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Court dismisses patent infringement case

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WASHINGTON (7/12/11)--A U.S. Court of Appeals has affirmed a lower court's decision dismissing a mobile banking patent infringement case filed by MShift against Intuit, four credit unions and several banks. The decision was rendered Friday. MShift, based in Fremont, Calif. had filed the lawsuit initially against Digital Insight Corp. (DI), now called Intuit Financial Services (IFS), on Feb. 19, 2010, in the U.S. District Court for the California Northern District (San Francisco). Later it amended the suit to include the credit unions, eight banks, and Mobile Money Ventures (MVV), a mobile technology provider. The defendants' motion to dismiss before the lower court had alleged the patent in question is outmoded and "solves a problem that no longer exists." The credit unions named in the complaint include Meritrust CU, Wichita, Kan.; Professional FCU, Fort Wayne, Ind.; Fort Worth (Texas) Community CU; and USE CU, San Diego. The banks named in the suit were: Community Trust Bank, Sanford Institution for Savings, Gate City Bank, Busey Bank, Dension State Bank, Fidelity Bank, Internet Bank of Indiana and Vision Bank. MShift's suit alleged its patent for a system for converting wireless communications for a mobile device was infringed by Intuit and the others. The patent No. 6,950,881, referred to as Patent '881 in the suit, was granted by the U.S. Patent and Trademark Office on Sept. 27, 2005, to Awele Ndili, MShift's former CEO (News Now Sept. 15, 2010). The patent was for a "conversion engine" that provided language to translate the contents of a Web page so it could display on mobile phones. Originally mobile phones were text-based browsers that didn't speak the Web HTML language, and they could not display Web pages the same as the pages displayed on desktop computers, said the complaint. In addition to the translation language, MShift also restructured multiple text boxes, which were graphic features or "input entries," into standard links that could display on the mobile devices. According to the defendants' motion to dismiss the case, none of this technology is necessary today, and there is no "first language" and "second language" involved in conversions because most mobile devices display the pages the same as on desktop--without the need to restructure. The suit claimed MShift contracted with Digital Insight as a reseller of its technology. It sought damages for the patent infringement claim against all the defendants, a breach of contract against IFS, and unfair competition against IFS. However, in the decision affirmed Friday by the U.S. Court of Appeals, the lower court had noted that "MShift has failed to meet its burden of showing the existence of genuine issues of material fact regarding whether the accused DI/MMV system infringes claim 20 of the '881 patent." It also "has not been able to uncover any competent evidence that the accused DI/MMV system works differently than how every witness and declarant has described under oath." "Not every patent case needs to churn on for years," said the lower court in the ruling that was affirmed. "Businesses have a legitimate need to know where they stand when accused of infringement…Mshift has now taken eleven depositions and has received over 186,000 pages of technical information in the months since the initial case management conference…It would be a waste of resources to allow MShift to go on additional fishing expeditions in vague hopes that something might turn up. Enough is enough." In a side note, Intuit announced two weeks ago it was expanding its mobile banking reach with the acquisition of MMV (Dow Jones Newswires June 27). Purchasing MMV gives Intuit ownership of all the technology used in Intuit’s mobile banking software provided to about 320 U.S. banks and credit unions.

At 101 Harry Hahn retires from CUs

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ERIE, Pa. (7/12/11)--After 60 years associated with credit unions, Harry Hahn, 101 has finally decided to retire, according to Erie Times-News (July 10). Hahn, who will turn 102 on Aug. 9, formally retired last month as a nonvoting director emeritus of the Erie (Pa.) FCU to spend more time with his bride, Theresa, age 92, whom he married late last year. Hahn--described by Erie FCU CEO Mary Beth Wilcher as having a "little hearing problem" but as "sharp as a tack"--also worked with Hammermill Employees FCU, where he served as board director, treasurer and supervisory committee member, before its merger with Erie FCU. He also was active in the Pennsylvania Credit Union Association (PCUA) and served on its board of directors for 15 years. He received its Lifetime Achievement Award and was its Volunteer of the Year. Jim McCormack, president/CEO of PCUA, described Hahn to the newspaper as humble, low-key and sincere. Hahn was a mentor to many, he said. "I owe so much to him, and a lot of people in Erie and the state would say the same thing," he said. Hahn credited his long career and his long life to moderation. "Do things moderately and be a volunteer. It is so self-satisfying to help out other people." He wanted to get across the message of helping others, rather than dwelling on his accomplishments. His greatest accomplishment, Hahn told the newspaper, "was to help people. Contact with people provided me with a fuller life."

