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CU System Archive

CU System

CU System brief (07/12/2011)

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BALLSTON SPA, N.Y. (7/13/11)--Jason LaPierre, 36, of Kingsbury, N.Y., has been sentenced to three to nine years in prison for embezzling more than $400,000 while employed at the Hudson River Community CU in Corinth, N.Y. LaPierre--who was a pastor as well as a former human resources and marketing employee at the $155.8 million asset credit union--pleaded guilty in May to second-degree grand larceny. LaPierre stole the funds over four years by forging about 300 cashier's checks from the credit union and depositing them into his personal accounts at another institution. He took about $100,000 a year and used the money for groceries, dinners and entertainment for his family of eight. He also was ordered to make restitution. The fraud was discovered after an auditor was called in to investigate complaints from vendors that they had not been paid (The Daily Gazette July 12 and Associated Press Newswires July 11) …

CUs involved in service mark infringement lawsuit

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LOS ANGELES (7/13/11)--Two Los Angeles area credit unions with similar names and overlapping fields of membership in the educational industry are involved in a lawsuit alleging service mark infringement and unfair competition. Schools FCU, a $104 million asset credit union based in Rancho Dominguez, Calif., filed the lawsuit Thursday in the U.S. District Court for the Central District of California in Los Angeles against the $8 billion asset, Santa Ana-based SchoolsFirst FCU. The smaller credit union is seeking damages and an injunction to stop SchoolsFirst FCU from using its name, logo and Internet domain name. Schools FCU--formerly called Los Angeles Schools FCU--changed its name to Schools FCU on April 14, 2005, and has used its service mark and logo in the its marketing promotions and advertisements in the area since then, said the complaint. SchoolsFirst FCU--the former Orange County Teachers FCU--changed its name on April 14, 2008. The suit alleges that as a "direct competitor" of Schools FCU, the larger credit union "intentionally adopted" and used a new name that "is confusingly similar to and infringes" on the name of Schools FCU. The complaint also alleges that the larger credit union did not inform the U.S. Patent and Trademark Office of the smaller credit union's "prior and superior rights" in the service mark. "Defendant's intentional use of a name so similar to Plaintiff's Service Mark has already caused substantial customer confusion as to the origin, affiliation, or sponsorship of the defendant's services and is likely to cause such consumer confusion," said the complaint, which alleged Schools FCU also suffered "actual damages."

International CU Day launches for 2011

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MADISON, Wis. (7/13/11)--International Credit Union (ICU) Day--with the theme “Credit Unions Build a Better World”--is Oct. 20. Through the Credit Union National Association (CUNA) website, credit unions can access resources to thank members on ICU Day and begin celebrating the International Year of Cooperatives. Among the resources the CUNA website offers:
* Art--Download the poster design, website icon and coloring page; * Copy--Borrow wording on the history of ICU Day and the press release announcing ICU Day; * Celebration ideas--See how other credit unions celebrated in the past, and share plans for 2011; and * Promotional products--Purchase gifts to thank current members and welcome new ones.
With the selection of a new vendor, CUNA offers better pricing on products, especially those bought in bulk, according to JoAnne Sepich, ICU Day coordinator. “We’ve really made an effort this year to provide credit unions with quality products and better pricing,” Sepich said. “It’s the start of a special year for credit unions and all cooperatives.” ICU Day is also the launch of the International Year of Cooperatives (IYC). The United Nations General Assembly has declared 2012 as the IYC to highlight the contribution cooperatives make to socio-economic development. The World Council of Credit Unions has customized the theme for credit unions and added a graphic for ICU Day 2011. Credit unions in the U.S. have access to the full-color poster art--through the CUNA website--which builds on the ICU Day 2011 theme and logo. To access CUNA ICU Day resources, use the link.

