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NEW: Harland Financial Solutions To Be Sold To Davis + Henderson

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SAN ANTONIO (7/23/13, UPDATED 4:45 p.m.)--Harland Clarke Holdings Corp. has entered into an agreement to sell its subsidiary, Harland Financial Solutions, to Davis + Henderson Corp. for $1.2 billion in cash.
 
Harland Financial Solutions accounted for roughly 15% of Harland Clarke Holdings' business in 2012.
 
D+H supports more 1,700 credit unions and banks across the U.S., including Mortgagebot and Compushare.
 
"Rest assured, Harland Financial Solutions will continue to operate in a 'business as usual' fashion, with no changes or impact to our clients," said Raju Shivdasani, Harland Financial Solutions CEO.
 
The sale is subject to customary closing conditions, including the expiration or termination of applicable waiting periods, and is expected to close in the third quarter of 2013.
 
D+H has established a website (www.NewFinTechFuture.com) to provide additional information regarding the acquisition.
 
Harland Clarke, the company's largest business segment, services about 12,500 financial and commercial institutions through multiple channels. Its marketing products include business intelligence and analytics, management, strategic services, and award-winning creative development.
 
Harland Clarke's payment solutions include checks, cards and related products and services, and high-value transactional documents, including statements, compliance documents and communications.
 
The company's retail division services big box retailers, large direct selling businesses, and membership-based and affinity organizations by products and services, including checks and related products, cash management and fulfillment services, private label materials, and small business marketing materials.
 
The subsidiary sold is not the same organization as Harland Clarke. Corp., the check printers, which is a CUNA Strategic Services provider.

Big Banks Argue Eastern Financial Florida CU Knew the Risks

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MIAMI (7/23/13)--Four big banks and two ratings firms have filed a motion to dismiss a lawsuit brought in a Southern Florida federal court by Space Coast CU over $150 million in investment losses that led to the collapse of Eastern Financial Florida CU, which Space Coast later assumed.
 
Eastern invested the amount in collateralized debt obligations (CDOs) backed largely by residential mortgage-backed securities (RMBSs) between 2005 and 2007. 
 
The case involves instruments underwritten by Merrill Lynch, Pierce and Fenner Inc., J.P. Morgan Securities LLC, UBS Securities LLC and Barclays Capital, and rated by ratings agency The McGraw Hill Cos. (Standard & Poor's) and Moody's Investor Services.
 
The motion to dismiss notes that on March 18, the U.S. District Court in Miami rejected the Melbourne, Fla.-based Space Coast's claims of fraud but allowed Space Coast to amend its complaint. In that ruling, the court noted that the suit required "particularized facts" related to the frauds and the specific CDOs, instead of relying on broad due diligence reports, emails and government reports, forensic analysis and reliance on bankruptcy debtors' statements.
 
Space Coast's amended complaint alleged fraud, negligent misrepresentation, unjust enrichment, constructive trust and aiding and abetting fraud. In the motion to dismiss, the defendants argue that Eastern knew the risks. "Indeed the offering documents for these CDOs specifically warned Eastern about the unreliability of the subordination levels and the riskiness of investing in securities linked to subprime and non-conforming loans," said the banks' motion.
 
The banks also argued there is not enough facts supporting the credit union's allegations, that the amended complaint has "recycled allegations" that are not supported by particularized facts, and that the banks cannot be held liable for misstatements they did not make.
 
Like other defenses  in similar lawsuits over RMBS, in which the National Credit Union Administration sued a number of brokerage firms over losses experienced by corporate credit unions, the defendants also argue that the claims are "time-barred" and were not filed on time.

