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CU System briefs (07/07/2011)

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* CHESTERFIELD, Va. (7/8/11)--DuPont Fibers FCU, Chesterfield, Va., will change its name Aug. 1 to Argent CU to better reflect its overall membership, which has evolved over the years since it was founded in 1956, and its Greater Richmond, community charter. The $190 million asset credit union said the new name has an affinity with the DuPont name. "DuPont" is French, and "argent" is the French word for money. Also, in Latin, "argent" means silver or coins. "DuPont Fibers FCU is changing names, not direction," said President/CEO Rose Gilliam, who added the credit union is "still dedicated to being our members' trusted financial partner for life. Simply, we are Argent CU, the new name for money" … * GRAND RAPIDS, Mich. (7/8/11)--Xtend Inc., a Grand Rapids, Mich.-based cooperative credit union service organization (CUSO), announced that two board directors were re-elected during the CUSO's Eighth Stockholders' Meeting last week at its headquarters. Steve Searfoss of South Bend, Ind.-based AAA FCU and Barb Niedbala of Rogers City, Mich.-based Calcite CU, were re-elected to three-year terms. The meeting, the CUSO's largest to date, served as a kickoff for networking events hosted by its sister CUSO, CU*Answers. Xtend President Scott Collins said Xtend hopes to set a pace of growth within its network of partners to bring more opportunities across the board, including establishing new partnerships with fellow CUSOs or helping credit unions drive more loan pipeline activity in their shops …

45M people manipulate IDs on applications study says

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SAN DIEGO, Calif. (7/8/11)--Roughly 45 million people in the U.S. have deliberately maneuvered their identities in applications for a variety of financial and other transactions, according to a study by ID Analytics Inc. They maneuvered their identities in applications for credit, for cell phone service, for auto loans and other transactions, said the San Diego-based consumer risk management company. ID Analytics Inc. is a CUNA Strategic Services provider. Its ID:A Labs conducted the study with data from its network, which contains more than 1.4 billion unique identity events for 300 million people. The study looks beyond typos and name changes to examine deliberate and improper variations of Social Security numbers, names, and dates of birth. Its findings:
* Eight million people use two or more Social Security numbers; * Sixteen million people use multiple dates of birth; and * Ten million people manipulated their identities by co-mingling some of their spouse's information (Social Security number or birth date) into their own identity.
The company provided examples from three of the most prolific offenders:
* Offender No. 1, who resides in Philadelphia, Pa., has 165 variations of Social Security numbers, 44 different dates of birth, and three different first names; * Offender No. 2, who resides in Brooklyn, N.Y. has 146 Social Security numbers, eight dates of birth, and eight different first names; and * Offender No. 3, who resides in Cleveland, Ohio, has 106 Social Security numbers, 12 dates of birth, and six different first names.
"This is the first national study of people who are explicitly manipulating identity information," said Stephen Coggeshall, Ph.D. and chief technology officer at ID Analytics. "While there is extensive research on the crime of identity fraud and its victims, there is far less on the actual perpetrators of the crime. Now, for the first time, there is a comprehensive view of who identity manipulators are, where they are living and specifically how they are manipulating their personal information," he added. "Deliberate identity manipulation is far more prevalent than we imagined," Coggeshall said. "We aren't including people using nicknames or making a typo on a Social Security number or date of birth, but rather repeated and intentional alteration of key identity elements, in some cases by spouses and parents." He added the study uncovered fraudsters, people manipulating their identity to hide in plain sight, as well as those seeking to avoid poor credit ratings. The worst cities for identity manipulation are metro areas in Michigan--including Detroit, Flint and Lansing--and Texas, which includes Dallas, Houston, and border and coastal towns such as Corpus Christi, El Paso and McAllen.

CUNA economist touts CU lending on IBloomberg RadioI

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WASHINGTON (7/8/11)--Credit Union National Association (CUNA) Chief Economist Bill Hampel was live on Bloomberg Radio Thursday discussing the economy and its recovery--and got in a plug for credit union lending in the process. During the nationally aired show, "The Hays Advantage,” featuring Kathleen Hays,Thursday afternoon, Hampel noted that consumers are feeling better about their own finances, but they are still very worried about the economy. “Consumers are basically able to spend more than they did before; they just aren’t yet willing to do so quite yet,” Hampel said. “One of the things that we see in credit unions is a lot of credit unions have plenty of money to lend, and are quite willing to lend to their members. As we’ve said before, [credit union] members and consumers have improving credit ratings--but they’re just not willing to borrow, not yet --but I think that’s going to be turning around quite soon,” he said. The CUNA economist noted that there’s plenty of available supply of credit, but it’s really up to the consumer to take action, at least at this point. “The consumer is quite able to borrow; but the consumer has to pull the trigger,” Hampel said.

