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CU System briefs (07/09/2009)

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* SACRAMENTO and RANCHO CUCAMONGA, Calif. (7/10/09)--The California Department of Financial Institutions (DFI) issued guidelines after receiving inquiries on whether credit unions and other state-chartered financial institutions are subject to limitations in cashing and holding registered warrants--the IOUs the state has distributed while it deals with its budget crisis. A financial code limit on the amount of obligations one person may owe to a bank at any time is not applicable to the IOUs. Neither are sections of the financial code that limit the amount a bank may invest in the security of one obligor. Credit unions may invest in the IOUS without a specific limitation on the amount, the directive said. Meanwhile more than 63 credit unions in the state are accepting the IOUs. Use the link for a list of the credit unions … * DURHAM SPRINGS, La. (7/10/09)--LA DOTD FCU announced Thursday it is changing its name to Main Street Financial FCU, effective July 20. The change reflects the growing diversity of its membership while honoring its legacy of serving employees of the Louisiana Department of Transportation and Development. The 70-year-old credit union's membership has grown to include several communities as well as LA DOTD contractors and consultants, and more than 200 corporate partners, said President/CEO Cary J. Anderson. The $103 million asset credit union serves anyone who lives, works, worships or attends school in Livingston, Calcasieu and Cameron parishes. "We believe Main Street Financial connotes the strong family and financial values that are at the heart of the credit union," said board Chairman Judy Wascom … * DEER PARK, Texas (7/10/09)--Shell FCU, a $354 million asset credit union based in Deer Park, Texas, announced that its loans during June broke records, with the credit union closing more than $17 million in consumer loans, mortgages and credit cards. Shell attributed the growth to its summer auto loan special with 90-day deferred payments, aggressive marketing efforts and exemplary staff participation. "We're not feeling the credit crunch at Shell FCU, and we're proving it to our members with our latest marketing billboard campaign stating, 'Banks taking all YOUR credit? We give CREDIT where credit is due,'" said D'Anne Turner, vice president of lending … * ANDERSON, S.C. (7/10/09)--Anderson County Educators CU, Anderson, S.C., will merge with S.C. State CU, Columbia, the credit unions announced (The Anderson Independent Mail July 8). Educators, with one branch, has $5.5 million in assets and serves employees and retirees from several area school districts and colleges and Anderson University. State CU has $455 million in assets. Its 17 offices in 12 towns serve employees of city, county and state agencies, those enrolled in the state Retirement Systems, and students and staff of any state-chartered college, university or technical college system … * RANCHO CUCAMONGA, Calif. (7/10/09)--California Center CU (CCCU) has moved to Ontario, Calif., from Rancho Cucamonga to share the property as its sponsors, which include the California Credit Union League and CU Direct Lending (CUDL). According to the $9 million asset credit union's president/CEO, Linda Pettit, "The new location provides California Center not only the ability to be near its sponsors but also enables the credit union to position itself, for the first time in its 41-year history, in a retail center with increased visibility and the opportunity to expand and grow." Its location near the city's airport makes the credit union the first financial institution location for visitors and travelers. The credit union also updated its brand and logo …

N.C. league thanks Sen. Hagan for fin-lit bill

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GREENSBORO, N.C. (7/10/09)--The North Carolina Credit Union League has sent a letter to U.S. Sen. Kay Hagan (D-N.C.) thanking her for introducing the Financial Literacy for Students Act of 2009 (S.B. 1339). Hagan introduced the bill on June 24. The bill aims to improve financial literacy among middle and high school students by giving states federal grants for integrating financial literacy curriculum in their schools statewide. The bill provides that 80% of funds would be earmarked for curriculum, with 20% for training teachers. League President John Radebaugh wrote in the letter, "Credit unions work hard to ensure that the next generation is responsible with their financial futures, and the Financial Literacy for Students Act of 2009 can only solidify that promise." Radebaugh noted that North Carolina credit union employees each year conduct 350 financial education workshops that reach more than 15,000 students. He mentioned the National Endowment for Financial Education's High School Financial Planning Program, Biz Kid$ curriculum based on the popular PBS show about young entrepreneurs, and Credit and Money Management. The league holds a seat on the board of the North Carolina Jump$tart Coalition, and the Carolinas Credit Union Foundation helps underwrite Biz Kid$ programming as well as provides supporting materials to more than 500 middle schools. Hagan is a "big supporter of credit unions' efforts in financial literacy," the league said on its website. "As our students enter the work force," the senator said in a statement released by her office, "it is critical that they have the tools they need to make sound financial decisions when applying for credit cards, securing student loans, taking out a mortgage and managing a budget."

