the credit union industry with 20 years of service and who have made significant contributions in the community. Hanley worked for the California league and the Credit Union National Association prior to joining SchoolsFirst (formerly Orange County Teachers FCU). Hurst joined the California league in 1982 as a consultant and is a graduate of Western CUNA Management School. SchoolsFirst FCU, Santa Ana, Calif., has $8 billion in assets. Unocal FCU is now Wescom CU, Pasadena, Calif. Hanley is pictured with Mary Cunningham, CEO of USA FCU, San Diego, and a member of the league Historical Preservation Committee. (Photo provided by the California Credit Union League) ...

Nebraska league board awards named

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OMAHA, Neb. (6/21/10)--The Nebraska Credit Union League and Nebraska Credit Union League Services Corp. boards named new officers during a reorganization meeting after the league’s 76th annual meeting convention. League board of directors include:
* Chairman--Tom Kjar, president/CEO, Creighton FCU, Omaha; * First Vice Chair--Ken Bradshaw, president/CEO, Liberty First CU, Lincoln; * Second Vice Chair--Mary Johnson, president/CEO, Omaha (Neb.) Police FCU; * Secretary/Treasurer--Scott Sullivan, president/CEO, Nebraska Credit Union League.
League Services Corp. board of directors officers include:
* Chairman--Bradshaw; * Vice Chair--Johnson; and * Secretary/Treasurer, Ronny Miller, president/CEO, Gallup FCU, Omaha.
Each officer will serve until the 77th annual meeting next June in Omaha. Also at the meeting, Jerry Barnett, president/CEO of Lincoln (Neb.) Goodyear Employees FCU--now LincOne FCU--received the 2010 Credit Union Professional Distinguished Service Award. Barnett began his career in 1977 at Burlington Northern CU as a teller, and joined Lincoln Goodyear in 1983 as a loan officer. In 1990, he was named CEO. According to Barnett’s nomination letter, every issue that comes before him is addressed from the perspective of how it will affect members. He has stated that there is no better feeling than helping members realize a dream or help them work their way out of a difficult financial situation. He believes that members are like family.

IWall St. JournalI Disaster recovery business is booming

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NEW YORK (6/18/10)--Demand for disaster recovery services and products is booming, according to Agility Recovery Solutions Inc., a CUNA Strategic Services alliance provider featured in an article in The Wall Street Journal (June 17). The article, "Disasters' Silver Lining: Green," noted that the number of disaster preparedness and recovery businesses--most of them small--have increased 20% to 30% over the past five years. The businesses are cropping up because more businesses (including credit unions), government agencies and individuals are hoping to protect themselves from potential catastrophes, particularly after the Sept. 11, 2001 terrorist attacks, Hurricane Katrina in 2005, and the recent oil spill in the Gulf of Mexico. Agility Recovery Solutions, a Charlotte, N.C.-based provider of mobile offices and emergency backup computer support, was one of the businesses interviewed. President Bob Boyd told the Journal that his company is fielding more inquiries than usual, with the hurricane season now. This year is expected to exceed the average year of 11 named storms, six hurricanes and two major hurricanes along the Atlantic, according to the National Oceanic and Atmospheric Administration. "Any time there's a big disaster, we have more customers calling us, and when we call prospects, they're more receptive to hearing about potential solutions," Boyd told the publication. Agility, with 75 employees, originally served large companies when it launched in 1989, but after adding affordable options for small and medium-sized concerns in 2005, its customer base grew sevenfold. Today it serves 7,000 clients, including credit unions. Historically, Boyd said, there was never a service like this for small businesses. Agility Recovery Solutions has been an alliance provider with CUNA Strategic Services since March 2006.

CU System briefs (06/17/2010)

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* TOLEDO, Ohio (6/18/10)--Ohio's first and newly chartered Latino credit union, Nueva Esperanza Community CU, Toledo, has hired its first full-time employee. Lillian Sue Cuevas will serve as the credit union's manager, according to the Ohio Credit Union League (eLumination Newsletter June 16). Cuevas has more than 20 years experience in the banking industry. She has held positions ranging from loan director and mortgage loan officer to banking center manager and financial investment assistant. Cuevas is president of the Hispanic Awareness Organization of Northwest Ohio and a member of the Toledo Hispanic Chamber of Commerce. She is fluent in Spanish, which will help the credit union build relationships with South Toledo's Latino community, said the league ... * MISSOULA, Mont. (6/18/10)--Ben A. Diveley, 34, of Helena, Mont., pleaded guilty Tuesday to embezzling nearly $77,000 from Helena Community CU, where he worked as a loan officer for five years (Associated Press Newswires June 16). He entered his pleas to credit union embezzlement, money laundering and identity theft before a U.S. Magistrate Judge in Missoula. While working at the credit union, Diveley allegedly took out loans totaling $75,000, using false borrower names and guaranteed with a member's certificate of deposit without the member's permission. Sentencing is set for Sept.24 ... * SHELTON, Wash. (6/18/10)--Joe Robertson, president/CEO for the past 25 years of Our Community CU in Shelton, Wash., will retire Dec. 31, the credit union announced
Thursday. Bert Fisher, currently chief operations officer (COO), will be promoted to CEO on July 1, to begin the transition to succeed Robertson at the end of the year. Robertson's career with the credit union began in 1975, when he was hired as a collection manager and later promoted to operations manager. He was appointed CEO in 1985 and has been active in the credit union industry, particularly with the Washington Credit Union League and as an advocate for credit unions on both Capitol Hill and in the community. Fisher has been COO since 2005, when he was hired as part of the succession plan for Robertson's retirement. As COO, Fisher oversaw branch operations, call center, lending and collections, human resources, staff development and the compliance department. He also has more than 24 years' experience in the wood products industry ... * WASHINGTON (6/18/10)--Gordon E. Hurd, former development director with the World Council of Credit Unions (WOCCU) and later a senior development officer in institutional philanthropy for AARP, died May 17 of cancer at his home in Arlington County, Va. Hurd joined WOCCU in 1976, holding positions in strategic planning and media management and as an international liaison before becoming development director in WOCCU's Washington, D.C., office He moved to the organization in Madison, Wis., in 1989. He began working for the University of Wisconsin Foundation in 1995, before joining AARP's staff in 2005. He is survived by his wife, one son, a sister and a brother (Washington Post June 17) ... *OKLAHOMA CITY, Okla. (6/18/10)--Donald Anton Brown, 92, died June 12 in Oklahoma City. He spent 50 years in the aviation industry and maintained an active pilot's and aviation mechanic's license for 60 years. Brown was president of the FAA CU, based in Oklahoma City, for seven years. He remained on the board of directors at the credit union for 25 years and was active in many community and aviation organizations. He is survived by two sons, one daughter, four grandchildren, six great-grandchildren, one brother and one sister (The Oklahoman June 15) ...

Former CU to convert to stock organization

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WAYCROSS, Ga. (6/18/10)--The mutual holding company of a former Georgia credit union that converted to a mutual savings bank in 2000 has adopted a plan to convert to a stock form of organization. Atlantic Coast Federal Corp. announced the planned conversion of the Atlantic Coast Federal, the mutual holding company, in a press release Thursday. Atlantic Coast Bank, which had about $914 million in assets as of March 31, is the former Atlantic Coast FCU, which was based in Waycross, Ga. The credit union converted to a federal mutual savings association in November 2000. In January 2003, the Atlantic Coast Federal Corp. was formed as the holding company. The company completed its initial public stock offering in October 2004. The mutual holding company currently owns about 65% of the outstanding shares of common stock in the company, which owns 100% of the issued and outstanding shares of the capital stock of the bank. The conversion is subject to the approval of the Office of Thrift Supervision, the mutual holding company's depositors, and the company's stockholders. The conversion and offering are expected to be completed by late third quarter or early fourth quarter of 2010.

LSCUs first annual meeting attracts 1100

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ORLANDO, Fla. (6/18/10)--More than 1,100 credit unions and others from Florida and Alabama attended the first annual meeting and convention of the League of Southeastern Credit Unions (LSCU) and heard speakers on a variety of topics, including interchange and the economy. LSCU CEO Patrick La Pine laid out the foundation of the new league and the initiatives that are most important--advocacy and information.
Click to view larger image Credit Union National Association President Dan Mica speaks before Florida and Alabama credit unions at the first League of Southeastern Credit Unions annual meeting, in Orlando, Fla. (Photo provided by the League of Southeastern Credit Unions)
Credit Union National Association (CUNA) President/CEO Dan Mica, told the group that the $250,000 share insurance coverage cap on accounts by the National Credit Union Share Insurance Fund is now permanent. He also noted that House Financial Services Committee Chairman Barney Frank told him he is ready to begin looking at member business lending after the interchange issue is resolved. He also said he hoped alternative capital would be on the table by the end of the year or early next year. The league announced it was donating $15,000 to Credit Union House in Washington, D.C., in honor of Mica, as a retirement gift. He will step down from the CEO position at CUNA in July. Mike Schenk, CUNA vice president of economics and statistics spoke about the economy's impact on credit unions." Things have been bad; the worst that credit unions have seen in our lifetimes," he said. "We're through the worst, but the recovery will be slower. It won't be an event, but a process." He also noted that "more credit unions in Alabama and Florida are recording gains, but recovery will be slower in the Southeast." Jeff Post, president/CEO of CUNA Mutual Group, said that more than one million homes are owned by credit unions right now, that the "real" unemployment rate is 16% to 20%, and that the gross domestic product grew exponentially in the 1990s at 38% while it grew 17% in the 2000s. Household net worth was negative in the 2000s for the first time in history. Post said the economy has bottomed out. World Council of Credit Unions President/CEO Pete Crear showed pictures from Haiti and said most people there live in tents because they fear buildings will collapse. He noted that Ethiopia and Sri Lanka have 8,000 credit unions and Kenya has 3,000. A new initiative in the United Kingdom will open 11,000 credit union branches in post offices and fund them through taxes on banks. Others speaking included keynote speakers and political commentators Tucker Carlson and Paul Begala, and National Association of State Credit Union Supervisors CEO Mary Martha Fortney. The Filene Research Institute's Mark Meyer, and National Credit Union Foundation's REAL Solutions program director Lois Kitsch were among those conducting educational sessions.

African-American CU Coalition Conference set

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ST. LOUIS (6/18/10)--The African-American Credit Union Coalition will host its 12th annual conference Aug. 4-7 in St. Louis. The theme is “Arching for Success--Gateway to Knowledge.” The conference includes educational sessions, speakers and live entertainment (The Missouri difference June 16). Confirmed speakers include:
* National Credit Union Administration Chairman Debbie Matz; * U.S. Rep. William Lacy Clay (D-Mo.); * Missouri Credit Union Association President/CEO Rosie Holub; and * St. Louis Community CU President/CEO Patrick Adams.
For more information, use the link.

18 receive Certified CU Executive status

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MADISON, Wis. (6/18/10)--Certified Credit Union Executive (CCUE) designations have been awarded to 18 individuals from nine different states, bringing the total nationwide to 2,683, said the Credit Union National Association (CUNA). CCUE, instituted in 1975, is a program designed for managers and those aspiring to credit union leadership. It teaches advanced credit union management and operations techniques. Three individuals earned the Certified Financial Services Professional (CFSP) designation. The CFSP program began in 1999 as a designation targeted at educating credit union professionals specializing in financial services. The Certified Executive Program (CEP) awarded specialty certifications to 18 credit union professionals. The certifications require in-depth courses in a specialty area such as compliance, lending, financial management, marketing and human resources. Recommended for college credit by the American Council on Education (ACE), the classes and materials are tailored to those working within the Credit Union System. All new designations were awarded in April. Receiving high-honor designations were:
* Mark Thomas Little, CUNA Mutual Insurance Society, Madison, Wis.; * Ah Ber Lim, Wright Patman Congressional FCU, Washington, D.C.; * Cynthia T. Magliocca, State Employees’ CU, Raleigh, N.C.; and * Jennie C. Newbold, Jordan FCU, Sandy, Utah.
Receiving honors designations were:
* Christine H. Wolski, Erie (Pa.) Community CU; * Steven Farnsworth, Heartland CU, Madison, Wis.; and * Julie R. Yoder, Park View FCU, Harrisonburg, Va.
States represented by designees include Florida, Indiana, Louisiana, Minnesota, New Mexico, North Carolina, Pennsylvania, Texas and Wisconsin. For a list of designees, use the link.

Illinois league hosts Australian delegation

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NAPERVILLE, Ill. (6/18/10)--Members of the Australian credit union movement recently had the opportunity to learn more about Illinois credit unions with a visit to the Illinois Credit Union League (ICUL).
Click to view larger image Members of the Australian credit union movement recently learned more about Illinois credit unions with a visit to the Illinois Credit Union League. Pictured, from left: Debbie Balzan, quality and audit manager, Encompass CU, Sydney, Australia; Victor Corro, senior manager, International Partnerships Program, World Council of Credit Unions (WOCCU); Louise Aubusson, executive manager--Sales and Lending, Encompass CU; and Joshua Fetting, program specialist, International Partnerships, WOCCU. (Photo provided by the Illinois Credit Union League)
The delegation included: Debbie Balzan, quality and audit manager, and Louise Aubusson, executive manager--sales and lending, Encompass CU in Sydney, Australia. Also attending were representatives from the World Council of Credit Unions (WOCCU): Victor Corro, senior manager, and Joshua Fetting, program specialist for WOCCU’s International Partnerships Program. At the meeting, the representatives were briefed on credit unions in the state, ICUL’s programs and initiatives, and products and services offered by the ICUL Service Corp. Balzan and Aubusson also shared their perspective about the Australian credit union movement. The visit to ICUL was part of a two-week trip the Australian delegation made throughout North America. Other stops included: Vancouver, Canada; Madison, Wis.; Albany, N.Y., and New York City. Overall, the delegation spent time with executives to discuss the big picture areas of interest to understand overall credit union operational procedures and member service. Some of the delegation’s other goals included gaining information to improve branches, administration, collections and risk, and information technology; and to review their processes and projects to embrace new technologies and marketing initiatives. “We found the study tour to be extremely worthwhile both on a personal and professional level,” said Aubusson, who added, “we have brought back many ideas.”

State leagues interchange views in media

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BOSTON and TERRE HAUTE, Ind. (6/18/10)--State credit union leagues have expressed their views on the interchange amendment to the U.S. Senate version of the financial regulatory reform bill in various media outlets. Some of the successful league efforts are:
* Daniel Egan, president of the Massachusetts and New Hampshire Credit Union Leagues and the Credit Union Association of Rhode Island, sent a letter to the Boston Globe criticizing the newspaper’s support of the U.S. Senate’s version of the financial reform bill. “Your support of the U.S. Senate’s version of the financial reform bill, which instructs the Federal Reserve to unilaterally cap debit card interchange fees, is a mistake,” Egan wrote. “The 200 banks and 225 credit unions of Massachusetts and millions of consumers will face unintended consequences: higher big-box retailer profits and less convenience and higher costs for consumers. “The merchants who have pushed for this action have sold it as a benefit to the nation’s consumers,” Egan added. “Yet there is no requirement to pass along savings to consumers, nor for the retailers to be responsible for any fraud, liability or negligence of their own doing. The retailers are receiving a big gift, and consumers, local banks and credit unions will suffer the consequences.” * John McKenzie, president of the Indiana Credit Union League, wrote an op-ed piece in the Terre Haute, Ind., Tribune Star in which he maintains there is still time to stop the interchange amendment by contacting Congress. “The current interchange arrangement helps credit unions and community banks cover the financial risks associated with issuing the cards such as losses on unpaid balances, fraud losses and data security,” McKenzie wrote. “These are costs the merchants don’t have to worry about. “The interchange amendment that is now in the financial regulatory reform bill would put in place government price controls on the interchange rates that retail merchants pay,” he continued. “If the government sets the merchants’ interchange rate too low, it will be more expensive for consumers, because credit unions and community banks will be forced to pass along the existing costs of offering debit/credit cards directly to consumers through higher fees.” * Ohio credit union leaders and the Ohio Credit Union League are working with the media to inform the public and policymakers of the detrimental effects of the Senate interchange amendment, the league said (eLumination Newsletter June 17). League Director of Media Relations Patrick Harris conducted an on-camera interview with WBNS-Channel 10 on Wednesday, and had another scheduled with WSYX-Channel 6 for Thursday. A press release from the league resulted in an article regarding Ohio’s efforts to defeat the interchange amendment in the June 2 Dayton Business Journal. A letter to the editor from Steve Favor, CEO of First Ohio CU, Fostoria, appeared in Findlay’s The Courier. League Vice President of Government Affairs John Florian and Harris spoke to a reporter for Crain’s Cleveland Business. A letter to the editor from Jaime Crooks of OhioHealth Care FCU, Dublin, was published in Monday’s Columbus Dispatch.
Individual credit unions also have succeeded in getting the interchange issue discussed in local media. Among them:
* Jim Barbarich, president/CEO of M-C FCU, Danville, Pa., wrote a letter that was published Wednesday in The Daily Item, saying the Senate interchange amendment is harmful to consumers. “This amendment, offered without debate, will harm consumers and our ability to provide critical financial services to our members, other credit union members and community banks in our area,” Barbarich wrote. “The focus of the financial reform bill was to address the bank failures and high-risk activities that led to the worst economic crisis in many of our lifetimes.“The debit card is the new standard of convenience for consumers in this age of automated financial transactions, where fraud protection and data security are in constant focus,” he added. “This service is not free, and is supported in part by interchange revenue, an important part of our revenue stream. The amendment empowers the government with control on the amounts that merchants pay to support the system that allows you to use your card at their establishment. Everyone needs to understand that the credit union assumes all of the risk on a debit card transaction.” * An article in the Marshfield News-Herald Wednesday quotes Pat Wesenberg, president/CEO of Central City CU, Marshfield, Wis., who said smaller institutions just would break even on debit card purchases, and an interchange fee reduction might cause his credit union to raise members’ annual fees on their debit cards. “[The amendment] would change the playing field and certainly make it more favorable to the larger institutions who have larger economies of scale and built-in efficiencies in their organizations because of their size,” Wesenberg said.
For more information, use the links.

Credit card study Charge-offs are up

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PORTLAND, Ore. (6/18/10)--Credit card charge-offs are up and delinquencies are down slightly but still high, according to a first quarter 2010 credit union credit card portfolio trends study.
Click to view larger image Click for larger view
The study was conducted by AssetExchange, a credit union credit card portfolio advisory and brokerage firm, using National Credit Union Administration call report data. Charge-offs were up 4.6%, from 4.1% in March 2009, and delinquencies were down 1.9% from 2% in 2009. For the 2,150 credit unions with card portfolios of $1 million or more analyzed by AssetExchange:
* Outstanding balances grew at an annual rate of 8.5% between March 2009 and March 2010 to $33 billion. Total assets at these credit unions grew at an annual rate of 7.6% during the same period. * Credit card accounts grew at a 3% annual rate to 12.5 million. * Cards as a percentage of total assets increased slightly to 4.4% in the first quarter, up from 4.3% in the first quarter of 2009. Credit card balances grew faster than total credit union assets. The average balance was $2,619. * Credit card penetration among members continues to trend near 17%, where it has stayed the past four years. * There were no sales of credit union credit card portfolios larger than $1 million in the first quarter.
The data are based on credit card portfolios larger than $1 million for the time periods.

Filene report Dont expect retirees to unload stock

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MADISON, Wis. (6/17/10)--Credit unions offering investment services may believe there will be a huge wave of selling of stock as the Baby Boomers begin to fund their retirement. But not so fast, says a new Filene Institute Research Report, Pre- and Post-Retirement Asset Portfolios. The report draws on the Rand Corp.'s Health and Retirement Study, which tracks the asset-selling trends of previous generations. Although stock holding has changed over time in the general population, the holdings among older generations have generally moved in concert, according to the Ben Rogers, Filene research director, in the executive summary of the report. It appears "that the boomers' retirement will be no more or less significant in the equities market than the retirement of previous generations," he wrote. Previous retirement waves indicate that no significant changes to direct stock holdings occur near the time of retirement. Economic theory may assume people will sell off assets to compensate for lost wages and to smooth retirement expenses, but the actual data indicate that real-world behaviors are much more nuanced. For example, half the households studied did not hold stock before or after retirement. However, one in 10 households acquired stock while one in 10 divested of stock. Other findings:
* Households with less than $50,000 in total financial assets hold about 11% of those assets in stock. Those with total financial assets of more than $150,000 have a lower stock-holding rate after retirement than before, indicating they may sell assets to pay for retirement. * A high school education matters in stock ownership. Those with less than a high school education are less likely than those with a high school education to own stocks after retirement. * Households with higher mathematical ability and more wealth tend to hold rather than sell stocks after retirement. * Those with traditional pensions are more likely to directly hold stock than those with defined contributions plans, probably because annuitized retirement plans allow their holders to take more risks elsewhere.
The report indicates that credit unions offering investment services should pay attention to findings that show consumers--especially higher-wealth consumers--maintaining direct stock holdings long after retirement. Although it's tempting to think that members will unload direct stock holdings at retirement, it's also far too simplistic a view, said the researchers. As credit union membership continues to age, it will be increasingly important to cater to members' actual behavior, said the report. While the research suggests that baby boomer retirement surge will not depress the stock market significantly, it's essential to ferret out the individual needs of retiring members. Researchers authoring the report were Jinkook Lee, Filene research fellow and senior economist at RAND Corp.; Arie Kapteyn, senior economist at RAND; Erik Meijer, Ph.D., economist at RAND; and Jung-Seung Yang, a doctorate candidate in economics at Seoul National University, South Korea.

IUSA TodayI cites CUs as way to avoid payday loan trap

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NEW YORK (6/17/10)--Credit unions are among the ways consumers in a bind can raise cash fast and avoid the payday loan trap, says USA Today (June 15). "Many credit unions and community banks offer short-term loans with more favorable rates and terms than payday loans. For example, Alternatives FCU's Credit Builder Loan has an interest rate of 14.25%, no fees, and doesn't have to be repaid for six months," wrote the newspaper's personal finance columnist, Sandra Block. Lauren Saunders, attorney for the National Consumer Law Center, told Block that some banks and credit unions offer loans with competitive rates and terms that aren't widely advertised. If consumers in a bind can convince the credit union or bank there's a legitimate need and a realistic chance of paying off the loan, they may qualify--even with less than perfect credit--for a loan, Saunders told the newspaper. Other payday lending alternatives mentioned included tapping into 401(k)s , and obtaining credit card cash advances. Both have certain drawbacks, including higher fees and interest rates. To access the article, use the link.

Innovation grants deadline is nearing says NCUF

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WASHINGTON (6/17/10)--Credit union organizations now are eligible to apply for new Innovation Grants from the National Credit Union Foundation (NCUF) through June 30. Innovation Grants are aligned with NCUF’s signature program, REAL Solutions, which aims to help the low-wealth achieve financial stability. However, participation in REAL Solutions is not required to apply for a grant. NCUF is seeking grant applications in any of REAL Solutions’ five service areas:
* Education. Innovation Grants assist credit union organizations participating in national financial education programs including Biz Kid$ and the National Endowment for Financial Education (NEFE). They also support initiatives such as financial counseling, product awareness and staff training. * Transaction Services. Examples include check cashing, money orders, pre-paid stored value cards, remittances, second-chance/fresh-start checking and tax preparation. * Savings. Examples include prize-based savings, safe accounts, savings challenges and step-up share certificates. * Credit. Innovation Grants support initiatives that help nonprime borrowers build and improve credit through credit unions. Initiatives include alternative credit reports, citizenship loans, first and last rent loans, flexible loan policies, nonprime used-car loans, score builder loans and thin-file loans. * Homeownership. Examples include foreclosure assistance loans, green loans, Home Loan Payment Relief mortgages, Individual Taxpayer ID Number loans and timely repayment rewards.
“We have added a grant application criterion asking, ‘Can your project be replicated by other leagues or credit unions?’” said NCUF Executive Director Bucky Sebastian. “We’re looking to maximize our funding to help credit unions reach new members and deliver innovative services.” Credit unions, credit union service organizations, state credit union associations, state credit union foundations, and any other organizations owned or controlled by credit unions can apply for the grants. Grant dollar availability depends on how much credit union organizations invest in the Community Investment Fund (CIF). Those interested in applying for grants and/or investing in the CIF can contact Lois Kitsch at 407-616-2409.

Pa. CUs on state Hill interchange a hot topic

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HARRISBURG, Pa. (6/17/10)--Pennsylvania credit unions just concluded two days of political advocacy efforts in the state--and interchange fees was among the issues addressed.
Pennsylvania Governmental Affairs Committee members John Schmidt and Carol Humenick meet with State Rep. Tim Hennessey, center, (R-Chester) during Hill visits after a joint meeting of the Pennsylvania Credit Union Association’s (PCUA) Governmental Affairs and State Credit Union Advisory Committees.
The second day of a two-day joint meeting of the Pennsylvania Credit Union Association’s (PCUA) Governmental Affairs and State Credit Union Advisory Committees featured more than 40 Hill visits Tuesday to representatives at the state Capitol (Life is a Highway June 16). Credit union leaders told lawmakers or staffers about credit unions’ community activities and how they are bettering the lives of their members. Discussion topics included the Credit Union Better Choice program--a payday loan alternative--savings and loan rates, and the impacts of credit card and mortgage reform. The interchange amendment to the Senate version of the financial regulatory reform bill came up because the state has several programs that use prepaid debit cards. Also, the state is researching using purchasing prepaid cards (P-Cards) to pay vendors directly to reduce administrative costs, and allow the state to garner revenue from card issuer rebates. Committee members also discussed how card-use costs would be shifted to consumers who are on state benefits--unemployment, public assistance, supplemental security income--and can’t afford it. That cost also undermines efforts to move low- and mid-income individuals into mainstream banking, PCUA said.
Bruce Foulke (left), vice chairman of the Pennsylvania Credit Union Association’s (PCUA) Governmental Affairs Committee, greets Trey Hawkins, vice president of political affairs for the Credit Union National Association, at a joint meeting Monday of PCUA’s Governmental Affairs and State Credit Union Advisory Committees. (Photos provided by the Pennsylvania Credit Union Association)
On Monday, the committees received an update on the status of the state and federal political advocacy efforts, including interchange, financial reform, and the state budget, along with pending regulatory issues from the National Credit Union Administration (Life is a Highway June 15). Trey Hawkins, vice president of political affairs for the Credit Union National Association, discussed upcoming elections. Nationally, there are 13 open Senate seats and 39 open House seats for the 2010 election cycle. There also are 14 competitive Senate races and 69 competitive House races. In Pennsylvania, both the U.S. Senate race and the 7th District seat are toss-ups. There are six seats that are deemed vulnerable, PCUA said. Hawkins touted ways for credit unions to get involved in the political process: campaign involvement, voter drives, and direct action to members--endorsements and promotion.