New York Desjardins winners recognized

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ALBANY, N.Y. (7/13/11)--The New York Credit Union Foundation recently honored four credit unions with the 2011 New York State Desjardins Youth Financial Education Awards for teaching personal finance concepts and skills to children. Clarence (N.Y.) Community & Schools FCU was the first-place award winner in the $50 million asset and under category for its Youth $avings Program offered to grades K through 12 in all six schools in the Clarence School District. CORE FCU, East Syracuse, was the first-place award winner in $50 million to $150 million asset category for its Students as Educators program. The program gives high school students the opportunity to learn about personal finance, shows them how to teach their peers and serve as mentors and role models for younger students in the school district. Participants also teach in teams during adult education sessions with school board members and credit union personnel. Teachers FCU was the first-place award winner in the $50 million and over asset category for diverse financial education offerings tailored to all grades and skill levels. Teachers FCU hosted five National Endowment for Financial Education High School Financial Planning Program train-the-trainer workshops for educators, administrators and youth advocates on Long Island, N.Y. First-place winners will be submitted to the Credit Union National Association for its National Desjardins Award consideration.

CUs 2.6M loan finances solar roof project

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BRIDGEWATER, N.J. (7/13/11)--An article in the July 8 edition of the Hunterdon County Democrat highlighted Financial Resources FCU’s $2.6 million loan to help finance a solar panel system for a local manufacturing plant. The loan from the $372 million asset Bridgewater, N.J., credit union will be used for photovoltaic solar panel system on the roof of the Fram Trak plant in Middlesex, N.J. Albert Santelli Sr. of Santelli Family Limited Partnership said Fram Trak would not have been able to obtain the loan without Financial Resources FCU. The company had had been dealing with banks for “decades,” he said. The solar panels will cover a rooftop area of about one-and-a-half acres and produce more than 600 kilowatts of electrical power, the equivalent to a year’s worth of power for roughly 60 homes. The energy-saving project is the largest of its kind in Middlesex borough, according to the article, titled, “Credit Union Helps Fram Trak Go Green with Solar Panels.” The system will offset nearly 100% of Fram Trak’s current power usage, which translates to a reduction of more than 800 tons of carbon emissions per year.

Martin FCU Higher bank fees boost unbanked numbers

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ORLANDO, Fla. (7/13/11)--Higher bank fees generated by financial reform regulations may end up increasing the "unbanked" population, according to Orlando, Fla.-based Martin FCU and others interviewed by the Orlando Sentinel (July 11). Florida's economy has about $9 billion in household wealth that is unbanked money, including about $2 billion held by the state's rapidly increasing Hispanic population. Martin FCU makes it a point each Monday to visit the Mexican Consulate in west Orlando to court immigrants as they secure documents to make a new life in the U.S. Many are unbanked. The credit union lets Hispanics know it has accounts available that are safe for them and their money, Nine Fayad, marketing specialist at the $128 million asset credit union, told the Sentinel. Fayad noted that banks facing federal financial reforms will raise fees to recoup revenue lost as a result of some of the new provisions. The reforms are affecting everyone in banking, she said, The first question everyone asks, she said, is what the fees will be. Recouping losses by raising customer account fees and minimum balances will create more barriers for the nation's unbanked, said Stanley Smith, a banking and finance professor at University of Central Florida. Other sources interviewed said the higher fees would force more back to the "quick-cash" industry to check cashers, payday-advance lenders, wire-transfer services and pawn shops. The article pointed out that "credit unions--which typically charge lower fees than big banks--are beginning to offer products such as money-transfer services" and short-term alternatives to payday loans and that several hundred credit unions offer the services. However, the National Credit Union Administration (NCUA) told the newspaper that credit unions are proceeding cautiously by balancing their fees so that they pay for the product or service delivered without being too high. Credit unions also offer prepaid check cards, with low fees and no overdraft fees, said the article.

Pennsylvania CUs approve PCUA bylaw changes

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HARRISBURG, Pa. (7/13/11)--Members of the Pennsylvania Credit Union Association (PCUA) approved and ratified new bylaws, under which member credit unions will be grouped by asset size for the purpose of electing directors to the PCUA board. “The move to asset-based voting categories was all about fair representation on the PCUA board, and the voting results show that our members appreciate that,” said PCUA Chairman Michael Kaczenski, CEO of Sun East FCU, Aston (Life is a Highway July 12). Starting with the 2012 election cycle, PCUA member credit unions will vote according to these asset categories: $30 million or less; $30 million to $100 million; and more than $100 million. “This change represents the last piece of a very long and well-thought out series of governance retooling,” said PCUA President/CEO Jim McCormack. “Our board had the vision to begin retooling the organization’s governance and got the ball rolling in 2002. We’ve evolved by transforming the name from ‘league’ to ‘association,’ downsizing the board, adopting term limits, and--most recently--[adopting] asset-based voting categories.”