CU goes the extra mile for member in trouble

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TAYLOR, Mich. (7/12/11)--How many banks would go the extra mile for a customer in trouble? Total Community CU, a $47 million asset credit union based in Taylor, Mich., did just that recently, in a classic demonstration of what makes credit unions different, according to the Michigan Credit Union League. Phillip Matous, president/CEO of the $47 million asset credit union, told the league last week that he recently found out about a member who arrived at the credit union around Memorial Day weekend, crying (Michigan Monitor July 11). A relative had just kicked the woman and her daughter out of the relative's home and they faced having to spend the night in her car, he told the league. The credit union's staff went into action. "Our staff took up a collection among themselves and used funds they had been collecting from jean day ($2 to wear jeans on certain days). "An employee with a bit of time that day went home and got some food for the lady and her daughter. She took all the money the staff contributed and rented a room at a local motel for three days for the lady and child, stocked it with food, bought her a gas card and a phone card," Matous reported. "During those three days, one of our member's fellow employees found a place she could stay after her time in the motel." "Today our member came in and told the staff she saved three weeks' pay and found an apartment. It brought tears to my eye," he said. So, how many banks would do that?

NuVision deploys Gen Y Street Team

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HUNTINGTON BEACH, Calif. (7/12/11)--"It's not your father's credit union" was the message delivered by NuVision FCU's three Gen Y street teams during the Huntington Beach, Calif. Fourth of July Celebration. The credit union deployed three groups of three people on July 2, the first day of the festival, to communicate to young Gen Y attendees that NuVision is part of a transformation of the traditional credit union idea, with many credit unions open to wider fields of membership such as communities. Armed with information sign up cards and a grab bag with a chance to win either $1 or $100, the teams succeeded in gathering more than 400 information cards from the event's celebrants interested in hearing more about the $1.2 billion asset, Huntington Beach-based credit union. LJ Tarman, NuVision vice president of marketing and public relations, noted that team succeeded "in reaching out to a young demographic who may not be aware that credit unions like NuVision are now open to the general public." In addition to the street teams, NuVision boosted its presence at the festivities with an information booth all three days of the Pier Festival, runners in the Surf City 5K run, and the Miss Huntington Beach float in the parade. Its booth, dubbed the "NuVision Lounge," featured a charitable cause with the opportunity to purchase Children's Miracle Network Hospitals "balloons" for $1.