Outstanding pros volunteers honored in New York

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Vicki O’Neill (left), president, ACMG FCU and Marion Smith, vice president and assistant treasurer, Melrose CU, were honored with the Professional of the Year Award by the Credit Union Association of New York. (Photos provided by the Credit Union Association of New York)
ALBANY, N.Y. (6/17/10)--The Credit Union Association of New York honored outstanding credit union professionals and volunteers, along with winners of the Dora Maxwell Social Responsibility and Louise Herring Philosophy in Action awards, during its annual meeting and convention in Cooperstown, N.Y., last week. Vicki O’Neill, president, ACMG FCU, Solvay, and Marion Smith, vice president and assistant treasurer of Melrose CU, Briarwood, received the Outstanding Professional Awards. Recipients of Outstanding Volunteer Awards were:
* Kenneth L. Putt, founding member and long-time volunteer leader, Olean Area FCU; * Hobart Rhinehart, the longest-serving board member at CCSE FCU, Salamanca; and * Pamela Wiss, director and chairperson of the supervisory committee at Palisades FCU, Pearl River.
Recipients of the Dora Maxwell Social Responsibility Award from the Credit Union Association of New York are, from left: Marsha Brauer, CEO, Clarence Community & Schools FCU; Joseph Toochin, board member and Elisabeth Philippe, business manager and public relations manager, United Nations FCU; Mario DiFulvio, president/CEO, Horizons FCU; Kate Burke, marketing specialist, GHS FCU; and Christina Sauve, community development coordinator, Cooperative FCU.
Winners of the Dora Maxwell Social Responsibility Awards were:
* Cooperative FCU, Syracuse, first place,$5 million to $20 million in assets; * Clarence (N.Y.) Community & Schools FCU, second place, $5 million to $20 million; * Western New York FCU, West Seneca, first place, $20 million to $50 million; * Horizons FCU, Binghamton, first place, $50 million to $100 million; * GHS FCU, Binghamton, first place, $100 million to $200 million; * United Nations FCU, Long Island, first place, more than $500 million; and * Visions FCU, Endicott, second place, more than $500 million.
Louise Herring Philosophy in Action winners were:
The Credit Union Association of New York’s Credit Union Volunteers of the Year are Kenneth L. Putt, Olean Area FCU, Hobart Rhinehart, CCSE FCU and Pamela Wiss, Palisades FCU.
* Clarence (N.Y.) Community and Schools FCU, first place, $50 million and under in assets; * Bethex FCU, Bronx, second place, $50 million and under; * GHS FCU, first place, $50 million to $250 million; and * Visions FCU, first place, $250 million or more.
Speakers at the meeting included Pete Crear, president/CEO of the World Council of Credit Unions, who offered an international view of the movement; Johnny Bench, baseball hall of fame member; and Peter Schutz, former president/CEO of Porsche AG. Schutz noted that credit unions can remain innovative and competitive by getting extraordinary results from ordinary people who are impassioned and invested in the larger vision of their organization.

CU blog turns table on groups duck ads

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JACKSON, Mich. (6/17/10)--Calling it "a bunch of quack," a credit union has turned the tables on the efforts of a group to link the interchange debate to the credit union tax exemption. Credit unions across the nation Tuesday and Wednesday reported receiving a fax of an ad (which originally appeared in the Washington political journal, Politico) from a group calling itself "American Family Voices." The faxed ad features a duck with a cigar in its mouth giving the old "if it walks like a duck" argument used for years by banks in the tax exemption debate. The aim of the ad is to support the interchange amendment, which would allow the Federal Reserve to set interchange fees. Credit unions and other small financial institutions contend the amendment would hurt their debit card programs and force more fees on consumers. But, at American 1 FCU, that tactic of faxing the ad backfired. The $173 million asset credit union in Jackson, Mich., pushed back in its blog and produced its parody of the faxed ad. The parody is pictured here. It says, "American Family Voices doesn't know quack." "We got a funny fax the other day from American Family Voices, a lobby group that's looking to enact interchange reforms that could hurt our debit card program," the credit union's blog says. "Pretty goofy, right? So goofy it relies on that ol' banker trick of trying to paint credit unions as do-gooder banks. AFV is trying to do two things at once: dig up the outdated banker argument, and ...spin it to fit their interchange views. It's a bunch of quack," the blog added. The blog outlines the points in the fax and refutes them. At the fax's claim that "this is not your grandfather's credit union," the credit union responds. "Well of course not--is growth a bad thing? Credit unions have grown partly due to customers' disgust with big banks, but our industry is still dwarfed [by] the for-profit banking industry." The blog continues: "We've already made our position on interchange clear, and we can argue about the merits of that all day long. But tying us together with the 'big Wall Street banks that helped caused the financial crisis'? I don't think so." The Credit Union National Association (CUNA) and credit unions strongly oppose the interchange amendment, which would allow the government to intervene in setting fees, damaging credit unions' and small institutions' debit card programs and forcing consumers to pay more as a result. Credit unions have generated more than half a million contacts with lawmakers about interchange since May 24. Also Wednesday: A letter signed by more than 130 members of the House, from both sides of the aisle in support of the credit union position on interchange, was made public.

Political leaders expert to address Maine convention

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WESTBROOK, Maine (6/17/10)--The Maine Credit Union League will hold its 72nd Annual Meeting and Convention Friday and Saturday in Portland with a theme that highlights the opportunities the state’s credit unions provide to their members and communities. The theme, “Maine’s Credit Unions--Opportunities Rock,” highlights the growing popularity and benefits of credit unions. During the past two years, the financial services industry has seen many changes, said the league. As a result, credit unions have provided consumers with many opportunities not found with other financial institutions--such as a continued source of lending, fewer fees and better rates. The role and value of Maine’s credit unions continue to attract positive attention and increased interest from the existing 600,000 Maine credit union members and also from non-members, the league said. During the two-day event, U.S. Rep. Michael Michaud (D-Maine) and U.S. Rep. Chellie Pingree (D-Maine) will speak to the more than 600 credit union representatives. Both U.S. Sens. Olympia Snowe (D-Maine) and Susan Collins (D-Maine) are expected to send videotaped messages. On Saturday, Mark Sievewright, senior vice president of Fiserv Inc., a provider of information management and technology solutions for credit unions, will be the keynote speaker. Sievewright, with 30 years in the financial services industry, will discuss the challenges and opportunities facing credit unions in the next decade. The convention comes at a time when the Maine credit union system is not only strong but is getting stronger, said the league. Year-end statistics for 2009 show that total assets grew 9% and combined assets at Maine credit unions topped $5 billion. Loans grew by more than $106 million or 3% for the year, while shares increased by 11% or $450 million--nearly double 2008’s growth. Membership at Maine credit unions increased by 5,296 members or 1%. Today, about half of Maine’s population are members of credit unions. Credit unions account for two thirds of the state’s financial institutions.

CU System briefs (06/16/2010)

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* CHESTERFIELD, Mo. (6/17/10)--First Community CU's new Short Message Service (SMS) Text Banking service already has more than 150 members signed onto the service since its launch early in May (The Missouri difference June 16). The service allows members to check account balances and recent transactions anytime, anywhere. The member's mobile device must be enabled with the SMS Text Message service. First Community is offering the service free, other than standard text messaging fees from members' mobile carrier. The credit union added mobile banking and online chat last year. "This is just one more convenient way for members to do their banking," said Glenn D. Barks, First Community president/CEO ... * RALEIGH, N.C. (6/17/10)--Coastal FCU has promoted Chuck Purvis to executive vice president/chief operating officer. With 29 years of credit union experience, Purvis has been part of Coastal's senior management team since 2001. He most recently served as senior vice president/chief operations officer. Purvis is vice chairman of First Carolina Corporate CU and a board member of uGenius LLC, a company that provides video banking technology to financial institutions. He also is former chairman and board member of the National Credit Union Foundation. Purvis has held other senior management positions at various credit union organizations. Coastal is a $2 billion asset credit union based in Raleigh ... * HARRISBURG, Pa. (6/17/10)--Reuben H. "Harry" Miller, longtime volunteer, director and employee at Eagle One FCU, died June 8. Miller was employed by the Philadelphia-based credit union in 1983 and moved on to become a volunteer, serving 12 years on the board, said the Pennsylvania Credit Union Association (Life is a Highway June 15). He served the credit union for more than 27 years. Miller was the father of Eagle One Treasurer Marion Nuss and grandfather of Buddy Nuss, a longtime Eagle One employee ...

Consumers place priority on making mortgage payment--study

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SILVER SPRING, Md. (6/16/10)--Consumers consider paying their mortgages a higher priority than their other debt obligations, according to a new survey. That could have some implications for credit unions' loan programs. The National Foundation for Credit Counseling's (NFCC) 2010 Financial Literacy Survey, conducted in March by Harris Interactive, revealed data that support consumers' ongoing efforts to stay in their homes, instead of walking away from their mortgages and allowing foreclosure, said NFCC. The overwhelming majority of consumers surveyed--even those in financial distress--still consider their mortgage payment a priority, the survey found. That could be good for credit unions offering mortgages, but also could suggest problems for other types of loans playing second banana in the loan chain, as members lose more income during a tough economy. The survey asked respondents: if they were unable to meet all their financial obligations, would they more likely keep their mortgage current or their credit cards current? Ninety-one percent said they would pay the mortgage first. Respondents also were asked under what circumstances, if any, they would consider it justifiable to default on a mortgage. About 23% answered that foreclosure is justifiable if the property is now worth less than what is owed on it. Another 15% said there is no justifiable circumstance under which a mortgage default would be acceptable. "Taken together, the NFCC survey data bring us some encouraging news: consumers still place a priority on making their mortgage payment," said Gail Cunningham, spokesperson for NFCC. "Americans continue to prioritize their obligation to service their mortgage loan, and this is indeed good news for homeowners, mortgage lenders and the housing market overall." The survey was conducted by telephone between March 4 and March 8, among 2,028 adults eighteen years and older.

DFCU Financial plans to acquire Midwest Financial FCU

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DEARBORN, Mich., and ANN ARBOR, Mich. (6/16/10)--Dearborn, Mich.-based DFCU Financial CU and MidWest Financial CU, based in Ann Arbor, Mich., have applied for permission with the Michigan's Office of Financial and Insurance Regulation (OFIR) to merge the two credit unions. DFCU Financial, based in Dearborn, is the state's largest credit union with more than $2.6 billion in assets. MidWest Financial, based in Ann Arbor, has more than $185 million in assets but had suffered losses the past two years. According to a statement on DFCU Financial's website, the new organization will assume the DFCU Financial name and have more than $2.9 billion in assets. The merged credit union will serve more than 218,000 members with 25 full-service branches and about 530 employees. The merged credit union "will benefit from geographic market diversification through the expanded branch network, expanded products and services, continued commitment to community initiatives, increased membership growth opportunities, and proven financial strength, leadership and operating performance," said Mark Shobe, DFCU Financial president/CEO. Richard Nowakowski, chairperson of Midwest Financial's board of directors, noted that partnering with Michigan's largest credit union will provide members with enhanced benefits and employees with greater opportunities. "Both MidWest Financial and DFCU Financial are dedicated to making the merger transition a positive experience for all involved," he added. The merger approval is expected to be a formality if MidWest members approve, according to Crain's Detroit Business (June 15).

Concern about interchange noted in more newspapers

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MADISON, Wis. (6/16/10)--Credit unions' concerns about the interchange amendment in the Senate version of the regulatory reform bill are still making the rounds in a number of newspapers and their online sites, in letters to the editor, op-ed pieces, and in interviews. The amendment would allow government intervention in setting interchange fees. If the Federal Reserve set fees set too low--to favor the economy of scales of large banks-- debit card programs at smaller financial institutions would suffer, and consumers would end up paying more, say several newspaper sources. The Credit Union National Association and the nation's credit unions oppose the amendment so strongly that hundreds of credit union representatives blanketed Capitol Hill in Washington, D.C., last week to talk to legislators. And, nearly half a million contacts with congressional representatives were made by credit unions grassroots supporters delivering the message: "No interchange amendment." The amendment "really has the potential to damage credit unions, and debit and credit programs," Winter Prosapio, director of public affairs for the Texas Credit Union League, told the Fort Worth Business Press (June 14). If the Federal Reserve set fees too low, banks and credit unions will lose money and some small institutions may not be able to offer credit and debit card program, which hurts competitiveness, she told the newspaper. Pat Brown, CEO of $10 million asset NRCS FCU, Fort Worth, agreed that the amendment would be detrimental. "Our debit card program puts us in the red every month, so we don't make money on the debit card program. If they take the interchange fee away, we'll be that much further into the red, and I don't know that we'll be able to keep offering the program," Brown told the newspaper. In an op-ed article in the Asheville (N.C.) Citizen Times (June 12), Patty Idol, president/CEO of the $98 million asset, Waynesville, N.C.-based Mountain CU, noted that the amendment is a bad deal for consumers and unnecessarily interferes in the free market. "This amendment threatens to drastically change the way credit unions operate their debit card programs, and punish the very consumers the bill is trying to help," she wrote. Wisconsin Credit Union League President/CEO Brett Thompson, in a letter to the editor of the Milwaukee Journal-Sentinel (June 12), agreed with the newspaper's June 8th editorial that the financial reform bill includes many ideas to help consumers get a fairer shake. "However, there is one troubling provision that needs to come out: the Senate interchange amendment," he wrote. "Retailers want the convenience of taking these cards--immediate payment for their goods and no risk of fraud--without having to pay their fair share of the costs," Thompson wrote, noting that "consumers will be the ones who pay for this." "Bottom line: Consumers won't save any money at the store, but they will pay more to use their cards. The Senate interchange amendment must be dropped," Thompson added.

CU System briefs (06/15/2010)

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* PHOENIX (6/16/10)--The Arizona CU Foundation is sponsoring Amy Singpradith of Canyon State CU, Phoenix, for a scholarship to attend The 1 Credit Union Conference, co-sponsored by the World Council of Credit Unions (WOCCU) and the Credit Union National Association (CUNA) in Las Vegas July 11-14. Singpradith, 35, is vice president of human resources at the credit union and chair of its Employee Recognition Committee. The scholarship, which promotes a credit union professional under 35 years old, is separate from the annual WOCCU Young Credit Union Person's (WYCUP) scholarship, said the Arizona Credit Union League. The foundation's scholarship is one-year only and was made available because the event is close to Arizona. For information about The 1 Credit Union Conference, use the link ... * WAUSAU, Wis. (6/16/10)--Connexus CU was the presenting sponsor of this year's Relay for Life of Wausau, Wis. The credit union donated $10,000 plus its employees raised nearly $14,000 to bring a total of $24,000 to the cause. Connexus employees have participated in the relay for 16 years, and employees volunteer as part of the Connexus team on the event committee and during the relay. From left are Joan Crisman, mortgage loan officer, and Nancy Kowalski, senior executive assistant, who gave the relay a thumbs up. (Photo provided by Connexus CU) ... * DOWNEY, Calif. (6/16/10)--Downey FCU mentored the first place winning team--students in the Regional Occupational Program (ROP)-- in the MoneyWise Teen state competition organized by the California Council on Economic Education. Mentoring the students was Kari Johnson, the Downey, Calif.-based, $154 million asset credit union's community education and development representative. She helped them win the competition over four other high school finalist teams. Each of the seven students and their instructor, Coty Alvarez, received $500. From left are: kneeling, Mario Rios and Eduardo Rivera; and back row, Aaron Chavarria, Brando Castro, Nicholas Baxter, Andrea Ovedo and Rodrigo Perez. (Photo provided by Downey FCU) ... * HOUSTON (6/16/10)--William H. "Bill" Strunk, chairman and founder of Strunk & Associates LP, a discretionary overdraft payment service provider for credit unions, died June 10 after a battle with leukemia. In addition to designing and deploying the original Overdraft Privilege Service Program, Strunk was responsible for a number of innovations commonly used by banks and credit unions, said Strunk President/CEO Mike Sobba. Strunk authored articles on topics such as branch profitability and financial services in banking journals and industry trade magazines. Services were held Tuesday (The Daily Exchange June 15) ...

Bay Gulf to merge with MIDFLORIDA CU

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TAMPA, Fla. (6/16/10)--Bay Gulf CU, Tampa, announced its intent to merge with MIDFLORIDA CU of Lakeland, Fla., subject to a due diligence review already underway. Both credit unions’ boards of directors have unanimously approved the merger. The intention to merge is not related to a cease-and-desist order issued in April to Bay Gulf by the Florida Office of Regulation, according to Bill DeMare, Bay Gulf president/CEO. “The cease and desist order was not what triggered it,” he told News Now. “I had been in talks with Kevin Jones [MIDFLORIDA CU president/CEO, regarding a merger] for some time.” Bay Gulf looked into the merger as a means to maintain profitability, and its board wanted to offer members more products and services. “The decision to merge was not an easy one, but our board felt like the products, services and customer service offered by MIDFLORIDA would benefit Bay Gulf’s membership,” DeMare said. He noted that MIDFLORIDA also is open extended hours from 7 a.m. to 7 p.m., which would benefit Bay Gulf members. While some of Bay Gulf’s long-time members may be sad to see the name change to MIDFLORIDA, DeMare said he hopes most members will be amenable to the change. MIDFLORIDA has $14 billion in assets, with a net worth of $130 million and a 9.3% net worth ratio. The combined credit union will have $1.55 billion in assets, with 150,000 members. MIDFLORIDA also has been rated five stars by Bauer Financial Ratings. “[The merger] really puts us in a strong financial position,” he said. “That’s a plus. We’ve had members ask about Bauer Financial Ratings.” Bay Gulf is a two-star institution, which is not “unusual with our capital,” DeMare said. Bay Gulf has submitted a capital restoration plan to regulators to help it reach 7% net worth by September 2012 after the cease-and-desist order. The credit union has been operating normally since. Regulators reviewed the plan and had several suggestions for adjustments, which include making a more conservative estimate of the effects the National Credit Union Share Insurance Fund premiums will have on the credit union. “We took a more optimistic approach,” DeMare said of the estimate.

Illinois league reaches out to faith-based CUs

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NAPERVILLE, Ill. (6/16/10)--The Illinois Credit Union League (ICUL) recently hosted a meeting for faith-based credit unions in the Chicago area--a second such effort to help the group of credit unions explore growth opportunities. With the daily challenges of staffing mostly by volunteers, restricted hours of operation, and limited opportunities to diversify their membership, the credit unions were offered networking opportunities and heard a variety of presenters. In addition to ICUL staff, presenters included:
* Ron Jones, economic development specialist from the National Credit Union Administration; * Representatives from Members United Corporate FCU, Warrenville; * Geri Burek, ICUL vice chairman and league director for the Chicago Metro Chapter of Credit Unions; * Christine Dickover, chapter chairman; and * Gregg Brown, CEO of South Side Community FCU, Chicago.
Presenters discussed the low-income/Community Development Financial Institution designation, chapter activities and opportunities, loan participation assistance, and system resources and programs. “Since they are not always able to attend educational sessions, chapter functions and other activities, we feel it is important to get this select group of credit unions together on an as-needed basis to discuss compliance and other issues,” said Joyce Jackson, ICUL regional director, who serves the credit unions. Nearly 30 individuals from 15 credit unions attended, representing an average asset size of about $500,000. The Illinois Credit Union Foundation also supported the effort with a Small Credit Union Development grant. One of those in attendance was Chris Grant, chairman of St. Gregory Parish CU. The credit union, located on the north side of Chicago, has more than 200 members and $331,000 in assets, and received its low-income designation about a year ago. “Many conferences are geared toward larger credit unions, so bringing our peer group together was excellent in terms of networking and feedback,” Grant said. “We received a ton of resources that were very hands-on and something we can immediately put into practice.”

IMSNBC.comI Check FIs health look up any CU

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NEW YORK (6/16/10)--Consumers can check out the health of any U.S credit union--or other financial institution--through an online MSNBC.com article Monday, which featured a searchable database. The article, “Bank profits rise, but so do bad loans,” by Wendell Cochran, is based on quarterly financial reports compiled by the Federal Deposit Insurance Corp. and analyzed by the Investigative Reporting Workshop at American University in Washington, D.C. The search does not identify branches of credit unions, only parent institutions. The National Credit Union Administration (NCUA) data are not reported for local branches. Users are taken to a page displaying details about the requested financial institution’s financial performance. The first quarter was difficult for credit unions and 2010 will be a difficult year, Debbie Matz, NCUA chairman, told MSNBC, [referring to the broad reach of the country's economic woes and housing crisis]. However, NCUA reported that U.S. credit unions made about $1.1 billion in the first quarter this year, MSNBC said. To read the article, use the link.

Interchange issue kicks off N.C. annual meeting

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RALEIGH, N.C. (6/16/10)--To kick off the North Carolina Credit Union League Annual Meeting Monday, the league’s Governmental Affairs Forum examined the interchange issue, the 2010 elections, and other topics of interest to credit unions.
The North Carolina Credit Union League’s Governmental Affairs Forum featured the entertaining members of the North Carolina SPIN panel, who discussed state politics and the 2010 elections. The forum kicked off the league’s annual meeting Monday. (Photo provided by the North Carolina Credit Union League)
The session began with a focus on the ongoing interchange amendment battle being waged by credit unions. Credit Union National Association Senior Legislative Representative Phil Drager shared the most recent information on the issue, and praised the work of North Carolina credit unions in contacting their elected leaders in Washington, D.C. (Weekly Update June 14). Drager also recapped the visits by credit union advocates to Washington last week to make the case in person on interchange. He noted three specific messages seemed to resonate with members of Congress:
* The amendment placed into the Senate bill came with no committee vetting and debate. Congress should have a thorough debate of the issue before getting involved. [Editor’s note: A conference committee in Congress likely will discuss the interchange issues at a meeting next week]. * If the amendment were to pass, the Federal Reserve would only be empowered to deal with the processing charges when considering an interchange fee structure. Other costs to credit unions--such as fraud--could not be considered. * The amendment does not specifically mandate a two-tiered pricing structure on interchange.
As of Monday, more than a 100 members of the U.S. House had signed a letter sent to the conference committee asking that the Interchange amendment be pulled from the final bill, Drager said. Four members of Congress from North Carolina have signed the letter as of Monday, said the league. Drager also updated credit unions on member business lending and secondary capital. “Issues such as business lending and secondary capital will continue to be part of our overall messages to Congress,” said Dan Schline, league senior vice president of association services. “But with the conferees on the Financial Services Regulatory Reform Bill expected to meet within days, it’s essential that credit unions and their members continue to make interchange priority No. 1.” A pair of panel discussions touched on advocacy and the North Carolina political scene. The advocacy panel included State Rep. Rick Glazier (D-45); Jay Rouse, director of governmental affairs for North Carolina’s Electric Co-operatives; and Southern Select Community CU CEO Huyla Jackson. League Director of Political Affairs Mickey Fanney moderated the panel. “It was a great look at how to be successful in grassroots advocacy from a variety of different perspectives,” Fanney said.

N.C. league state award winners announced

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GREENSBORO, N.C. (6/16/10)--The North Carolina Credit Union League announced its statewide Dora Maxwell, Louise Herring and Alphonse Desjardins Award winners Monday during its 75th annual meeting. The league also honored Mark of Excellence and Credit Union Person of the Year Award winners.
The Mark of Excellence Award recognizes sustained leadership among North Carolina credit union people. Eligibility is limited to past winners of the Ronald J. Hutchins Credit Union Person of the Year Award who have at least 25 years of service in the credit union industry. This year’s winners are Bobby Hall, senior executive vice president, State Employees’ CU, Raleigh, and Curtis Ring, Summit CU, Greensboro. The Ronald J. Hutchins Credit Union Person of the Year Award is presented to a credit union professional and volunteer to recognize outstanding accomplishments, time and effort given in support and promotion of the credit union ideal of people helping people. The league this year honored Joy Watts, president/CEO, Carolina Postal CU, and Leslie Colin "LC" Kelly, Charlotte Fire Department CU, both of Charlotte. The league also presented first- and second-place Dora Maxwell Social Responsibility Awards to:
* Ecusta CU, Pisgah Forest, first place, $20 million to $50 million asset category; * Carolina Mountains CU, a Division of Self-Help, Durham, second place, $20 million to $50 million; * Latino Community CU, Durham, first place, $50 million to $100 million assets; * Carolina Postal CU, second place, $50 million to $100 million; * Charlotte (N.C.) Metro FCU, first place, $200 million to $500 million assets; * Members CU, Winston Salem, second place, $200 million to $500 million; * State Employees’ CU, Raleigh, first place, more than $500 million in assets.
The Louise Herring Award for Philosophy in Action also was given to:
* State Employees’ CU, first place, more than $250 million in assets; * Local Government FCU, Raleigh, second place, more than $250 million.
Latino Community CU also received first place in the $50 million to $150 million asset category for the Desjardins Youth Financial Education Award.

CUs on the Tube CU Man rescues potential bank victim

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MANCHESTER, Conn. (6/15/10)--Super hero "Credit Union Man," the masked and caped alter ego of a staffer at Northeast Family FCU in Manchester, Conn., is now a video star on YouTube. His mission: "I'm here to save you from the high costs of banking." In the video, Credit Union man meets a woman at the door of Multi-High Fee Bank. She has accumulated "a ton of fees, preventing me from using my debit card." Credit Union Man--also known as Fred Brown, director of marketing and member development at the $63.5 million asset credit union--convinces her that the credit union is better, with lower fees, member ownership, and no profits shared with a "rich old boys' club of shareholders." In the next scene, she's happily signing her membership papers to the tune of "This Can't Be Love." Brown told staffers at the Credit Union National Association that he's entered the video in a contest. To watch it, use the link.

Debit card growth shows more small-ticket transactions

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HOUSTON (6/15/10)--The debit card market--robust during the second year of the economic downturn--is expected to grow strongly in 2010, according to the 2010 Debit Issuer Study commissioned by PULSE. Much of the growth is in small-ticket transactions, suggesting consumers prefer debit over cash. Card issuers surveyed saw overall debit transaction growth of 10% between 2008 and 2009, with 58% of debit transactions in 2009 at less than $20 (Business Wire June 14). "The debit market has continued to weather the economic storm as a result of consumer preference for debit and increasing merchant acceptance of small-ticket debit transactions," said Cindy Ballard, PULSE executive vice president. "As consumers scaled back spending during the recession, they embraced a pay-as-you-go approach and are keeping their debit card top of wallet." Personal identification number (PIN) debit transactions outpaced signature debit transactions, said the study. PIN debit grew by 13% from 2008 to 2009, with an average ticket size of $41. Signature debit transactions rose 9% with an average $35 ticket. Both ticket figures are a decline by $1-$2 from PULSE's previous study. Other findings:
* Active debit cardholders, with at least one PIN or signature point-of-sale (POS) transaction in the past 30 days, conducted an average 17.3 transactions per month--steady with the 2008 transactions. * Debit card penetration--the percentage of eligible accounts that can be accessed by debit card--remained steady at 73% since 2007. Sixty-four percent of consumer debit cards are active, compared with 66% in 2008.
The increase in transactions has prompted more concern among card issuers about how fraud and government regulation might impact profitability of debit cards. Last year, 95% of debit card issuers were hit by data breaches, making fraud mitigation a top challenge, said PULSE. Issuers' average signature POS fraud losses rose 43% last year, from 5.2 basis points (bps) to 7.5 bps. And PIN POS fraud losses increased 24% to one bp from 0.8 bp. Issuers surveyed cited government regulations as a major challenge for their institutions. Changes to Regulation E taking effect this summer will require opt-in consent before consumers can incur overdraft charges. Those surveyed expect 30% of consumers to opt- in to overdraft services, but expectations vary according to institution size. Large banks expect 20% to 40% of customers to opt in. Many credit unions and community banks surveyed expect a much higher opt in rate--of more than 70%. Interchange and overdrafts produced about $118 of annual revenue per active card in 2009, but financial institutions said the Reg E changes will result in fewer approved transactions, lower interchange income and less profitable debit card programs, impacting debit card profitability over the next two years. The survey indicated that 45% of issuers surveyed already have created a plan to respond to the changes. PULSE is an ATM/debit network that serves more than 4,400 banks, credit unions and savings institutions across the U.S.

