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CUNA council white paper focuses on technology security

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MADISON, Wis. (7/29/11)--Security issues continue to evolve with the introduction of new technology and the development of new tactics by fraudsters. That makes creating barriers to repel intruders an ongoing challenge, according to according to a new CUNA Technology Council White Paper. “Technology Security: Mitigating Current Threats and Emerging Challenges” is based on information gathered from six information technology (IT) leaders at credit unions and five experts from security and technology firms. The white paper discusses measures that credit unions can take to strengthen security, including:
* Restricting Internet access to employees based on a case-by-case review; * Providing ongoing training for employees on security policies, risky behavior and social engineering; * Taking an enterprise-wide approach to security with measures such as naming a designated security officer; * Scrutinizing vendors, which is especially important for new technologies such as cloud computing and mobile banking; * Developing policies and procedures to address the use of social media, which poses a potential risk to the credit union’s reputation; and *Strengthening multi-factor authentication to repel intruders and comply with Federal Financial Institutions Examination Council supplemental guidance on authentication issued in June.
Security threats are an everyday part of the electronic exchange of ideas, data and funds in today’s marketplace. While these concerns cannot be avoided entirely, the white paper offers measures that credit unions can take to mitigate risk as they continually take aim at the moving target of technology security. The paper is available online. For more information, use the link.

Consider consumers in different ways Tufano says

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Click to view larger image Closing speaker Peter Tufano stressed the importance of making financial education simple, easy to understand and fun in order to help develop a savings culture among members.
GLASGOW, Scotland (7/29/11)--Financial education is too often boring, which is why so many credit union members fail financial literacy tests, according to Peter Tufano, Pete Moores Dean and a professor of finance with the University of Oxford’s Saïd School of Business. Financial education that is simple, easy to understand and, above all, fun is more likely to help credit unions develop a savings culture among their members, according Tufano, the closing speaker at World Council of Credit Unions’ (WOCCU) World Credit Union Conference. “Credit unions should be open to all people, just like it says in the Rochdale Principles,” said Tufano, who assumed his Oxford position July 1 after spending 22 years on faculty at the Harvard University Business School. “However, sometimes a credit union’s structure makes it hard to do well while trying to do good.” Tufano is a specialist in consumer finance, with particular emphasis on applying research insights to better meet the financial services needs of everyday households. Based on the research he presented to the general session audience, consumer financial education and personal economic security is in a very rocky place.
Click to view larger image "Credit unions are stronger and the outlook brighter than you may think," said NCUA Chair Debbie Matz, while reminding credit union attendees their responsibility to be vigilant and act in the face of future challenges.
In one study, researchers asked whether consumers could come up with $2,000 within 30-days’ notice to cover a minor emergency. Great Britain ranked the highest with 49% of adults surveyed claiming they could meet that level of need, while just 46% of adults responded positively in the U.S. Other countries went precipitously downhill from there. The answer, of course, is more effective financial education and the cultivation of a stronger savings culture among members to the degree that those members have the capability to support it. Often, age and economic standards play a major role in debt literacy. Creating educational programs that operate more like video games may be part of the solution, said Tufano, who pointed to www.financialentertainment.org as a good example of what he defined as a new and, perhaps, more effective approach. “You have to understand your member, not only by understanding what they know, but what they think they know,” Tufano said. “If there is a natural metaphor for money, it is water. Because water can both nurture us and drown us.”
Click to view larger image CUNA Chair Harriet May (left) and President and CEO Bill Cheney (center) present outgoing WOCCU President and CEO Pete Crear with a resolution.
Wednesday's closing session also featured a presentation by Debbie Matz, chair of the National Credit Union Administration (NCUA) and the United States’ top credit union regulator. Matz stressed the strength of the industry but also encouraged a more global view when it comes to current trends involving capital adequacy, industry consolidation and meeting consumer needs. “Credit unions are stronger and the outlook brighter than you may think, but we can't afford to become complacent in facing the challenges of the future,” said Matz, who is serving her second term as NCUA chair. “I am struck by the level of contact many of you have with your members. You live the credit union credo of ‘not for profit, not for charity, but for service.’” Matz was introduced by Credit Union National Association (CUNA) president/CEO Bill Cheney and Chair Harriet May, president/CEO of GECU of El Paso, Texas. The pair also presented outgoing WOCCU president/CEO Pete Crear with a resolution from the CUNA board of directors honoring Crear's 40-plus years of service to the global credit union movement.