Ecuadoran CUs visit four Chicago area CUs

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NAPERVILLE, Ill. (7/12/11)--About a dozen individuals from OSCUS, a credit union in Ecuador, recently visited four credit unions in the Chicago area to learn about credit union practices, as part of the World Council of Credit Unions’ (WOCCU) International Customized Training program. The host credit unions included Baxter CU (BCU), Vernon Hills; First Northern CU, downtown Chicago and Rockford; NorthStar CU, Warrenville; and South Division CU, Evergreen Park. Each credit union was shared information and discussed its specific role in one of the delegation’s major areas of concern. The challenges OSCUS faces in Ecuador are similar to U.S credit unions’ challenges. They include finding a balance between serving its traditional membership (low wealth, undereducated) with loans and deposits, while trying to be more modern and relevant when competing in the marketplace with big banks. Also, youth in Ecuador are not looking to credit unions for financial services. OSCUS aims to capture that market, gain new members and realize steady growth so it is not known just as the “poor man’s bank.” The credit union’s statistics include assets of $132.3 million (80% loaned out, and 2% in fixed assets; ranked fifth in assets among Ecuador credit unions), liabilities of $111.3 million (46% liquid deposits and 43% in certificates of deposit), and a loan portfolio of $102 million (with a 2.56% delinquency rate and 275% in regulatory reserves). “The delegation wanted to visit credit unions that were unique in each of these areas, and that is why I recommended they come to Chicago,” said Victor Miguel Corro, senior manager of WOCCU’s International Partnerships Program. Corro was joined for the trip by Josh Fetting, WOCCU International Partnerships officer. Lloyd Fredendall, CEO, NorthStar CU, kicked off the visit by explaining the governance and structure of the U.S. domestic credit union movement. BCU was a second stop on the trip, and CEO Mike Valentine and John Bratsakis, senior vice president of business development, discussed the use of technology and the electronic delivery of services and risk management. Also, Ed Berg, CEO of First Northern CU, and his staff emphasized marketing efforts, including branch design and branding. Geri Burek, CEO of South Division CU, discussed community involvement efforts. “The intention of this trip is they can go back and directly apply ideas and adopt new technology and services for the people, especially those they are trying to attract,” Corro said. “Anytime that you can share information, it can only benefit the credit union movement locally and on an international basis,” said Dan Plauda, Illinois Credit Union League president/CEO.

Mich. foundation sets 100 K goal for 2011

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LIVONIA, Mich. (7/12/11)--The Michigan Credit Union Foundation (MCUF) seeks to give $100,000 back to Michigan credit unions in the form of scholarships and grants during 2011 as part of an initiative to increase the foundation’s presence in the state. The initiative is being driven by the foundation’s board of trustees and is in response to work done at state credit union foundations nationwide, according to the Michigan Credit Union League (Michigan Monitor July 11). MCUF Executive Director Stacy Dugan said. Michigan, with its strong network of more than 300 credit unions, has the presence to meet the $100,000 goal, Dugan added. “MCUF is working to create recognition among Michigan credit unions as the source for support of employee education and grants for credit unions to reach out to their communities,” said Doug Burroughs, foundation Board of Trustees president. “MCUF seeks to elevate its profile and is looking to state credit union foundations with a similar league size and credit union footprint as role models.” The foundation created a video of trustees and credit union professionals who have benefited from the monies the MCUF offers. MCUF will add donation capabilities to its website, possibly by the end of the year. Online forms for scholarship and grant applications are also in the works. In addition to scholarships and grants, the foundation supports community outreach and engagement initiatives by credit unions through the Michigan Credit Union League’s Community Reinvestment Initiative grant program.

IUSA TODAYI CUs MBLs helping Iowa businesses

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DES MOINES, Iowa (7/12/11)--By providing member business lending, Iowa credit unions are helping commercial enterprises by filling the void in business lending that occurred when banks cut back on the loans since the start of the financial crisis, according to a Monday article in USA TODAY. In an article titled “Credit unions growing commercial lending business,” USA TODAY said total loans by banks declined by more than $500 billion from March 2009 to March 2011, according to Federal Deposit Insurance Corporation data. The publication noted that “Over the past year, credit union business lending is up 5%, while bank business lending is down 3%--a decline of about $95 billion, according to the Credit Union National Association (CUNA)." Credit unions are moving into business lending partly because of slow demand for consumer credit--such as auto and home loans--Pat Keefe, CUNA vice president of communications and media, told the newspaper. “Businesses are looking for new sources of credit; credit unions are looking for new sources of borrowers,” Keefe added. “They’re improvising strategies to do business lending.” The article also mentioned the efforts of Veridian CU, a $1.78 billion asset, Waterloo, Iowa-based credit union, to provide a $25,000 line of credit to a Des Moines, Iowa, medical-supply company so it could fill large customer orders. The company could not get a bank to extend it a line of credit, the paper said. “We’re still doing everything we’ve ever done,” John Poley, Veridian head of commercial lending, told the paper. “We just so happen to be able to now step into a void in that lending space that [banks have] created.” To read the article, use the link. CUNA and credit unions are pressing Congress to increase credit unions’ MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