Space Coast CU members donate 106423 for Haiti relief

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MELBOURNE, Fla. (6/15/10)--Space Coast CU, which established a Haitian relief fund for its members to donate to just days after the devastating Jan. 12 earthquake, donated $106,423 to the relief effort Friday. The money will be channeled to Haiti through the American Red Cross (FloridaToday.com June 12). Included in the amount is $50,000 in matching funds the $3.2 billion asset, Melbourne, Fla.-based credit union promised to match of it members’ donations. The credit union made similar efforts to match donations for other mass relief efforts, such as the Indonesian tsunami and Hurricane Katrina, the newspaper said. However, the Haitian relief effort was the first one to meet the $50,000 threshold. This time it was personal. The credit union has a staffer who lost 13 members of her family in the earthquake. To read the article, use the link.

Bankers bathe in money confess sins in CU ads

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NEW YORK (6/15/10)--New credit unions ads--some of which are humorous and others which are blunt in their assessments--use the general theme, “big banks are bad for you, why not join us?” in attempts to lure bank customers to credit unions, according to a blog in The New York Times. Some of the ads are edgy and have videos on YouTube, while others are more traditional print ads, wrote Tanzina Vega in an article titled “A Gallery of Credit Union Ads” (bucks.blogs.nytimes.com June 11). Credit unions promote more personalized service, lower fees, a more ethical way of doing business, and the fact they are nonprofit organizations, the Times said. The article asks readers to judge for themselves if the ads are convincing or not, and if they convince readers to join a credit union. They’ll see bankers in a confession booth, bankers bathing in money, and more. To see the ads and a related New York Times article on credit unions’ ad campaigns, use the links.

IN.Y. TimesI CUs promotions getting cheekier

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NEW YORK (6/15/10)--Credit unions--traditionally conservative marketers--are taking a bolder, cheekier approach to promoting themselves as consumer dissatisfaction with banks continues, The New York Times.com said Friday. Such efforts were featured in the article, “Some Credit Unions Try Something New, Promoting Themselves,” by Andrew Martin and Ron Lieber. Credit union leaders often discuss among themselves why the industry does not have a national advertising campaign such as the dairy industry’s “Got Milk?” to promote credit unions’ advantages over banks, Bill Hampel, chief economist for the Credit Union National Association, told the Times. An issue with a national credit union campaign is how to divide the costs, he added. A more rudimentary problem is how to let most Americans know they are eligible to join a credit union, the Times said. Another issue is the time and effort it takes to switch to a credit union--or any other financial institution. That involves shutting down automated bill payments at a consumer’s existing financial institution, setting up new ones elsewhere and having enough money in both accounts to avoid overdrafts during the transition period, the Times said. It cited these examples of aggressive credit union marketing:
* Boeing Employees CU (BEU) in Tukwila, Wash., takes a swipe at banks by running an ad urging people to “Switch Now or Pay Later.” * SCE FCU in Irwindale, Calif., runs a campaign with the tag line, “I wish banking were less bankish.” * Public Service CU in Romulus, Mich.--in response to bank bailouts, rising bank fees and executive bonuses--creates a video in which Amy McGraw, Public Service marketing director, asks a colleague to portray a fat cat banker in a bathtub, bathing himself in dollar bills. The tagline is: “What are all the big banks really doing with your money?”
Also mentioned were: the Pennsylvania Credit Union Association; VyStar CU, Jacksonville, Fla.; and Dade County FCU, Doral, Fla. To read the Times article and a related article featuring videos of some credit union ads, use the links.

N.Y. CUs lawmakers urge passage of municipal deposits bill

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ALBANY, N.Y. (6/15/10)--Rep. David I. Weprin (D-Queens), several state legislators and the Credit Union Association of New York urged the State Assembly to pass a municipal deposits choice bill, which would allow New York City and local government entities to deposit their funds in credit unions. “I strongly support municipal deposit choice, which simply gives local governments the ability to deposit their tax dollars in credit unions and community savings banks in addition to commercial banks,” Weprin said Saturday in a press release (ReadMedia June 13). Commercial banks currently have a monopoly on municipal tax deposits. The municipal deposits bill, which has been supported by New York Gov. David Paterson and the state Senate, is authored by State Rep. Carl Heastie (D-83). Several other bills pending in the state legislature also seek to allow deposit choice. These include bills by Sens. Kevin Parker (D-21), Craig Johnson (D-7) and Rep. Harvey Weisenberg (D-20). “Together with Weprin and others in the legislature, we are asking the State Assembly to support municipal deposit choice and join the governor, who included it in his proposed budget, and the State Senate, which included it in its passed budget resolution,” said William J. Mellin, association president/CEO. “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. “Municipal deposit 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,” he added.

UsNet announces 2010-2011 board

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ALBANY, N.Y. (6/15/10)--Universal Sharing Network (UsNet) announced its board of directors for 2010-2011 during the organization’s annual meeting in Cooperstown, N.Y. UsNet has a national shared branching network and is partnered with CO-OP Shared Branching. Newly elected to the board were Don Denofio, president/CEO of Saratoga’s Community FCU, Saratoga Springs, and John Tucker, president/chief financial officer, FASNY FCU, Albany. Re-elected to new three-year terms are:
* Board chair--Mark Pfisterer, president/CEO of AmeriCU CU, Rome; * Al Frosolone, manager/CEO of Niagara’s Choice FCU, Niagara Falls; and * Nancy Kasprzak-Whitmore, president/CEO of Niagara County’s FCU, Lockport.
Those re-elected to one-year terms were:
* Kevin Brauer, president, Northeast region of Members United Corporate FCU, Warrenville, Ill.; * William J. Mellin, president/CEO of the Credit Union Association of New York; and * Bruno Sementilli, president/CEO of Quorum FCU, Purchase.
Returning as vice chair, treasurer and secretary are: Vicki O’Neill, president of ACMG FCU, Solvay; Edward Paternostro, CEO of Nassau Educators FCU, Westbury; and Mark Welshoff, president/CEO of Palisades FCU, Pearl River, respectively. Filling out the board are returning directors James Doig, president/CEO, Sidney (N.Y.) FCU; Robert G. Allen, president/CEO of Teachers FCU, Farmingville; and Christine Peters, CEO of Family First of NY FCU, Rochester.

Two Texas league programs honored by associations group

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DALLAS (6/15/10)--Two of the Texas Credit Union League’s programs--Juntos Avanzamos and REAL Solutions--have made the American Society of Association Executives’ “Associations to Advance America” (AAA) Honor Roll. Juntos Avanzamos, or “Together we advance,” is the league’s Hispanic outreach program. It seeks to empower Texas credit unions to address the unique needs of the market. REAL Solutions aims to help low-wealth individuals gain financial stability. REAL Solutions is the signature program of the National Credit Union Foundation and stands for “Relevant, Effective, Asset-Building and Loyalty-Producing.” “Credit union support of league initiatives such as Juntos Avanzamos and REAL Solutions demonstrate their commitment to reaching out to Texas’ unbanked and underserved communities, and lifting them out of poverty and onto the path of financial stability,” said Dick Ensweiler, Texas league president/CEO. AAA recognizes associations that made significant contributions to solving local and national crises, fostering volunteerism and developing initiatives for the public good.

Arizona league awards presented

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Click to view larger image Arizona Credit Union League's Rose Mofford Credit Union Volunteer Award recipient is Harlan L. Bradford Sr., right, a volunteer at American Southwest CU, Sierra Vista. He is shown with Brian Barkdull, president/CEO of the credit union.
Click to view larger image Pete Pritts, second from left, CEO of First Corp, Phoenix, is flanked by his family--parents Pete and Doreen, sister Jennifer and his daughters, Elizabeth and Paisley--after accepting the Arizona Credit Union League's VOCUP (Very Outstanding Credit Union Person) Award. (Photos provided by the Arizona Credit Union League)
TUCSON, Ariz. (6/15/10)--The Arizona Credit Union League presented its two top credit union awards during its 2010 Annual Convention. Each year the league honors a "Very Outstanding Credit Union Person" (VOCUP) and a recipient of the Rose Mofford Credit Union Volunteer Award. The 37th annual VOCUP award was presented to Pete Pritts, CEO of Phoenix-based FirstCorp for his commitment to member service, enthusiasm, dedication, hard work and tenacity, said the league. The award is presented to a credit union executive or volunteer who gives time and energy to the movement through serving on the league, chapter, and credit union boards or committees, as well as for time spent in other volunteer activities. The recipient of the Rose Mofford Credit Union Volunteer Award for 2010 is Harlan L. Bradford Sr., from American Southwest CU, Sierra Vista. Bradford has more than 30 years of volunteer service and earned five Volunteer Achievement Award certifications. He will retire from the board this year and will turn 80 in August. Southwest CU President/CEO Brian Barkdull said Bradford's "personality and character are deeply woven into the fabric of our credit union and we will miss his wit, his common-sense approach and his diverse experiences, which have helped bring us ongoing success."

RCU to acquire 11 AnchorBank offices June 26

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EAU CLAIRE, Wis. (6/15/10)--Royal CU (RCU), Eau Claire, Wis., announced that it has received regulatory approval to move ahead with the purchase of 11 AnchorBank offices. The acquisition will take place June 26 and June 27, with the offices opening as RCU on June 28. The offices, all in Wisconsin, include Amery, Balsam Lake, Centuria, Menomonie, Milltown, New Richmond, Osceola, River Falls, St. Croix Falls, Somerset and Star Prairie. Under terms of the agreement, RCU will assume $177 million in deposits, real estate loans and other assets. RCU will purchase nine of the offices and assume the lease on the other two. “This is the largest bank branch acquisition that our state and federal regulators have considered,” said Charles Grossklaus, RCU CEO. “RCU is strong, stable, and well-positioned for the purchase of these 11 in Western Wisconsin." He added, "we see great potential in these new locations.” Once the acquisition is complete, RCU will have 25 offices--22 across central and western Wisconsin and three in Minnesota’s Twin Cities Metro area, serving more than 140,000 members. RCU received approval from the National Credit Union Administration (NCUA), the Wisconsin Department of Financial Institutions, Office of Credit Unions, the Federal Deposit Insurance Corp., and the Office of Thrift and Supervision. AnchorBank customers will become RCU members if they continue to use the products and services it offers, Grossklaus said. It’s too early to know yet if all the customers will become members, he added. Some AnchorBank customers are apprehensive because Anchor previously merged with another bank, so this will be the third conversion. Grossklaus said RCU has received every good reception from the mayors, chambers of commerce and United Way in the communities where the new RCU offices are located. Credit unions choosing to merge with banks should be aware that the process is labor intensive. “We’ve done a lot of due diligence,” Grossklaus said. The merger also should fit within a credit union’s strategic plan. Banking terminology and technology is a lot different than credit unions,’ so it “takes a good year to get it right,” Grossklaus added. Working with NCUA was a positive experience, Grossklaus said. “They asked a lot of questions,” Grossklaus said. “They did their due diligence. NCUA really stepped up to the plate.” After the merger is complete, RCU plans to spend some time in the communities to answer questions people might have.

CU System briefs (06/14/2010)

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* WESTBROOK, Maine (6/15/10)--Maine CUs' Campaign for Ending Hunger
Click to view larger image Click for larger view
presented $17,000 to 33 food pantries in the state and the Good Shepherd Food Bank. The sixth annual "Share the Bread" campaign aims to bring awareness of the hunger issue in Maine and the need for food for Maine's 65,000 school children during summer vacation, when meals aren't provided by their school. From left are Jon Paradise, governmental and public affairs manager of the Maine Credit Union League; Rick Small of Good Shepherd Food Bank; and Luke Labbe, chair of the league's Social Responsibility Committee. (Photo provided by the Maine Credit Union League) ... * WASHINGTON (6/15/10)--A former teller/supervisor of Department of Interior CU , Washington, has been sentenced in a U.S. District Court for District of Columbia to three months' incarceration for taking property in the care, custody and control of a credit union. Monica Michals stole more than $25,000 in depositors' funds from 2006 to 2008, said prosecutors. She took money on 25 occasions from the accounts of at least three members, two of whom were elderly and especially vulnerable, they said. (Targeted News Service May 21). After her jail term is over, Michals will be on home detention with electronic monitoring for 180 days as part of a three-year supervised release. She was also ordered to complete outpatient drug treatment and make full restitution to the credit union ... * OKLAHOMA CITY (6/15/10)--Tinker FCU has been named among Oklahoma's top 28 Best Places to Work by OKCBiz Magazine. It ranked first among finalists in the "large companies" group. The competition has two categories: large companies with 250 or more employees, and small/mid-sized companies with fewer than 250 employees. Best Companies Group collects information from the competition entrants and conducts employee surveys to determine the companies with the best practices. Factors reviewed include leadership and planning, corporate culture and communications, role satisfaction, work environment and relationship with supervisor. The credit union cited three factors that keep employees happy, motivated and involved in fulfilling the credit union's mission: empowerment, community involvement and extras that make coming to work rewarding, but fun. "Our employees know they can have a say in making a difference in the lives of those we serve," said Susan Rogers, senior vice president of human resources at the $2 billion, Oklahoma City based credit union. An incentive program paid more than $1.3 million last year to employees, recognition and gift certificates for exceptional service, competition prizes and more ... * SOUTHBRIDGE, Mass. (6/15/10)--Roger A. Dion, former CEO/treasurer of Southbridge (Mass.) CU died Friday at a local hospital after an illness. He was 81. Dion retired in 1993 as CEO/treasurer of the credit union where he worked for many years. He started his banking profession in the 1950s at the former Worcester County National Bank. Funeral services were Monday ( Worcester Telegram & Gazette June 12) ...

CUs succeed in local coverage on interchange

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MADISON, Wis. (6/14/10)--From Raleigh, N.C., to Superior, Wis., from Houston, Texas, to Kansas City, Mo., and Des Moines, Iowa, credit unions and others are speaking out in the media with this message: No interchange amendment. The amendment in the Senate version of the regulatory reform bill would allow government to intervene in setting interchange fees. It is strongly opposed by Credit Union National Association and credit unions. Last week, hundreds of credit unions have hiked Capitol Hill to deliver their message to Congress. Credit unions and their members have made about 450,000 individual contacts with their representatives. Others took to the media to explain why they oppose the amendment. Here are some examples. In an op-ed in the Kansas City Star Thursday, Stuart E. Weiner, a former vice president and director of payment system research at the Federal Reserve Bank of Kansas City, said credit unions' concerns that they cannot avoid the harms of interchange price controls even through an exemption "should not be ignored." "It is hard to envision an outcome where the larger institutions which are essential to achieve the economies of scale necessary to operate a national or global network choose to continue to support a system that provides a significant revenue advantage to thousands of their competitors throughout the country," he said. "The result would be a single system at the lower regulated rate, in effect bringing the smaller issuers under the regulation," he said. The amendment would require the Federal Reserve, one of the nation's two automated clearinghouse operators, to set prices for its competitors, and it would be difficult for the Fed to precisely determine a correct interchange fee, Weiner said. (For the full article, use the resource link.) In the Houston Chronicle (June 10), business columnist Loren Steffy said, "Financial reform was designed to address the egregious practices of banks that contributed to the financial crisis. Swipe fees weren't part of the problem." James Tuggle, CEO of Transtar FCU, Houston, told the Chronicle that his credit union would have difficulty keeping members or attracting new ones without offering a debit card for checking accounts. Smaller institutions "would be put at a competitive disadvantage. If I want to keep my debit card program, I can either operate it at a loss or pass that on to consumers," which would prompt them to switch to a larger institution. Use the resource link for the full article. In the Superior (Wis.) Telegram, Gary Elliott, president/CEO of Superior Choice CU, said, "We're all in favor of reforms that protect consumers from the kind of bad practices that caused the financial crisis. But this bill should not be used as a convenient cover by merchants simply looking to shift their costs to consumers. Our members should not have to foot the bill." Credit unions aren't asking their members to stand up for a fight that they won't benefit from personally, he said. "Members are standing up for credit unions because they're the owners whose wallets will feel the impact of this provision," he added. "Nothing in the amendment guarantees that consumers--whose interests should drive public policy in the area--will see any savings at all from the reduced interchange fee," said Tom Liebe, vice president of government affairs at the Wisconsin Credit Union League, citing a similar bill in Australia. In Raleigh, N.C.'s News Observer (June 8), Maurice R. Smith, president of Local Government FCU, Raleigh, N.C., wrote, "Credit unions did not cause the financial crisis, but rather have been instrumental in the solution. So we are alarmed that the effects of financial reform could be misplaced and hurt consumers who are already struggling to pay their bills. "With plastic cards, issuers like the credit union run the risk of not getting paid. Fraud is the highest expense and risk for card issuers. Yet the fraud often takes place at the merchant's point of sale," Smith said, adding, "It would seem merchants would like to go back on an arrangement that has served both parties well. Merchants would like to unload all of the risk and their costs on the card issuers. This is not fair." For the article, use the resource link. On Radio Iowa the Iowa Credit Union League explained that the amendment would lead to bigger fees for credit union members. Justin Hupfer, league vice president of government affairs, said the amendment would not include the cost of protecting against fraud, which is a significant cost for debit card programs. The interchange fee would lead to more fees for consumers. And it would be unlikely that merchants would reduce their prices if the interchange fee was lowered. For the full article, use the resource link.

Minnesota CUs feel recessions lending slump

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MINNEAPOLIS/ST. PAUL, Minn. (6/14/10)--A drop-off in lending caused by the recession is the major reason that 60% of the largest 25 credit unions in Minnesota’s twin cities area--Minneapolis/St. Paul--are reporting lower capital rates. The situation is leading some credit unions to take proactive approaches to the problem. Some credit unions reported double-digit percentage drops in the value of loans generated in the first quarter 2010, compared with the same period last year (Minneapolis/St. Paul Business Journal June 11). “You’re not seeing second-mortgage loans as much,” Mark Cummins, president/CEO of the Minnesota Credit Union Network, told the Journal. “People aren’t buying new cars. If the consumers are not buying, we’re not lending to them. That’s going to hurt our bottom line. It’s going to make it hard for us to raise capital.” Credit unions not only are dealing with defaulted loans, they also are handling loans that are being paid on time, but for some reason are considered troubled and need to be renegotiated, the Journal said. Therefore, money has to be set aside, per accounting rules. As an example, Hiway FCU was advised by its outside auditor to reserve more funds for troubled loans, Jeff Schwalen, president of the $847.7 million-asset, St. Paul-based credit union, told the publication. That resulted in a first-quarter loss of $1.72 million--the largest loss among the Twin Cities’ biggest 25 credit unions. However, Hiway still is well-capitalized and Schwalen told the Journal he thinks the worst is over. “The third and fourth quarter will be positive,” he added. Some credit unions are trying different approaches rather than waiting for economic conditions to improve, the Journal said. In one instance, Financial One FCU, a $68 million-asset credit union based in Columbia Heights, entered partnerships with roughly 40 auto dealerships to provide auto financing. The auto loans bolstered the credit union’s loan levels, allowing it to provide nearly $8 million in first-quarter loans this year--eight times more than the same quarter a year ago, Previn Solberg, Financial One president, told the Journal. Also, some smaller credit unions are looking to merge with larger ones. More difficult financial times and increased regulation are forcing more credit unions to merge, Sherri Stumpf, interim CEO of TruStone Financial FCU, a $642.4 million-asset Plymouth-based credit union, told the Journal. “[Some credit unions are] seeking us out saying, ‘We can see the rates you are able to offer on car loans and home loans and we’d like to be able to give that to our members, and we just can’t anymore because of all these assessments and impairments,’” Stumpf added. Four other Twin Cities credit unions were mentioned in the article.

Four out of five Net households bank online

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BROOKFIELD, Wis. (6/14/10)--Credit unions should note that four out of five households with Internet access use online banking services--primarily to access balance and account history, and transfer money between accounts--according to a Fiserv survey. These figures are expected to keep rising, said Brookfield, Wis.-based Fiserv, a company that provides information management and e-commerce systems for the financial services industry. “We believe that consumers will continue to conduct more and more of their financial activities online,” said Geoff Knapp, Fiserv vice president of online banking and consumer insights. Credit unions may be particularly interested in this survey because 64.8% provide Web-based home banking, according to The National Credit Union Administration Freedom of Information Act file for March 2010. Roughly 96% of credit union members can use Web-based home banking, while 4% cannot because their credit union doesn’t offer it. About 64.4 million households pay at least one bill online, through a financial institution website or directly through a company website. Of those Fiserv surveyed, 41% of current online banking users indicated they planned to pay more bills online at their financial institutions’ website in the coming months. And 35% of those who pay bills directly at company websites said they planned to pay more bills online at those sites. Consumers use online banking because of its speed, ease of use, cost savings and control, Fiserv said. The survey also noted:
* About 49% of consumers who use online bill pay said they are less likely to switch banks due to their experience, up from 43% last year; * Roughly 67% of online bill pay users would recommend their bank to a friend or relative; and * Over a period of three months, 38% of online bill pay users recommended the service to others. Those recommending the service did so an average of two times.
Fiserv’s survey reflects the habits of 88.2 million households in the U.S. The survey has been conducted since 2001.

Greylock appoints Sperling as interim presidentCEO

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PITTSFIELD, Mass. (6/14/10)--Greylock FCU, Pittsfield, Mass., has named Marilyn Sperling as interim president/CEO, according to the credit union's board of directors. "We have accepted the resignation of President/CEO Angelo Stracuzzi," the board said in a statement Friday. The board noted the resignation "concludes a full evaluation that began in late May 2010 when this board of directors first learned of Angelo Stracuzzi's 2005 misdemeanor conviction. "In accordance with our established succession plan, the Greylock directors convened a special board meeting and appointed long-time executive Marilyn Sperling as interim president/CEO." Sperling has 35 years of banking experience, including 25 at Greylock. "Marilyn and the other members of Greylock's senior management team have taken all steps needed to ensure a seamless transition with no disruption of service," the board said. For the past seven years, Sperling has been senior vice president at Greylock overseeing the credit union's branch network. She built the credit union's mortgage practice and is recognized as the foremost real estate lender in the region. Sperling also had established Greylock as the top mortgage lender in Berkshire County, said the board's press release. Board Chairperson Sheila LaBarbera said that Stracuzzi, in tendering his resignation, "stated that he felt this was in the best interest of the credit union. We'll always appreciate the achievements of the credit union under his leadership." Local news media reported that there was a potential conflict of interest probe, and the board had accepted the resignation of Stracuzzi and of board member Cliff Nilan. Nilan was the chief of probation for Berkshire Superior Court (Associated Press and Boston Herald June 5).

Pa. CUs VITA programs tally 2M in refunds

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HARRISBURG, Pa. (6/14/10)--Eight Pennsylvania credit unions participated in the Internal Revenue Service (IRS) Volunteer Income Tax Assistance Program (VITA) during this spring’s tax-filing, resulting in more than $2 million in federal tax refunds for state taxpayers. Nearly 2,000 Pennsylvania taxpayers had their 2009 tax returns processed through the program, said the Pennsylvania Credit Union Association (Keystone Extra June 11). The IRS VITA and the Tax Counseling for the Elderly (TCE) Programs offer free tax help for underserved taxpayers. Trained community volunteers provide tax preparation assistance and may help with special credits, such as Earned Income Tax Credit, Child Tax Credit, and Credit for the Elderly or the Disabled. AmeriChoice FCU, Mechanicsburg, assisted more than 93 families in the Harrisburg area with refunds equaling $151,730, an increase of more than 25% from 2009. The credit union partnered with the United Way and the Community Action Commission to provide free tax preparation each Friday afternoon. Belco Community CU, Harrisburg, recruited 19 volunteers, 14 of whom went through a minimum of 16 hours of training to become certified tax preparers. Five others served as greeters and assisted the program. Overall, the volunteers contributed a combined total of 275 hours to the VITA program and completed 161 returns, resulting in refunds totaling $295,489. Two employees from Choice One Community FCU, Wilkes-Barre, prepared tax returns at its main office on Wednesdays and in its waterfront branch on Thursdays. They prepared 143 federal returns for total refunds of $171,444. Twenty-five taxpayers received the Earned Income Tax Credit of $43,028. At Clearview FCU of Moon Township, 18 volunteers prepared returns at eight branches and seven volunteers were located at three satellite sites. A total of 480 electronic file returns and 53 paper-filed returns provided refunds of $584,990. Seven employees at Erie (Pa.) FCU trained and were certified at the Intermediate Level to prepare tax returns. One additional employee scheduled appointments. The employee volunteers committed 185 hours of time for tax preparation. As a whole, the credit union processed 82 returns for $136,733 in refunds, in addition to 27 EITC returns totaling $45,631. Erie (Pa.) General Electric FCU completed its fifth year of volunteering for the VITA program. Its volunteers prepared 425 tax returns, with total refunds exceeding $625,000. Timberland FCU, DuBois, participated in the VITA program for the first time. The credit union’s three IRS-trained employees filed more than 60 returns at the credit union, with an average return of $1,328. They volunteered more than 100 hours. The sum of the county program was 307 returns totaling $407,812. As part of the York County Financial Stability Partnership, White Rose CU, York, agreed for the second consecutive year to prepare taxes for free at all four branches. During the 2009 tax season, credit union employees and volunteers helped prepare 369 tax returns, compared with 184 in 2008. All individuals who filed tax returns were offered free debit cards, with acceptance guaranteed. Thirty-eight individuals, formally unbanked, joined White Rose. The York County program included 79 certified tax preparers and 49 phone volunteers, with 7,862 volunteer hours. They prepared 2,451 federal tax returns totaling $3.94 million. Although Lehigh Valley FCU, Allentown, did not process tax returns, the credit union donated its conference room for AARP volunteers preparing tax returns for members and nonmembers. The partnership assisted more than 135 individuals, and the credit union has already reserved the room for next tax-filing season, for each Thursday from February through mid-April 2011. The IRS in 2010 awarded 24 TCE grantees $6.1 million and 147 VITA grantees $7.44 million. Through mid-May, the two grant programs filed more than 2.1 million returns at nearly 9,000 sites nationwide.

CU System briefs (06/11/2010)

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* JACKSON, Miss. (6/14/10)--Mississippi Attorney General Jim Hood has issued a warning that new phishing activity has surfaced in Northeast Mississippi. Consumers in the area have called his office and the state Public Service Commission about suspicious phone calls that advise them their credit or debit card has been deactivated, frozen, or transferred to another company. Consumers are then prompted to enter their account number. "This is a common scam that our office sees on a regular basis," said Hood. He noted it is "important to remember that a legitimate financial institution will never call, text or e-mail you to ask for your information." ... * PHOENIX (6/14/10)--The Arizona Credit Union Foundation announced its sponsorship of Kara Kirschner-Brooks, learning and development specialist at Chandler-based First CU, for the Gary L. Plank World Council of Credit Unions' (WOCCU) Young Credit Union Professionals Program (WYCUP) Scholarship. WYCUP is a scholarship program to promote credit union professionals under 35 years old. As Arizona's 2010 representative, Kirschner-Brooks has been automatically nominated for one of five WYCUP scholarships WOCCU will award to attend the 2011 World Credit Union Conference in Glasgow, Scotland ... * MONTPELIER, Vt. (6/14/10)--The National Youth Involvement Board (NYIB) has selected the Association of Vermont Credit Unions' (AVCU) Economy of Me Project Manager Colin Ryan for the Robert L. Curry Scholarship Award to cover conference and education fees for Ryan to attend the NYIB 2010 Annual Conference July 26-29 in St. Louis. The scholarship recognized AVCU's mission of enhancing the financial education of Vermont high school students through the project, which resembles the principles of leadership development exemplified by Curry, a former president/CEO of CUNA Mutual Group ... * CHARLOTTESVILLE, Va. (6/14/10)--UVA Community CU's success in supporting small businesses was recognized by the U.S. Small
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Business Administration (SBA), which named the credit union the Top Credit Union in the Richmond District for fiscal year 2009. The district includes all of Virginia, except for the Washington, D.C., metropolitan area. The award recognizes the highest loan volume by dollar amount. The credit union closed more than $5.5 million in business loans in 2009, providing much-needed capital to local businesses in various industries. At year end, it had more than $20 million in business loans outstanding, a 23% increase from 2008. Business member-owners more than doubled during that period, to 453 from 216. At the award presentation June 3 in Richmond are, from left: Donald "Scott" Dailey, SBA assistant district director of lender relations; Ronald E. Bew, SBA district director, Richmond office; Michael D. Lyster, vice president of business lending, UVA Community CU; Bridget Bean, acting regional administrator of Region 3, SBA; U.S. Rep. Robert C. "Bobby" Scott (D-Va.); and Virginia Lt. Gov. William T. "Bill" Bolling. (Photo provided by UVA Community CU) ...