Two more file suits on CUNA Mutuals credit disability

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RAPID CITY, S.D., and GREENVILLE, S.C. (7/10/09)--Two more credit union members have filed suits against CUNA Mutual Group and CUNA Mutual Insurance Society (CUMIS) regarding credit disability benefits. Conrad Perovich, a member of Dacotach FCU, Rapid City, S.D., filed a lawsuit July 2 in U.S. District Court in the District of South Dakota, Western Division, against CUNA Mutual Group and CUMIS for denying him credit disability coverage. Perovich is suing CUNA Mutual and CUMIS for rejecting disability benefits regarding a claim he submitted Feb. 28, 2008, for benefits between Jan. 9, 2007, and Jan. 11, 2008. CUNA Mutual denied Perovich’s claim on March 17, on the basis that he had not filed for benefits within the time frame allowed under the certificate of insurance, the complaint said. Perovich claims that he did file within the time allowed by the certificate of insurance, which says that proof of loss must be submitted within 90 days when the claimant’s disability stops. Russell Smith, a member of Market USA FCU, Laurel, Md., also filed suit May 7 in South Carolina after CUNA Mutual Group refused to pay benefits after Smith became disabled, according to the complaint. “CUNA Mutual carefully examines each claim and pays benefits due under the policy,” said Phil Tschudy, CUNA Mutual media relations manager. “We are in a closely regulated industry, and we routinely work with regulators to review claims handling practices. We are fully transparent, and the interpretation of the policy that is being challenged was one that no court had ever disagreed with,” he told News Now. CUNA Mutual is reviewing past claims that might involve a similar situation, and will work with regulators to discuss how to best handle the situation, he added. “As a mutual insurance company, our responsibility is to administer our claims fairly, and we consistently meet that responsibility,” Tschudy said. In 2008, CUNA Mutual paid out $1.6 billion in benefits to policyholders, of which $385.6 million were in claims for credit insurance. In June, the estate of Teri Powell, who died of cancer in 2007, won a lawsuit against CUNA Mutual Group. She filed the suit after CUNA Mutual denied credit disability benefits on her home equity loan (News Now June 16). CUNA Mutual Group is considering an appeal of that decision.

Texas league media efforts result in 147 articles

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FARMERS BRANCH, Texas (7/10/09)--The Texas Credit Union League has placed 147 stories and articles about credit unions and the movement in media channels since the year began. That's not bad, considering that today is the 191st day of the year. The articles appeared in newspapers, on radio and on television, said the league (LoneStar Leaguer July 10). According to an unnamed independent service, the league exposed credit union messages to more than 5.8 million people around the country. The "ad value"--what it would have cost to purchase the space covered--was calculated at nearly $2 million worth of free publicity, the league said.

Deadline for CU training awards is Aug. 3

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MADISON, Wis. (7/10/09)--The deadline is Aug. 3 for entries in this year’s Experience Learning Live (ELLy) Training Awards program for credit unions, sponsored by the Credit Union National Association (CUNA). Awards will be presented at the 2009 Experience Learning Live conference, held Oct. 25-28 in Nashville, Tenn. The ELLys are the only national awards presented to credit union trainers who are outstanding in professional staff development. Awards will be presented in two asset divisions--less than $250 million assets and $250 million assets or above--in six categories:
* Chi Phi Delta X II Award--Represents the best development of a Credit Union University, and its effect on staff learning and performance, using CUNA’s Center for Professional Development products as the foundation; * Coach Award--Recognizes a trainer who has significantly impacted a trainee’s career and life through education, mentoring and coaching. The entry can be submitted by employees or trainers in honor of trainers who impacted their own or their co-workers’ lives and careers; * eLearning Award--Demonstrates how technology-based training was incorporated into, and enhanced, credit union training programs; * Training Champion Award--Singles out senior management staff who go beyond the call of duty to support and develop the training in their credit union; * Training Professional of the Year Award--Honors exceptional achievements in performance and learning by a credit union training professional or department; and * WOW Award--Awards the credit union with the best overall training curriculum or best training event.
For more information, use the link.