As debt ceiling looms CUs plan for members

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MADISON, Wis. (7/29/11)--Facing the possibility of major disruptions to the federal government's operations from an impasse, credit unions serving federal workers are putting in place contingency plans to help affected members. Credit unions that serve government employees are familiar with this type of contingency planning. In April many credit unions with federal employee members were prepared to offer assistance to members in the event of a government shutdown over a possible federal budget impasse. Chris McDonald, president/CEO of Andrews FCU, Suitland, Md., said preparing for a disruption for the second time is easier on some levels, but not emotionally. “From a procedural standpoint, it’s much easier but it’s discouraging too,” McDonald said. “We’re dealing with real lives here. Our members are trying to get through the tough financial decisions in their lives and they can’t figure out why Washington can’t work this out, why Washington is playing politics on their backs. We’ve made the commitment to do everything we can so they don’t feel that.” Jason Lindstrom, chief marketing officer at $275 million asset Belvoir FCU Woodbridge, Va., said having a plan in place alleviates any anxiety for both the members and the credit union. “If they do ask us about needing help we have a plan in place,” Lindstrom said. “We actually had a couple calls from members this morning--not asking for help--but thanking us for being there to help them.” Belvoir FCU, Woodbridge, Va., has introduced an Emergency Assistance Loan, skip-a-payment for members who currently have loans with the credit union, and free financial consultation services to help members. Belvoir FCU serves the Fort Belvoir community and several select employee groups. Andrews FCU, which serves the District of Columbia, Andrews Air Force Base, McGuire Air Force Base (N.J)., and military installations in central Germany, Belgium, and the Netherlands, will advance mid-month payroll scheduled for August 15 to active duty military members who have direct deposits with the credit union. The one-time advance provides military members with the means to pay mortgages and other important expenses even when their government paycheck is unavailable. The amount advanced will be based on the mid-month payroll received in July. Andrews FCU will also offer 0% annual percentage rates loans to members who receive other government direct deposits, including military retirement pay. The 0% APR loans will have a 30-day repayment term. Justice FCU, with $514 million in assets, Chantilly, Va., will offer current and potential members a special Furlough Relief loan. Affected current members will also be offered deferred payments on any existing consumer loans or credit cards that are carried with Justice FCU, which exclusively serves employees of the Department of Justice, the Department of Homeland Security, law enforcement communities, their family members, related associations, and contractors. The special Furlough Relief loan will allow current and potential members a 0% interest rate for 60 days, at which time the interest rate will convert to 4.90%. The repayment term will be 12 months and the maximum amount will be up to $3,000. “Supporting our members in a time of financial stress is important to us,” said Justice FCU president/CEO Pete Sainato. “Providing assistance to our law enforcement community is a vital part of our operation. We were there for our members during the last government furlough and plan to be there for them this time should the government shut down.” STAR USA FCU, Charleston, W. Va., is working with federal government employees who may be impacted by a shutdown, and also “retiree” members who are receiving government benefit checks like social security. STAR USA is offering short term loan would be at a 5% APR anyone DD those who are not delinquent prior to any shutdown. STAR USA has a community charter and serves many federal employees who work at the Veteran’s Administration Hospital in Huntington, W. Va. The credit union also has a high number of retired employees who receive government benefits. “I think everyone believes it’s going to be worked out in a short period of time,” said STAR USA president/CEO Dan Smithson. “But we feel that we know our membership well enough that we can help them through a difficult time if it comes to that.”

WOCCU welcomes new member The Gambia

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GLASGOW, Scotland (7/29/11)--The National Association of Cooperative Credit Unions of The Gambia (NACCUG) is the newest member of World Council of Credit Unions (WOCCU). The WOCCU board of directors unanimously approved NACCUG’s application at its meeting immediately preceding the 2011 World Credit Union Conference here last week, bringing the number of WOCCU membership organizations to 44 members representing 55 countries. “I am especially pleased that NACCUG has chosen to join WOCCU,” said outgoing President/ CEO Pete Crear, who attended his final board meeting last week. “The inroads we have made into Africa, as well as on other continents, shows that the global credit union movement is growing in strength and reach, and I am happy to have seen one final example of that growth before my retirement.” Founded in 1991, NACCUG is The Gambia’s only credit union trade association and represents all 61 credit unions in the country. The Gambia’s credit unions serve 40,000 members and have $10.8 million in total assets. NACCUG provides advocacy, training and marketing services and acts as a central finance facility to its affiliates. WOCCU held its 2008 African Technical Congress in The Gambia in collaboration with NACCUG, and NACCUG officials participated in WOCCU's African Regulators’ Roundtable meeting in Malawi last year. “Today, the credit union movement in The Gambia steps forward proudly to join their peers within the wonderful international credit union fraternity,” said Baboucarr Jeng, NACCUG general manager. “We look forward to becoming a full and active member of the WOCCU family.” NACCUG’s membership was effective as of its approval last week by the WOCCU board. Crear will retire from his post Aug. 3 and will be succeeded as president/CEO by WOCCU Executive Vice President and Chief Operating Officer Brian Branch.