CU System Briefs (07/23/2013)

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  • MILWAUKIE, Ore. (7/23/13)--Mary Greco is the new president/CEO of the $250 million Clackamas FCU in Milwaukie, Ore. She previously served as the credit union's executive vice president. Greco began her career at Coconino FCU in Flagstaff, Ariz., where she spent six years. She continued in the credit union industry for the next 15 years in Las Vegas, first at the former Network FCU and later at Silver State Schools CU. She joined Clackamas in 2001. Her experience includes operations, lending, accounting, branch administration, and human resources and training ...
  • SEAFORD, Del. (7/23/13)--Sussex County FCU's employees and members, in the true cooperative spirit, collected 25 gallons of Pop Tabs to donate to the Ronald McDonald House of Delaware, says the Delaware Credit Union League (Together July 15). The Seaford, Del.-based, $252 million asset credit union said its members and employees are committed to supporting children and their families who benefit from the house's services. In addition to supporting the community's recycling efforts, the Pop Tabs provide monetary value, measured in weight to support a program that has personally impacted the lives of the credit union's employees, members and their families. Pictured with some of the Pop Tabs are, from left, Debbie Jewell, SCFCU business development manager, and Barbara Loeslein, development director at Ronald McDonald House of Delaware (Photo provided by the Delaware Credit Union League) ...
  • FARMERS BRANCH, Texas (7/23/13)--After 37 years of involvement with the Southwest CUNA Management School, Dr. Charles Idol is retiring as a faculty member. Idol was honored last week during the 41st graduation ceremony at the school, said the Cornerstone Credit Union League (Leaguer July 22).  He has been involved in the credit union movement since 1975, serving as a credit union director and providing consulting, research and educational services in asset/liability management and investments for credit unions and their professional associations. He has conducted seminars for the Credit Union National Association, the Credit Union Executives Society, the National Credit Union Administration, the National Association of State Credit Union Supervisors, AICPA , state credit union regulatory agencies and more than 30 credit union leagues.  He also served as chief economist for a number of organizations, including the Texas Credit Union League (now Cornerstone) and the Southwest Corporate FCU (now Catalyst Corporate FCU) ...
  • EAST LANSING, Mich. (7/23/13)--Michigan State FCU (MSUFCU) in East Lansing, Mich., has decided to rebrand its Oakland University branch in Auburn Hills, Mich., as Oakland University CU (OUCU), said the Michigan Credit Union League. Although OUCU is a trade name, the credit union will remain a part of MSUFCU. The enhanced relationship will allow OUCU to strengthen its more than 50-year partnership within the community, by providing an endowed student scholarship, a grant program, sponsorships, ATM locations on campus, and financial education, said MSFCU. The $2.34 billion asset MSFCU's commitment to Oakland University is valued at nearly $5 million over 10 years (Michigan Monitor July 22) ...

Deadlines Set For Documents On NCUA Appeal Of Barclays Ruling

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DENVER, Colo. (7/23/13)--The National Credit Union Administration will have until Aug. 28 to file its opening briefs with a Denver appellate court on its appeal of the dismissal of its claims against Barclays Capital, which sold residential mortgage backed securities that contributed to the collapse of U.S. Central FCU and Western Corporate FCU.

A July 16 letter from the Clerk of Court of the U.S. Court of Appeals for the Tenth Circuit to NCUA attorneys noted that the court had received and docketed NCUA's appeal and outlined deadlines for documents and briefs to be filed in the case.  Friday, the U.S. District Court for the District of Kansas certified that the record is complete for purposes of an appeal, starting a 40-day clock for NCUA's briefs under the Tenth Circuit's rules.

The agency's appeal comes after the July 10 decision by the district judge to dismiss the Barclays case, as well as 12 out of 20 claims against Credit Suisse, on the basis that the claims are time-barred (News Now July 17).  The Kansas court--as well as a California court in a similar NCUA lawsuit against brokerage firms over corporate losses due to RMBS--said an extender statute and a tolling agreement did not delay the time allowed for NCUA to file its claims.
 
The Tenth Circuit Court of Appeals is also reviewing the time-barred issues in a separate suit NCUA filed against RBS Securities.

CUAD Social Good Site Reports 1,000 Stories Posted

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BISMARCK, N.D. (7/23/13)--The Credit Union Association of the Dakotas reports that the CU Social Good website it launched seven months ago has posted more than 1,000 individual stories about credit unions reaching out to their communities.
 