Filene selects 22 new i3 members

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MADISON, Wis. (7/10/09)--The Filene Research Institute has selected 22 credit union executives to join the institute’s i3--Ideas, Innovation, Implementation-- program, which fosters the development of new ideas and innovations for credit unions. Each member will serve a two-year term and participate in semi-annual meetings arranged by Filene. The next meeting will be Sept. 29 through Oct. 2 in Montreal, Quebec. Seventeen individuals representing 12 states were selected, Filene said. Also, for the first time, i3 will include a five-person Canadian team representing three provinces. Denise Gabel, Filene’s chief innovation officer, noted that Filene is “eager to continue our collaboration with our friends to the north and explore their financial model at our fall meeting.” Currently, i3 members are working on topics such as the American Dream, sustainability, and income generation. i3’s most recent idea is an anonymous debt management tool for members. Credit unions can test drive the tool at DebtinFocus.org and tap into the service by e-mailing innovation@filene.org. Filene received more than 60 applications from qualified credit union executives. The selection was based on innovative aptitude, experience, and other factors including present position, leadership abilities, motivation, geography and type of credit union. “Innovation is a people business,” Gabel said. “Having such a rich talent pool in these challenging economic times illustrates the industry’s strong commitment in building a better tomorrow.” New i³ members are:
* Shelly Berryman, director of member advocacy, SchoolsFirst FCU, Tustin, Calif.; * Corey Bowes, chief operating officer, OMISTA CU, Moncton, NB; * Dawn Collins, project manager, Mt. Lehman CU, Abbotsford, BC; * Julie Cosgrove, vice president of employee relations, Affinity Plus FCU, St. Paul, Minn.; * Mark Coudriet, vice president of information technology, Xceed Financial CU, El Segundo, Calif.; * Louise Delaney, manager, marketing, Salmon Arm Savings and CU, Salmon Arm, BC; * Yolanda Draine, senior vice president of human resources, First South CU, Bartlett, Tenn.; * Paul Ebisch, chief financial officer/vice president, Assemblies of God CU, Springfield, Mo.; * Jackie Edwards, business development manager, Connexus CU, Rothschild, Wis.; * Ernesto Flores, executive vice president, Camino FCU, Montebello, Calif.; * Josette Gauthier, senior vice president, human resources, Alterna Savings, Toronto, Ont.; * Matthew Henry, vice president of information technology, Elevations CU, Boulder, Colo.; * Jane Kennedy, marketing and business development manager, Utilities Employees CU, Wyomissing, Pa.; * Mike Kenzie, chief administrative officer, Patriot FCU, Chambersburg, Pa.; * Paul Kirkbride, vice president of credit services, Unitus Community CU, Portland, Ore.; * Tamela Meade, vice president of member service, American Airlines FCU, Fort Worth, Texas; * Toni Montgomery, community relations manager, Americhoice FCU, Mechanicsburg, Pa.; * Chris Phillips, director of marketing, Land Of Lincoln, CU Decatur, Ill.; * C.J. Presto, vice president of finance, Baxter CU, Vernon Hills, Ill.; * Lisa Randall, vice president, lending and marketing, Vermont FCU, Burlington, Vt.; * Domenic Vinci, senior vice president and chief operations officer, Interior Savings CU, Kelowna, B.C.; and * Alison Wolf, vice president of marketing, FAA CU, Oklahoma City, Okla.
For more information, use the link.