Royal CU purchases assets of Anchor Bank

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ALEXANDRIA, Va. (6/14/10)--Twenty thousand bank customers were transformed into credit union members last week when Royal CU, of Eau Claire, Wis., purchased assets from Wisconsin-based Anchor Bank. The bank has been seeking solutions to its stability problems all year. As reported in April by the Milwaukee Journal Sentinel online version , the bank lost $158.2 million last year after losing $169.8 million in 2008 and had been looking to shed assets and branches. The National Credit Union Administration (NCUA) announced Friday that it has approved the purchase and assumption of certain assets, including eleven branch offices in Wisconsin, and deposits by the state-chartered Royal CU from Anchor Bank. The Wisconsin Office of Credit Unions, Federal Deposit Insurance Corporation, and Office of Thrift Supervision also have approved the transaction. Royal, which is federally insured, has approximately $1.05 billion in assets. An Anchor Bank spokesman said this transaction reduces its operation from 72 branches to 61. After pending arrangement with Nicolet Bank in the region to purchase four more branches, Anchor will continue operations with 57 branches. Carla Leuck, community relations coordinator at Royal CU, said the credit union was planning to release more information about the purchase today.

CUs pick up steam says MSNBC.com

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NEW YORK (6/11/10)--More than 1.2 million Americans joined a credit union in 2009, the Credit Union National Association (CUNA) told MSNBC.com (June 9). The growth is significant, with credit unions now having nearly 10% of the household savings in the U.S.--their biggest share ever, the news outlet said. The article attributes the growth to "public backlash from the financial meltdown and government bailout" of banks. "Memberships increased more than one-and-a-half times faster than the growth in the U.S. population," CUNA President/CEO Dan Mica said in the article. Nearly one in four Americans now belongs to a credit union. "Twenty years of surveys show credit unions are really trusted and highly regarded; the most trusted sector in the financial services industry," Mica told MSNBC.com. "Credit unions have always invested rather conservatively, so they didn't get caught up in all of the recent loan losses." The article cites a new Bankrate.com study that shows "free checking is alive and well at credit unions." It also points out that members are owners, not stockholders, and quotes Noreen Perrotta, money editor at Consumer Reports, who says that at credit unions " you are as important as the next depositor. In a mega bank, if you don't have a large amount on deposit, you may get slammed with more fees and you may feel like you're not that important to them." Consumers saved $7.3 billion--$81 per member--in 2009 by using credit unions, said the article. It also cites Tukwila, Wash.-based BECU's aggressive advertising campaign, "Switch Now or Pay Later" and discusses shared branching. The article also points to CUNA's credit union locator at creditunion.coop. For the full article, use the resource link.

Washington league Oregon association intend to merge

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BEAVERTON, Ore., and FEDERAL WAY, Wash. (6/11/10)--The boards of directors of the Credit Union Association of Oregon (CUAO) and the Washington Credit Union League have signed a letter of intent to merge, they announced Thursday. Pending independent votes of the two states' memberships and their boards' joint approval of the final business plan, the regional, Northwest-focused credit union trade association will begin operations on Jan. 1. "The executive leadership and boards of the two organizations are aligned in common purpose, vision and desired objectives,” says Washington league President/CEO John Annaloro. “In addition to eventual cost efficiencies, the proposal would create an organization with a strong national voice that empowers Northwest credit unions to exercise more influence within the national credit union system and among third-party product and service providers,” Annaloro said. The two organizations have discussed the possibilities of combining operations for more than 20 years. According to the CUAO President/CEO Troy Stang, in addition to creating greater depth of service to member credit unions, a regional model gives staff the ability to concentrate on their areas of expertise. “The credit union movement benefits from innovation and evolution,” he says. “The proposed merger provides the opportunity to share knowledge, grow networks and collaborate in ways that help our members become more competitive in the markets they serve.” Senior teams from both organizations together are developing the regional operations plan. Town hall meetings will be held in August to discuss that plan with credit unions across the two states. Joint board meetings to consider member feedback are planned for September. “Both boards feel strongly that now is the time for a combined organization to build a sustainable association model to serve their needs into the future,” says Oregon association Board Chairman Gene Pelham, president/CEO of Rogue FCU, Medford. “However, as democratically run associations the approval of the merger, ultimately, is in the hands of our member credit unions.” “It’s important to also note that this proposal will not change either associations’ priorities or core value in all aspects of the credit union environment,” says Washington league Board Chairman Debie Keesee, president/CEO of Spokane Media FCU. “We will continue to provide effective leadership and advocacy for the credit union movement on a local level.” A simultaneous, multi-state membership vote is planned for November.

Interchange amendment report Negative impact in five areas

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MAYNARD, Mass. (6/11/10)--The interchange amendment in the Senate version of the regulatory reform bill would have negative consequences in five areas, according to an independent industry study. The amendment, which would allow government intervention in setting interchange fees, is strongly opposed by the Credit Union National Association and the nation's credit unions. This week hundreds of credit union representatives hiked the Hill in Washington, D.C., while more than 400,000 contacts with congressional representatives were made by credit unions grassroots supporters delivering the message: "No interchange amendment."(See related story in News Now's "CUs' interchange efforts noted in Wash. Post.") The report from Mercator Advisory Group, a firm based in Maynard, Mass., analyzed the potential impact of the amendment on the electronic payments industry. Among the findings:
* The cost of financial services will rise for consumers across a wide range of economic levels. * The largest issuers will have less of an incentive to promote debit-related products and services, and will either shift activities toward credit-based services or will cover their costs differently by fee-based approaches to debit accounts. * The smaller financial institutions, though exempt from portions of the amendment, are unlikely to escape undamaged. Wide government-mandated pricing discrepancies between large players, whose fees are price-controlled, and smaller exempt issuers would be difficult to sustain from a network perspective. The report noted "major public statements by smaller issuers expressing concern over the loss of their customers to those institutions mandated to charge artificially low rates." * State and federal agencies that recently migrated public benefit payments from paper checks to prepaid card programs are growing increasingly alarmed at the impact this legislation would have on these programs and their ability to continue supporting them without additional funding sources. * Merchant benefits may not be as robust as anticipated. While direct debit interchange costs may be lower (depending on the current rates which vary widely), merchants may see a shift in consumer usage toward credit products, a decline in average ticket size as fewer cardholders opt for debit in an environment with lower promotional activities, or more transactions taking place in less efficient forms such as cash and paper checks, the report said.
The report said the amendment has five erroneous assumptions:
* "The amendment falsely assumes that debit cards and checks are a functionally equivalent, or similar, payment scheme which implies that a common cost structure exists under which these forms of payment are processed." * "Proponents of the amendment incorrectly assert that small financial institutions are protected from harm." * "The amendment also appears to assume, contrary to prevailing evidence, that regulation of payment schemes operating in the U.S. economy will improve market conditions and benefit consumers." * "Proponents of the amendment incorrect assumes that imposing price controls would not have broad, sweeping unintended consequences for key stakeholders." * "The amendment incorrectly assumes that all debit card value chains are the same and so failed to identify that prepaid cards, which run under the debit scheme, will cost more for both government and low/moderate income citizens."
The reported noted that smaller financial institutions would be harmed because establishing and sustaining a two-tiered structure would be unlikely. Under a two-tiered structure, small institutions would charge market-based interchange fees while the larger banks responsible for approximately 80% of debit transactions would be limited to a much lower government-controlled rate. "It is not clear why any of the large banks, which are essential to achieving the scale necessary for a nationwide or global network, would continue to sustain a system that provides such a dramatic advantage to thousands of [their] competitors. A potential outcome is that card networks find it necessary to implement a single interchange schedule based on the Federal Reserve's ruling in order to best preserve the integrity and value proposition of their debit and credit systems," the report said. "In summary, it is our opinion that caution is warranted before any regulation of this type is enacted," said the report. "It is evident by the numerous calls for additional consideration being made by state agencies, credit union advocacy groups, industry experts, and independent analysts that further study is warranted and justified."

N.J. Senate passes municipal deposits bill

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TRENTON, N.J. (6/11/10)--The New Jersey Senate Thursday afternoon passed municipal deposits legislation supported by credit unions, according to the New Jersey Credit Union League. The vote was 29-6. S-1807 will enable counties, school boards, municipalities and other local government entities to use credit unions as depositories. The measure was sponsored by Senate President Steve Sweeney (D-3), Senate Republican Conference Leader Bob Singer (R-30) and Deputy Majority Leader Paul Sarlo (D-36). "This is an important day for credit unions and property taxpayers alike," said league President/CEO Paul Gentile after the vote. "While some tried to make this a bank vs. credit union issue, it's really more about choice, competition and saving taxpayer dollars," he said. He noted that the issue "will benefit all New Jerseyans." A companion bill introduced by Assemblyman Fred Scalera (D-36) and seven co-sponsors is pending consideration in the lower house. That bill will be reviewed by the Assembly Financial Institutions & Insurance Company committee, Chris Abeel, league director of governmental affairs, told News Now.

ATM and debit card safety tips for members

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HOUSTON (6/11/10)--Keeping your personal identification number (PIN) a secret is among safety tips released Thursday by PULSE, an ATM/debit network. Credit unions can pass the tips on to members. June is ATM & Debit Card Safety Awareness Month, which is why PULSE released the tips. The recession has prompted consumers to use their debit cards more than other forms of payment, but with the increased use comes an increased risk of fraud, according to Jim Cichy, PULSE vice president of fraud management. “To keep money safe and secure, consumers need to better understand how to work with their financial institution to combat security compromises and fraudulent use of financial information,” he said. Along with keeping PIN numbers a secret, PULSE noted that consumers should memorize their PINs and never write it on a card or store the number with the card. Also, never let someone else enter a PIN number. “No company or individual should ever ask for your PIN,” PULSE said. PULSE also suggested that consumers:
* Never provide a debit or credit card number or any personal information through an unsolicited e-mail or request; * Look for secure transaction symbols when shopping online to ensure the account information is protected; * Call the financial institution if a card is lost or stolen; * Review all account statements promptly and report any errors; * Do not expose a card’s magnetic stripe to magnetic objects because they can damage cards; * Block the view of others when using an ATM or PIN debit terminal; * Observe surroundings before using an outdoor ATM or debit terminal; * Do not use ATMs that appear to be tampered with and report tampering to the ATM owner immediately.

WOCCU to Basel Smaller FIs effective in crisis

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FRANKFURT, Germany (6/11/10)--Smaller financial firms, including the world’s credit unions, did better than their larger counterparts during the recent economic crisis, but attempts to strengthen global financial regulations by closing loopholes in existing laws could unintentionally cause problems for those firms, said the World Council of Credit Unions (WOCCU). That was the message a WOCCU delegation gave attendees at a Basel Committee on Banking Supervision meeting held in Frankfurt, Germany, June 1. WOCCU was one of five organizations summoned by the Basel Committee--and the only one representing credit unions--to discuss the committee’s current capital and liquidity proposals. From a participant list that included the heads of Deutsche Bank, Barclays PLC, HSBC, Citibank and others, the committee solicited opinions on proposed capital level increases and the introduction of first-time global liquidity standards. The proposed standards make increased credit union access to central bank liquidity, capital sources, deposit insurance and payment systems even more critical in helping financial cooperatives avoid facing unintentional restrictions in serving members, WOCCU said. “For the past six years, we’ve seen global capital rules set in favor of large money center banks,” said Dave Grace, WOCCU vice president of association services, who traveled to Frankfurt with WOCCU President/CEO Pete Crear. “We drove home the point that credit unions have been more stable, more resilient and have a lower risk profile than large banks. These advantages need to be reflected in the committee's pending recommendations.” Basel Committee members, led by Chair Nout Wellink, acknowledged the severity of the proposed changes, estimating that current proposals could reduce global gross domestic product by 0.5% to 1% due to the proposed leveraging restrictions on financial institutions. Meeting-participants’ concerns were added to existing industry input, which includes more than 300 comment letters the committee has already received. The committee will attempt to synthesize all information as it finalizes a regulatory reform package for presentation at the upcoming Group of 20 (G-20) nations summit meeting Nov. 11-12 in Seoul, South Korea. During the Frankfurt meeting, WOCCU representatives stressed the success credit unions have had during the economic crisis and the intrinsic strength of the cooperative model. The delegation also noted that specific recognition of financial cooperatives’ unique advantages exists in the committee’s capital proposal, but appears absent in the proposed liquidity model. Continued absence of that consideration and continued lack of access to central bank liquidity sources could keep credit unions from successfully fulfilling their mission--a force that has helped blunt the impact of the economic meltdown this past year, according to Crear. “Better rules for financial institutions worldwide is the first step toward addressing the ills caused by the 2009 economic crisis,” Crear said. “By meeting with the Basel Committee on these issues, we’ve assured that credit unions will continue to have a seat at the table and a credible voice in the global re-regulation of financial services.”

Is your balance sheet ready for rising interest rates

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MADISON, Wis. (6/11/10)--Credit union managers and boards nationwide are keeping two main concerns about interest rates in the forefront--when and how quickly they turn around, and what credit unions should do to prepare for interest rates’ upturn, according to Southwest Corporate FCU Investment Services. The question all credit unions should be asking is, “Is our balance sheet well-positioned if interest rates were to begin rising tomorrow?” wrote Mark DeBree, Southwest Corporate manager of asset liability management (ALM) services, in an article titled “Managing Interest Rate Risk: What Goes Down Must Come Up!” “A strong asset/liability management program can help credit unions position [that question] relevant to two others: How much risk does a credit union have to rising rates? And what is the credit union strategy when interest rates do change?” Debree added. To have a sound risk-management process, one should:
* Understand and be familiar with the assumptions used within the ALM process; * Ensure that the analyses measuring interest rate risk are accurate and presented in a timely manner; * Designate senior management responsibility for managing the credit union’s risk exposure; and * Ensure that credit union personnel are capable of understanding and communicating the resulting risk exposures to examiners and the board.
“When properly tuned, an ALM model addresses the identification, measurement, monitoring, and reporting of interest rate risk exposures,” Debree wrote. “Credit union senior management is ultimately responsible for making the decisions for controlling or managing that risk. For this reason, examiners want to ensure credit unions understand ALM and are able to incorporate the ALM results into their risk management and decision-making processes.” To read the article, use the link.

Arizona league awards board announced

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TUCSON, Ariz. (6/11/10)--The Arizona Credit Union League honored recipients with its league awards and elected members to its board during the 2010 annual convention in Tucson, Ariz., June 3-6. Robert Ramirez, president of Vantage West CU, Tucson, Ariz., was elected board chairman. Other elected officials include:
* Vice chairman Susan Frank, Desert Schools FCU, Phoenix; * Treasurer Colleen Curtis, Southwest Healthcare CU, Phoenix; and * Secretary Dan Desmond, TruWest CU, Scottsdale.
Steve Dunham, former chairman, withdrew from nominations but joined the board along with Brian Barkdull, American Southwest CU, Sierra Vista; Nathaneal Tarwasokono, Pima FCU, Tucson; Todd Pearson, Arizona Central CU, Phoenix; and Vince McKee, Pinal County FCU, Case Grande. The league also awarded Pete Pritts, CEO of FirstCorp., Phoenix, with the Very Outstanding Credit Union Person award. The award honors an individual who goes above and beyond to serve the credit union movement. Harland L. Bradford Sr., American Southwest CU, was honored with the Rose Mofford Credit Union Volunteer Award. Bradford has more than 30 years of volunteer service and has earned five Volunteer Achievement Award certifications, the league said. Paul Stull, Arizona State CU, Phoenix, received the Credit Union Advocate of the Year award. Also, 11 credit unions received honors for 100% participation in advocacy efforts and six credit unions were honored for their growth management with Credit Union Progress Awards.

Summit spotlights Maine CUs youth fin lit

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AUGUSTA, Maine (6/11/10)--Maine’s credit unions reinforced their commitment to financial literacy as one of the lead sponsors and presenters at the state’s first-ever Financial Literacy Summit held May 7 in Augusta, Maine.
Click to view larger image Maine Gov. John Baldacci, center, presented a plaque recognizing the leadership and involvement of Maine’s credit unions in the state’s first Financial Literacy Summit, held recently in Augusta, Maine. Rick Lachance, left, president/CEO of Maine Education and Maine Credit Union League director, and Jon Paradise, right, league governmental and public affairs manager, accepted the plaque on behalf of Maine’s credit unions. (Photo provided by the Maine Credit Union League)
Nearly 175 teachers statewide participated in this event, which was organized by the State’s Office of Securities and the Maine Jump$tart Coalition. Maine’s credit unions are represented on Jump$tart’s board of directors (News & Views June 2010). Maine Gov. John Baldacci spoke about the importance of financial education in schools and singled out Maine credit unions as “one of the leaders in helping bring financial education to students across Maine and being proactive on this very important issue.” The event featured state and national speakers, and several breakout sessions. Two of the breakout sessions featured credit union representatives as presenters. Donna Steckino, president/CEO of Community CU, Lewiston, discussed Maine-Based Community Programs for Financial Literacy. She spoke about the Financial Fitness--Money Management Experience fairs that she helped to start in Maine. “We are working to expand the number of fairs and will continue to do so moving forward,” Steckino said. “Maine credit unions were innovators in this concept and are eager to reach even more students.” “More than 150 educators were given practical tools to help students become financially capable adults,” wrote Judith M. Shaw, administrator of Maine’s Office of Securities, in an opinion piece about the event in the Portland Press Herald (June 10). “Each of us has a responsibility to be educated about personal finance and the pitfalls that can yield money problems for ourselves and our families,” Shaw added. “Perhaps more important, we have an obligation to share this insight with future generations.”

CU System briefs (06/10/2010)

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* HARAHAN, La. (6/11/10)--The Louisiana Credit Union League has
announced two promotions. Jennifer Green, who has been with the league since 2002, has been promoted to vice president. She will continue to be the main compliance contact for Louisiana credit unions. In addition, she will oversee the league's human resources, education and information technology departments. Lacey Hyer has been named director of communications. She will be responsible for planning, coordinating and directing all league public relations and communications programs. She has worked with the league since 2006 (eNews June 9) ... * UPPER MARLBORO, Md. (6/11/10)--NASA FCU has launched its free remote deposit service, allowing members, businesses and other individuals to deposit checks anytime, anywhere, from a computer with a scanner and Internet connection. "Remote deposit and our other online services essentially bring the credit union to our members, no matter where they live, saving them time and money," said Karen Friel, vice president of operations. The service has no monthly fee or minimum contact term or termination costs. Members login to the credit union's eBranch website and select "remote deposit": then endorse, scan and securely upload the check image; review images of the deposited checks; and click "submit." Up to 999 checks can be included in one deposit. Deposits are immediately credited to the account. The credit union plans to launch its mobile version of the remote deposit service in July ... * CHICAGO (6/11/10)--Mechanicsburg, Pa.-based Members 1st FCU has won the Fun at Work award presented by bswift, a Chicago software and services provider for human resource and benefits administration. Members 1st has 650 employees. During the presentation of the award in Chicago last week, bswift noted that the creation of a fun work environment at the credit union starts at the top with Members lst President/CEO Robert Marquette. "His alter ego is the Original Advice Guy, a super hero who travels around the community (also appearing on TV and billboards) to assist consumers with their financial decisions," said bswift Chief Fun Officer Patrick McGarrity. "At Halloween, he chooses a theme and spends three days visiting all 43 Members 1st branch locations in five counties to judge decorations [and] costumes and award prizes. Every morning he is in the office, he visits every cubicle in every department to say 'good morning,'" said McGarrity. Members 1st boasts a 98.7% satisfaction rating among its 172,000 members (Business Wire June 9) ...

Irelands regulator plans to stress-test CU loans

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DUBLIN (6/10/10)--Ireland's credit union regulator may start stress-testing loans for about 20 credit unions that it says are having solvency problems. However, the Irish League of Credit unions (ILCU) has produced figures contradicting that claim. ILCU says that only five credit unions have solvency issues out of the country's 414 credit unions (The Independent June 9). In late May, Jonathan McMahon, assistant director general for financial institutions supervision at the Central Bank, told the Oireachtas Committee on Economic Regulatory Affairs that the regulator was in the early stage of assessing problems at about 20 credit unions (Irish Times May 28). The 20 are on a watch list for high levels of arrears and potential solvency issues, said The Independent. James O'Brien, the registrar of credit unions, told the committee some credit unions may not be able to stand alone but he did not have legal authority to merge struggling credit unions into stronger ones. He said the only option available if a solvency problem arose would be to liquidate, according to the Times.. ILCU said that its Savings Protection Scheme--the league's deposit insurance fund for credit unions--is assisting five credit unions.

i3 applications due Sunday

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MADISON, Wis. (6/10/10)--Applications to participate in the Filene Research Institute's i3 innovation group are due by noon CT Sunday. Filene is seeking 17 new members for the group, which focuses on ideas, innovation and implementation and will develop an innovation competency for the next generation of credit union CEOs. Candidates will be selected and notified by June 16. Filene said there are typically at least five applicants for each opening. Many successful candidates apply two or three times before acceptance. The positions are available beginning in the fall. Applicants are recruited from natural person credit unions in the U.S. and Canada that are Filene Research Institute members. New this year, CEOs of credit unions under $50 million in assets are eligible to apply. Those applying should:
* Agree to one two-year term; * Obtain support from their CEO to be involved in the group; * Secure credit union commitment to cover travel and hotel expenses for two national meetings per year (or a total of five meetings); * Attend four two-to-three day meetings in the spring and fall: * Make a monthly time commitment to i3-related projects beyond the national meetings; * Gain support from their credit union to pilot and test at least one Filene i3 idea; and * Consent to the i3 participant agreement.
For more information, use the link.

CU purchases five stars

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STOCKTON, Calif. (6/9/10)--Safety. Soundness. Stability. Steadiness. Strength. These are five stars recently purchased and named by Financial Center CU to celebrate Five-Star Superior Ratings for the past 16 consecutive years. The ratings were from Bauer Financial Inc. The purchase of the stars was announced by President/CEO Michael Duffy at the $300 million asset Stockton, Calif.-based credit union’s 55th annual meeting in May. “Now is the time to tout the sound decisions that were made throughout the 2000s,” Duffy said. “Our careful planning is paying off and is creating a true competitive advantage. This is our opportunity to educate the local community and provide consumers a safe alternative for their hard-earned money.” Most recently, Financial Center’s strength and success was showcased in an article that ran in the Stockton Record, a newspaper that circulates to more than 60,000 households in the credit union’s immediate area. The credit union was highlighted as the only five-star institution in the county.

Michigan league launches its largest ad campaign

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LANSING, Mich. (6/10/10)--The Michigan Credit Union League said it is launching the largest advertising campaign in the history of the state credit union industry, to inform consumers that, as credit union members, they own their money. With the tagline, “Own Your Money. Join a Credit Union,” the multi-million dollar TV and radio campaign informs consumers about the credit union difference and the rewards of credit union membership, such as lower fees, better rates and available credit. The campaign also highlights the differences between credit unions and other financial institutions. Despite a tough economy, Michigan credit unions remain strong in 2010, including record growth in membership, savings deposits and small business loans, said league President/CEO David Adams. Therefore, the current economic climate is a perfect time to launch an all-new appeal to Michigan residents to join the 5,000 Americans a day who are joining a credit union, he added. “As not-for-profit cooperatives, credit unions have always been owned by their members, not stockholders looking for a profit,” Adams said. “Consumers today want more control over their finances, and credit unions are a perfect alternative for people who want to keep their money close to home, working for them and their community. For 85 years, credit unions in Michigan have been in the business of helping people manage their money by investing in them, in Michigan and in America.” Beginning this week, TV and radio commercials will air statewide. They are produced by McCann Erickson Worldwide, which has offices in Birmingham, Mich., and a client list that includes General Motors. “Credit unions across the state joined together to help fund this historic advertising effort, adding up to a combined total of $4 million, including contributions from our CUcorp affiliate,” Adams said. “There is growing public awareness and support for credit unions and, with consumers looking for a safe and sound alternative for their finances, this is a perfect time to inform them about the credit union difference.” The league plans a second wave of commercials to air in the fall to build on the momentum and awareness generated by the first campaign. The commercials also will highlight the Invest in America program, which offers preferred pricing on General Motors cars and trucks, Sprint mobile services, DIRECTV and other members-only programs. To see the commercials, use the link.

Rep. Frank supports HarborOnes fin ed center

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MANSFIELD, Mass. (6/10/10)--U.S. House Financial Services Committee Chairman Barney Frank (D-Mass.) attended the grand opening of a financial education center, HarborOne U, at HarborOne CU on Friday. “Our goal is to provide educational opportunities to help people make better financial choices,” said CEO James Blake. “We believe that education is the key to a better life.”
Click to view larger image James Blake, (left) president/CEO of HarborOne CU in Brockton, Mass., welcomes Rep. Barney Frank (D-Mass.) to the grand opening of the credit union’s HarborOne U Friday. (Photo provided by HarborOne CU)
HarborOne U will offer financial education, including youth financial literacy programs, first-time home buyers seminars, credit counseling, and classes on retirement and estate planning. HarborOne U will also offer life and career management programs, such as health and wellness seminars. Classes will teach participants how to search for the right college, select elder care options, and understand Social Security and Medicare benefits. Small business programs include classes on management of cash flow and receivables, working capital, social media, business and marketing plans, succession planning, and business insurance and investments management. “Credit unions are not motivated simply by profit,” Frank said. “They have a commitment to a better community, making sure people in the middle ranges and below middle ranges of income are fully served. This is an example of it. What would be a wise financial decision for some people would be an unwise one for others. That’s why what HarborOne is doing is so important.” HarborOne U stems from HarborOne's award-winning MultiCultural Banking Center in Brockton, Mass. The center opened in September 2007 to provide low- and moderate- income residents with access to financial information to help them avoid predatory lenders and assist those facing foreclosure. The center has helped more than 2,000 people. Since the credit union opened the MultiCultural Banking Center, “many people from all walks of life have inquired about financial education opportunities tailored to their specific needs," Blake said. "Given the state of the economy over the past few years, it’s evident that there is a tremendous need and desire for financial information and education. That need spans all economic levels and cultures." Classes will be offered days, evenings and weekends. Some courses will be in one-session seminars while others will be scheduled as multi-session classes. In most cases, classes will be free. Others will require a nominal fee to cover course materials. Classes and other programs will be presented by HarborOne and other area professionals. HarborOne also has a Business Information Center with free workspace, Internet access and a resource library. The center will be open Monday through Friday from 9 a.m. to 5 p.m. HarborOne has $1.8 billion in assets.

