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Economic forum speaker to address trends

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FARMERS BRANCH, Texas (7/17/09)--Speakers at the Southwest Corporate FCU's 32nd annual Economic Forum Oct. 27-28 in Dallas will address financial institution trends in helping credit unions in "Navigating the New Normal," the conference theme. Among the featured speakers will be:
* Martin Feldstein, a Harvard economics professor and president emeritus of the National Bureau of Economic Research. Feldstein served as former President Ronald Reagan's chairman of the Council of Economic Advisers and is a member of President Barach Obama's Economic Recovery Advisory Board. * William Ford, former president of the Federal Reserve Bank of Atlanta and former chief economist of the American Bankers Association. He is currently an economics professor at Middle Tennessee State University. * Bill Hampel, chief economist of the Credit Union National Association; * Gigi Hyland, board member of the National Credit Union Administration; and * Dr. Charles Idol, credit union economist.

Loan Lies pinpoints 189 mortgage-modification scams

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WASHINGTON (7/17/09)--A coordinated national law enforcement effort aimed at ending mortgage modification scams was announced Tuesday by the Federal Trade Commission (FTC) and California Attorney General Jerry Brown. Operation Loan Lies involves 189 actions by 25 federal and state agencies against companies that deceptively marketed foreclosure rescue and mortgage modification services. The scams, which affected consumers throughout the nation, originated in southern California. The FTC announced four new lawsuits, bringing the number of such cases filed to since April. Attorneys general from 23 states and other agencies participating in Operation Loan Lies are initiating action against 178 companies engaged in the mortgage deceptions. The agency also announced a settlement in one lawsuit filed in November. According to the lawsuits, defendants allegedly made false claims that they would either obtain a mortgage loan modification or stop a foreclosure, or both. Some claimed they would give refunds if they failed. The companies would charge at least one month's mortgage payment in advance, but did little or nothing to get a modification or stop foreclosure, and reneged on their promise of a refund. The FTC also is distributing a three-and-a-half-minute video of scammers' victims sharing lessons from their experiences to more than 5,000 housing counseling and consumer protection organizations throughout the country. The "Real People. Real Stories." video also is posted on FTC's website and on YouTube.

33 CUs among CDFI Fund second-round applicants

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WASHINGTON (7/17/09)--Thirty-three credit unions are among the 194 community development financial institutions (CDFI) that have applied for the U.S. Department of Treasury's CDFI Fund's fiscal year (FY) 2009 supplemental round. The applicants--from 44 states, the District of Columbia and Puerto Rico--have requested an aggregate of more than $270 million in financial assistance, said the Treasury. That, coupled with the initial FY 2009 applications, brings the total for the year to 419 applicants seeking $507 million in assistance through the program. Sixty-one or 32% of the institutions applied under Category I--SECA--for more than $33.2 million in financial assistance. Of those, 21 or 34% were credit unions, while 39 (64%) were loan funds, and one (2%) was a venture capital fund. Category II--Core funds attracted 131 or 68% of applicants seeking $237.5 million in assistance. They include 12 credit unions, which make up 9% of these applicants. Also applying were 99 loan funds (76%); 14 banks, thrifts or holding companies (11%); and six venture capital funds (5%). The CDFI Fund said that it announced all $90 million of Recovery Act funding earlier this month to accommodate the additional solicitation of applications and expedite the award dollars to low-income communities. It will make a second announcement in September, when it will award about $52 million of annual appropriations to the most highly rated applicants in a combined pool that includes those who applied in response to the amended Notice of Funds Availability (NOFA) and those who applied under the original FY 2009 NOFA but did not receive an award in the first funding announcement. About 260 applicants requested more than $237 million in the first FY 2009 application round.