Ohio membership rises--first time in five years

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COLUMBUS, Ohio (7/10/09)--More than 20,000 new members were added to the rosters of Ohio credit unions between March 2008 and March 2009, according to the Ohio Credit Union Quarterly Performance Summary. It's the first membership gain in the state since 2004. The new membership is a strong indication that the economy is causing many Ohioans to review their finances, said the Ohio Credit Union League. In addition, credit union assets and lending continued their steady growth, posting gains of 8.11% and 8.26%, respectively, during that period. "Credit unions have the capital to work individually with our members to help them manage financial stress and, in many cases, have modified existing loans to ease income losses or other financial hardships. That makes us attractive to Ohioans," said Paul Mercer, league president. The average Ohio credit union capitalization level is at 11.7%, the report said. Regulators consider credit unions well-capitalized at or above 7%. The Credit Union National Association's (CUNA) "Benefits of Membership" report notes that Ohioans receiving their financial services from an Ohio credit union are benefiting financially. The report--which compares Ohio credit union and bank dividend rates, interest rates and transaction fees--notes credit unions provided more than $184 million in direct financial benefits to the state's members last year. That equals $71 per member and $135 per household. Other first-quarter indicators for the state's 407 credit unions:
* Mortgage originations rose 63.6% during the quarter; * Auto lending market share more than doubled--to 18.1%; * Asset quality remained strong despite a pickup in delinquencies (1.28%) . The delinquency rate of the state's credit unions remains below the national average and that of state banks.
Membership in Ohio credit unions totals 2.64 million. The average credit union has 6,369 members, nearly $47.5 million assets and $29.2 million in loans. They employ more than 6,800 people and contribute nearly $140 million in employee compensation annually.

CUs can make most of bank in-fighting says OCUL

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COLUMBUS, Ohio (7/10/09)--Credit unions can capitalize on increased in-fighting between large and small banks over big banks’ bailout with federal tax dollars, and banks’ reduced political lobbying and campaign contributions, according to the Ohio Credit Union League. The Independent Community Bankers of America ran a full-color ad in a June edition of Roll Call, a Capitol Hill newspaper, criticizing “irresponsible big institutions getting bailed out by the U.S. government using their tax dollars.” In contrast, it claims that “community banks exist to protect and provide for [ordinary people]" (eLumination Newsletter July 8). These trends, combined with the positive attention given to credit unions throughout the economic crisis, create one of the greatest advocacy opportunities of the decade, said John Florian, league vice president of government affairs. “Elected officials and policymakers are eager to learn about credit union differentiation, how members are empowered through affordable and accessible services, and that credit unions are local institutions that benefit their communities,” Florian said. “Additionally, it presents an ideal opportunity to educate legislators on changes needed to enable credit unions to better serve current and potential members.” Advocacy not only helps credit unions retain their tax-exempt status, but also serves to enhance credit unions’ business environments---such as increasing the cap on member business lending and revising prompt corrective actions levels, Florian added. “The bottom line is banks are distracted and have focused their attention elsewhere,” Florian said. This provides an opportunity for credit unions to ensure a thriving future for the credit union movement, he concluded.

Popes financial crisis encyclical cites CUs love

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MADISON, Wis. (7/10/09)--Love and credit unions function in the same manner, said Pope Benedict XVI Tuesday in his third encyclical, “Charity in Truth,” which focused on the economy, business and finance. “If love is wise, it can find ways of working in accordance with provident and just expediency, as is illustrated in significant ways by much of the experience of credit unions,” he wrote (The Wall Street Journal Blogs July 9). The encyclical is widely seen as being directed at G-8 world leaders gathering in Italy this week. The Pope speaks about the need to use the economy to help the poor and care for the environment. He also supports globalization as a way to lessen poverty, and he supports the idea of a free market. The pope is from Germany, where the first credit society in the world was established in 1849 by Frederick Raiffeisen, the mayor of a small town. Raiffeisen devised a credit society to help people help themselves instead of relying on charity from land barons. In 1852, Raiffeisen and Hermann Schulze-Delitzsch established the first true credit unions in Germany (Credit Union National Association).

More CUs more members worldwide--WOCCU stats

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MADISON, Wis. (7/10/09)--Credit unions worldwide are expanding at a steady pace, with more members being served by more credit unions in 2008 than in the previous year, according to the just-released World Council of Credit Unions’ (WOCCU) 2008 Statistical Report.
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Survey respondents from 97 countries reported that 53,689 credit unions served nearly 186 million members last year. In 2007, roughly 49,134 responding credit unions reported serving roughly 177 million members in the same number of countries. The number of credit unions responding to the survey grew 9% for 2008, while the number of members of those credit unions jumped by 5% compared with 2007 results published last year. First-time responses from Ethiopia and Haiti helped drive credit union and member growth in Africa and the Caribbean. Other areas of the world showed modest growth or slight declines in the number of credit unions. Global credit union assets in 2008 totaled $1.19 trillion, up from 2007 total of $1.18 trillion. Credit union savings worldwide last year reached $995.7 billion, also an increase from $987.9 billion in 2007. Loans worldwide dipped slightly to $847 billion in 2008 from $847.9 billion the previous year. “The 2008 results show us that credit unions worldwide are effectively weathering an economic storm that has had disastrous effects on some other financial sectors,“ said Pete Crear, WOCCU president/CEO. “Currency valuation changes in countries around the world may have tempered aggregate financial progress as reported in U.S. dollars, but growth in the number of institutions responding this year tells us credit unions are alive and well, and on the path to serving an ever-increasing number of members,” Crear said. WOCCU has collected annual statistics on the international credit union movement for the past 36 years to produce its annual Statistical Report.