Kites over Washington CU film wins regional Emmy

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BELLEVUE, Wash. (6/10/10)--A short film, “Kites over Washington,” which documents a temporary art installation of 131 long-tail kites that flew over a Bellevue, Wash., park as a promotional stunt for Washington credit unions, won a Northwest Regional Emmy Award. Bellevue filmmakers Illona Rossman Ho and Shannon Hart-Reed made the film, with Ho producing and Hart-Reed directing (Bellevue Reporter June 8). Credit Unions of Washington and Women in Film/Seattle provided funding for the project. Each of the 131 kites represented a member credit union in the state. “I was really going for a feel-good moment--unexpected visuals, sunny skies and a feeling of relaxation,” Hart-Reed told the newspaper. To read the article, use the link.

CUs stand against interchange bill in media

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MADISON, Wis. (6/10/10)--Credit unions continue to reach out to regional media to oppose an interchange provision in pending federal regulatory reform legislation that would allow the government to set interchange fees. Credit unions also are teaming up with other financial industry groups on their anti-interchange efforts. Dick Ensweiler, president/CEO of the Texas Credit Union League, wrote a joint op-ed with Christopher L. Williston of the Independent Bankers Association of Texas that was published by The Cherokeean Herald Wednesday. The piece, “When Reform Hammers Swing Too Wide, Consumers Get Nailed,” reiterates that interchange legislation would ultimately cost consumers. Other efforts:
* Minnesota Credit Union Network (MnCUN) President/CEO Mark Cummins wrote a letter to the editor that was published in Wednesday’s edition of Finance & Commerce. Cummins was asked by the publication to provide a comment for a separate article on how the interchange amendment will affect credit unions. His perspective was included in the story. * First Class CU, Westown, Iowa, published a letter in the Des Moines Register Wednesday opposing interchange. President/Manager Kent Strawn wrote in response to a letter written to the paper by Pat Drennen, Iowa Credit Union League board chair, and Roger Claypool, Iowa Bankers Association board chair, also opposing interchange. * Arrowhead CU President/CEO Larry Sharp sent an e-mail statement to 77,000 members asking them to write their federal representatives opposing the interchange amendment, said the Redland Daily Facts (June 3). Arrowhead CU is based in San Bernardino, Calif. * The Disclosures, a credit union band featuring Christopher Morris, CUNA Council manager of communications and Web resources, and Chad Helminak, Web producer and media relations manager for the Wisconsin Credit Union League, wrote a song, “Don’t Change Interchange,” and created a video on YouTube about interchange fees (use the link).
The coverage comes as the Credit Union National Association (CUNA) hosts a “fly-in” this week with state credit union leagues and credit union representatives to oppose the interchange amendment. The “fly-in” was organized by CUNA so state leagues and credit union representatives can demonstrate to lawmakers how the interchange fee would affect them. Total credit union contacts with Congress on the interchange issue since May 24 is between 375,000 and 400,000, CUNA said. Credit unions continue to contact lawmakers on interchange. CUNA and its credit unions oppose the interchange amendment because it would be costly for credit unions to continue offering their members card products and portfolios as a part of their services. The interchange language is included in the Senate version of the bill, and CUNA is working to keep the language out of the final bill.

Card fraudsters turn from high tech to old-school skimming

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DES MOINES, Iowa (6/10/10)--Skimming is making a resurgence as a favorite method of card fraudsters to siphon cash, according to a new white paper from TMG (The Members Group). What is attracting fraudsters back to this "old school" method of theft? Fraudsters steal millions of dollars through skimming, and the skimming process is inexpensive, said Karen Postma, TMG Card Risk senior manager and author of the paper, "A Throw Back Threat." "High-profile data breaches achieved through high-tech thievery have been grabbing headlines steadily over the past five years, forcing criminals to dream up new and more devious ways to steal valuable information," said Postma. "Skimming, however, is a proven, relatively inexpensive way to grab small amounts of data over a very short period of time. A criminal with access to a couple thousand dollars and an Internet connection can procure a skimming device within a week, maybe less," she added. Skimming is achieved when a fraudster places a look-alike device over the card slot of an ATM or gas pump. The device can read the magnetic strip as credit, debit and prepaid cards pass through. It is often used with a pinhole camera that picks up the cardholder's personal identification number (PIN) as it is typed onto the keypad. This allows criminal access to the code before the PIN pad can encrypt it. The second installment of TMG's three-part series of white papers on fraud, "A Throw Back Threat" looks at skimming's comeback and some tricks-of-the-trade to help financial institutions combat this foe. "Staying on top of the latest and greatest in fraud tools and technologies is a must, of course. But, so too is keeping your eye on the mainstays of crime," says Postma. To download "A Throw-Back Threat," use the link. In the next few weeks, Postma will wrap up the series by unraveling how "Card Fraudsters Get Tricky with Travel." TMG is a wholly-owned subsidiary of the Affiliates Management Company, which is owned by Iowa credit unions and their members.

CU System briefs (06/09/2010)

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* TAMPA, Fla. (6/10/10)--Joseph "Joe" Brancucci has been named president/CEO of Tampa-based GTE FCU, effective in early July, announced the credit union's Board of Directors. He succeeds Wendell "Bucky" Sebastian, who retired in December and was recently named executive director of the National Credit Union Foundation. Brancucci is executive vice president and chief operating officer of the $8.6 billion asset Tukwila, Wash.-based BECU (formerly Boeing Employees' CU). At BECU since 1995, he was instrumental in leading BECU's efforts in paperless consumer and real estate lending, tellerless branches, risk management, talent management and development and operating efficiencies. He founded Prime Alliance Solutions Inc., a provider of mortgage technology and business solutions to more than 100 credit unions. He will remain chair of the board and CEO of Prime Alliance. Brancucci also has held senior executive positions in financial services for nearly 40 years, including at Freddie Mac and a South Florida credit union. He is the former chair of the CUNA Council Forum and the CUNA Lending Council. He is chair and founder of the CU Housing Roundable and is a member of the board of Balance and board secretary at CUDL ... * ANTIOCH, Calif. (6/10/10)--A former teller at Concord-based Metro 1 CU's Antioch branch was sentenced to five years in a federal prison for helping mastermind a $74,000 robbery at the branch on Feb. 25, 2009. Daniel Ramsey, 21, of Pittsburg, Calif., also must pay more than $37,000 in restitution. He was charged with conspiracy to commit bank robbery, armed bank robbery and being an accessory after the fact. According to prosecutors, Ramsey used his inside knowledge of Metro 1's layout and security procedures to help carry out the heist, which was modeled on a takeover robbery of the credit union Ramsey witnessed in 2008. Authorities said the planning was made by Ramsey and a local community college student, Angelo Leyesa, 21, of Antioch. Two gunmen, Jarrett Sermeno, 20, and Kevin Michael Taylor, 39, allegedly carried out the robbery. Leyesa, Sermeno, Taylor, and Shannon Sorrell, the alleged getaway driver, are expected to plead guilty and be sentenced today (SFGate.com June 9 and Targeted News Service June 8) ... * SANTA ROSA, Calif. (6/10/10)--Redwood CU has added "Peanuts" character Lucy Van Pelt to its stable of "Peanuts on Parade"
Click to view larger image Click for larger view
statues, honoring the work and contributions of longtime Santa Rosa resident and "Peanuts" creator Charles M. Schulz. The program, which began in 2005, allows local businesses to sponsor statues of "Peanuts" characters, when are decorated and placed on permanent display around town. RCU conducted a design contest among employees. This year's winning design was submitted by RCU Marketing Specialist Jon Lehre. Titled "The Advisor is In," the statue features Lucy behind her psychiatric stand doling out financial advice. In true credit union spirit, the five-cent charge has been changed to "Free." She offers budgeting tips for items such as a football, a kite, and even a sad little Christmas tree. A team of volunteer RCU employees constructed and painted the statue. (Photo provided by Redwood CU) ...

NEW IMSNBC.comI CUs picking up steam

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NEW YORK (Filed at 9:43 a.m. CT 6/10/10)--More than 1.2 million Americans joined a credit union in 2009, the Credit Union National Association (CUNA) told MSNBC.com. The growth is significant, with credit unions now having nearly 10% of the household savings in the U.S.--their biggest share ever, the news outlet said. The article attributes the growth to "public backlash from the financial meltdown and government bailout" of banks. "Memberships increased more than one-and-a-half times faster than the growth in the U.S. population," CUNA President/CEO Dan Mica said in the article. Nearly one in four Americans now belongs to a credit union. "Twenty years of surveys show credit unions are really trusted and highly regarded; the most trusted sector in the financial services industry," Mica told MSNBC.com. "Credit unions have always invested rather conservatively, so they didn't get caught up in all of the recent loan losses." The article cites a new Bankrate.com study that shows "free checking is alive and well at credit unions." It also points out that members are owners, not stockholders, and quotes Noreen Perrotta, money editor at Consumer Reports, who says that at credit unions, "you are as important as the next depositor. In a mega bank, if you don't have a large amount on deposit, you may get slammed with more fees and you may feel like you're not that important to them." Consumers saved $7.3 billion--$81 per member--in 2009 by using credit unions, said the article. It also cites Tukwila, Wash.-based BECU's aggressive advertising campaign, "Switch Now or Pay Later" and discusses shared branching. The article also points to CUNA's credit union locator at creditunion.coop. For the full article, use the resource link.

CU System briefs (06/08/2010)

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* RANCHO CUCAMONGA, Calif. (6/9/10)--The California and Nevada Youth Involvement Network (CNYIN), in partnership with the Richard Myles Johnson (RMJ) Foundation, has named Kern High School District's Regional Occupational Center (ROC), Bakersfield, Calif., and the Delta Academy in Las Vegas, Nev., as 2010 recipients of its School of the Year Award. Each school received $500. The ROC was nominated by Casey Woodruff of Kern Schools FCU, Bakersfield, for its on-campus, student-operated credit union branch, which employs 60 students each year. The Delta Academy was nominated by Colleen Maurer of Silver State Schools CU, Las Vegas, because its economic teacher, Adrianne Young, incorporates the National Endowment for Financial Education's High School Financial Planning Program in all her classes. The award honors a California or Nevada school that excels at providing youth financial literacy to students and has specific plans to continue doing so ... * HALIFAX, Nova Scotia (6/9/10)--Jamie Baillie, president of Credit Union Atlantic in Halifax announced he is a candidate for the leadership of Nova Scotia's Progressive Conservative Party. He previously served as chief of staff to former Premier John Hamm, who attended Baillie's announcement. The party will chose a new leader at a convention on Oct. 30. Baillie said he intends to keep his job with the credit union for the duration of the campaign, adding he would resign if he is named party leader. He will use evenings, weekends and vacation time to seek support for his bid (The Canadian Press June 7) ... * WASHINGTON (6/9/10)--Brian McVeigh, senior vice president of Lake Trust CU, Lansing, Mich., has been named to a two-year term on the Board of Directors of Credit Union Student Choice. Officers of the board include: Chairman, Tom Ryan, chief operating officer, Digital CU, Marlborough, Mass.; Secretary, Linda Stephens, vice president of lending, Wright-Patt CU, Fairborn, Ohio; and Treasurer, Tom Berquist, senior vice president, member strategies, BECU, Tukwila, Wash. Other board members are Peter Schmitt, president, Total Member Care, a PSCU Financial Services company; Charles "Chip" Filson, president, Callahan & Associates; and Jon Jeffreys, president, Credit Union Student Choice, a credit union service organization that provides turn-key private student lending services for credit unions ... * LANSING, Mich. (6/9/10)--Frederick L. Mills of Higgins Lake, Mich., died June 6 at the age of 85. Mills was president of Lansing Community CU for 25 years. He worked with the Board of Water and Light for more than 38 years, retiring as superintendent of fleet services. He is survived by three children and five grandchildren. A graveside service will be held Friday at Chapel Hill Memorial Gardens, Lansing (Lansing State Journal June 8) ...

Hamden FCU Wepawaug Flagg FCU to merge

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HAMDEN, Conn. (6/9/10)--Two Hamden, Conn.-based credit unions have agreed to merge, with Hamden FCU joining Wepawaug Flagg FCU, pending approvals from members and regulators. The credit union will operate under the Wepawaug Flagg name. Hamden FCU Chairman and CEO Kevin Shields said the credit unions wanted to provide expanded services to members. Another key factor in the decision was the increase in regulations in the past few years, he said (Euclid Infotech June 5). The merger is expected to close on June 30, according to Michael Hinchey, president/CEO of Wepawaug Flagg FCU. There are no plans to close branches, and the credit union hopes to retain Hamden FCU employees, he said. Chartered in 1962, the nearly $7 million asset Hamden FCU has an office in Hamden and one at Southern Connecticut State University in New Haven serving more than 1,800 members. Wepawaug Flagg FCU, established in 1936, serves more than 30 select employer groups, including certain municipal employees of New Haven and the Board of Education employees in Hamden and Cheshire. It has nearly $64 million in assets and serves more than 10,500 members.

MnCUN praises international partnership with Paraguay

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ASUNCION, Paraguay (6/9/10)--The Minnesota Credit Union Network (MnCUN) issued a formal salutation to the credit unions of Paraguay at the Central de Cooperativas del Area Nacional (CENCOPAN) International Seminar on June 2-3. The salutation expressed support of Paraguayan credit unions and CENCOPAN, and admiration for the cooperatives’ successes in providing financial services. The statement was presented to conference attendees at this eighth annual event. “We greatly value the ongoing relationship between MnCUN and CENCOPAN, and look forward to continuing our regular exchanges to further benefit credit unions in both Paraguay and the state of Minnesota,” said MnCUN President/CEO Mark D. Cummins. Now entering its seventh year, Cummins characterized the partnership to be “as important as ever.” MnCUN and CENCOPAN have been linked since 2004 through the World Council of Credit Unions’ International Partnerships Program. The Partnership Program is designed to allow an exchange of knowledge, information and experiences between developed and developing credit union movements. Formed in 1994, CENCOPAN is located in Asuncion, Paraguay, and provides its member credit unions with services similar to those offered by trade associations and corporate credit unions in the U.S. Dr. Modesto Segovia Boltes, CENCOPAN president, expressed agreement with Cummins’ statement during a dialogue in 2009. He said that as a landlocked country, international partnerships are new in Paraguay but that CENCOPAN has been very successful in forging these relationships. “Credit unions have the highest profile and highest awareness within the cooperative sector [of Paraguay],” Boltes said. “Having an international partner, especially in the U.S., has certainly helped…and that projects a forward-looking image. Frankly, our organization is the envy of other co-ops.” Minnesota credit union professionals representing MnCUN have traveled to Paraguay each year to meet with their credit union counterparts, resulting in meetings both educational and enjoyable. Through these exchanges, participants have learned about the international credit union movement and used the experience of U.S. credit unions to make improvements in the legislative and regulatory environments of Paraguayan credit unions. Technology has been another main focus of exchanges, including internships coordinated in both countries. “As Minnesota and the entire U.S. face numerous challenges today, credit unions remain strong and are frequently viewed as a solution to the financial issues confronting Americans today--not the source of the problems that have arisen,” Cummins said. “We hope that all credit unions--both nationally and internationally--will continue to be regarded as safe, sound and secure financial institutions.”

NASCUS leadership regional meetings this week

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CHICAGO (6/9/10)--The Board of Directors and Credit Union Executive Council of the National Association of State Credit Union Supervisors (NASCUS) will join NASCUS management for association business meetings this week in Chicago. The board and executive council will meet Thursday and Friday to discuss NASCUS' budget for fiscal year 2010-11, as well as regulatory reform, examination issues and other organization business. The NASCUS Board and executive council meet in person three times a year and conduct periodic conference calls. Also, NASCUS Chairman Tom Candon of Vermont will host a regional regulator meeting today with state regulators from six states at the Illinois Department of Financial and Professional Regulation. The meeting is the last of the year in an annual series that aims to provide small group settings for state regulators to discuss regional and national issues of mutual interest. Today's agenda includes proposed rules, pending legislation and examination issues. State regulators attending also can share state-specific issues. "Given the level of activity on the legislative and regulatory fronts, this in-person dialogue comes at a perfect time as we continue to shape our association response and activity with regard to current events in the credit union system

Suspects face death penalty in guards murder

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DETROIT (6/9/10)--The trial of a suspect in a 2001 robbery--in which an armored-truck guard was killed while delivering cash to the main office of Dearborn FCU (now DFCU Financial)--began Tuesday in a U.S. District Court in Detroit. Timothy Dennis O'Reilly, 36, faces the death penalty for the murder of Norman "Anthony" Stephens during the Dec. 14, 2001 holdup, which netted more than $200,000 in cash and remained unsolved for years (The Detroit News June 8). Two co-defendants, Norman Herbert Duncan and Kevin C. Watson, also will face the death penalty, prosecutors said. A fourth defendant, Earl L. Johnson, was sentenced to life in prison after a jury convicted him of conspiracy, bank robbery, and aiding and abetting a murder. The robbery at the credit union's ATM was the first of three similar armored-truck robberies. The others occurred at Comerica Bank in Detroit in June 2003 and in February 2004. In the last robbery, a guard fired back and one robber, Eddie Cromer, died. Duncan was arrested near the scene. O'Reilly and Duncan had worked for Guardian Armored Security Services, which was targeted in the 2003 and 2004 robberies. The case received a major break six months after the last robbery, when an inmate where O'Reilly was incarcerated on an unrelated charge tipped off the Federal Bureau of Investigation (FBI) that O'Reilly was bragging about the robbery and had named the other suspects. The FBI had the inmate tape a conversation in which O'Reilly again bragged about the robberies, said The Detroit News. Michigan was the first state to ban capital punishment in 1847, but the state can still impose the death penalty for federal capital crimes such as murder during a bank robbery.

Heacock elected to CUNA Board

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MADISON, Wis. (6/9/10)--Roger Heacock has been elected to the Credit Union National Association (CUNA) Board. Friday was the deadline for the special election for the District 5, Class B position. Johnson Lambert & Co. LLP has certified the results of the election. CUNA received three nominations for the seat. They included:
* Heacock, president/CEO, Black Hills FCU, Rapid City, S.D. * William Jacobs, White Sands FCU, Las Cruces, N.M.; and * Angela S. McCathran, People's Trust FCU, Houston.
District 5 includes Arizona, Colorado, Kansas, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, Utah and Wyoming. The seat was held by former CUNA Chairman Kris Mecham, who resigned effective June 1 to perform mission work in Mongolia for his church. Heacock’s term will begin immediately and will expire at the adjournment of CUNA’s 2013 Annual General Meeting.

Tornado-damaged CU in new site

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MILLBURY and WALBRIDGE, Ohio (6/9/10)--A tornado-damaged credit union in Ohio should be up and running today thanks to the generosity of a nearby credit union. Woodco FCU in Millbury, Ohio, sustained major damage Saturday when a tornado touched down destroying significant portions of the high school where the credit union was located, said the National Credit Union Administration (NCUA) Monday. The $8.9 million education-based credit union was closed and no one was injured inside the credit union. NCUA staff was onsite Monday assisting as needed. Millbury, Ohio, is a small town located southeast of Toledo. CanDo CU in nearby Walbridge, Ohio, an $8.8 million asset credit union, is providing a temporary location for Woodco FCU. “Hopefully they’ll be up and running today Wednesday or Thursday,” Mark Sommer, CanDo president/CEO, told News Now. “Their back office staff is set up in our conference room.” Also, new data lines have been installed, an unused teller window made available, and a second drive-through terminal designated for Woodco members. CanDo has an “open-ended arrangement” to provide space for Woodco as long as is needed, Sommer added. Nearly a dozen Ohio credit unions of all sizes--some with $500 million to $600 million in assets--offered to help Woodco, Becky Hart, vice president of communications for the Ohio Credit Union League, told News Now. “The Ohio Credit Union Foundation is offering disaster recovery assistance--even as basic as office supplies [to Woodco],” Hart added. “One credit union is sending office supplies, and others are sending a large ‘goody box.’” NCUA said it is assisting the credit union and its members affected by the tornado. As necessary, NCUA will:
* Encourage the credit union to make loans with special terms and reduced documentation to affected members; * Reschedule routine examinations if necessary; * Guarantee lines of credit for the credit union through the National Credit Union Share Insurance Fund; and * Make loans to meet liquidity needs through the Central Liquidity Facility.

ICNNI cites CUs as good source for cards

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NEW YORK (6/9/10)--Credit unions are an alternative for consumers who are looking for a good deal on credit cards, CNNMoney.com said Monday. CNN cited a recent op-ed piece by two Harvard University doctoral students who discussed a study they conducted about investor-owned banks versus member-owned credit unions. “They found that credit cards from credit unions were less likely to charge fees and penalties that big banks do,” CNN said. “And when fees are involved, those fees are less. “Credit union cards actually offer lower annual fees and longer grace periods than regular cards,” CNN added. The article also told readers to go to www.creditunion.coop to find a credit union in their area or to call the Credit Union National Association at 800-358-5710. To read the article, use the link.

New Md.D.C. ad campaign kicks off

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COLUMBIA, Md. (6/9/10)--The Credit Union Cooperative Advertising Campaign, coordinated by the Maryland and District of Columbia Credit Union Association (MDDCCUA), has begun with radio ads, metro bus advertising, a Facebook page and other social media. The campaign effort has a wide scope to ensure area consumers are aware of credit unions as an alternative to banks, according to MDDCCUA President Mike Beall. The regional campaign runs through July 31, with a primary audience of women 25-54 years old and Generation Y. Ninety contributors, including credit unions in Maryland, the District of Columbia and northern Virginia, the Virginia Credit Union League, MDDCCUA chapters and other business partners, are supporting for the campaign. A Hart Research poll conducted in late 2009 indicated that nonmembers lack awareness of credit unions and don’t believe they are eligible to join. The association’s campaign was developed using the poll data and other research from member credit unions, the Filene Research Institute and a Generation Y focus group. Components of the $170,000 campaign include:
* Radio ads in the Baltimore and Washington, D.C., areas which will run on roughly 20 stations; * A website, WhatsInItForMe.org, which includes a consumer quiz, testimonials, and a credit union locator; * Social media, with a campaign on Facebook; and * CU Toolkits, with collateral materials branded to reflect the campaign. They include tent signs, Web graphics, art for brochures and individual credit union names on the WhatsInItForMe.org website.

Cheney to address The 1 CU Conference

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MADISON, Wis. (6/8/10)--Bill Cheney will speak at The 1 Credit Union Conference in Las Vegas July 12--his first official conference as CEO of the Credit Union National Association (CUNA). Cheney will become CUNA’s president/CEO on July 5. He will speak at 9 a.m. with World Council of Credit Unions President/CEO Pete Crear to welcome attendees. The conference will offer attendees 30 breakout sessions including:
* Youthful Products for a Younger Membership; * The Current Economy and Future Trends: An Industry Update; * 10 Tips for Increasing Technology and Operational Efficiency; * Mobile Banking: What People Have Learned From Being on the Cutting Edge; * Coping with a Growing Compliance Burden: What Credit Unions Need to Know; and * Using the Power of Social Networking to Build Your Credit Union.
Also, registrants who sign up for CUNA’s Executive Series by June 15 can win dinner with Jim Collins, best-selling author of “Good to Great.” The Executive Series is an exclusive learning and networking series for credit union CEOs and executives. Attendees will participate in educational sessions prepared with credit union leadership issues in mind. For more information, use the link.

Leagues have scholarships to WOCCUs Spanish program

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MADISON, Wis. (6/9/10)--Four state credit union foundations and leagues have created scholarships so employees from their member credit unions can participate in the World Council of Credit Unions’ (WOCCU) Spanish Immersion Program.
Click to view larger image Amy Klassen, (middle) community outreach manager at Denver Community CU and a participant in the 2009 World Council of Credit Unions Spanish Immersion Program, is pictured with her host parents in Costa Rica. (Photo provided by the World Council of Credit Unions)
Participants in the program are fully immersed in Spanish language lessons and Hispanic culture, while also spending time working at local credit unions and exploring their marketing strategies. The program provides participants with insight to better serve Hispanic consumers at their home credit unions. This year’s program, which begins Oct. 2, is in San José, Costa Rica, where participants will receive four hours of Spanish-language instruction at a certified language school with an emphasis on business and financial terminology. Each participant is classified according to skill level, from beginner to native Spanish-speaker. Participants can apply what they learn from language classes in a real-world setting while living with a pre-screened Costa Rican host family. The host family will provide a private room and all meals to the participant, along with the experience of being a part of a Hispanic family. Participants can choose either a one- or two-week session priced at $1,800 and $2,600, respectively. Those who register before June 30 will receive a $100 early bird discount. State credit union foundations and leagues offering program scholarships are:
* The Texas Credit Union Foundation, which is offering three scholarships for 80% of the total registration fee for the program. Contact Courtney Nickles at cnickles@tcuf.coop or 800-953-8283 for more information. * The Credit Union Association of New York, which is offering two half scholarships for the one-week program for its members. Contact Allison Barna at allison.barna@cuany.org or 800-342-9835 ext. 8134 for more. * The Arizona Credit Union Foundation, which is offering one full scholarship including airfare for the one- or two-week program. Contact Sandy Watts at swatts@azcreditunions.org or 602-264-6701 ext. 202 for information. * The League of Southeastern Credit Unions, which also offers scholarship opportunities. Contact Laura Vann at Laura.Vann@lscu.coop for details.

CUs reach out to media on interchange

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MADISON, Wis. (6/8/10)--Credit unions and leagues nationwide are ramping up their media efforts to inform lawmakers and others about the adverse affects an interchange amendment--included in pending regulatory reform legislation--would have on credit unions and consumers. They, along with the Credit Union National Association (CUNA), oppose the adoption of an interchange provision in the reform bill--which would allow the government to set interchange fees--because it would be costly for credit unions and their members. CUNA and the leagues also are sponsoring a national fly-in this week, asking credit union advocates to make personal visits with their lawmakers in Washington, D.C., on the issues involved. Other actions by state credit union leagues:
* Pat Drennen, Iowa Credit Union League board chair, wrote an op-ed piece, “Consumers on losing end of debit card legislation,” that was published in the Des Moines Register Friday. Drennen wrote the piece with Roger Claypool, Iowa Bankers Association board chair. * The next Pennsylvania Credit Union Association (PCUA)-sponsored segment of Pennsylvania Newsmakers will discuss the financial reform bill. During the discussion, Rick Wargo, PCUA executive vice president and general counsel, and Mike Wishnow, senior vice president of communications and marketing, will explain what interchange fees are and how the proposed amendments would affect consumer access to debit and credit cards. The show is slated to air today, Wednesday and on Saturday on local Pennsylvania stations (Life is a Highway June 4). * The West Virginia Credit Union League jointly wrote a letter to the House of Representatives with the West Virginia Bankers Association about interchange. The Ohio Credit Union League is running advertisements about interchange in Sunday’s Columbus Dispatch and Cincinnati Plain Dealer.

