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CUNA provides credit score advice in IIndiaPost.comI

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MADISON, Wis. (7/24/08)--The Credit Union National Association's (CUNA's) expertise has drifted overseas, with a website in India picking up CUNA's advice about credit scores. The report Wednesday in talked about what credit score numbers mean and the misconceptions surrounding credit scores. "More nontraditional types of entities are using credit scores," Jan Garkey, editor with CUNA's center for personal finance, said in the article. While credit ratings and credit scores take on more meaning and importance in everyday life, so do the misunderstandings and misconceptions that surround them, the article said. There's more than one type of credit score, said Garkey. "There are a lot of different scoring models out there," and different creditors add to the confusion by looking at different factors. Many larger financial institutions have their own scoring systems, as do credit bureaus, she said. The article also quoted staff from Experian, a major credit bureau, and Fair Isaac Corp., which pioneered credit scoring and introduced FICO scores.

CU files lawsuit vs. dissidents in conversion attempt

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ODESSA, Texas (7/24/08)--Members of First Basin CU expressed disappointment and outrage at the credit union's lawsuit against six members who opposed its bank conversion plans as well as the National Center for Member Trust and Durham, N.C.-based Self-Help CU. The Odessa, Texas-based First Basin filed the lawsuit July 14 alleging that members of Save First Basin, a conversion opposition group of credit union members, "tortiously" interfered with the its attempts to convert by disseminating false information to other members, the public and the media (Odessa American July 22). The suit says the defendants or "individuals at their discretion" contacted and warned members they would lose their deposits and their accounts would be closed; and that the officers and directors had a conflict of interest and would make money in the conversion. It seeks $600,000 in damages, primarily from the two organizations, and permanent injunction against six members. "We have not been served the papers but are aware of it," said Randy Chambers, board member of the National Center for Member Trust, Wednesday. "It's outrageous that a credit union CEO is attacking its members for engaging in free speech and rights they have under National Credit Union Administration (NCUA) regulations and the U.S. Constitution," Chambers told News Now. "Members have a right and an obligation to determine whether their credit union becomes a bank. This goes beyond the pale." Chambers said the center will "vigorously defend the members. They’ve been given a slingshot to fight with against a bazooka, and the credit union continues to fire bazookas," he added. Danny Armstrong, a school teacher and one of the members named as defendants in the lawsuit, told News Now he was served with papers last week and was "amazed that it's gone this far. "This is our credit union. My institution is suing me for letting people know that what the leadership was doing was not in the best interest of the members," Armstrong said. He noted that the credit union spent about $600,000 in its campaign to encourage members to vote for the conversion. "I'm still a member. I still believe strongly in that credit union. But I feel that in the past five years, it has taken a wrong turn," Armstrong said. He criticized its plans to get more into business lending, saying its directors had "lost sight of what they're there for--for the members." "I'm disappointed it's come to this. As an owner and member, I don't appreciate my assets used against me and wasted." Although he was worried about his family and protecting his assets, he is open to a countersuit. "I'll play it to the bitter end. I'll counterfile," he said. In addition to the two organizations and Armstrong, defendants named in the lawsuit are Letty Ayala-Moreno, Carol Uranga, Sylvia Acosta, Manny Puga and Armando Rodriguez.

Texas CUs batten down as Dolly hits coast

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BROWNSVILLE, Texas (7/24/08)--With the eye of Hurricane Dolly making landfall Wednesday afternoon on South Padre Island, Texas, near Brownsville, some Texas credit unions had battened down the hatches in preparation. The storm contained steady winds of 100 mph with gust reaching 120 mph, according to the National Hurricane Center in a Wednesday afternoon advisory (> July 23). All three credit unions located in Brownsville, Texas--Brownsville City Employees FCU, First Financial Community FCU, and Valley FCU--did not answer their phones when contacted Wednesday morning by News Now, and were assumed closed. The Texas Credit Union League (TCUL) is monitoring the situation and has a Disaster Preparation page on its website to monitor Hurricane Dolly (use the link). The Office of the Comptroller of the Currency issued a proclamation Wednesday allowing national bank offices affected by the hurricane to close at their discretion. Credit unions already are allowed the discretion to close if conditions warrant, according to John McKechnie of the National Credit Union Administration (NCUA). Therefore NCUA had no plans to issue a similar statement, McKechnie said. An advisory issued Tuesday by the Commissioner of the Texas Credit Union Department stated: “In conjunction with Gov. Perry’s proclamation concerning the threat from Hurricane Dolly, the [Texas] Credit Union Department advises Texas state-chartered credit unions with offices in areas that may be affected by this hurricane to take appropriate precautions to safeguard property and personnel. The department notes that state-chartered credit unions in Texas have the authority … to close offices threatened by an emergency if the department is notified as promptly as possible, by any means available.” CUNA Mutual Group also was taking steps on Wednesday to prepare for Dolly’s landfall and aftermath. “We’re always concerned anytime a hurricane strikes land,” Phil Tschudy, media relations manager, CUNA Mutual, told News Now. “While we have not contacted any credit unions at this point, we have activated our disaster team to handle any losses caused by this hurricane. Fortunately, there are a limited number of credit unions in and around the Brownsville area. “Due to the size of this particular storm, we don’t anticipate it will have a large impact on our insureds,” he continued. “Nonetheless, all hurricane-related loses will be handled on a priority basis. Credit unions can report losses by calling our disaster phone line, which is staffed 24/7/365, at 800-637-2676.” The National Credit Union Foundation (NCUF) will check with TCUL and the state credit union foundation in the aftermath of the hurricane to see if any help is needed, Steve Bosack, NCUF deputy director, told News Now. “Generally, state foundations take the lead and assess damages and the impact on members. Then NCUF will contact the state foundations to see what help they need and if we can assist,” Bosack explained.