Mortgage loans waaay up says CU Members Mortgage

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DALLAS (7/10/09)--Federal government initiatives to boost the nation’s housing market have created a lending boom for CU Members Mortgage and its credit union partners. CU Members Mortgage reported an increase of 83.2% in the number of closed loans from January through May, compared with the same period in 2008. About 4,580 loans for $756 million were closed in the first five months of 2009 compared to 2,500 units for $386 million in January through May 2008. While 77% of new mortgages take the form of refinancings, government programs also are stimulating new home purchases--especially for first-time buyers. An $8,000 first-time home buyer tax credit will apply to home purchases closed by Dec. 1 for qualified buyers. The tax incentive, combined with record low rates and an abundance of houses for sale in the market, has prompted many to buy homes for the first time, CU Members Mortgage said. “For many, low rates and incentives make ownership possible for the first time or allow them to move up to a larger home, and that is good for our country’s economic recovery,” said David Motley, president of CU Members Mortgage. “Likewise, those who are refinancing to a lower interest rate on their existing home loans typically lower their monthly payments, and that frees up cash for other needs.” CU Members Mortgage provides mortgage services to more than 900 credit unions, credit union service organizations and leagues.

Four CUs hit by insider embezzlement schemes

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MADISON, Wis. (7/10/09)--Credit unions experienced a rash of insiders accused or convicted of embezzlement schemes this week. Four incidents involved a manager of a defunct credit union, a branch manager who also is a pastor, a loan officer and a clerk. The amounts taken totaled nearly $1.7 million. The four incidents involved:
* Tampa, Fla.-based Suncoast Schools FCU loan officer/branch manager and pastor Donnell Dewitt Williams, who, along with three church members, was charged with grand theft, identity theft and money laundering. Authorities said he doled out more than $400,000 in fraudulent loans to family, friends and parishioners, and kept $50,000 for himself. Three parishioners acted as recruiters for the scam by encouraging church members or relatives in need to take out a small loan. The ring would "help" the borrowers with the application by falsifying information to get the loan approval. Of 400 accounts examined, 120 were fraudulent, said the Hillsborough County Sheriff's Office economic crimes unit. (St. Petersburg Times July 8). * Marlene Aguilera Pena, former manager of the now-defunct Marian Miami FCU in Miami, Ariz., who was indicted on 25 counts of embezzlement by an employee of a lending, credit or financial institution. The U.S. Attorney's Office in Phoenix said Pena embezzled $1.18 million between 2001 and July 2006 by creating more than 140 fictitious loans and fraudulently issuing checks to family members and friends. She had worked for the credit union since 1994 and became its manager in 2000. The embezzlement led to the collapse of the credit union, said authorities (The Associated Press via Charleston Daily Mail July 8). * Angelica Sagote, 21, a former clerk at Pacific Postal CU, who was sentenced to three years and 10 months in prison for her part in a robbery that netted more than $76,000. She provided inside information to her uncle, Sefo Sagote, and Elisara Taito after she was fired from the credit union over money missing from her cash drawer. The two men attempted to rob the credit union on Aug. 4 but fled with purses of two customers before completing the robbery. Two days later, the pair robbed the credit union of $76,000, with Angelica Sagote acting as the getaway car driver. Police recovered $32,000 when they made the arrests ( San Francisco Chronicle and Associated Press Newswires July 8). * Crystal Smith, a former loan officer at Bluegrass Community CU, Ashland, Ky., who was sentenced to 57 months in prison by U.S. District Court Judge David L. Bunning for credit union fraud, bank fraud and aggravated identity theft. Smith admitted using her position as loan officer to create fraudulent loans over 18 months beginning October 2006 by using other people's Social Security numbers. More than $165,000 was embezzled (Targeted News Service< July 7).