WOCCU opens bidding on online charity auction

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MADISON, Wis. (7/12/11)--Worldwide Foundation for Credit Unions, the charitable arm of World Council of Credit Unions (WOCCU), opened bidding on its online charity auction Monday. Bidding will take place online at www.biddingforgood.com/woccu through July 26. All proceeds will be used to expand WOCCU’s credit union development work worldwide. The online format allows everyone to bid, including friends and family outside the credit union industry or those unable to attend the live event at WOCCU’s World Credit Union Conference in Glasgow, Scotland, July 24 through July 27. This year’s auction features hundreds of items from around the world, including sports tickets, artwork, jewelry and travel packages. “We have fantastic items this year, all donated by our fellow credit union colleagues around the world,” said Judy Ensweiler, wife of Texas Credit Union League President/CEO Dick Ensweiler, who is co-chairing the auction this year with Crissy Cheney, wife of Credit Union National Association (CUNA) President/CEO Bill Cheney. “By bidding, you’ll not only get something great, but you’ll be supporting WOCCU’s development work and expanding credit union access to people worldwide.” Auction items were donated by credit unions, leagues, credit union service organizations and vendors from throughout the worldwide movement. For more information about the auction, use the link or contact Jeri Davis at 608-395-2088 or jdavis@woccu.org.

Money Mission included in Jumptart clearinghouse

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MADISON, Wis. (7/12/11)--Money Mission--an online financial literacy video game--has been approved for inclusion in the Jump$tart Coalition for Personal Financial Literacy Clearinghouse, announced the Credit Union National Association (CUNA) and the Wisconsin Credit Union League Monday. Money Mission uses videos to teach personal finance basics--such as recognizing opportunity costs and budgeting--to high school students. Lessons are reinforced through interactive gameplay--teens’ preferred learning style. “Money Mission brings financial literacy training into the new millennium,” said Jill Nordstrom, director of member solutions for the Wisconsin CU League. Money Mission also offers scholarship opportunities to high school seniors. “Money Mission is now included in the nation’s most comprehensive collection of financial education resources for students,” said Terry Costin, CUNA senior vice president of sales and marketing. “This further demonstrates that Money Mission is an effective financial education tool, as only resources that meet the national standards in K-12 Personal Finance Education are selected.” More than 10% of Wisconsin credit unions and several credit unions in Illinois and North Carolina provide Money Mission to their members. For more information, use the link.

Pa. CUs continue to outperform national stats

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HARRISBURG, Pa. (7/12/11)--While Pennsylvania credit unions continue to outperform the nation’s credit unions in growth of assets, loans and members, results from the first quarter show mixed results with increased earnings, slow loan growth, and a record low in asset yields. The data were taken from the Pennsylvania Profile, a quarterly economic summary of Pennsylvania Credit Union Association (PCUA) members, with statistics provided by the National Credit Union Administration and the Credit Union National Association. Savings balances rose 4% in the first quarter, greater than the 3.6% growth in first quarter 2010. Credit union savings balances are expected to continue growing in 2011 and 2012, according to PCUA (Life is a Highway July 11). However, consumers will struggle with tight household budgets, which could affect their ability to save, PCUA said. Asset yields fell to 4.06% in the first quarter--a 21 basis-point decline from the fourth quarter of 2010--and the lowest yield on assets in Pennsylvania credit union history. The first quarter drop in asset yields marks the fourth consecutive year of declines, a result of low interest rates. Increased loan growth in 2012 should boost asset yields. Pennsylvania’s unemployment rate continues to drop, falling to 7.8% in March from 8.5% in December. An improving job market will improve credit quality and is expected reduce loan delinquencies, according to PCUA.