Shot fired at Bellco CU during robbery no one hurt

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LAKEWOOD, Colo. (7/24/08)--County sheriff's deputies were searching Wednesday afternoon for an armed man who fired off a shot during a robbery at a Littleton, Colo., branch of Bellco CU. No one was hurt, said Grace Stanton, public relations consultant for Bellco CU. Bellco is headquartered in Greenwood Village, Colo. The robbery occurred at the Southwest Plaza in Littleton, she told News Now. The incident was reported via a 911 call from someone inside the credit union. Thirteen people--eight men and five women--were inside the credit union when the robbery occurred at about 9:30 a.m., said a spokeswoman for the Jefferson County Sheriff's office. News reports indicated those inside were forced to the ground (ABC7,, and July 23). Jefferson County Sheriff's Office spokesman Jim Shires said a SWAT officers surrounded the credit union because there were conflicting reports as to whether another gunman remained inside the credit union. Photos on various media sites showed SWAT team members with guns drawn at the site. The robber fled with an undisclosed amount of cash and the keys to an employee's minivan, which was found abandoned later, authorities said. The Littleton branch was closed for the remainder of the day, according to Bellco's website.

PCUA to host statewide call on FOM rulings impact

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HARRISBURG, Pa. (7/24/08)--The Pennsylvania Credit Union Association (PCUA) will host a statewide call-in for its member credit unions to discuss the impact of a recent court ruling related to field-of-membership (FOM) expansions. The call is scheduled for Aug. 5 at 1:30 p.m. EDT. PCUA will provide an update on the litigation and what it means to the three credit unions involved in the lawsuit, as well as its impact to other credit unions. The decision--that the National Credit Union Administration's (NCUA) record was not sufficient to sustain its decision to grant a six-county area community credit union expansion in Pennsylvania--was announced Monday by the U.S. District Court, Middle District of Pennsylvania (News Now July 22). The American Bankers Association and the Pennsylvania Bankers Association filed the suit and argued NCUA acted in an "arbitrary and capricious" manner when it approved the charter request for Members 1st FCU, based in Harrisburg, Pa. The agency decision was used later as a basis to authorize two other charter requests from New Cumberland (Pa.) FCU and from AmeriChoice FCU, Mechanicsburg, Pa. NCUA said Monday it is reviewing its options. It noted the court's decision did not challenge its community charter regulations and affects only the credit unions serving the six-county community in Pennsylvania (News Now July 22).

CU in New Hampshire sues MetaBank over fake CD

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BERLIN, N.H. (7/24/08)--A small New Hampshire credit union has filed a lawsuit against Iowa-based MetaBank, alleging the bank was negligent in allowing an employee to walk off with millions of dollars in a phony certificate of deposit (CD) scheme. Guardian Angel CU, a $39 million asset Berlin-based credit union, alleges in the suit that it deposited $99,000 in April 2005 in exchange for a CD from MetaBank. In January 2008, Guardian Angel learned the CD was a fake. Gerald Dumoulin, CEO of the credit union, confirmed that the lawsuit had been filed in the U.S. District Court of New Hampshire in Concord. However, Dumoulin told News Now that because the litigation is in progress he could not comment on the case or facts involved. According to the lawsuit, the $686 million asset MetaBank had investigated phony CDs after an earlier unspecified complaint. The bank was sued in April by two Texas banks, including The Frost National Bank in Texas. The court records and filings with the Securities and Exchange Commission said a former Metabank employee, Charlene M. Pickhinke, had sold fraudulent CDs to several financial institutions and that $4.2 million was still outstanding (New Hampshire Business Review July 15). Guardian's lawsuit identifies Pickhinke as a supervisory employee and part of the bank's management staff. It says the bank was negligent in hiring her in a supervisory position and in failing to take measures to prevent such a theft. The suit asks that the bank pay back the funds with interest to financial institutions who bought about 50 phony CDs. MetaBank in answer to a complaint filed by the Texas bank said it was unaware of and not a participant of the alleged CD sale and that Pickhinke carried out the scam individually and apart from her work authorized by the bank. It has not filed an answer to the credit union complaint, said the Business Review.