CU Home Buyers Plan wins innovation tournament

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MADISON, Wis. (7/29/11)--The Filene Research Institute and the Crash Network--a group of young credit union executives from around North America--posed a challenge earlier this year to other young credit union executives to increase home ownership. “The Collider,” a tournament that funneled the question from 19 initial ideas to a winning product in just 10 weeks, asked “How can credit unions increase the availability of affordable home ownership in North America?” Filene and the Crash Network kicked the competition off in mid-April. The Crashers had to come up with new, responsible approaches for affordable homeownership. In less than two weeks, 19 pitches rolled in from the group. Round two demanded concept documents from 10 teams, which a panel of judges then drilled down to the final four ideas. “This was an experiment for us,” says Mark Meyer, CEO of the Filene Research Institute. “But we were blown away by the level of creativity and quality of ideas coming out of the Crasher group.” In the end, “The Credit Union Home Buyer’s Plan” by Robert Christiansen of Servus CU, Edmonton, Alberta, took home the gold. “The Credit Union Home Buyer’s Plan” offers matching incentives on member-contributed savings to assist members in saving for a down payment for the purchase of a home. The credit union makes an annual matching contribution on member-contributed savings every year over the life of the plan. “In an industry where nearly no financial institutions offer meaningful incentives for saving, this product could serve to drastically differentiate the host credit union from its competitors at essentially the same cost a credit union would spend on a marketing campaign,” Christiansen said. The judges agonized over which team would be crowned the ultimate Collider champion. Crashers Bill Clancy, Lake Michigan CU, Grand Rapids, Mich.; Amanda Thomas, Members First CU, Columbus, Ohio; Matt Vance , Industrial CU, Bellingham, Wash.; Lisa Brown, Tallahassee-Leon FCU, Tallahassee, Fla.; and Sean Capaloff-Jones, UMassFive College FCU, Hadley, Mass., offered healthy competition as they tested out concepts in income-based mortgage payments (CCPE Loan Program), lease-to-own options on foreclosed homes (Smart Move Mortgage), and separating the value between land and properties (Land Trusts). Christiansen’s idea will get a boost into the marketplace with the assistance of a Filene Research Institute implementation team. In addition to winning that support, Christiansen will present “The Credit Union Home Buyer’s Plan” at Filene’s annual big.bright.minds meeting in October. big.bright.minds is a gathering of Filene’s research council CEOs, i3 innovators, and academic research fellows. “I’m thrilled to have been selected for the winner of The Collider and am looking forward to working with Filene’s implementation team to build the CU Home Buyers Plan,” Christiansen said. For more information and a photo of Robert Christiansen, use the link:

United FCU to buy Griffith Savings Bank

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ST. JOSEPH, Mich. and GRIFFITH, Ind. (7/29/11)--United FCU (UFCU), St. Joseph, Mich., and Griffith Savings Bank, Griffith, Ind., Wednesday jointly announced the signing of a definitive agreement under which UFCU will purchase substantially all of the assets and assume deposits and other liabilities of Griffith. Under the terms of the agreement, UFCU will purchase all loans, investments, real estate, accrued interest receivables, and other banking-related assets of Griffith (with an estimated value of roughly $81 million, after a discount to the loan portfolio agreed to by the parties) and will assume all deposits, Federal Home Loan Bank advances, and accrued interest payable of about $81 million. “We are extremely pleased to have the opportunity to expand our market presence into Northwest Indiana,” said UFCU’s CEO, Gary L. Easterling. “We welcome the Griffith customers and employees to the UFCU family and look forward to continuing the tradition started by Griffith Savings Bank of delivering community-focused value to the people of Griffith.” UFCU will continue to operate its new credit union branch at Griffith’s current location. Griffith will be retaining certain assets that will be used to fund accrued liabilities relating to its employee benefit plans, which will not be acquired by UFCU in the transaction. The acquisition is subject to regulatory approvals and is expected to close in the third quarter of 2011. Griffith intends to liquidate after the closing and distribute any remaining net assets at the time of liquidation to its depositors. Although the amount of the distribution cannot be determined at this time, depositors who retain accounts at UFCU will be credited with their pro rata distribution upon Griffith’s liquidation. Other depositors will be sent their distributions. Established in 1949, United FCU had total assets of $1.3 billion as of June 30 and operates 22 offices in Michigan, Nevada, Arkansas, North Carolina and Ohio. Griffith had total assets of $88.5 million as of June 30, and operates a single location. Griffith was initially formed in 1930 as Griffith Building and Loan Association.