Visa CEO notes interchange rules impact on CUs

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NEW YORK (7/8/11)--As it made its first filing with the Securities and Exchange Commission (SEC) since the Federal Reserve's final ruling on restricting debit card interchange fees, Visa Inc. said in a conference call Wednesday that it expects credit unions and small banks and other programs to see "unintended consequences" from the rule. Visa CEO Joseph Saunders said Wednesday in the conference call that the 21-cent limit for debit card payments, excluding a fraud-protection fee, allows card issuers to "at least partly defray the cost of running a secure, reliable and efficient debit card program (Dow Jones Newswires via NASDAQ.com July 7). However, Visa continues to believe that the cap "will have unintended consequences as it relates to small banks, credit unions, prepaid and government programs, as well as industry investments in security, innovation and reliability," Saunders said. He indicated the card company would continue to provide "some level of incentives to specific merchants" to ensure they route payments through Visa's network. Any increases in incentives would be "primarily due to significant increases in global volume" rather than regulation or legislation. The company could make concessions about how much it charges financial institutions for processing transactions in order to preserve and grow the business under the new structure, said Visa Chief Financial Officer Byron Pollitt during Wednesday's conference call on the impact of the Fed's rule. In its SEC filing Wednesday Visa said it expects its revenue for this year to grow 11% to 15% and more in 2012. Earnings per class A share are expected to increase more than 20% this year and percentages in the middle to high teens in 2012. Visa's guidance has implications for other credit card programs, said Dow Jones. MasterCard has told its investors to expect more than 20% earnings per share growth this year, next, and in 2013.

LSCU honors pros CUs for service

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TALLAHASSEE, Fla. (7/8/11)--The League of Southeastern Credit Unions (LSCU) recognized seven credit unions and executives for their work and dedication, with LSCU Awards during the closing general session of its second Annual Convention & Exposition (AC&E) on June 18. Each award was also accompanied by a video highlighting the good works of the recipient. The awards are granted to professionals, volunteers and credit unions that have made outstanding contributions to the development and growth of the credit union movement in Alabama and Florida. The LSCU Award categories and winners were:
* Distinguished Service Award--Bill Marquardt (posthumous), former CEO, $288 million asset City County CU of Fort Lauderdale, Fla. Marquardt’s picture also will hang in the Credit Union House in Washington, D.C.; * Professional of the Year--Joe McGee, president/CEO, $367 million asset Legacy Community CU, Birmingham, Ala.; * Volunteer of the Year--Maurice W. Johnson, chairman, $1 billion asset Pen Air FCU, Pensacola, Fla.; * Credit Union of the Year (less than $100 million in assets)--$72 million asset NAHEOLA CU, Pennington, Ala.; * Credit Union of the Year ($100 million to $500 million in assets)--$410 million asset Alabama CU, Tuscaloosa, Ala.; * Credit Union of the Year ($500 million or more in assets)--$1.2 billion asset CFE FCU, Lake Mary, Fla.; and * Brother’s Keeper--All Alabama and Florida credit unions, for their efforts following the tornadoes in Alabama in April.

Man pleads guilty to shooting teller during robbery

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GREENSBURG, Pa. (7/8/11)--A Crafton, Pa., man pleaded guilty Thursday to charges stemming from a Jan. 8, 2010, robbery that left two tellers of Westmoreland Community FCU injured. David Louis Mathis, 47, faced a possible life sentence. However, he pleaded guilty to using a firearm during a crime of violence in exchange for an agreement that he would serve the mandatory minimum sentence of 25 years in prison and five years on probation, said Pittsburgh Tribune-Review (July 7). During the robbery, Mathis walked into the Greensburg, Pa.-based credit union shortly before 4 p.m. and fired a 9 mm pistol at a teller's computer monitor. The bullet went through the monitor and struck the teller in the stomach. A second bullet appeared to target another teller's head, but the teller ducked and the bullet hit the wall behind her. Two other shots were fired at random, said the Pittsburgh Post-Gazette (Jan. 8, 2010). He also pistol-whipped another female teller when the teller who was shot couldn't open the vault. According to the Tribune-Review, Mathis fled the credit union with $6,878 and got into a sports utility vehicle driven by Lamont Laprade, 34, of Huntington, W.Va. The getaway vehicle was pointed in the wrong direction and became blocked by a member pulling into the credit union. Mathis and Laprade opened fire on the other vehicle before turning the SUV around and fleeing. They abandoned the SUV and fled through snow on foot. State Troopers found Laprade hiding in a barn two miles away. Mathis was arrested the next day at a mall trying to buy shoes and clothing after spending the night in the cold. Laprade faces six charges, including armed bank robbery and conspiracy. Sentencing for Mathis is set for Oct. 26.