CUs 1.99gal. gas promo draws 2-3 mile line

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WORCESTER, Mass. (7/24/08)--Digital FCU (DCU) ran a promotion with a Worcester, Mass., gas station offering $1.99 per gallon gasoline Tuesday that resulted in hundreds of people showing up in their cars, causing lines stretching for miles.
Digital FCU team member Janice Hannigan (left) assists one of the 800 patrons who took advantage of the credit union's $1.99 per gallon gas promotion held at a Gulf station in Worcester, Mass., Tuesday. (Photo provided by Digital FCU)
The $3.9 billion asset, Marlborough, Mass.-based credit union was looking at various advertising opportunities when it decided that helping consumers with high gas prices would be the best way to thank area members for their business and also make a big publicity impact for the credit union. “Every media entity that we pitched this to picked it up,” John LaHair, DCU public relations manager, told News Now. “We really hit one out of the ball park this time.” Seven local TV stations and one national affiliate (CBS news) picked up the story. Also two area newspapers, two local radio stations and a couple of online news services had covered the story as of press time. About 800 vehicles showed up at the gas station for the promotion. At one time, the line was about two to three miles long, LaHair said. The regular price of a gallon of gas was going at $3.97 per gallon. The promotion began at 7 a.m.--with cars starting to lineup at 5 a.m.--and gas was pumped until 1:45 p.m. Overall, 7,429 gallons of gas were sold at the discounted price. DCU paid the Gulf station more than $14,000 to make up the balance. The promotion was two-fold: to thank the Worcester community for embracing DCU’s two branches, and to try something different, LaHair said. “From the credit union perspective, it’s the philosophy of us putting our members first,” he said. “When the opportunity presented itself, we realized we could have a one-on-one connection with members, non-members and potential members. It was a captive audience. When people wait one to two hours in line for gas, we can tell the DCU story and be able to show we understand what people are going through. “It’s an opportunity to educate once you get their attention. So we can talk about the products and services we offer and make a difference in people’s lives. We will look at similar strategies in other communities, because this time everything came together--the people, the media and the credit union itself,” LaHair added.

ATM security camera photo in robbery prompts lawsuit

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ORLANDO, Fla. (7/24/08)--A lawsuit filed Friday against an Orlando-based credit union has prompted the credit union to require more specific information from police when they request access to its security camera surveillance videotapes. Larry Tobin, president/CEO of Fairwinds FCU, said he has not yet received a copy of the lawsuit filed Friday by a member, Joyce Treutel, whose suit claims an invasion of privacy. The credit union gave police separate photos of Treutel and a man using an ATM at a branch. The police gave local media the photos and incorrectly linked them as "persons of interest" in an investigation of an ATM card theft. The photo and incorrect information were broadcast on local news. Treutel and the man were interrogated by the police but they had nothing to do with the theft. "Police requested an ATM film for a specific period of time, but they gave us no other information," Tobin told News Now. "We provided it, and the police, based on that tape, posted two photos on the news and said that they were 'people of interest.'" However, "the clock on the ATM was out of sync, and they were not the right people at the right time," he said. "Had the police given us more information, we could have pinpointed the correct people at the ATM," he said. Finding the correct people in such a time frame is challenging, he said, adding that "three or four people can use an ATM within a one-minute period." As a result of the error, "we are requiring police to provide details about what they are looking for" in addition to the time frame. The credit union likely could request a court order and is exploring its legal options, but "we'd certainly want to cooperate with authorities needing the information," he said. The second person photographed did not sue, but claimed damages, which the credit union settled, Tobin said. The credit union apologized publicly for When asked if the credit union would pursue claims against police or the media, Tobin said that would be up to its insurer.

CU System brief (07/23/2008)

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* ALBANY, N.Y. (7/24/08)--J. Raymond Curtin, former co-president/CEO of Empower FCU, Syracuse, N.Y. died Monday, according to the Credit Union Association of New York. Curtin served in the financial services industry for 30 years. He held positions at OnBank, Merchants Bank, Agway and Price Waterhouse before joining the credit union industry as president/CEO of Empire FCU. Curtin was also a professor of finance at SUNY Oswego. He served as chapter president and council member of the association, chaired its education committee and received its Educator of the Year Award in 2003. He assisted in the merger that created Empower FCU, which has more than $640 million in assets, and served as the new credit union's co-president and CEO until his retirement in December 2007. Curtin is survived by his wife, Pat; a daughter; two sons; and five siblings. Memorial donations may be sent to United Way of Central New York, P.O. Box 2129, Syracuse, NY 13220 …