Portland CUs connect to bicycle community with loans

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PORTLAND, Ore. (7/17/09)--Several credit unions in Portland, Ore., are offering loan programs to help their members finance bicycles and bike accessories. Unitus Community CU began its program more than a year ago. “Unitus recognized people in the Northwest love to be active and healthy, and we see the increasing amount of people biking,” Lori Fink, Unitus marketing manager, told News Now. “We had a connection to the bicycling community via bicycle shops and the Bicycle Transportation Alliance. Through these relationships, we discovered that there was a need for a loan for those bicyclists who were serious about long rides, races and other community events. “In some cases, the owners of these shops were putting out money to lend to their customers,” Fink added. “In other cases, people purchased their bikes with credit cards. As an effort to provide more people with the opportunity to ride a bicycle, we established a bicycle loan.” Unitus’ loan program applies to new bikes at 80% of the total purchase price, including accessories. Loans must be a minimum of $250. The maximum is $2,500. The loans have a fixed annual percentage rate of 7.99% interest. Loan terms are based on the amount borrowed, and the maximum loan term is one year. Unitus’ target audience is middle-income to blue-collar Northwest residents who care about a healthy lifestyle, and are conscious about the environment, Fink said. “Typically, the weathier folks can afford to buy the more expensive bikes,” she added. Northwest Resource FCU also offers a bike loan program, which started July 1. Although the program has only been offered a few weeks, there already has been some interest, said Kim Faucher, Northwest Resource director of marketing. One woman who was not a member of the credit union learned about the loan program on a biking blog and called the credit union for more information. She wasn’t within the credit union’s field of membership, so she got her company to sign up as a select employee group at Northwest Resource. Her company has about 250 employees. The woman is now planning to buy bikes for her whole family with the program, Faucher told News Now. Northwest Resource offers bike loans at a minimum of $500 and a maximum of $2,500. The loan is unsecured, but will be at a better rate than other unsecured loans the credit union offers, she added. Some say that you shouldn’t go into debt for a car, but is the same true for bikes? “It’s not a huge loan amount,” Faucher said. “If [members] need the bike now rather than having to save up for a year, we can help them.” Northwest Resource plans to go to local bike shops and see if they’d be interested in partnering to promote the loan program. Faucher said the program is looking to promote more than recreational biking--like biking to work and the benefits of biking for exercise and to protect the environment. The credit union serves primarily downtown Portland, and could attract many young people who want to use a bike to commute. A bike loan also could help them build credit since it is a small loan, Faucher said. She advised credit unions interested in offering a bike loan to research others’ programs and then tailor their own lending guidelines.

CU System briefs (07/16/2009)

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* MADISON, Wis. (7/17/09)--David K. Henke, former president of Rapids Municipal CU (RMCU), Wisconsin Rapids, Wis., was indicted on charges of embezzling about $634, 222 from RMCU from November 1999 through October 2008. Henke allegedly embezzled the money by making false entries into general ledger accounts at the credit union, according to the indictment. The indictment also alleges that he provided false information to the board of directors relating to delinquent loans, used RMCU members’ dormant accounts to deposit the embezzled funds and forged members' signatures on collateral pledge agreements. He also is charged with removing members--whose accounts had been subjected to unauthorized loan add-ons--from the monthly statements mailing. Henke faces a maximum penalty of 600 years in prison, a $1 million fine, five years of supervised release, a $2,000 special assessment and restitution. RMCU has since merged with Bull’s Eye CU of Wisconsin Rapids ... * MISSOULA, Mo. (7/17/09)--Peter M. Thompson, 24, pleaded guilty in U.S. District Court to charges of bank robbery and discharging a firearm to further a crime of violence during a Jan. 12 armed robbery of Missoula (Mont.) FCU. Thompson fired a shot into the ceiling of the $281.2 million-asset credit union during the robbery in which more than $11,000 was stolen, according to court records. A deputy pursued Thompson after the robbery in a car chase and when Thompson’s truck veered off a road, he fired a shot, court records said. The deputy returned fire, hitting Thompson in the face. Through a plea agreement, Thompson will be given sentencing credit for accepting responsibility for the robbery. Bank robbery carries a mandatory 20-year sentence, while the gun charge carries a mandatory 10 years in prison, consecutive to the bank robbery sentence ( July 15 ) … * LENEXA, Kan. (7/17/09)--Margaret Blankers, founder of MJB Public Relations Group, received the 2009 "Entrepreneur of the Year" award from the Kansas City/International Association of Business Communicators. The award recognizes achievements of self-employed professionals who inspire others with their skill and spirit. Blankers was honored for her diligence and success in communicating on behalf of credit union clients during the unprecedented challenges facing the financial industry. The award noted that through her public relations efforts, many credit unions and industry organizations maintained strong, positive reputations in their communities while reassuring members about the strength of their organizations. Blankers and her team work with credit unions, corporate credit unions, credit unions service organizations and related service providers, developing PR strategy and providing communications services …