NYIB announces recipients of 2010 scholarships

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MADISON, Wis. (6/8/10)--The National Youth Involvement Board (NYIB) has selected eight credit union professionals for its annual scholarships, aiding the volunteer network’s objective to promote leadership development related to youth services and financial education. The awards cover conference and education fees. Five winners will go to the NYIB 2010 Annual Conference July 26-29 in St. Louis; one to The 1 Credit Union Conference, hosted by the Credit Union National Association and the World Council of Credit Unions July 11-14 in Las Vegas; and two to the National Credit Union Foundation (NCUF) Credit Union Development Education (CUDE) Training program. Winners will be recognized at the 2010 NYIB Annual Conference. Delegate of the Year and Volunteer of the Year also will be announced. Three credit union professionals received NYIB Regional Scholarships:
* Kim Beaulieu, community education specialist at Jeanne D’Arc CU, Lowell, Mass., East Region Scholarship; * Jennifer Remes, marketing coordinator at Arsenal CU, Arnold, Mo., Central Region Scholarship; and * Cori Frauendiener, director of education partnerships at MaPS CU, Salem, Ore., West Region Scholarship.
Colin Ryan, financial literacy coordinator at the Vermont Credit Union League, South Burlington, Vt., will attend the NYIB Annual Conference on the Robert L. Curry Scholarship and Award. Ryan’s involvement fits closely with the principles of leadership development exemplified by award namesake Robert L. Curry, former president/CEO of CUNA Mutual Group. Another NYIB Conference participant--Leticia Icmat of Shreveport FCU, Shreveport, La.--will attend with the “Serving the Underserved” Scholarship. The award recognizes individuals working with credit unions that serve low-income or underserved markets. Theresa Hilinski, training director at Virivia CU, Philadelphia, will attend The 1 Credit Union Conference, this year’s combination of the America’s Credit Union Conference and the World Credit Union Conference. Kelli Martin, business development representative at Chesterfield FCU, Midlothian, Va., and Lisa Farnen, vice president of marketing at Electro Savings CU, St. Louis, will participate in CUDE Training organized by NCUF, which hosts the next session Aug. 11-18 at IslandWood on Bainbridge Island, Wash. For more information, use the link.

Wegner Award nominations due June 18

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WASHINGTON (6/8/10)--The Herb Wegner Memorial Awards nominations are due June 18. Winners will be recognized at the 23rd Annual Herb Wegner Memorial Awards Dinner, presented by the National Credit Union Foundation on Feb. 28, in Washington, D.C., in conjunction with the Credit Union National Association's Governmental Affairs Conference. All credit union system employees and volunteers are encouraged to nominate visionary individuals and organizations they feel deserve the credit union movement’s highest national honors. The awards include:
* The Individual Achievement Award, which honors an unsung hero for innovative concepts and/or accomplishments that have made a significant impact on the national and/or international credit union movement within the past 10 years--or now have a significant potential impact. Nominations must cite a specific subject of achievement. Examples include financial literacy, service to the unserved or underserved, alternatives to predatory lending, and/or new products. * The Outstanding Organization/Program Award, which honors an organization or program for innovative concepts and/or products/services that have made a significant impact with measured results on the national and/or international credit union movement. * The Lifetime Achievement Award, which honors an individual who has dedicated his/her life to promoting credit union philosophy. This person must have created innovative concepts and provided leadership that has made a significant and lasting impact on the national and/or international credit union movement.
Nominations can come from individuals and/or organizations. To make a nomination:
* Obtain the Wegner Awards brochure and nomination form (use the link): * Complete the nomination form; * Gather at least five letters of recommendation, citing examples of the nominee’s achievements relevant to the award criteria; and * Submit forms and letters electronically to: Josie Collins, Resource Development & Donor Relations Director at jcollins@ncuf.coop by June 18. Only electronic copies will be accepted. If you have questions about the nomination process contact Josie Collins at 800-356-9655, Ext. 4397.

NY to add five to CU Hall of Fame today

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ALBANY, N.Y. (6/8/10)--Five individuals were added to the Credit Union Association of New York’s Hall of Fame today at the association’s annual meeting and convention in Cooperstown, N.Y.
Inductees include:
* Ralph “Art” D’Amico, who began his credit union career in 1951 as a cost accountant at Marathon Paper Company. While there, he took the initiative to form a credit union for its employees. He also became its first treasurer. When the company moved out of the area 12 years later, the credit union had to be liquidated. Because of D’Amico’s leadership, the credit union was able to pay a 19% dividend to the membership. D’Amico then was manager of Nestle Employees FCU--now Empower FCU--until his retirement in 1982. He also served in several elected positions for the Association’s Central New York Chapter Council. * Gregory DeVito, who has been part of Special Metals FCU since its inception in 1961. While working for Special Metals Corp., DeVito was the credit union’s part-time manager, then took on the manager role full-time. In 2007, he retired from the credit union, but continues to serve on its board of directors. * Geno Gizzi, who began managing of Rome FCU 40 years ago. Gizzi’s contributions include mentoring young credit union leaders, a trustee and treasurer for the association’s political action committee, and as a Utica-Rome Chapter council member for over 30 years--12 years as council president. * Paul Infantino, who began his career in 1962 as assistant treasurer for the former Rochester Telephone FCU (now The Summit FCU) and ascended to the position of general manager, which he held for 21 years. Under his leadership, the credit union grew from 2,400 members and one cashless branch with $1.4 million in assets to over $100 million in assets. Infantino also served 10 years on the credit union’s board of directors. * Robert Witty, who began his career with CFCU in 1969 as an assistant manager when the credit union had only one office, 2,000 members and $3 million in assets. When he took over as CEO 15 years later, the credit union had grown to $39 million in assets with 16,000 members. Under Witty’s leadership, the credit union grew to $600 million in assets and 60,000 members. Witty plans to retire later this year.
“Each of these individuals made credit unions their life work,” said Association President/CEO William J. Mellin. “The success and stature of their respective credit unions today can be traced back to their dedication to and involvement in all aspects of the credit union movement throughout their years of service.”

Mellin named to CU House Board

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ALBANY, N.Y. (6/8/10)--William J. Mellin, president/CEO of the Credit Union Association of New York, was appointed to the board of directors for Credit Union House (CU House). Charles Elliott, president/CEO of the Mississippi Credit Union Association, assumes the chairmanship due to the departure of John Dill, former president of the Credit Union Association of Colorado. Other board directors include:
* Vice Chairman Dick Ensweiler, president/CEO of the Texas Credit Union League; * Secretary Brett Thompson, president/CEO of the Wisconsin Credit Union League; and * Treasurer Patrick LaPine, president/CEO of the League of Southeastern Credit Unions.
CU House is a permanent presence for credit unions on Capitol Hill. It is a welcoming embassy for credit union visitors in Washington, D.C., and a grassroots advocacy tool. “Hike the Hill” receptions and other events are held there. The house was constructed through efforts of state credit union leagues, the American Association of Credit Union Leagues and the Credit Union National Association. It is sustained by credit union and other individual contributions.

IWSJI CUs more wholesome alternative to banks

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NEW YORK (6/8/10)--Credit unions are positioning themselves as “a more wholesome alternative” to banks beset by bailouts and scandals, and as a result are seeing growth, The Wall Street Journal said Saturday. The Journal spotlighted better rates, lower fees, and attentive service at credit unions, compared with banks on many products. “With their fatter yields and lower fees, credit unions are having little trouble attracting depositors these days,” wrote Jane J. Kim in an article titled, “Credit Unions: A Better Bet Than Banks?” “Credit unions are seeing big growth in their deposits, as their share of the total U.S. household savings climbs,” Kim added. “Credit unions’ share of the total household-savings market climbed to 10% in March, from 9.5% a year earlier, according to a Wall Street Journal analysis of data from the Federal Reserve, the National Credit Union Administration and the Treasury Department.” However, credit unions haven’t gone completely unscathed by the financial crisis, Kim wrote. Many are experiencing higher loan losses, while several corporate credit unions sustained large losses in mortgage-backed securities. “We have been collateral damage just like everyone else,” Bill Hampel, chief economist at the Credit Union National Association, told the Journal. “Even the good, old-fashioned standard conventional mortgages were severely affected by the sharp declines in home prices.” At credit unions, consumers can find and get more yield on their money or reduce their interest payments in the areas of deposits, mortgages and home equity lines of credit, auto loans and credit cards, Kim wrote. The article mentions Summit CU, Madison, Wis., for its lower fees and great service, and Otero FCU, Alamogordo, N.M., for it deposit growth. Otero has seen growth of 8% to 10% in the past year. To read the article, use the link.

CU System briefs (06/04/2010)

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* JACKSON, Miss. (6/7/10)--Sarah Dale Simpkins, 22, of Starkdale, Miss., has been chosen as the first Young & Free Mississippi spokesperson by Credit Unions of Mississippi. As spokesperson for the state's 18 to 25 year olds, Simpkins becomes a contract employee of the Mississippi Credit Union Association (MSCUA). She will serve as a reporter and advocate for her age group, attending events and creating regular online videos and writing blogs to keep YoungFreeMississippi.com an information hub for the 25-and-younger set. "I am so impressed with the videos, blogs and posts Sarah made during the spokesperson search," said Charles Elliott, MSCUA CEO. Simpkins won the competition with 48% of the online public voting. Other finalists were Aaron Dollar, 25, of Long Beach, and Josh Butler, 24, of Byram. They will receive iPod Touches or cash for their work during the competition ... * MADISON, Wis. (6/7/10)--UW CU announced it will purchase the Equitable Bank property in Waukesha, Wis., to become the credit union's fourth branch in Milwaukee and 18th branch location in Wisconsin. "Our strong balance sheet allows us to expand service to the Milwaukee community with the purchase of a new location that will provide our more than 8,500 members and University of Wisconsin alumni living in the area with added convenience," said President/CEO Paul Kundert. UW CU will open the full-service Waukesha branch in Summer 2011. It will include drive-up lanes and surcharge-free ATMs. The credit union's purchase of the property does not include customer deposits, loans or investment center, which will remain with Equitable Bank ... * WILKES-BARRE, Pa. (6/7/10)-- Michael L. Pesta of West Pittston, Pa., died Wednesday at the age of 79. He was CEO of the UFCW FCU, Wyoming, Pa., for 29 years until his retirement in 1995. Pesta is survived by his wife, a daughter, and two grandchildren. Services were held Saturday in Exeter, Pa. (The Wilkes-Barre Times Leader June 3) ...

AARP IConsumer ReportsI Time to check out CUs

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NEW YORK (6/7/10)--Credit unions are the place to go if you want to move your money, AARP Magazine tells its 47 million readers in its July/August issue. The sentiments are echoed in the July issue of Consumer Reports. In "The Little Banks That Can," AARP cites "three compelling reasons" to switch: lower fees, higher interest rates on deposits and better service. "As it turns out, you are likely to find all three at some of the smallest financial institutions in the nation: credit unions," says the two-page article. The article references data from the Credit Union National Association (CUNA) about how much consumers save using a credit union rather than a bank. It also cites CUNA's online credit union locator at creditunion.coop and CU Infosight's findacreditunion.com. It provides several favorable quotes and anecdotes about credit unions. "The average consumer does much better at a credit union than a bank," said Ed Mierzwinski, consumer program director at U.S. Public Interest Research Group. Curtis Arnold, founder of CardRatings.com, a credit card information website, said, "I'm a big fan [of credit unions]. Unlike a lot of banks, most credit unions don't try to cross-sell you products you don't really want." The article also addresses the credit unions' interest in raising the member business lending cap, discusses credit unions' "can-do attitude," and suggests checking for CO-OP Network membership to access surcharge-free ATMs. In Consumer Reports' July issue, "When to Bail on Your Bank" discusses the "Move Your Money" campaign to get consumers to switch from big banks to smaller institutions, including credit unions. While big banks may have better online banking, "there are great deals at local banks and especially at credit unions," said the article. It cites the benefits of better card rates, higher yields on savings and low rate loans, and it links to both creditunion.coop and findacreditunion.com. Use the links to access the articles.

IAPI circulating IDenver PostI item on battle to lift MBL cap

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DENVER (6/7/10)--An article in The Denver Post Friday about credit unions' efforts in Congress to lift their member business lending cap to 25% of assets from 12.25% has been picked up by the Associated Press and is circulating the country. The item has appeared in The Daily Times in Farmington, N.M., on Syracuse.com in Syracuse, N.Y.; NJ.com in New Jersey; as well as in Alabama.com and Mississippi Press. The article reports estimates from the Credit Union National Association (CUNA) that lifting the cap would create more than 100,000 jobs and increase small-business lending by $10 billion within a year. "We feel like this is the first time since the cap was put in place that we have an opportunity to get something done," Pete Kirchhof, interim CEO of the Credit Union Association of Colorado, said in the article. "All the right people are saying the right things, but we have to just wait and see what happens." The article also reports that Stacy Hamon, a salon owner, and her husband Bob received a $25,000 loan from Westminster (Colo.) FCU in 2006 to expand their business after three banks turned them down. "The credit union stepped in and took a chance on us when no one else would," Hamon said. "They saved us. As small as we were, I don't think we could have kept the doors open with everything going on during the last two years."

Thompson named CEO at Mid-America CU Association

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BISMARCK, N.D. (6/7/10)--Mid-America Credit Union Association (MACUA) has named Robbie Thompson as president/CEO, the association announced Friday. Thompson, currently vice president general counsel of Members Cooperative CU, a $280 million asset credit union based in Cloquet, Minn., has almost 20 years in the financial services industry. Previously, he served as association general counsel of the Minnesota Credit Union Network (MnCUN). He also served as senior vice president of league services and general counsel at the New Jersey Credit Union League. While there, Thompson provided legal advice and support to the league, and oversaw several areas of the association, including the education department, compliance and legal department, foundation, and small credit union initiative. Thompson also has been a speaker at numerous local and national conferences on compliance and legal topics and has published articles in a number of publications. "Robbie brings a tremendous amount of credit union and association management experience to our organization," said MACUA Board Chair Doug Thompson. "His background in working directly in credit unions as well as association leadership and his 'hands on' experience in professional trade association advocacy will be a valuable asset to our credit union members across the Dakotas," he added. "Credit unions face many challenges in the years ahead, but also have many opportunities," said Robbie Thompson. "A strong MACUA now and in the future will help credit unions both address those challenges and find those solutions. I want to put a significant focus on MACUA being a strong advocate both politically and in our communities for credit unions. I look forward to getting to work and hearing from the credit unions in North and South Dakota about the direction they hope to see MACUA take in the future." Minnesota Credit Union Network President/CEO Mark Cummins noted that he was pleased to see a former MnCUN employee and credit union senior staff member "continuing his career in the movement. Through his leadership, I look forward to developing a close working relationship with our neighboring credit unions in North and South Dakota." "Robbie understands the operational, marketplace, and political challenges credit unions are facing," said New Jersey league President/CEO Paul Gentile. "He will be a great leader for North and South Dakota credit unions during these very interesting times." MACU, headquartered in Bismarck, serves 78 credit unions with more than 442,000 members and assets in excess of $4.38 billion.

Four CMIS directors re-elected

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MADISON, Wis. (6/7/10)--Four directors were re-elected to positions on the CUNA Mutual Insurance Society (CMIS) Board of Directors at the annual policyholder meeting May 27. CMIS directors re-elected to three-year terms included:
* Bert Hash, president/CEO, Municipal Employees CU of Baltimore Inc.; * Alan Peppers, president/CEO, Westerra CU, Denver; * Farouk Wang, Buildings & Grounds Management, University of Hawaii; and * Larry Wilson, president/CEO, Coastal FCU, Raleigh, N.C.
Other CUNA Mutual board members include:
* Loretta Burd, president/CEO, Centra CU, Columbus, Ind.; * Eldon Arnold, retired president/CEO, CEFCU, Peoria, Ill.; * Joseph Gasper, retired president/chief operating officer, Nationwide Insurance; * Robert Marzec, retired audit partner, PricewaterhouseCoopers; * Victoria Miller, retired executive vice president and chief financial officer, Turner Broadcasting System Inc.; * Randy Smith, president/CEO, Randolph-Brooks FCU, Live Oak, Texas; * James Zilinski, retired chairman, president, CEO, Berkshire Life Insurance Co.; and * Jeff Post, president/CEO, CUNA Mutual.

CU establishes fund for oil spill wildlife recovery

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PENSACOLA, Fla. (6/7/10)--A Florida credit union that says it can't sit idly by and wait for others to solve the oil spill crisis has committed $50,000 for a matching donation fund to assist the Wildlife Sanctuary of Northwest Florida in its recovery efforts from the spill. "We wanted to create an opportunity for the community to double the amount they give to the Wildlife Sanctuary," said Pensacola-based Gulf Winds FCU President/CEO Chris Rutledge. "When they give through our website, we will match the gift dollar-for-dollar, up to a total of $50,000." The aim is to take the $50,000 pledged and turn it into a $100,000 donation "with help from the Gulf Coast residents," Rutledge said. Rutledge and several Gulf Winds staffers toured the Wildlife Sanctuary recently. "We were very impressed with the facility and the work they are doing,” said Rutledge. "The Wildlife Sanctuary has been a part of this community for over 28 years and will be here long after the BP (British Petroleum] cleanup operation has left the area. "We know that the Wildlife Sanctuary will be assisting and doing all they can do to protect, restore and rehabilitate wildlife that will be affected by this disaster," said Rutledge. "Our wildlife cannot wait while lawsuits are settled. They will need our help now and long term." Although reports indicate that BP has committed to covering the costs associated with the oil spill incident, including the wildlife cleanup, the Wildlife Sanctuary is preparing for a potentially overwhelming amount of work. Dorothy Kaufmann, Wildlife Sanctuary director, said her staff and volunteers are working closely with many collaborating organizations in the recovery efforts. It already has received injured birds from Tri-State Rescue and Research, an organization contracted by BP to rehabilitate wildlife in this incident. "The birds and other animals can't be released to the wild immediately," says Kaufmann. "The oil is still out there. We will be ready to nurse the animals back to health and if needed, hold them until it is safe to release them." The sanctuary is a non-profit organization that has served Northwest Florida since 1982. It does not charge for its services and relies on contributions to stay open. The money is used to build facilities, and for grounds upkeep, medical supplies and food. During a normal year, the sanctuary takes in 3,000-4,000 injured or sick animals. Staff expect a big increase this year. Donations can be made at the resource link. The credit union said 100% of the donation goes directly to the local sanctuary.

SECU top CU in nation for PFI penetration loyalty

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RALEIGH, N.C. (6/7/10)--An annual membership survey indicates that State Employees' CU (SECU) has a 97% member satisfaction rating, with 87% of members saying they are "very satisfied" with the credit union's services. The survey responses also put SECU in the top spot among credit union peers for membership loyalty. The annual survey, administered by the Credit Union National Association (CUNA) Research, polled 5,000 randomly selected SECU members on quality of service, use of SECU products and overall satisfaction with the credit union. It saw a marked increase in the members who indicated the credit union was their primary financial institution (PFI)--77% of members consider SECU as their PFI. CUNA Research noted this places SECU at the top when compared with the average 53% PFI rating established by credit union peers. SECU's PFI figure also spearheaded an increase in the percentage of members considered "highly loyal," to 56%, compared with the industry average of 24%. "SECU's 'Do the Right Thing' approach to offering low-cost, affordable financial services on a non-commissioned basis is unique in today's financial marketplace and allows SECU employees to serve as trusted advisers to members," said Jim Barber, SECU board chairman. "The positive survey results acknowledge that our members welcome this approach and are increasing their utilization of the credit union's consumer friendly products," he added.

Report SECU of N.C. saved members 551M in 2009

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RALEIGH, N.C. (6/7/10)--State Employees' CU (SECU) based in Raleigh, N.C., helped its members save $551 million last year, according to a report written by a professor of finance and management at the University of Alabama. Dr. William E. Jackson III is also the Smith Foundation Endowed Chair of Business Integrity in the Culverhouse College of Commerce at the university. Jackson documented savings for SECU members in several categories, including lower loan rates, higher deposit rates, lower fees, and benefits to members from the credit union's Salary Advance Program. Members received nearly $48.4 million in the salary advance program alone. He noted lower rates on six types of loans, with more than $193.9 million in loans overall and with substantial savings in mortgage costs. Higher deposit rates provided nearly $200 million in benefits to members through the credit union's money market shares, regular shares, interest checking, share term certificates and individual retirement account (IRA)/Keogh services. Lower fees netted savings totaling $109.7 million through reduced charges on nonsufficient fund fees and credit card fees, as well as low checking account maintenance fees, said the credit union.
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The report also mentioned the value of SECU's Mortgage Assistance Program for members having difficulty keeping up with their mortgages and SECU's participation in the Internal Revenue Service's no-cost Volunteer Income Tax Assistance program for members of modest means. "Even in a year when the economy of North Carolina suffered severe unemployment and was in an economic recession, SECU of North Carolina produced an exceptional amount of financial benefits for its members," said Jackson in the report. He also noted the credit union provided "significant value to all North Carolinians, especially through competitive pressures on other financial institutions, through generous scholarships and grants from the SECU Foundation, and via its 1,100 no-surcharge Cash Points ATM network." SECU "is tasked with bringing value to its members and all North Carolina consumers," said SECU Board Chairman Jim Barber. "We take this mission very seriously and are pleased to see that our credit union's efforts have resulted in such an exceptional value for members. In a year where the citizens of our state faced tremendous economic challenges, SECU responded in a variety of ways to help keep more dollars where they belong--in the pockets of North Carolinians." The full report is on the credit union's website.

League opposes Ohio small-biz bill after CUs excluded

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COLUMBUS, Ohio (6/7/10)--The Ohio Credit Union League is opposing a bill in the Ohio legislature geared to help small businesses raise capital, because the bill excludes credit unions. Members of the Ohio House of Representatives had introduced a small-business initiative to create the Small Business Working Capital Loan Program. House Bill 521 would authorize the state to deposit up to $100 million into eligible lending institutions that have agreed to loan the money to small businesses (e-Lumination Newsletter June 2). Prior to the legislation’s introduction, the league discussed credit unions’ inclusion in any economic initiatives with House and Senate leadership, Gov. Ted Strickland’s administration and key legislators, the league said. However, credit unions were not included in the bill. As a result of being deliberately excluded, league General Counsel John Kozlowski testified in opposition of the bill and informed House members of the league’s opposition. Speaking to the House Economic Development Committee, Kozlowski said, “If the objective of the program … is truly to reach out and provide loans and credit to small businesses in Ohio, why would the state exclude credit unions, many of which are already providing loans and credit to small businesses in Ohio?” House Bill 521 was voted out of committee last week without an amendment to include credit unions. The league said it will continue working with members of the General Assembly to include credit unions in the economic initiative.

Ohio league lobbies to keep separate CU Council

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COLUMBUS, Ohio (6/7/10)--The Ohio Credit Union League said it is lobbying to maintain a separate Credit Union Council in the state to keep the unique needs of credit unions in the forefront. Language to merge the state’s Credit Union Council, Banking Commission, and Savings and Loan and Savings Bank Board into a single Financial Consumer Council was not included in House Bill 495 when it passed out of the Ohio House of Representatives’ State Government Committee (eLumination Newsletter June 2). The league and others worked with representatives from the Ohio Department of Commerce to stress the need for maintaining the current system of three separate entities. Testifying for the league before the committee, General Counsel John Kozlowski said that while “it may appear that the … respective depositories may have many similarities, nothing could be further from the truth. While these depositories do fall under many of the same Federal Reserve regulation, each of the depositories have a different structure, purpose, regulation, laws and rules.” The committee amended the bill to maintain the independent depository boards, and the bill passed the House. It awaits passage in the Senate. The Credit Union Council, created in 1995, comprises six credit union officials from state-chartered credit unions and the Deputy Superintendent of Credit Unions. The council provides advice, makes recommendations on credit union laws and rules, and confirms the supervisory fees assessed to state-chartered credit unions annually.

Filene research on idea flow at CUs holds surprises

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MADISON, Wis. (6/7/10)--Findings from the Filene Research Institute show statistically that good ideas are just as likely to come from the front line as from managers and that job tenure and education levels are weak predictors of who has quality ideas. Research also shows that employees don’t speak up often enough. Therefore, it’s dangerous for leaders to assume they know who at their credit union has good ideas. What’s worse is that many leaders assume good ideas will find them--dangerous again, Filene said. “Employee Voice and (Missed) Opportunities for Learning in Credit Unions” follows an 18-month study by doctorate degree researchers Ethan Burris, University of Texas at Austin; James Detert, Cornell University; and David Harrison, Pennsylvania State University. They solicited ideas from thousands of employees at 11 small to large credit unions, and examined how those ideas were treated by credit union leadership. The results are an in-depth analysis of employee “voice” at credit unions. The researchers describe several findings:
* Demographic and psychological variables--including age, gender, tenure and even education level--do not correspond with idea quality; in other words, good ideas come from everywhere. * About 61% of employees surveyed indicated that they had more ideas than what they ultimately communicated to their supervisors. * Formal upward-reporting mechanisms are less efficient at getting ideas to senior leaders; instead, leaders who actively seek ideas, demonstrate openness, and follow up tend to elicit more voice. * Employees may need coaching to guarantee that they present ideas effectively--for example, by “selling issues” in economic or stakeholder terms and by choosing effective tone and language.
Beyond describing how ideas move in an organization, the research offers four imperatives for leaders to capitalize on in getting ideas from all levels of the credit union. Leaders should:
* Spread a wide net. The research shows statistically that across the 11 credit unions, good ideas are simmering at all levels. * Emphasize voice with mid-level managers. Local managers, especially branch leaders, are critical in getting good ideas to the top. * Actively solicit ideas. Leaders who slide down the organizational chart in search of new ideas, rather than waiting on ideas to bubble up, have much more success. They add to that success by personally following up on quality ideas. * Train for voice. Even a good idea won’t survive poor presentation. Train employees to couch ideas in terms of benefits for the overall organization.
Filene Chief Research Officer George Hofheimer and Filene Research Director Ben Rogers will discuss the report’s findings live Tuesday at 1 p.m. EST. To register for the complimentary live “Lunch with Ed” videocast, use the link.

Lake Charles Telco merges with Pelican State

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HARAHAN, La. (6/4/10)--Lake Charles (La.) TELCO CU will merge with Baton Rouge, La.-based Pelican State CU on July 1. The merger was approved last week in a unanimous vote of the membership and unified support from both credit unions' boards, according to the Louisiana Credit Union League (E-Weekly June 2). Pelican will retain all Lake Charles Telco employees and members. "We will work together to join the two credit unions as seamlessly as possible," said Jeffry K. Conrad, Pelican CEO. He added that service to Telco members will be uninterrupted. Telco's members will have access to products and services previously not available such as debit cards, online banking, cash services and access to more than 3,500 Credit Union Service Center locations nationwide. Conrad said more than 400 Pelican members reside in Lake Charles, where one of its select employer groups is W.O. Moss Regional Medical Center. Hospital employees are eligible for membership with Pelican and will benefit from the new local branch. Telco has roughly $1.9 million in assets and more than 600 members. Pelican has more than $172 million. On Jan. 1, Pelican merged with Pinekraft FCU based in Pineville.

Real-estate holding co. seeks CU charter in Texas

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AUSTIN, Texas (6/4/10)--The Texas Credit Union Department has received an application for a new credit union charter for iLife CU from Austin, Texas-based real estate group Tenura Holdings Inc. and its affiliates. The new credit union would serve employees and members of the boards of Tenura Holdings and its affiliates, employees of the credit union, and family members of the group and credit union, according to the department's May 31 newsletter.. Tenura's affiliates include One Percent Realty LLC; Ameripro Funding Inc., doing business as (dba) Land Mortgage; Privatus LLC, dba Private Label Realty; Reliant Title Agency LLC; and Amerifirst Insurance Agency LLC. Also, the credit union would persons receiving retirement, pension or other benefits as a result of prior employment with the companies or credit union, and spouses of those who died while within the credit union's field of membership.