The site was launched in January and dedicated solely to the sharing of the good things that credit unions do for people and their communities every day.
 
Broken down by category, the entries include, as of Monday afternoon:

  • Charitable work, 500;
  • Community, 427;
  • Credit Unions for Kids, 19;
  • Financial literacy, 137;
  • Scholarships available, 23;
  • Scholarships awarded, 84; and
  • Sustainability, 19.

To celebrate the milestone, CUAD is giving away 25 T-shirts to credit union employees who sign up for its weekly emailed newsletter, Spotlight, which highlights some of the stories each week. Winners will be randomly selected from Spotlight subscribers and announced Aug. 30, said CUAD. 
 
"Credit unions give back to their local communities in an amazing variety of creative and generous ways," said CUAD, adding, "Credit union employees and members are well-known for their volunteer work and charitable fundraising events." CUAD noted the website can be used by credit unions to help in lobbying legislature, community efforts and awareness campaigns.
 
Also, watch for News Now's series of special reports on outreach efforts by credit unions all over the U.S.  And, check out the stories posted--or post your own--on the Unite For Good and aSmarter Choice websites (use the links).
 
Letting people know about the good credit unions do helps raise awareness of credit unions; raising awareness is one of three legs that the Unite For Good campaign stands on to promote the strategic vision where "Americans choose credit unions as their best financial partner."

CUs' Summer Fun Often Has a Cause In Mind

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MADISON, Wis. (7/23/13)--It's July, it's hot, and sometimes credit unions want to have a little fun. 

Click to view larger image Genisys CU, Pontiac, Mich., found out fun and water go together when it sponsored Paddlepalooza 2013, an eight mile canoe and kayak race, which began in Auburn Hills and ended at Rivercrest Banquet Center in Rochester Hills.  Eighty-four paddlers and 20 volunteers participated and had a chance to win items donated by sponsors and supporters, such as duffle bags, paddle floats, waist packs, water bottles,  apparel and gift cards. "It is great to see the Auburn Hills and Rochester Hills communities come together to create a wonderful event on the river," Genisys President/CEO Jackie Buchanan told the Michigan Credit Union League (Michigan Monitor July 22). (Photo provided by the Michigan Credit Union League)
Credit unions, being people-oriented, are finding many ways to have fun this summer, from creating playful videos, to showing appreciation for their members with special events, to boosting employee morale with barbecues and hotdogs, to raising funds or volunteering for a charity. Often the good times had a cause in mind.
 