Western CUNA Management School celebrates 50 years

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CLAREMONT, Calif. (7/29/11)--More than 150 credit union professionals networked extensively during the Western CUNA Management School’s (WCMS) special two-day 50th anniversary conference and graduation held July 20 and 21 at Pomona College in Claremont, Calif. Throughout, some of the school’s more than 3,500 alumni over the past five decades mingled with current students. The event--sponsored by CO-OP Financial Services--included a reception, breakout sessions and graduation ceremony. CUNA President/CEO Bill Cheney served as the 50th graduating class commencement speaker, and Google Vice President of People Operations Laszlo Bock was the conference keynote speaker. Other conference speakers included WCMS President James D. Likens, long-time WCMS faculty members Martha Andresen (Pomona College English professor), Harry Eggleton (Emergent Consulting president), and David Tansey (Josephson Institution of Ethics business ethics speaker), as well as WCMS Dean Michael Steinberger, CO-OP Financial Services Inc. President/ CEO Stan Hollen, and Filene Research Institute CEO Mark Meyer. At the July 21 graduation, Cheney--a former WCMS board member--shed light on the mission credit unions have to convince consumers the industry is a “smarter choice” over banks. “We have to create an operating environment that will allow credit unions to grow, and we need your help to accomplish this,” Cheney said. “For you to show a commitment to credit unions at this point in the history of our nation and economy shows how much you value our movement and the people we serve. I am counting on you.” During the two-day conference, U.S. Rep. Ed Royce, (R-Calif.), was featured in a video message during lunch, saying credit unions are committed to helping give consumers a choice. Royce also spoke about the member business lending cap bill he authored. “What this bill will do is create 100,000 new jobs,” he said. “I ask you to contact your senator and urge their support. That’s my call to action.” Conference keynote speaker Bock addressed Google’s unique culture and discussed the “heart” of business. He noted parallels in the people-oriented management approaches of credit unions and Google. He encouraged credit unions to “use data to make better people decisions.” Likens’ focused on the theme of “adaptability”. As the economic, political, and social environments continue changing, credit unions have always been able to adapt and contribute to the future success of American consumers, he said. He gave a history of how credit unions have adapted over the years, referencing significant events. “We must continue to recognize the significance of such important forces of change and be adaptable to them,” Likens said as he addressed the opening general session audience. “We operate in an ever evolving world, and as it changes, credit unions must adapt if they are to survive and remain vital. For this to happen, credit unions need smart, adaptable leaders. That’s where WCMS comes in. We don’t train--we educate for the future.” Likens was “honored and humbled” by his students’ success, and thanked them for attending the momentous occasion. "If you have someone in your credit union that you want to attend this school, we want to find a way for them to attend. Money should not be a barrier." Steinberger said during the conference. "Credit unions are more relevant today than ever. WCMS is helping produce the next generation of credit union leaders." And Hollen added: “We’re proud of this prestigious school and its students. We are all proud to celebrate its achievements over 50 years. This year’s James D. Likens Alumni Recognition Award went to Susan Streifel, CEO of Woodstone CU, Federal Way, Wash. The Charles M. Clark Memorial Award went to Jay Lee, operations officer for Mattel FCU, El Segundo, Calif., and risk management and technology officer for City of Downey (Calif.) FCU. The Likens Award, founded by the Alumni Association of WCMS, is given to a graduate who has made significant achievements in the credit union field since graduation. The Clark Award is given to the senior student nominated by his or her class who best represents high moral character, leadership, credit union dedication, and academic achievement. WCMS’ program for credit union professionals is held over three years, with two-week terms during consecutive summers, led by a faculty made up of carefully chosen professors, consultants and credit union leaders. Students also complete two major projects that analyze their credit unions.