Members file class action suit on NY mortgage tax

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NEW YORK (6/4/10)--Three members of Hudson Valley FCU who paid mortgage recording taxes (MRT) required under New York state law have filed a class action lawsuit against the credit union and title insurance companies in the U.S. District Court for the Southern District of New York, saying the taxes are unlawful under the Federal Credit Union Act (FCUA) and should not have been charged. Hudson Valley FCU is the $2.7 billion asset, Poughkeepsie, N.Y.-based credit union that previously filed a separate lawsuit in state court, in May 2009, against New York tax officials That lawsuit sought a declaratory judgment that the MRT cannot lawfully be charged to a federal credit union because of the FCUA's tax exemption. Last month, the judge in the declaratory judgment action ruled that federal credit unions and their members must continue to pay MRT and held that the FCUA tax exemption does not apply to that tax. Attorneys for the three plaintiffs in the class action lawsuit--Maria Milone and Thomas and Kelly Y. Morel, all of Poughkeepsie--filed the class action lawsuit on April 29. Despite the state court's decision that the FCUA tax exemption does not apply to MRT, the plaintiffs are essentially arguing that the credit union never should have required members to pay that tax. The lawsuit seeks class actions status for all members of Hudson Valley FCU who paid the MRT. Their class action complaint alleges violations of the federal Racketeer Influenced and Corrupt Organizations Act (RICO), as well as fraud and breach of contract claims. RICO usually applies to racketeering organizations such as the Mafia, and RICO lawsuits have not been successful against credit unions in the past. For example, two 1990s lawsuits involving the former Rhode Island Central CU, brought under Rhode Island's version of RICO, resulted in summary judgments in favor of the credit union parties. The factual basis for these RICO and other claims, according to the complaint, are that the credit union and title insurance companies allegedly represented that the amount charged constituted a valid tax but plaintiffs maintain that "no tax was legally due in connection with the mortgages from plaintiffs and class members because Hudson Valley and the other federal credit unions are exempt from the tax pursuant to the Federal Credit Union Act of 1934." An attorney for the credit union, however, says it must pay MRT according to state law until the matter is resolved. "As soon as Hudson Valley FCU was advised by my firm that we felt they had a strong basis to claim exemption from the tax, they authorized us to research the matter thoroughly, and then to engage K&L Gates as co-counsel and commence legal proceedings," said Dale J. Lois, a partner at the law firm Quartararo and Lois, one of the law firms, along with K&L Gates, representing the credit union. "They did so for the benefit of their members and others similarly situated, and have expended considerable efforts and resources in the process," Lois said. "Unless and until New York State changes its policy with respect to this matter, neither Hudson Valley nor any other federal credit union can avoid payment of the tax upon the recording of its mortgage."

Charter issued for Ohios first Latino CU

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TOLEDO, Ohio (6/4/10)--Ohio has a new state-chartered credit union--Nueva Esperanza (New Hope) Community CU in Toledo, which is the state’s first Latino credit union. The Ohio Division of Financial Institutions issued the state charter, conditioned upon attaining share insurance and bond coverage. The credit union is in the process of obtaining both, with the National Credit Union Administration and CUNA Mutual Group, respectively, said the Ohio Credit Union League (eLumination Newsletter June 2). Founding Nueva Esperanza Community CU “has been a long and tedious process, and [the incorporators, VIVA South Toledo Community Development Corp., and leaders of the Latino community] are to be commended for seeing it through,” said Barry Shaner, CEO of Directions CU in Toledo, who played an instrumental role in making the new credit union a reality. “It has been many years since a new credit union charter has been granted in Ohio, and what you have accomplished is a very rare feat in today’s world. I know I speak for all the credit unions in Ohio when I say ‘Welcome!’" Shaner told the credit union. “We are anxious to help you in your next steps, and can hardly wait to see the good things you will do for your community.” The credit union will move into its renovated facility--a former library outfitted with furniture and fixtures donated by several credit unions across the state--later this month, and a “soft opening” is anticipated this summer. The Ohio Credit Union Foundation leveraged a $69,500 Innovation Grant from the National Credit Union Foundation to help charter Nueva Esperanza (News Now Jan. 22, 2009).

CUNA economist on 1Q Challenges but improvements seen

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MADISON, Wis. (6/4/10)--The Credit Union National Association (CUNA) has posted its U.S. Credit Union Profile for First Quarter 2010, a summary of credit union operating results, on its website. CUNA is "cautiously optimistic that credit unions have turned the corner on the way back to more favorable economic times, although there are still many challenges ahead," said Mike Schenk, CUNA vice president of economics and statistics. "First quarter data reflect a continuation of strong savings inflows and weak lending," he said. "Net income rebounded to an average of nearly 0.5% on average assets, and asset quality reflects modest improvement with declines in both delinquency and net chargeoff rates," Schenk continued. "Net worth ratios remain at 9.9%, and 94% of credit unions remain well-capitalized under PCA [Prompt Corrective Action] guidelines. "The current results show gradual improvement in many of the key metrics we examine, but they also make it abundantly clear that recent challenges haven't disappeared.. Nevertheless we clearly have a solid basis for future improvement and that makes it likely that full-year 2010 results will be substantially stronger than 2009 results," Schenk concluded. Credit unions across the nation totaled 7,636, with total assets at $909.8 billion, a 4.7% growth over 2009, according to CUNA's profile. Credit union loans totaled $574.8 billion at the end of the first quarter, a 12-month decline of 0.3%, while savings totaled $784.1 billion, an increase of 6.6% over the period. Total memberships grew 1% to nearly 92 million members. To access the full report, use the resource link.

Michigan league presents awards elects board

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DETROIT (6/4/10)--The Michigan Credit Union League (MCUL) presented awards to credit union professionals and elected board officers during the league’s 76th annual Convention and Exposition May 18-22 in Detroit. The general session began by recognizing MCUL and Michigan Credit Union Foundation award recipients, including:
* Distinguished Service Award, Robert Mackay, retired CEO of Berrien Teachers CU, Saint Joseph; * Credit Union Professional of the Year Award, Thomas Miller, president/CEO of Affinity Group CU, Pontiac; * Outstanding Credit Union of the Year Award, Michigan State University FCU, East Lansing; * Young Professional of the Year Award, Lori McCloud of Monroe County Community CU, Monroe; * Credit Union Youth Advocate of the Year Award, RuthAnn Albus of DFCU Financial, Dearborn; * Award for Excellence in Consumer Education, Susan Young of CP FCU, Jackson; and * Credit Union Community Involvement Award, Michele Myrick of E&A CU, Port Huron, accepted posthumously by her husband Scott.
The league also elected new board officers: Chairman George Isola, Ishpeming (Mich.) Community FCU; Vice Chairman Howard Spencer, Northland Area FCU, Oscoda; and Secretary/Treasurer Anthony Carnarvon, Co-op Services CU, Livonia (Michigan Monitor May 3).

Louisiana CUs gather for state GAC

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NEW ORLEANS, La. (6/4/10)--Roughly 70 Louisiana credit union professionals and volunteers from 22 credit unions statewide attended the 2010 Louisiana Credit Union League Governmental Affairs Conference May 18-19 in Baton Rouge.
Click to view larger image The Louisiana Credit Union League held its 2010 Governmental Affairs Conference May 18-19 in Baton Rouge. Pictured are Sandy Yelverton, CSE FCU; Clark Yelverton, CSE FCU; Sen. Willie Mount (D-27); Ken Gardner, CSE FCU; and from Access of La FCU, Kathy Bourgeois and Brian Burton; Jessica LaRocca, Calcasieu FCU; and Bruce Thomas, Calcasieu Teachers & Employees CU.
Click to view larger image Bobbi Bush, Shell New Orleans FCU; Rep. Jared Brossett (D-97); and Maureen Genovese, Shell New Orleans FCU, attended the Louisiana Credit Union League's Governmental Affairs Conference. (Photos provided by the Louisiana Credit Union League)
Coinciding with the conference, Louisiana Gov. Bobby Jindal declared May 18 as Louisiana Credit Union Day. The conference focused on the current climate of the state and federal legislature, upcoming legislation and the impact on credit unions, presented by Rob Rieger and Jeff Brooks of Adams and Reese LLP. Charles “Chuck” Johnson, a board member of the Louisiana Credit Union League and Barksdale CU, Bossier City, La., who died this year, also was honored by his friend, State Rep. Henry L. Burns (R-9), at the event. Five senators and 27 state representatives joined the credit union representatives at the conference. “The participation by our state legislators and our credit union volunteers and professionals was incredible,” said Connie Major, league executive vice president. “Opportunities to interact one-on-one with our state legislatures provides great inspiration to our credit union officials, showing them that their long-term commitment to political action and fundraising efforts truly do make a difference.”

PrimeWay TexasOne Community to merge

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HOUSTON (6/4/10)--PrimeWay FCU and TexasOne CU are merging, culminating discussions that began late in 2009. The Houston credit unions said they were intent on adding value to their membership rather than just growing (LoneStar Leaguer June 3). “There were a number of synergies that made this a good partnership,” Dale Roberts, CEO of PrimeWay FCU, told the Texas Credit Union League. “TexasOne had branches in key areas for our membership and we had key branch locations for their membership. That, combined with strong product offerings and new economy of scale, will help us bring greater value to our joint membership.” At $279 million in assets before the merger, PrimeWay is now among the city’s largest credit unions with combined assets of just over $400 million after assuming the $128 million in assets of TexasOne. TexasOne CU will continue to operate under the TexasOne name and logo through the end of 2010. The extra months will provide the credit unions time to combine operations and create a smooth transition for their members. “Members will begin to see value immediately in areas such as loan rates and decreased fees,” Roberts told the league. “Then, by first quarter 2011 when we have converted our core systems, members will have access to all of the joint locations and a larger product offering.”

Connecticut league GAC held Tuesday

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MERIDEN, Conn. (6/4/10)--The Credit Union League of Connecticut held its State and Federal Issues Governmental Affairs Conference
Click to view larger image Tony Emerson, Credit Union League of Connecticut president/CEO, left, speaks with Connecticut Attorney General and Democratic candidate for U.S. Senate Richard Blumenthal on the important role credit unions play in Connecticut’s economy.
Click to view larger image Credit Union League of Connecticut president/CEO, Tony Emerson, left, poses with U.S. Rep. and House Caucus Chair John Larson (D-1) before Larson addresses credit unions. (Photos provided by the Credit Union League of Connecticut)
Wednesday in Hartford, Conn. U.S. Rep. and House Caucus Chair John Larson (D-1), and Connecticut Attorney General and Democratic candidate for U.S. Senate Richard Blumenthal led a list of speakers who addressed national and local issues affecting credit unions. Among them were John McKechnie, National Credit Union Administration director of public and congressional affairs; State Comptroller Nancy Wyman; Connecticut Department of Banking official Howard Pitkin; State House Majority Leader Denise Merrill (D-54); and State Sen. and Banking Committee Chair Bob Duff (D-25). “This event provided an outstanding opportunity for Connecticut credit union leaders to discuss the interchange amendment and other vital issues of importance to the industry,” said Tony Emerson, league president/CEO. “Firsthand face-to-face information exchange with ample opportunity to ask pertinent questions made for a positive, informative and constructive meeting that credit unions can use to plan their future course,” Emerson added.

Main Line Health EFCU Franklin Mint to merge

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PHILADELPHIA (6/4/10)--The boards of directors of Main Line Health Employees FCU and Franklin Mint FCU have agreed to merge in the third quarter with Franklin Mint as the continuing institution. The merger is subject to regulatory approval and a membership vote. Main Line Health Employees FCU, Bryn Mawr, Pa., has $52 million dollars in assets, 7,000 members, three branches and 16 employees. Branches are located at Lankenau Hospital, Bryn Mawr Hospital and Paoli Memorial Hospital. Franklin Mint FCU, Media, Pa., has nearly $600 million in assets, more than 60,000 members and 28 branch locations, nine of which are in local hospitals and five in local high schools. Once the two credit unions merge, they will have 31 branch offices with a combined asset size of more than $650 million dollars.

Texas league helps Jamaican CUs on new regs

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MONTEGO BAY, Jamaica (6/4/10)--The need to strengthen and unify Jamaica’s credit unions has taken on greater importance in light of increased competitive pressures in the country’s financial markets, according to the Jamaica Co-operative Credit Union League Ltd. (JCCUL) and the Texas Credit Union League (TCUL).
Click to view larger image Jamaica’s credit unions have the vision necessary to accomplish their goals, said Mike Delker, vice president of credit union relations, Texas Credit Union League, at a joint planning session in Montego Bay, Jamaica.
Working effectively together to improve credit union operational efficiency was one of the issues dominating the recent strategic planning session between the two leagues. The two associations, affiliated through World Council of Credit Unions’ (WOCCU) International Partnerships Program since 2005, met late last month to help JCCUL plan the next five years of growth and development for Jamaica's credit unions. “The partnership between Jamaica and Texas continues to be successful, with a healthy exchange of ideas and growing assistance between the two organizations,” said Yvonne Ridguard, immediate past board president of JCCUL and a WOCCU director. “JCCUL has received tangible benefits from the Texas league, including helping establish 22 individual credit union partnerships between the two countries.” Last month’s planning session, a follow-up to an initial joint planning session in 2005, focused on readying Jamaica's credit unions for pending regulations. Also, planners discussed the need to: diversify income sources in the face of declining interest income, move to a more pro-active microlending program to strengthen credit unions' bottom lines and increase service penetration, develop stronger risk management awareness and programs, and re-engineer processes to cope with a changing environment. “Effective strategic planning plays a more important role in credit union success than ever, and I was impressed by the foresight and dedication displayed by JCCUL and its member credit unions during the planning session,” said Mike Delker, TCUL vice president of credit union relations. He traveled to Jamaica twice earlier to assist the country's credit unions. He noted their vision for Jamaica’s credit union movement was supported with goals and objectives that will enable them to even better serve their members in the future.
Click to view larger image Credit unions in Jamaica should focus on ways to collaborate effectively, Dave Grace, vice president of association services for the World Council of Credit Unions, told attendees during a joint Jamaica-Texas league meeting in Jamaica. (Photos provided by World Council of Credit Unions)
Session content, drawn in part from a prior survey of Jamaica’s credit unions and executives, emphasized overall strengthening of credit unions and the Jamaican movement. Ideas on ways to strengthen staff capabilities and improve operations--including merging institutions to result in fewer, yet stronger credit unions--were presented to more than 150 participants of the two-day event. “Jamaica’s credit unions have developed tremendous market penetration and public awareness over the past five years,” said Dave Grace, WOCCU vice president of association services, who helped facilitate the meeting. “As a result of the Jamaican government’s fiscal belt-tightening, the days of large margins have passed,” he added. “Jamaica's credit unions will have to focus on ways to make their operations more efficient through strategic, collaborative efforts designed to improve their market position and member-service capabilities.”

22 become CU development educators

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MADISON, Wis. (6/4/10)--Twenty-two credit union professionals have graduated from the Credit Union Development Education (DE) Training program held at the University of Wisconsin campus in Madison. The program is sponsored by the National Credit Union Foundation (NCUF), the World Council of Credit Unions, the Credit Union National Association, and CUNA Mutual Group.
Click to view larger image Twenty-two credit union professionals, shown with group facilitators, graduated from Development Education Training on the University of Wisconsin-Madison campus after undergoing a week-long program in which participants completed group exercises and other credit union-related activities. (Photo provided by the National Credit Union Foundation)
During the week-long program, participants completed team projects that proposed solutions for credit unions to help alleviate or eliminate challenging situations in any given area. “We have new case studies this year, incorporating challenges credit unions face today while continuing to provide critical lessons in cooperative principles and credit union philosophy,” said DE Training Facilitator Tom Decker, NCUF director of social impact management. DE training strives for timeliness “as participants work through critical issues that include expanding services to the underbanked, shifting of member demographics, national branding and succession planning,” he said. Thong Yang, loan officer, Marathon County Employees CU in Wausau, Wis., commented on his DE experience. “This event has had a huge emotional effect on me,” said Yang. “It not only taught me how I can improve my work life, but also how I can impact my community and the world.” The second of this year’s scheduled DE training classes will take place Aug. 11-18 at IslandWood located on Bainbridge Island in Washington. IslandWood is designed to use the environment as a classroom. DE training is open to everyone from new employees who need a credit union orientation to seasoned executives who need to recharge. Participants receive:
* Skills in credit union outreach initiatives, problem solving, technical assistance, team building and public presentations; * Credit Union Development Educators (CUDEs) certification--more than 900 from America and 11 other countries have graduated from the training; * Realization that credit union issues are global--and that credit unions grow stronger by working cooperatively; and * Understanding of how to promote cooperative principles and credit union values as distinct advantages in today’s competitive financial services marketplace.
Scholarships to attend the program are available through NCUF’s DE Fund and several state credit union foundations and leagues. “We realize that the economy is tough, so we are doing everything we can to make it easy as possible for credit unions to send representatives to DE training,” Decker said. For a list of graduates, use the link.

Visa deposits 500M into litigation fund

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NEW YORK (6/3/10)--Visa Inc. deposited $500 million into an account earmarked for litigation costs, a move that acts as a repurchase of class B shares. Credit unions and banks are the sole owners of class B shares. Visa put the funds into the litigation escrow account on Friday, the company said in a press release. The deposit has the effect of a repurchase by the company's more than 6.7 million shares of Class A common stock at roughly $74.22 per share, on an as-converted basis, by reducing the as-converted Class B common stock share count to 136.3 million from nearly 143 million shares. As a result of the deposit, the conversion rate applicable to Class B common stock has decreased to nearly 0.56 cents from more than 0.58 cents. Each class B share is now convertible to 0.56 class A shares. The escrow account had been established previously under the company's retrospective responsibility plan. Visa had set aside $3 billion from its March 2008 initial public offering to cover potential liabilities in lawsuits alleging the company conspired to stifle competition and fix prices, reported Bloomberg Businessweek (June 1). The account provides coverage and potential payments for judgments or settlements in U.S. legal cases and protects its common shareholders from direct losses. Previous deposits to the account included $700 million in July 2009 and $1.1 billion in December 2008.

Mississippi CU to merge with Louisiana CU

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NEW YORK and ALEXANDRIA, Va. (6/3/10)--The merger of First Delta FCU in Marks, Miss., with Shreveport (La.) FCU will preserve vital community development credit union (CDCU) services in four low-income counties, according to the National Federation of Community Development Credit Unions. The National Credit Union Administration (NCUA) recently gave final approval for the merger, said the federation, which assisted the credit union for years. First Delta has been in conservatorship since Oct. 23. The conservatorship board and management worked for several months to restore First Delta to financial stability and now are confident of on-going services by the action, said the federation. First Delta worked through the years to bring homeownership initiatives, small business services, and other lifeline financial services to the Delta Region of Northern Mississippi, it said. "While we regret the loss of the First Delta FCU's independent status, we are truly delighted that services will be preserved and even expanded by Shreveport FCU, one of our outstanding CDCUs in the Southeast, led by Helen Godfrey-Smith, a nationally recognized CDCU and credit union leader," said Clifford N. Rosenthal, federation president/CEO. Godfrey-Smith, CEO of Shreveport FCU and a federation board member, noted that the merger is a great match. "The missions of both credit unions are near-perfect reflections of each other--to provide the highest level of personal financial services to underbanked and underserved communities, while encouraging and increasing the knowledge of thrift, savings, and the wise use of credit by individuals and small businesses in the targeted communities," she said. "We view this action as a business partnership with phenomenal possibilities for everyone concerned," Godfrey-Smith added. "While the decision to merge was precipitated by First Delta's very unfortunate circumstances, we believe this action to preserve credit union services to the Tri-Delta counties will be seen as one of the great decisions of this era." "From its origins as Quitman County FCU in the early 1980s, First Delta FCU has played a distinguished and important role in community development and the credit union movement in general," Rosenthal said. "People have been inspired by First Delta's tireless and innovative work to bring basic financial services to one of the most economically disadvantaged communities in the U.S., and its extraordinary youth program in particular, has year after year, demonstrated the community impact of the credit union on the federation's national stage. In addition, Robert Jackson, founder and former treasurer of the credit union, has played an invaluable role as a national advocate for CDCUs." Jackson, an original organizer of First Delta who is a Mississippi state senator, said he was pleased the merger was approved because "our community will get the best of both worlds; a credit union with combined assets of $85 million, a continued alignment with our core principles of service to our members, and the added value of a broad range of cutting-edge products and services from Shreveport FCU.," he said. First Delta's sponsor organization, Quitman County Development Organization, where Jackson is CEO, remains committed to working with Shreveport FCU, the federation said. Under the merger, the credit union will be identified as the "Delta Division of Shreveport FCU." Shreveport FCU has $85 million in assets and seven branches serving more than 20,000 members.

CUAC CEO search committee named

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DENVER (6/3/10)--A search committee was appointed to select a successor to Credit Union Association of Colorado CUAC) President/CEO John Dill, who stepped down from his position last week. Pete Kirchhof, former CUAC senior vice president of government affairs, is interim president/CEO. CUAC Board Chairman Mike Williams, president/CEO of Colorado CU, Littleton, appointed the committee, which will begin developing criteria for the position and decide whether to hire a search firm. Search committee members represent Colorado credit unions of various asset sizes and locations. Members include:
* Dave Maus, president/CEO, Public Service CU, Denver, committee chairman and past CUAC chairman; * John Uchida, president/CEO, Space Age FCU, Aurora, and CUAC vice chairman; * Sundie Seefried, president/CEO, Eagle Legacy CU, Arvada, and CUAC secretary; * Gerry Agnes, president/CEO, Elevations CU, Boulder; and * Steve Pearson, president/CEO, Fellowship CU, Lamar.

CO-OP Miracle Match offering 1M to hospital fundraisers

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RANCHO CUCAMONGA, Calif. (6/3/10)--CO-OP Financial Services is raising funds for Children’s Miracle Network--and is looking for credit unions and associations to add to their total. CO-OP’s program awards $1 million in matching funds annually for Credit Unions for Kids events, proceeds of which go to local children’s hospitals in the Children’s Miracle Network. “The CO-OP Miracle Match program is a natural extension of the people-helping-people model of the credit union movement,” said Stan Hollen, president/CEO of CO-OP Financial Services, and a member of the Children’s Miracle Network’s Board of Governors. “We are looking forward to working with industry partners to do even more in 2010 to help children.” Generations FCU raised $30,000 and received $10,000 through CO-OP Miracle Match with its Annual Credit Unions for Kids Bowl-a-Thon, held Nov. 18, 2009 (in the 2010 program year). Greater Texas FCU raised $20,000 and added $10,000 with CO-OP Miracle Match funds through its Dec. 4, 2009 World’s Finest Chocolate Candy Sales Event. The funds from both events benefit CHRISTUS Santa Rosa Children’s Hospital in San Antonio. During the 2009 program year, by comparison, the top fundraising credit union produced $45,000 in funds, to which $10,000 in miracle match funds were added. CO-OP Miracle Match is managed by CO-OP Financial Services on behalf of its 3,000 member credit unions. The credit union industry is currently the third largest contributor to Children’s Miracle Network. For more information, use the link.

Florida CUs here for the long haul

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SARASOTA, Fla. (6/3/10)--Despite difficult times wrought by an economic downturn, credit unions in the Sarasota, Fla.-area still are thriving, with some going through mergers and name changes, the Sarasota Herald-Tribune said Monday. Sarasota Coastal CU, the area’s biggest locally based credit union, experienced financial turmoil before it merged into the $878.7 million asset, Largo, Fla.-based Achieva CU, last fall, the newspaper said. Sarasota Coastal’s five branches are being switched over to Achieva, with the conversion of systems slated for the July 4 weekend. Sarasota Coastal had roughly $211 million in assets and more than 25,000 members in three counties, the paper said. On Tuesday, Tropicana FCU, a 52-year-old Bradenton, Fla.-based credit union with $23.4 million in assets, changed its name to Manatee Community FCU to indicate its countywide expansion effort, the paper said. “We’ve been the best-kept secret, and its time to get the word out,” Cindy Barco, Tropicana president for the past 33 years, told the paper. West Coast Federal Employees CU, a $34.6 million asset, Sarasota-based credit union, lost money last year and its membership is down about 500 members who lost their jobs and moved out of the area to find work, Marie Peet, West Coast president/CEO told the paper. The credit union also implemented cost-cutting measures such as closing its offices early on Wednesdays, renegotiating vendor contracts and replacing two full-time employees with part-timers, the paper added. “We’re here for the long haul,” she said. “We didn’t anticipate this coming down the road and impacting us and our members to this degree. We were prepared and had our capital built up.” To read the article, use the link.

LSCU welcomes Redstone FCU as an affiliated CU

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TALLAHASSEE, Fla., and BIRMINGHAM, Ala. (6/3/10)--The League of Southeastern Credit Unions (LSCU) is welcoming Redstone FCU--Alabama's largest credit union--as an affiliate. The Huntsville, Ala.-based, $2.6 billion asset credit union rejoins the league after a seven-year absence. Redstone FCU's board of directors and management agreed on May 27 to officially rejoin the LSCU and the Credit Union National Association (CUNA), effective June 1. "The experience of [Redstone] CEO Joe Newberry and his staff is invaluable," said LSCU President/CEO Patrick La Pine. "The amount of lobbying, innovative lending, and trust the Redstone name brings to the credit union movement will only enhance all of our credit unions in Alabama and Florida," he added. Newberry said Redstone is "proud to be associated with" the league. "Under the leadership of Patrick La Pine, the LSCU will be doing great things for the credit union movement over the coming years, and Redstone is excited to be a part of this." He added that Redstone is looking forward "to playing an active role within the league to help ensure the continued vibrancy and growth for the credit union movement." The reaffiliation also provides CUNA with additional resources, which will be handy with the amount of legislation being discussed in Washington, D.C., that could affect credit unions. "It is great to again have Redstone FCU as a CUNA/LSCU affiliate," said Dan Mica, president/CEO of CUNA. "Our voice in Washington will be even stronger with Redstone's involvement. We appreciate the board and management's decision and the confidence it expresses in all our abilities." Newberry noted that "With the recent financial problems within our banking system and subsequent ongoing debate in Washington over reform and re-organization of the nation's financial systems, it is crucial that the credit union voice is heard in this debate. "There is no greater impact than having credit unions speak with a unified voice. As a member of the LSCU, Redstone joins with more than 330 other member credit unions of Alabama and Florida to represent the interests of our membership," he added.

CUSN honors Shared Branching excellence

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LAKEWOOD, Colo. (6/3/10)--CU Service Network (CUSN) announced honorees for its third annual annual Shared Branching Excellence Awards, presented at the CUSN 2010 Annual Meeting in Golden, Colo., May 14. CUSN recognizes participants and partners for their work to support shared branching. Recipients of CUSN Excellence Awards include:
* Neighborhood Community CU, Omaha, Neb., the greatest issuer transaction growth at 103%; * Aurora (Colo.) Schools FCU, the greatest acquirer transaction growth at 132%; and * Arapahoe CU, Centennial, Colo., the largest ratio of annual issuer transactions to total members at 7.
C. Michael Litzau, Sooper CU, Denver, also received the Vision Award. He has served as director/manager on the CU Service Network board, chairman of the Credit Union Association of Colorado, chair of the Colorado Credit Union Foundation, chair of the National Association of State Credit Union Supervisors and on Credit Union National Association committees. CUSN is based in Lakewood, Colo.