CU System briefs (07/11/2011)

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* ATASCADERO, Calif. (7/12/11)--A virus in an phony e-mail purporting to be from the National Automated Clearing House Association (NACHA) triggered an attempt to steal $83,000 through wire transfers from the city of Atascadero's account at Rabobank, the city said (The San Luis Obispo Tribune July 8). Three of the transfers--made on July 1 and adding up to $30,000--were sent to Tinker FCU, a $2.3 billion asset credit union based in Oklahoma City, Okla. Tinker does not do business with the city. Credit union employees flagged the transfers and informed the city about the transactions. The credit union will return the money to the city. Two other transfers made that day did not complete because of invalid account numbers. Another five unsuccessful attacks were mounted July 5 but were caught by Rabobank. The transfers in that attack were headed to financial institutions in California, Florida, Maryland and Pennsylvania … * SEATTLE (7/12/11)--Claudiu Tudor, 37, of Renton, Wash., was sentenced to five years in federal prison for fraud stemming from accessing consumers' bank accounts through skimming devices at ATMs and stealing more than $225,000 from 130 people. Tudor was convicted of bank fraud, conspiracy to commit access device fraud and aggravated identity theft, said the U.S. Attorney's Office in Seattle (The News Tribune July 9). The ATM skimming devices were placed at ATMs across the Puget Sound area, including at a Tukwila, Wash.-based BECU's branch in Puyallup. Tudor and a co-defendant installed the devices, along with tiny cameras to capture personal identification numbers (PINs) as they were keyed into the ATM. They used the information to make phony debit cards and raided consumers' accounts. They were caught after someone saw them loitering near an ATM in Woodinville and called the Sheriff's Office … * WHITEFISH, Mont. (7/12/11)--A former branch manager at Whitefish (Mont.) FCU was sentenced in a U.S. District Court in Missoula, Mont., Thursday to 30 days in a federal prison for embezzling nearly $677,000 from the credit union. Kathleen Sammons, 52, of Charlo, worked in the credit union's Polson branch, was charged with embezzlement and money laundering. She also was ordered to pay $676,872 in restitution and stay under supervised release for five years, including 17 months of home confinement. She told authorities she used Wite- Out to paint over the numbers in the daily cash counts, substituted other numbers and faxed the altered sheets to the accounting department so the Wite-Out would not be detected. She covered her theft during audits by withdrawing large amounts from high-balance members, then returning the money after the audit was over. A surprise audit on June 23, 2010, discovered the vault was $676,000 short. She used the funds to pay for a home, donate to local charities, pay for high school sports and banquet trips, make loan payments for members and cover thefts of cash by others (Missoulian.com July 7) … * BEAVERTON, Ore. (7/12/11)--Lynn Heider, an award-winning television news director in multiple high-profile markets, has been named assistant vice president, public relations and communications for the Northwest Credit Union Association (NWCUA). For the past three years, Heider has served as news director for KOIN-TV, Portland, Ore. Prior to that she served as news director at WTEV and WAWS TV in Jacksonville, Fla.; WEWS in Cleveland, Ohio; and KSHB, Kansas City, Mo. The addition of Heider to the management team is part of the organization's commitment to elevate the association's role in strategic advocacy on behalf of member credit unions, said NWCUA CEO John Annaloro and NWCUA President Troy Stang in a joint statement. In addition to managing multi-million dollar budgets, Heider also helped KOIN-TV ascend to the No. 1 rating for the 11 p.m. newscast market … * FRANKLIN, Va. (7/12/11)--Bronco FCU has selected Brian Hedgepeth,
its former director of retail services, as its new CEO, announced the Franklin, Va.-based, $204 million asset credit union. Board Chairman Charlie Wrenn made the announcement on behalf of the board and staff. Hedgepeth has held the credit union's retail services director position for four years. Before that, he had experience with two banks, beginning with Virginia National Bank (later Sovran, then NationsBank) in 1981. In 1994, Hedgepeth moved to Crestar (now SunTrust), where he worked until taking a position at Bronco in 2007. (Photo provided by Bronco FCU) …