Study Consumers save 4.3B in late fees with bill pay

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HOUSTON (7/13/11)--More U.S. citizens used expedited bill-pay services in 2010, saving $4.3 billion in late fees, according to a May study by Javelin Strategy & Associates. As service providers expand their mix of expedited payment solutions offered to their financial institution clients, more credit unions will be able to deliver this service to members, the study found. Expedited payments pose a significant opportunity for financial institutions looking for consumer friendly ways to generate revenue in the aftermath of the Dodd-Frank Act amendment, the CARD Act and overdraft reform, said the study, “Expedited Payments: Consolidator Originated Routing Solutions May 2011” (PR Newswire July 12). The study evaluated four different routing options available for expedited payments: overnight check, money transfer services, direct biller connection and virtual card technology such as PreCash’s Billocity. Javelin found financial institutions are under-using this service, even though consumer demand for online and mobile expedited payments is rapidly increasing. Only seven of the top 40 U.S. banks--or 20%--offer expedited payments to their customers. Also, 58% of consumers who never made an expedited bill payment at their financial institution’s website--but who have made such payments at a biller site in the past 12 months--indicated they would like to use a financial institution site to make an expedited payment in the future. With demand for expedited bill-payment services growing, consumers are expected to garner $6.4 billion in savings by 2015, Javelin said. A National Federation for Credit Counseling survey conducted in 2009 found 58 million U.S. adults pay their bills late, and consumers paid $20 billion in credit card-bill late fees in 2009. To read the study, use the link.

Latest mergers in Kansas Calif. Wash.

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MADISON, Wis. (7/13/11)--Three more mergers of U.S. credit unions--one each in Kansas, Washington and California--have been announced and are pending. Among the pending mergers:
* CU of America (CUA) and First Choice CU, both in Wichita, Kan., intend to complete a merger by the end of 2011 or the beginning of 2012 (The Wichita Eagle July 12). The merger will create a $450 million asset credit union with 47,000 members, under the name of CUA. First Choice has three branches, plus a high school student branch. CUA has nine full-service branches in three cities, plus an employee-only branch at a hospital and a high school student branch. * Catholic CU and Yakima Valley CU (YVCU), both of Yakima, Wash., received approval of their merger application from the Washington Department of Financial Institutions and the National Credit Union Administration (Yakima Herald-Republic Online News July 7). YVCU members will next vote on the merger, since YVCU will merge into Catholic CU. The combined credit union will have $471 million in assets and nearly 50,000 members, with eight full-service branches. A new name and brand will be designed once the merger is complete. * 1st Choice FCU, Castro Valley, Calif., received approval June 2 to merge with and into SF Police CU, San Francisco, said the California Department of Financial Institutions. 1st Choice CU has $8.1 million in assets and two branches--one in Castro Valley and one in San Leandro. The $634.5 million asset SF Police CU has four branches: two in San Francisco, one in San Mateo and one in Pleasanton.

New Mexico governor appoints FI regulator

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SANTA FE, N.M. (7/13/11)--New Mexico Gov. Susana Martinez has named Albuquerque banker Cynthia Richards as the state's Financial Institutions Division director, effective July 25. The agency regulates more than 5,000 financial institutions, including credit unions (Associated Press via NewsChannel10.com July 12). Regulation and Licensing Superintendent J. Dee Dennis Jr. made the announcement Monday. Richards replaces Bill Verant, who was ousted after Martinez took office. With nearly 30 years of banking experience, Richards has served as vice president of American Bank, Rio Rancho, and Western Bank and First Community Bank in Albuquerque.