Vic Thate named ICU MagazinesI Hero of the Year

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MADISON, Wis. (6/3/10)--Credit Union Magazine's 2010 Credit Union Hero of the Year is Vic Thate, executive vice president of FAA CU, Oklahoma City, the magazine announced Wednesday. Thate, known as Oklahoma's "godfather" of Credit Unions for Kids, was selected from four nominees by magazine readers voting on creditunionmagazine.com. Credit Unions for Kids is a partner with Children's Miracle Network, which raises funds for children's hospitals nationwide. Thate had a long career as a banker/banking consultant and Children's Miracle Network advocate in Texas. When he joined FAA CU in 1998 as executive vice president, few Oklahoma credit unions were raising funds for the network. The local network's office contacted him, at about the same time the Oklahoma Credit Union League began the early stages of forming its fund-raising committee for the project. Thate chaired that committee for the first two years. The first year state credit unions raised less than $100. But largely because of efforts he spearheaded since then, Oklahoma placed 10th in the U.S. for credit union fund raising in 2008, donating more than $150,000. In 2009, Oklahoma credit unions' goal was $180,000. He also served on the Oklahoma City CMN Council and volunteered as a board member of the city's Children's Medical Research Institute. Thate is also active in the political arena at the state and national levels and is on a first-name basis with many of Oklahoma's lawmakers. Other programs he advocates include serving the underserved Hispanic population and promoting indirect lending. Although he didn't work at credit unions until he joined the staff of University FCU in Austin, Texas in the 1980s, Thate grew up on a Missouri farm and knew the benefits of cooperatives, said the magazine. Other nominees were:
* Leslie Ellis, CEO of Credit Union 1, Anchorage, Alaska; * Augustine Kang (posthumous), first CEO of the Association of Asian Confederation of Credit Unions (WOCCU) and special project director for the World Council of Credit Unions' China project; and * Dave Maus, CEO of Public Service CU in Denver.
Thate will be honored at The 1 Credit Union Conference in Las Vegas, July 11-14 and will receive free conference registration and lodging, said the magazine. The conference is co-hosted by the Credit Union National Association (CUNA) and WOCCU. Credit Union Magazine is CUNA's monthly magazine for credit union staff and volunteers.

CUANY municipal deposits on senators TV show

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ALBANY, N.Y. (6/3/10)--Amy Kramer, vice president of governmental affairs for the Credit Union Association of New York, taped a segment last week of State Sen. Kevin Parker’s (D-Metropolitan) “Legislative Update” show, discussing credit unions and municipal depository choice.
Click to view larger image Amy Kramer (right), vice president of governmental affairs for the Credit Union Association of New York, talks about municipal depository choice with New York State Sen. Kevin Parker on the set of his weekly “Legislative Update” show. (Photo provided by the Credit Union Association of New York)
Kramer and Parker’s conversation focused on the credit union difference: how credit unions operate, the advantages of credit union membership, and legislative issues affecting New York credit unions. The conversation then turned specifically to municipal depository choice. Parker is a strong proponent of municipal depository choice, said the association. He is the lead sponsor of legislation (S.1782A) that would allow local government entities such as cities, town, counties, school districts, fire districts and public libraries to deposit tax dollars in their local credit unions or savings banks. He also had a direct role in the state Senate’s inclusion of municipal depository choice legislation in its 2010-2011 budget resolution. A long-time supporter of credit unions, Parker talked about the credit and jobs crisis that prevails in his district. He said he felt strongly that the way to turn things around in his and other communities is to end the lending crisis by getting credit moving into the hands of small business and homeowners, entrepreneurs and ordinary members of the community. Credit unions, given the opportunity to become depository options for municipalities, are uniquely positioned to do just that, he added. Municipal deposit reform would help local governments save revenue, by providing local choice, expanding their investment options, and creating more competition. Such reform also would encourage more funds to stay local through community reinvestment, creating more opportunities for local residents to take out personal or small business loans, the association said.

Kinecta NuVision FCUs to merge

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MANHATTAN BEACH, Calif., and HUNTINGTON BEACH, Calif. (6/3/10)--Kinecta FCU and NuVision FCU have announced intentions to merge. NuVision CEO Roger Ballard Monday assumed the role of CEO for the
new organization, which will retain the Kinecta name. The credit union will have 40 branches in Los Angeles and Orange Counties. The plan to merge resulted after Kinecta conducted a CEO search to replace Steve Lumm, who has served as Kinecta’s interim CEO. “The Kinecta board’s CEO search process gave us the opportunity to not only look for new leadership--but also to explore other strategic options that could best serve our members, including potential mergers,” said Mary Yasui-Yamabe, Kinecta board chairman. The board realized that Kinecta and NuVision have a shared history, culture, core sponsor and membership base, she added. NuVision has actively explored new strategies, including mergers, to benefit its members, according to Robert Geraci, NuVision board chair. “When we realized the Kinecta board was conducting a CEO search, we believed the time might be right to discuss a merger opportunity,” he said. The merger is pending completion of due diligence processes and approval by federal regulators and NuVision members. Both credit unions were founded in Southern California to serve aerospace employees. NuVision also serves employees of The Gas Company/Sempra Energy. NuVision FCU, Huntington Beach, has $1.2 billion in assets. Kinecta FCU, Manhattan Beach, has $3.5 billion in assets.

CU System briefs (06/02/2010)

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* WALNUT CREEK, Calif. (6/3/10)--Pacific Service CU has donated funds to the Silicon Valley Education Foundation for use in a Stepping Up to Algebra program. The donated funds will provide 150 low-income eighth-grade Hispanic students with pre-algebra modules, plus classroom and student materials to help them prepare for and pass the California Standards Test in Algebra I. "We were surprised to learn that almost 60% of eighth graders do not pass the standardized Algebra I test," said Steve Punch, president of the credit union. "Over the years we have supported a variety of educational efforts within the Hispanic community in Silicon Valley. When we became aware of the need to improve math education, we focused on what we could do to help the community make a positive difference in score results," he added. Pacific Service CU, based in Walnut Creek, Calif., has more than $1 billion in assets ... * ST. LOUIS (6/3/10)--Vantage CU has launched Young & Free St. Louis and a search for a spokesperson for Generation Y members (ages 18 to
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25). Young & Free is a Web-based initiative to address financial needs of Gen Y. The spokesperson selected will be the voice of Gen Y for a year, attending regional events and keeping YoungFreeStLouis.com fresh with videos, blogs, and tips to educate, entertain and engage Gen Y-ers. Online voting will determine the successful applicant. The spokesperson will be paid during the year and provided with all the gear to do the job, including a MacBook Pro notebook, an HD video camera, an iPhone with a one-year paid contract and use of a Nissan cube, pictured here. Details are on the website. Applicants should include a 60-second video uploaded from YouTube, a blog post and a completed personal information form. Deadline for applications is at noon July 5. (Photo provided by Vantage CU) ... * RALEIGH, N.C. (6/3/10)--SECU Foundation, based in Raleigh, N.C.,
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has been named Humanitarian of the Year by the Association for Home and Hospice Care (AHHC) of North Carolina. The foundation, established in July 2004 and funded solely by members of State Employees' CU, provided grants for numerous hospice initiatives in the state, including projects in Caldwell, Cleveland, Forsyth, Iredell, Johnston, Rutherford, Surry, Wake and Wayne Counties. Pictured at AHHC's awards lunch and convention are, from left: Jane Miles, AHHC president, and Shirley Bell, SECU Foundation board chair. (Photo provided by SECU Foundation) ...

Attorney HeartlandMC settlement pennies on the dollar

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HOUSTON, Texas (6/2/10)--Credit unions and other financial institutions that re-issued MasterCard payment cards compromised by the 2008 Heartland Payment Systems data breach--the largest in history--are being urged by three attorneys to "carefully review" the proposed $41.4 million settlement between Heartland and MasterCard. "The proposed MasterCard settlement has many of the same weaknesses as the Visa settlement offered a few months ago," said Richard L. Coffman, The Coffman Law Firm, Beaumont, Texas; Michael A. Caddell, Caddell & Chapman, Houston; and Joseph G. Sauder, Chimicles & Tikellis LLP, Haverford, Pa. The three are Interim Co-lead counsels for a class action lawsuit against Heartland Payment Systems. Among the settlement's weaknesses, they said:
* It is not based on the actual damages incurred by the affected financial institutions and therefore may offer them little compensation; * It gives financial institutions little time to decide whether to participate; and * It requires financial institutions to release all their legal claims against Heartland, its two acquiring banks--KeyBank and Heartland Bank--and other parties that may be liable.
MasterCard said individual settlement proposals were communicated to the financial institutions affected on May 27. Credit unions and banks have until June 25 to accept or reject the settlement. "Financial institutions that accepted the previous Visa settlement were surprised to learn a few weeks later that had they refused the settlement, they would have automatically received about half of their settlement offer without releasing any of their legal claims under the Visa ADCR Program," the attorneys said. "It is certainly something to consider," said Sauder, one of the court-appointed lawyers representing the proposed class of MasterCard issuers against Heartland, KeyBank and Heartland Bank in a pending class action lawsuit in a Houston federal court. The proposed settlement is not as generous as the parties want financial institutions to believe, said Caddell. "There were over 40 million MasterCard payment cards compromised by the data breach. Once a financial institution factors in the costs it incurred to cancel and reissue the payment cards and the unauthorized charges it was forced to absorb, its share of the settlement most likely will be pennies on the dollar." Coffman noted KeyBank and Heartland Bank, which are defendants in a coordinated lawsuit--are also potentially liable for the breach damages and would receive a complete release of liability in the settlement. Most of the settlement funds are provided by Heartland Payment Systems. KeyBank has $95 billion in assets and Heartland Bank has more than $900 million in assets, "which suggest that there are additional sources of money to compensate the issuers for their damages," he said. Sauder advised each financial institution to perform its own cost/benefit analysis to determine whether to accept or reject the settlement. He emphasized the firms will pursue the cases but added "there are no guarantees that our class action lawsuit will be successful. We simply want to ensure that the financial institutions are making this important decision based on all of the pertinent information." In early May, Heartland agreed to pay MasterCard Worldwide $41.4 million to resolve claims from MasterCard and its issuers related to the 2008 breach of Heartland's payment system environment. Five months earlier Heartland reached a $60 million settlement with Visa related to Visa credit and debit cards (News Now Jan. 11). Ten months ago, it entered settlements of $3.6 million with American Express and $2.4 million in a consumer cardholder class action lawsuit (News Now Dec. 21 and Dec. 29). Like the Visa settlement, the MasterCard settlement is contingent upon financial institutions representing 80% of the claimed-on MasterCard accounts accepting the alternative recovery offers.

Wisconsin CUs tell how they handle hits from economy

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MADISON, Wis. (6/2/10)--Credit unions in south central Wisconsin have lower-risk lending and investment practices, but they too are seeing the impact of the recession on their members. In a Wisconsin State Journal (May 30) article about how the recession is affecting financial institutions' ratings by ratings agencies, Wisconsin Credit Union League President/CEO Brett Thompson points out that both banks and credit unions have been impacted by the tough economy. "Credit unions are not immune to that stress, although from a comparative perspective, I think they've come out of it pretty well," Thompson said. First American CU in Beloit noted that it while banks' recent loan losses are generally tied to commercial developments and home mortgages, First American's relate to business loans. Local mom-and-pop stores are hit by factory cuts in the Janesville area. CEO Tracy Blaske said the credit union's net income and reserve fund are improving, and the credit union is hopeful that businesses can turn around. Three small credit unions have increased their ratings. Members Serving Members of Beaver Dam, the Madison Fire Department CU and the Truax CU of Madison have had positive earnings. Steve Wright, president of Madison Fire Department, explained how his credit union had positive earnings: Firefighters have steady jobs and aren't likely to be hit by government cutbacks even during tough times. The credit union also limits services to mainly savings accounts and loans. "We just do a few (services) and try to do them well," he told the paper. Credit unions also benefit with their low-risk practices. Kim Brilowski, chief examiner for the Wisconsin Office of Credit Unions, noted that credit unions don't get involved in the type of investments and commercial lending that banks do. For most of the 236 credit unions in Wisconsin as of Dec. 231, net income and net worth decreased slightly in the past year, Brilowski said, but overall, their capitalization or reserve fund ratios average 10% or more. Mergers can affect ratings, too. Madison-based $1.4 billion asset Summit CU is the second largest credit union in the state. Its merger two years ago with Great Wisconsin CU increased its operating expense ratio temporarily last year, according to Kim Sponem, Summit president/CEO. But even after the merger, Summit's assets have grown more than 10%. Credit unions nationwide are attracting more members who are fleeing banks in a "flight to safety," said Thompson. In Wisconsin credit unions have 11% of the financial services market, the article said.

Southwest Corporate reports more OTTI charges

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DALLAS (6/2/10)--Southwest Corporate FCU released its financials for April, noting a net loss of $23 million for the first four months of 2010. That compares with the Dallas-based corporate's $9.8 million net income for the same period in 2009. The net loss resulted from other-than-temporary impairment charges totaling $31.6 million, said the corporate credit union's financial statements posted on its website. The OTTI charges relate to the further deterioration of certain non-agency residential mortgage-backed securities since Dec. 31. The net loss is partially offset by net operating income totaling $10.1 million for the period, the corporate said. The OTTI charges mean that the $10.3 billion asset Southwest Corporate has a retained deficit at April 30 of more than $23 million. The corporate reported to its members last week that it will be required to deplete about 5.72% of the original members' capital accounts (MCA) to cover the retained deficit. The latest charges would increase the cumulative MCA depletion percentage to 78.40% from 72.68%.

WesCorp is back in the black

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SAN DIMAS, Calif. (6/2/10)--Western Corporate FCU (WesCorp) presented its April 2010 financials Thursday, announcing that it had realized net income of $14 million for the month. For first quarter, WesCorp's net income was $3.6 million. WesCorp's quarterly income reflects income from normal operations of $53 million less the effect of additional other-than-temporary-impaired (OTTI) charges of $49.4 million recognized in March, according to financials posted on its website. Actual realized losses on 50 securities incurred in April totaled $92.3 million, bringing actual realized losses to date to $362 million for 54 securities in the portfolio, on a life-to-date basis. The actual losses experienced in April will have no additional impact on WesCorp's financial statements because they already have been recognized in previous periods through the recognition of OTTI. The corporate credit union was placed into conservatorship on March 20, 2009, by the National Credit Union Administration. WesCorp is operating with a Prior Undivided Earnings Deficit of $4.964 billion guaranteed by the National Credit Union Share Insurance Fund.

United SavingsSelf-Help FCUs merger in effect

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ANTIOCH, Calif. (6/2/10)--United Savings FCU, Antioch, Calif., is now operating as United Savings FCU, a division of Self-Help FCU, effective yesterday. United Savings and Self-Help have received regulatory and member approval to merge their operations. The partnership aims capitalize on the credit unions’ strengths and expand their capacity to provide financial services to working families in California. United Savings has provided services to local steelworkers and their families since its opening in 1935, according to Bill Waters, United Savings board chairman. “When we decided a merger was the right path for the credit union, we were excited to find that Self-Help Federal’s values, goals and operating philosophy were well-aligned with our own,” Waters said. The merger will help preserve a local institution that provides responsible credit to the Antioch community. Over time, it will result in a broader set of products and services for members, said Mark Ryan, CEO of United Savings FCU. “The combination of Self-Help FCU’s size, financial strength, and commitment to local communities with our long and deep history with the Antioch area will enable us to expand our services and to heighten our impact in the community,” Ryan said. Self-Help FCU was chartered to preserve and expand economic opportunities for families and communities of modest means. It now has 10 branches in the Bay Area and Central Valley. The credit union is based in Durham, N.C. “United Savings’ location, strong management, and tradition of service are a great fit with our vision and existing branch network,” said Steve Zuckerman, managing director of Self-Help’s California operations. “The current and very challenging economic environment is making it increasingly difficult for many smaller financial institutions to thrive.” The merger is the fifth in California for Self-Help FCU. Self-Help FCU has full-service credit union branches in Modesto, Riverbank, East Palo Alto, Porterville, Bakersfield and Lamont under its Community Trust FCU division, a branch in Oakland under its People’s FCU brand, and a Micro Branch in East San Jose. United Savings has $23 million in assets. Self-Help has $180 million in assets.

Virginia CUs MBL cap debate addressed in Richmond paper

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RICHMOND, Va. (6/2/10)--Virginia credit unions and their push to raise credit unions’ member business lending cap were addressed in a Richmond, Va., newspaper Tuesday. The Virginia Credit Union League’s projections show 2,500 jobs would be created in Virginia if the cap was raised to 25% of assets from 12.25%, Karin Sherbin, league director of government affairs, told the newspaper (Richmond BizSense.com June 1). Raising the cap is a “win-win” for everyone because doing so would help the economy without costing taxpayers, Sherbin told the newspaper. The newspaper also noted the Credit Union National Association’s (CUNA) statistics indicate that credit unions had lower rates of business loan charge-offs than banks through the first three quarters of 2009. Credit unions charged off 0.44%, while banks charged off 2.28%. Credit unions experienced 11% growth in business loans between September 2008 and September 2009, while community banks reported a 7.3% decrease and the banking industry as a whole reported a 15.1% decline during the same time period, CUNA said.

CUs loan delinquency rates trending downward

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MADISON, Wis. (6/2/10)--For a second consecutive month, credit unions’ loan delinquency rates--delinquent loans divided by total loans--fell, perhaps a sign of a downward trend due to a recovering job market, according to a Credit Union National Association (CUNA) economist’s analysis of CUNA’s monthly review of credit unions for April. The rate dropped to 1.83% in April from 1.88% in February. “If two months of data make a trend, then we can say that credit union's loan delinquency rates are trending down,” Steve Rick, CUNA senior economist, told News Now.
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“The decline in this ratio is even more remarkable given that the denominator--total loans--fell 0.35% during this two-month period, which would increase the ratio,” he continued. “So a 2.8% decline in the dollar amount of delinquent loans--the numerator--was sufficient to drop the ratio. If the Euro-Zone debt crisis doesn't lead to a double dip recession in the U.S., we believe delinquency rates hit their apex in February and should continue to trend down through 2010. “The biggest causal factor leading to this decline is a recovering job market,” Rick added. “During five of the past six months, more jobs were created than were lost. This is setting in motion a self-sustaining economic recovery where job growth begets job growth.” Credit union loans outstanding decreased less than 0.1% during April, compared with a 0.3% decline during March. Credit union loans in April totaled $579 billion, compared with $582.4 billion in April 2009. Adjustable-rate mortgages led loan growth, increasing 1%, followed by used-auto loans and home equity loans, which both rose 0.4%. Credit card loans increased 0.3%, while unsecured personal loans and fixed-rate mortgages both fell 0.5%. New-auto loans dropped 1.6%. “Credit union loan balance growth is still in the doldrums, having declined for each of the last six months as members pay down debt, and credit unions either sell off or charge-off debt,” Rick said. “This is the first time in 50 years, if not all of credit union history, we’ve seen this level of debt reduction. It should be of no surprise, however, given the massive debt accumulation that took place leading up to the great recession. We don’t expect a robust pickup in loan demand anytime soon because households are still trying to fix their personal balance sheets.”
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Credit union savings balances increased 1% in April, down from a 0.7% rise during March. Credit union savings in April totaled $794.8 billion, compared with $746.6 billion in April 2009. Share drafts grew 6.9%, followed by regular shares and money market accounts, which each rose 0.9%. Individual retirement accounts grew less than 0.1% and one-year certificates decreased 0.5%. “Credit union savings balances increased 3.3% during the first four months of 2010, less than half the pace set during the similar period in 2009,” Rick said. “The fear spawned by the 2008-09 recession has ebbed and consumer confidence is on the rise, both of which reduce credit union members’ desire to boost precautionary savings balances.” The loan-to-savings ratio decreased slightly to 73% in April. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 19%. The movement’s overall capital-to-asset ratio remained at 10% in April. The total dollar amount of capital is $90 billion.

Top 10 INews NowI stories for May (06/01/2010)

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MADISON, Wis. (6/2/10)--Stories about interchange fees accounted for four of the top 10 stories in News Now for May. An interchange amendment was included in the Senate version of the regulatory reform package, S. 3217, the Restoring American Financial Stability Act, which the Senate passed earlier last month. The Credit Union National Association (CUNA) is lobbying against the amendment and has written to lawmakers urging them not to support the interchange amendment. The amendment would have adverse affects on credit unions because, according to CUNA, these amendments “are intended to disrupt the card payment system, with the goal of reducing the merchants’ financial responsibility for the benefits received from the card payment system.” CUNA and the leagues are mounting a grassroots campaign this week and next to express their opposition to the amendment. The top 10 News Now stories for May are: 10. CUNA urges CU action against interchange amendments WASHINGTON (5/5/10)--The Credit Union National Association on Tuesday urged credit union advocates to contact their U.S. senators and ask them to oppose amendments to financial regulatory reform legislation that would affect the debit and credit card system. 9. Credit unions prepare full grassroots alert over interchange WASHINGTON (5/24/10)--Credit unions should be prepared this week for a full grassroots action alert to both the entire Senate and House on interchange legislation once a conference committee on the regulatory restructuring legislation is "instructed," the Credit Union National Association advised its members Friday. 8. NCUA sounds alarm on fraudulent email to CU members ALEXANDRIA, Va. (5/26/10)--It's always “phishing” season, and the National Credit Union Administration Tuesday issued an alert about a new scam targeting credit union members. 7. Compliance: Internet gambling rules take effect June 1 WASHINGTON (5/5/10)--The Credit Union National Association has confirmed with Federal Reserve Board staff that the Unlawful Internet Gambling Enforcement Act regulations are on track for mandatory compliance on June 1. 6. Maine league: Auto dealer yanks ad misrepresenting CUs AUGUSTA, Maine (5/11/10)--An auto dealer's unauthorized ad insert that misrepresented some Maine credit unions and ran in several editions of the Portland Press Herald last week will no longer run, according to the dealer's attorney. 5. NCUA to consider splitting share insurance, corp. fees ALEXANDRIA, Va. (5/14/10)--Telling credit unions that the agency is "very mindful of the effect" that assessments have on their balance sheets, National Credit Union Administration (NCUA) Chairman Debbie Matz said that the NCUA would soon consider splitting the fees used to maintain its share insurance and corporate stabilization funds. 4. Cheney’s experience good for CUNA CEO post WASHINGTON (5/6/10)--Bill Cheney--who will succeed Dan Mica, effective July 5, as the president/CEO of the Credit Union National Association (CUNA)--brings to the position more than 25 years’ experience in a variety of roles in the movement, according to CUNA Chairman Kris Mecham. 3. Compliance: Beware five “Untruths” of new TIL rules WASHINGTON (5/4/10)--The Credit Union National Association (CUNA) is alerting credit union management to give appropriate time and attention to assuring timely compliance with new Federal Reserve Board changes that implement the first changes in a quarter of a century to Truth-in-Lending Act rules. 2. Interchange vote forces CUNA opposition to Sen. reform bill WASHINGTON (5/14/10)--Late Thursday the U.S. Senate voted 64-33 in favor of including Sen. Richard Durbin’s (D-Ill.) interchange amendment in S. 3217, the Restoring American Financial Stability Act. 1. Three banned from future CU work ALEXANDRIA, Va. (5/10/10)--Three former credit union employees have been banned from future work at any federally insured financial institution under prohibition orders issued by the National Credit Union Administration.

CU System briefs (06/01/2010)

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* SAN DIMAS, Calif. (6/2/10)--WesCorp FCU announced that Delton Ho, vice president of Pacific Operations, has accepted the responsibility for managing WesCorp's office in Honolulu, Hawaii. Ho's new role replaces the position previously held by Rand Yamasaki. Ho previously served as vice president and controller of Pacific Corporate FCU since 1999, and served as the director of financial accounting for the Hawaii Newspaper Agency (Gannett) for more than nine years. WesCorp President/CEO Philip Perkins noted that Ho is "highly regarded throughout Hawaii and Guam, and his acceptance allows us to maintain continuity of leadership and superior service to our members." ... * MADISON, Wis. (6/2/10)--CUNA Mutual Group announced that Don Davidson, vice president for CU System Relations since 2000, retired
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May 21 after a 37-year career with the credit union insurer. He was the longest-serving officer in CUNA Mutual's 75-year history. He was charged with building stronger partnerships with CUNA Mutual credit union system partners, including leagues, the Credit Union National Association, other national trade associations, corporate credit unions and the CO-OP Financial Network. He managed teams investigating disability claims and negotiated settlements with credit union CEOs and boards; served as the company's first recruiter in human resources and led its negotiation team through four labor contracts; established CUNA Mutual's first call center, rebuilt the company's international sales and marketing teams and served as CUNA Mutual's delegate to the World Council of Credit Unions; served on the board of HRN Management Group, Salt Lake City, and The LoanLink Center in Dallas. At his recent retirement celebration in Madison, Wis., are from left: John Radebaugh, president of the North Carolina Credit Union League; Rosie Holub, president of the Missouri Credit Union Association; Davidson; and Brett Thompson, president of the Wisconsin Credit Union League. (Photo provided by CUNA Mutual Group) ... * MADISON, Wis. (6/2/10)--Charles "Chuck" F. Eikel III, who worked in public relations at CUNA Mutual Group for more than 25 years, died Thursday of complications from ALS (Lou Gehrig's disease). He retired as a staff writer/editor in 2002. He wrote for internal and external publications, including Dimensions magazine and the annual report, and wrote a column in Risk Management, providing advice for credit unions on loss prevention Eikel wrote a credit union history that explained credit unions' fit with the social and economic history of Europe, North America, and then the globe. He graduated as a Credit Union Development Educator (DE) with the first DE class in 1982 and continued DE training after his retirement. He received the Horizon Award, the DE Program's highest award. Eikel's father, the late Charles "Charley" F. Eikel Jr., was a credit union pioneer and a Credit Union National Association (the CUNA & Affiliates) organizer in Louisiana and 14 other states and was president of CUNA Mutual Insurance Society for 17 years until retirement in 1973. Chuck Eikel's wife, Claire Girvan, preceded him in death. He is survived by a daughter, Siobhan (Michael K.) McGuire; and three grandchildren. A memorial gathering will be held at Cress Funeral Home, 3610 Speedway Road, Madison, WI, on Sunday from 10:30 a.m. to noon (CT) ...

Underserved Latino CU conference speakers announced

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PITTSBURGH (6/2/10)--The National Federation of Community Development Credit Unions and the Network of Latino Credit Unions and Professionals (NLCUP) are hosting a group of industry leaders at their June 9-12 conferences in Pittsburgh. At the 36th Annual Conference on Serving the Underserved & 6th Latino Credit Union Conference, attendees can learn from credit
union experts, researchers, policy-makers, and others with decades of experience serving underserved low- and moderate-income markets, the federation said. Confirmed keynote speakers include:
* Deborah Matz, National Credit Union Administration (NCUA) board chairman: * Gigi Hyland, NCUA board member; * Ambassador Carlos García de Alba, executive director, Institute for Mexicans Abroad. de Alba is executive director of the Institute for Mexicans Abroad. He previously served as director general of international affairs at Mexico's Ministry of Public Education. As a career diplomat in Mexico’s Foreign Service, he served as Mexico’s alternate representative to the Organization for Economic Cooperation and Development; as Consul General of Mexico in Dallas, Texas; as trade adviser at Mexico's Embassy in Italy; and as advisor and permanent delegate of Mexico to the Food and Agricultural Organization. He has also served as director general responsible for the Ministry of Foreign Affairs regional offices throughout Mexico, and as director of multilateral affairs in the Pacific Region. * Bill Hampel, senior vice president of research and policy and chief economist, Credit Union National Association (CUNA). He is an expert on the economy and credit union issues, he is regularly interviewed by the media for stories appearing on national news outlets, including: Bloomberg TV and Radio, The Wall Street Journal, MarketWatch, The Associated Press, CNBC, Reuters, CNN, SmartMoney, Dow Jones News Service, Kiplinger’s Personal Finance magazine, and USA Today among others.
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