Here are a few examples.
  • Community Financial CU, Plymouth, Mich., is sponsoring many events--from movies to concerts and in between this summer. They include A Summer Cinema Matinee Series 2013 at the Penn Theatre in Plymouth; Canton Thursday Night Concerts; Friday Family Fun Nights in Novi, Music in the Air in Plymouth and Tuesday Mornings in the Park in Novi.  "Families are how our communities are built and why they continue to thrive," said Sarah Cousineau, marketing manager. "That is why we are proud to continue to support events around the area that promote families enjoying time with each other throughout the summer."
  • Alabama CU, Tuscaloosa, Ala., on Saturday hosted a yard sale and street market so members of the community could "find a good deal" and "help feed hungry kids in the process."  All proceeds went toward Secret Meals for Hungry Children, a program that identifies children how may not have food at home when they leave school.  Residents could sell some of their own items, if they donated $30 to the cause.  Some of the items sold included computers, furniture and a piano.
  • Click to view larger image Rock Valley CU, Loves Park, Ill., treated members and non-members to hot dogs during Rochelle Hot Dog Days on Saturday, July 13.  Rock Valley President/CEO Mike Rosek, pictured here, grilled 240 hot dogs on a "hot day, but a great day."  Lori Perkins, director of marketing, noted non-members went into the branch to inquire about accounts and a few "very new members" shared with their friends in the parking lot what a great financial institution Rock Valley CU is. (Photo provided by Rock Valley CU)
    Del-One FCU, Dover, Del. hosted a mixer with the Central Delaware Chamber of Commerce on June 19 at Del-One's West Dover Corporate Center. The event included "fun, food, prizes and close to 100 people in attendance," said Amy Resh, director of marketing at Del-One.   The theme was Summer BBQ, with food catered by Where Pigs Fly in Dover. "Everyone had a great time, and Del-One FCU staff looks forward to doing it again soon," she said.
  • Greylock  FCU, Pittsfield, Mass., is joining WUPE/WNAW Radio in sponsoring the North Adams "Party in the Park" each Thursday during July and August. Free concerts entertain the public from 6 p.m to 8 p.m. at Noel Field. The event also features a display each week of antique and customized cars. "The combination of live music and food makes for an enjoyable evening at the park with family," said Marilyn L. Sperling, Greylock Federal president.
  • AmeriChoice FCU, Mechanicsburg, Pa., hosted its Fifth Annual Family Fun Extravaganza July 13 in Mechanicsburg. The free event included food, games, child safety kits, balloon twisting, a bounce house, photos with Dollar Dog, and a live broadcast by 99.3 KISS FM. It also included a one-day promotion offering a $25 match when a new Dollar Dog Kid's Club Account was opened for a young member, said the Pennsylvania Credit Union Association (Life is a Highway, July 12).
  • Diamond CU, Pottstown, Pa. combined fun and fundraising at its Eighth Annual Bingo Event to support the American Cancer Society Relay for Life. More than 230 players helped raise $10,000 to shouts of "Bingo" (Life is a Highway July 12).
  • TruMark Financial CU, Trevose, Pa.,  has 27 business and community leaders, professionals and teachers going "hog wild" to compete for the privilege of kissing a pig in its Third Annual Kiss-a-Pig Financial Literacy Fundraiser to support area schools with resources to teach students the basics of money management and personal finance.  TruMark Financial kicked off its fundraiser on June 26 with a luncheon for participants at a local restaurant in northeast Philadelphia. Participants will raise sponsorship money to earn the privilege of kissing a pig. Last year TruMark Financial raised $36,000 and awarded $5,800 grants to six schools. This year's goal is $40,000.
  • San Antonio's Generations FCU started the summer co-sponsoring San Antonio's Eastside Midnight Basketball League (Leaguer June 20).  The 2013 league is featuring 12 men's teams and four women's teams.  Generations served as Title Sponsors for the first season in 2012, which was hailed as an outstanding late-night alternative for more than 100 local at-risk youth. San Antonio Spurs co-sponsored that season and sent talent scouts to the games. The Spurs are the title sponsor this year, with the credit union co-sponsoring the league.
For more fun, check out the photos.  And check out the Credit Union National Association's picnic celebration items. Use the link for more information.

League Surveys In Four States Note Mobile Banking Increase

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FARMERS BRANCH, Texas, and DULUTH, Ga. (7/23/13)--Mobile banking adoption continues to surge, according to surveys in four states by two credit union leagues.
 
About 60% of respondents in Arkansas, Oklahoma and Texas used mobile banking in a survey conducted by the Cornerstone Credit Union League (The Leaguer July 22). About 57% said they use mobile banking weekly; 22% said they engage in daily usage and 21% use mobile banking at least monthly.
 
The league's survey suggests consumers' view is that mobile banking is becoming a necessity rather than a luxury. About 44% of respondents to the survey indicate the availability of mobile banking influences their choice of financial institutions. Roughly 33% of survey respondents said their financial institution doesn't offer the service.
 
Those who used mobile banking indicated they used three functions: Checking account balances (95%), followed by making payments (40%), and making deposits (15%).
 
Of those who do not use mobile banking, 39% said they do not see the need, 33% are concerned about security, and 11% said the technology is too complicated. In addition, 22% indicated their phone does not support the technology.
 