Students spend summer gaining experience at CU

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ROCKVILLE, Md. (7/17/09)--While some high school students spend their summer vacation working at the beach, the pool, or at a summer camp, five teens are currently gaining banking and financial service experience through a paid internship with MCT FCU.
Dorothy Zarr, right, a former MCT FCU intern, helps Prathyusha Yanignadla, a current intern, navigate through a member’s account in the credit union’s summer internship program.
Blair Wilen, a high school student working at a paid internship this summer at MCT FCU, helps a member at one of the Rockville, Md.-based credit union’s branches. (Photos provided by MCT FCU)
MCT offers the internship program each summer to Montgomery County high school students who work for MCT’s student-run in-school branches at six schools and to students enrolled in the Academy of Finance (AOF) program. The AOF program also is offered at six high schools, helps students prepare for careers in business and finance through business-specific coursework and a required internship. “MCT offers an internship program designed to enhance our relationship with our primary membership group, Montgomery County Public Schools, and to provide students with practical work experience as part of their education,” said Sandra Gura, MCT director of organizational development. “Additionally, interns obtain skills for future employment opportunities. In fact, six current MCT employees worked here as interns at some point.” The $403 million asset, Rockville, Md.-based MCT hired five high school students as interns this summer. Three interns work in an MCT branch, one works in its contact center, and another works in the information technology department. All interns were hired in late June and underwent one to two weeks of training, depending on their department. Although most interns have only worked in their department or branch for about a week, most say they already are gaining useful skills that they can use in a future career. “I really enjoy working on a team here at the branch,” said Blair Wilen of Magruder High School. “It’s been fun learning new things from my team members and managers. Working on a team and interacting with members is good practice for my future career in communications.” Prathyusha Yanignadla of Watkins Mill High School, who hopes to become an entrepreneur or have a career in international business, views her internship experience as a stepping stone into the business world. “I’m learning about the business world firsthand just by studying MCT’s business model,” she said. “Each day, I’m learning how MCT runs itself, takes care of its members, and practices its values.”

New Hampshire first lady joins CU walk

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PORTSMOUTH, N.H. (7/17/09)--New Hampshire First Lady Dr. Susan Lynch participated in a Walk N.H. event sponsored by Service CU, Portsmouth, N.H. on Tuesday. Lynch chairs the Foundation of Healthy Communities, a nonprofit organization that works to address health issues through prevention programs. During the walk, she told Service CU employees that individuals with diabetes can reduce their death rates by one-third if they walk three to four hours a week. Walking also can help people lose weight, and reverse high blood pressure and cholesterol, she said ( July 15). Walk N.H. is one program that helps raise money for the Foundation of Healthy Communities. Service CU donated $1,500 to the cause. A large amount of the money goes toward preventing childhood obesity, Lynch said. Laurie Ainsworth and Linda Marshall were two of 35 Service CU employees who participated in Tuesday’s walk. They told the newspaper that any occasion to leave the office to help the community is a good one. Service CU’s staff is very receptive of the credit union’s community service efforts, said Karen Benedetti, Service CU vice president of marketing.

Illinois student loan program attracts 14 CUs

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NAPERVILLE, Ill. (7/16/09)--Fourteen Illinois-based credit unions will invest nearly $105 million in Illinois State Assistance Commission (ISAC)-issued securities to finance low-interest, federally secured student loans, announced the Illinois Credit Union League and ISAC Wednesday.
Mark Spenny, CEO of Peoria, Ill.-based Citzens Equity First CU (CEFCU) addressed the media during a press conference announcing the availability of $105 million in student loans from 14 credit unions in the state. (Photo provided by the Illinois Credit Union League)
The loans for Illinois students and their families will be offered through the Federal Family Education Loan Program (FFELP). They are part of the Illinois Designated Account Purchase Program (IDAPP). The announcement was made at a press conference hosted by Peoria-based Citizens Equity First CU (CEFCU) on the Illinois Central College campus in East Peoria. "Our partner credit unions and the Illinois Credit Union League have really stepped up to make sure Illinois students have access to federally backed, low-rate student loans," said ISAC Executive Director Andrew Davis, who noted there is "plenty of money to lend" students. The league played a critical role in building support for the program from credit unions. "Receiving a quality education earning a college diploma is crucial for today's students," said Dan Plauda, league president/CEO. "Credit unions are proud to partner with ISAC and invest in our state's future work force." The liquidity crunch, higher tuition costs and federal policy changes that cut lender profits have disrupted student lending programs in some states. A number of banks--including U.S. Bank, the sixth largest FFELP lender with $2.3 billion in loan volume last year--have exited the student-lending arena the past two years. "Thanks to the credit unions' support of ISAC's FFELP participation, we can continue to provide student loans to those in need while serving our mission of offering Illinois students and parents services such as college access programs, financial literacy education and loan delinquency and default prevention," Davis said. Davis said more information can be found at the website. Financing for the agreement is subject to approval by the ISAC Commissioners and by the credit unions' boards at their respective meetings.