UIECU celebrates first year as universitys Visa provider

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CHAMPAIGN, Ill. (7/8/11)--The University of Illinois Alumni Association (UIAA) and the University of Illinois Employees CU (UIECU) are celebrating the first year of the Official Visa Card of the University of Illinois. In July 2010, UIAA selected the $252.6 million-asset, Champaign, Ill.-based UIECU, which has served University of Illinois families for nearly 80 years, to provide an Illinois-branded Visa credit card to its 625,000 members. The endorsement replaced a 19-year relationship with MBNA and its successor, Bank of America. UIAA said the credit union could provide better credit card terms and service to alumni than the major banks that have traditionally sponsored such affinity programs. In the first eight months of the program, the new partnership issued more University of Illinois-branded credit cards than any college or university during the previous calendar year nationwide. As part of the program, Illinois alumni and fans may carry one of six card designs representing the University of Illinois Urbana-Champaign, Chicago and Springfield campuses. Cardholders also have the option to enroll in a rewards program. In one year, more than 2.5 million points have been earned by the program’s cardholders--translating to hundreds of free airline flights. “One year later, our cardholders are already saving over $250,000 annually in interest expense due to our low rates,” said E.J. Donaghey, UIECU president/CEO. As part of the partnership, a royalty is paid to the university’s alumni association from the transaction fee paid by merchants when they accept the card for payment. The royalties help fund alumni association programs, communications and services that benefit alumni, students and the University of Illinois.

Five more CU mergers in the works

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MADISON, Wis. (7/8/11)--Consolidation in the credit union industry continues nationwide, including a merger between two of the largest credit union trust companies. Among the mergers in the works:
* BECU Trust Co., Tukwila, Wash., will merge with Members Trust Co., Tampa, Fla., forming the largest credit union service organization for trust services in the U.S., according to the two companies. Under terms of the merger agreement, BECU, with $165 million in assets under management will gain an ownership interest in Members Trust Company, which has $700 million in assets under management. * Towpath CU, with $76 million assets, Fairlawn, Ohio, and $39 million-asset TeleCommunity CU, Akron, Ohio, have merged. The continuing credit union will retain the Towpath name (Beacon Journal July 6). Alan McArthur, Towpath CU president/CEO; and Rose Bartolomucci, president/CEO of TeleCommunity CU, will operate the credit union as a team, with McArthur serving as CEO and Bartolomucci serving as president. * Charleston Newspapers FCU, Charleston, W.Va., with $2.4 million assets, has merged into $75 million-asset Members Choice WV FCU, also of Charleston (Daily MailJuly 4). * Birmingham (Ala.) News Employees CU, has merged into $560 million-asset Alabama One CU, Tuscaloosa, Ala. (Birmingham News July 1). * Huntingdon County FCU, with $11.9 million assets, Huntingdon, Pa., has merged into SPE FCU, with $65 million assets, State College, Pa. (Centre Daily Times July 5).

CenCorp completes capital offering

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SOUTHFIELD, Mich. (7/8/11)--Central Corporate CU (CenCorp) announced it completed its Perpetual Contributed Capital (PCC) offering July 1. CenCorp said it received strong support from its existing members, with more than 90% of member credit unions giving PCC commitments of $80 million so far. CenCorp said it anticipates contributions will rise as the process is finalized and paperwork is revised from additional members. “This is a significant milestone for CenCorp,” said Bill Walby, CenCorp CEO. “With the capital change, CenCorp is positioned to serve members under its revised business model and comply with new regulatory requirements. The high participation rate from members demonstrates that a credit union-owned cooperative for correspondent services continues to make sense. We are fortunate to have received this level of support.” CenCorp, based in Southfield, Mich., is a corporate credit union that provides wholesale investment, credit and correspondent services to more than 300 credit unions.

June bankruptcies down says another report

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NEW YORK (7/8/11)--Another study confirms that the number of U.S. citizens filing for bankruptcy is declining, although that doesn’t necessarily portend an improving economy, according to a Wednesday article in The New York Times. U.S. bankruptcy filings in June totaled 120,623--an average of 5,483 per day, which is a 6.2% decline from May, when filings were 122,775--or 5,846 per day, according to a report from Epiq Systems, a company that monitors bankruptcy filings. For a related News Now Tuesday article about another bankruptcy report and credit unions, use the link. Compared with filings in June 2010, average daily filings are down nearly 10%, Epiq’s study found. In the short term, access to credit can influence the bankruptcy rates. When lenders tighten their standards, bankruptcy filings usually increase because consumers feeling the pinch no longer can use credit cards or other loans to float them through a rough financial period. When there is a rise in new loans being issued, filings tend to fall--at least for a while, the Times said. Overall bankruptcy filings should drop 5% to 10% this year, leveling at roughly 1.46 million--in large part because consumers have a little more access to credit now than in recent years, Robert Lawless, a University of Illinois College of Law professor who specializes in bankruptcy, told the Times. That estimate compares with roughly 1.56 million filings in 2010 and nearly 1.45 million in 2009. To read the article, use the link.