In another survey, in Georgia, more than 49% of respondents to the Georgia Credit Union Affiliates (GCUA) Midyear 2013 Consumer Survey report said they use mobile banking (Consider This July 2013), said GCUA. This is an 18% increase from year-end 2011
 
Mobile banking also is on the rise nationally. About 28% of all mobile phone users and 48% of smartphone users have used mobile banking in the past 12 months, according to a November 2012 survey by the Federal Reserve Board. Those figures represent increases of seven percentage points and six percentage points, respectively, since December 2011. The Federal Reserve Board also reports that 49% of underbanked consumers report using mobile banking in the past 12 months.
 
 

CUs Prepared To Help Members Affected By Detroit Bankruptcy

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DETROIT (7/23/13)--The city of Detroit formally sought federal bankruptcy court protection Thursday when Kevin Orr, the city's appointed emergency manager, made a filing after Michigan Gov. Rick Snyder approved it. The Michigan Credit Union League and area credit unions are poised to help members impacted by the event.
 
"There is still much uncertainty about what the bankruptcy filing will mean for the city of Detroit, and that includes those credit unions that serve city employees," MCUL & Affiliates CEO David Adams told News Now.
 
"But what is certain is that those credit unions will continue to support their members through this process. While these are trying times, we hope that this will be the start of a new, more prosperous future for one of America's great cities," he said.
 
Area credit unions also are uncertain about the bankruptcy's effect. "We don't know what the repercussions are; it is still early for us," Kathy Trembath, president/CEO of Detroit Municipal CU, which serves mostly city employees, told News Now. "We don't know if they will reduce wages more for municipal employees. We may do restructuring of loans or extensions for members.
 
"We will take any action to help members," she added. "Right now, [the situation] is all over the place as to what will happen. Everyone is speculating on things.  We will be proactive to protect our credit union members and assets."
 
Snyder explained his decision in a letter authorizing the bankruptcy filing by citing key statistics  that indicate the city's troubled state (USA TODAY July 19-21).
 
They include: 
  • Since 2000, the city's unemployment rate has nearly tripled and is more than double the national average;
  • About 78,000 city structures have been abandoned;
  • In the first quarter of 2013, an estimated 40% of the city's street lights didn't work; and
  • The city's homicide rate is at a historic high.
Lost auto-industry jobs and an escalating crime rate have caused many middle-class citizens to leave Detroit during the past few decades, resulting in the city's population plummeting to 700,000 from a peak of 1.8 million during the 1950s auto-industry boom times, said USA TODAY.

Wisconsin CUs Raise $542,919 For Kids' Hospitals

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MADISON, Wis. (7/23/13)--The Wisconsin credit union system raised more than a half million dollars for Children's Miracle Network Hospitals in 2012. The $542,919 went to the hospitals nearest the area where the funds were raised, said the Wisconsin Credit Union League.

Wisconsin credit unions accounted for slightly more half of that success. Chapters accounted for about 10% of the total (theleague.coop July 19).

CUNA Mutual Group, with $137,000, provided the largest support from a system partner. Also, the company has separately donated upwards of $500,000 to the charity since 2005 through its local support of a hospital-run kindergarten-readiness program in Dane County. CUNA Mutual also contributes to other states' totals through sponsorship contributions.

CO-OP Financial Services was the next-largest giver in Wisconsin among system partners, with $35,000 contributed. CO-OP also matches funds raised by credit unions that apply for a match before they conduct their fundraisers. In 2012, more than $3 million was raised nationwide through the match-up program.

Credit Union Miracle Day, a run in Washington, D.C., raised the rest of Wisconsin's 2012 fundraising total.

Wisconsin ranked fifth in the nation for credit union support of the charity. The top states for credit union fundraising were California and Texas, each raising more than $1 million in 2012, followed by Florida at $860,000 and Arizona at $554,944.

Credit unions support Children's Miracle Network Hospitals through Credit Unions for Kids, and are the third-largest corporate sponsor of the hospitals, behind only Walmart and Costco, the league said. The effort helps children regardless of their families' ability to pay.

Funds raised help support new facilities, equipment, research programs, patient services, special patient needs and health education programs benefiting 17 million children annually.