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Tech CU modifies 10M in distressed homeowners loans

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SAN JOSE, Calif., (8/13/09)--Technology CU has modified more than $10 million in mortgage loans for homeowners since it accelerated its efforts two years ago to assist members in financial difficulty. The $1.2 billion asset credit union implemented a number of payment relief options for members and has helped modify nearly $2.2 million in auto loans. Its team of specialists are specifically dedicated to working with members to explore workout options. "Our focus in a loan modification is affordability and sustainability, and our specialists are trained to work with members to develop loan modification options that will ensure long-term success," said David Luu, assistant vice president of Tech CU's loan adjustment department. The number of default notices issued in California increased 2% in the second quarter, compared with second-quarter 2008, according to DataQuick. That indicates the number of homeowners falling behind on their payments is still rising. Foreclosure resales accounted for more than 50% of all California resale activity during second quarter--up from 40% for the same period in 2008, DataQuick said. "We know that many families are in crisis in terms of their ability to pay their bills," said Luu. "Tech CU is committed to preserving home ownership for members when it is legitimately possible to work out a payment reduction plan." He noted the credit union's courteous and prompt response is in contrast to many large, national financial institutions that are backlogged with borrowers requesting loan modifications. Members do not have to make repeated calls trying to get through to the credit union, and the team adheres to a philosophy of treating every inquiring member with dignity. The loan modifications are free. The Tech CU blog, www.techcublog.com, offers tips on avoiding foreclosure rescue schemes and other resources.

CU System briefs (08/12/2009)

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* HIGHTSTOWN, N.J. (8/13/09)--The New Jersey Credit Union Foundation recently provided a $12,000 grant to the New Jersey Coalition for Financial Education. The grant will provide 15 financial education classes in partnerships with credit unions statewide, according to the New Jersey Credit Union League (The Daily Exchange Aug. 11). A list of classes will be available at the end of the month. A new class, Managing Money in Tough Times, also will be offered. Registration ends Sept. 15 ... * NORTH CHARLESTON, S.C. (8/13/09)--South Carolina FCU will close a branch near Charleston Southern University, North Charleston, to reduce costs, the $1.445 billion asset credit union said Tuesday. The last day the branch will be open is Sept. 25. The ATM at that location will remain operational. Impacted employees will be reassigned to other branch locations. The branch, which opened in February 2005, serves about 2,000 members, the North Charleston-based credit union said. Five other branches are located within a seven-mile radius of the university, the credit union added (The State Aug. 12) … * MINNEAPOLIS, Minn. (8/13/09)--Teacher FCU, based in Plymouth, Minn., changed its name to TruStone Financial, with the help of brand naming company Strategic Name Development. The change signifies the solid foundation of the credit union's 70-year history with its teacher members. TruStone will maintain its dedication to teachers while shifting from being a credit union just for teachers to a credit union that teaches …

International remittances expected to drop

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NEW YORK (8/13/09)--Credit unions may want to note that Latin American remittances are expected to drop 11% this year because of the global recession and fewer job opportunities for immigrants, according to the Wall Street Journal. Remittances are likely to be $62 billion this year, down from $69 billion last year. The decline is the first drop in global remittances to the region since the Inter-American Development Bank began tracking remittance data 10 years ago. Last year, immigrants averaged 15 money transfers per year. This year, the expected figure is 12. The amount sent in transfers is expected to average $230, down from $241, the newspaper said. Many credit unions offer remittance services to Hispanics. In May, News Now reported that remittances to the Caribbean and Latin America would likely decline this year for the first time in a decade. The trend will impact credit unions, according to the World Council of Credit Unions (WOCCU). About 109 U.S. credit unions participate in WOCCU’s IRNet, a remittance service operated by WOCCU Services Group. The service sends remittances in eight countries and has sent 148,000 transactions, valued at $80 million, since its inception in 2001 (News Now May 21).

Former CU officials seek injunction vs. conservatorship

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BIRMINGHAM, Ala. (8/13/09)--The former board and CEO of Mutual Savings CU in Birmingham, Ala., Monday filed a request for a temporary injunction to stop its conservatorship. The credit union was placed in conservatorship July 31 by the Alabama Credit Union Administration (ACUA). A hearing was scheduled for Aug. 24 in the Jefferson County Circuit Court in Alabama, Patrick La Pine, League of Southeastern Credit Unions president/CEO, told News Now> “The burden will fall on the regulator to justify the conservatorship,” he said. The league is not involved with the injunction. “We’re staying neutral,” La Pine said. “We’re just monitoring the situation.” Glenn Latham, ACUA administrator, told News Now that the judge will have to determine whether the conservatorship should continue. The credit union is still operating, although its former board, CEO and supervisory committee were relieved of their duties. The senior staff remains, he said. “Nobody’s going to lose any money, and member services have not suffered,” Latham added. Mutual Savings CU had suffered some losses prior to being placed into conservatorship, he said. League President La Pine said the last quarterly call report indicated that Mutual Savings CU had a capital level of 8%. The recommended capital threshold is 7%.

Bankers Association attorney named top Florida regulator

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TALLAHASSEE, Fla. (8/13/09)--A man who served 25 years as general counsel to the Florida Bankers Association has been appointed Florida's commissioner of the state Office of Financial Regulation, which oversees credit unions and other financial institutions. J. Thomas Cardwell was appointed Tuesday by the Financial Services Commission, comprised of Gov. Charlie Crist and the state Cabinet. He will succeed Linda Charity, who was acting commissioner since May 27 (Jacksonville Business Journal Aug. 11). Cardwell also served as CEO of Akerman Senterfiit, one of the state's largest firms. He chaired the law firm's financial institutions practice. In March, he was named to the Florida Supreme Court's Mortgage Foreclosure Task Force, which will make recommendations about court dealings with the mortgage foreclosure crisis in Florida (Tallahassee.com Aug. 12. According to Amy Jowers, vice president of communications in the Tallahassee office of the League of Southeastern Credit Unions, the league has no history involving Cardwell since 2002 when she joined the Florida Credit Union League. "Mr. Cardwell has stated that he intends to enforce the laws fairly," Jowers told News Now. "We expect nothing less since the purpose of his position and OFR is to ensure the protection of Florida's consumers against financial fraud with the consumers' best interests in mind." Florida Chief Financial Officer Alex Sink said Tuesday she expects Cardwell to "bring a strong enforcement mentality and responsible approach to" the office (The Miami Herald Aug. 12). Rep. Scott Randolph (D-Orlando) who serves on the Finance and Tax Council, questioned whether a banking industry advocate could act on behalf of consumers, noting that the banking industry has been an opponent to some of the most basic consumer-protection reforms. The position became vacant 11 months ago when Don Saxon was forced to resign. A series in The Miami Herald revealed that the agency had failed to perform required background checks for mortgage brokers and allowed criminals--including bank robbers, embezzlers and convicted racketeers--to work as mortgage brokers and fleece consumers during the mortgage boom. Cardwell said his only priority for now is to ensure the office operates competently and fairly.

MDDCCUA CEOs letter on courtesy pay in IUSA TODAYI

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NEW YORK (8/13/09)--A letter in Wednesday's USA TODAY from Maryland and District of Columbia Credit Union Association President/CEO Michael Beall says that courtesy pay is a safety net for struggling members. Beall responded to a recent article about courtesy payments, which cover members' checks when they have insufficient funds. The orginal article indicated the service is primarily a profit center "Such courtesy payments are a short-term safety net for members struggling to stay on their feet," Beall wrote. He noted the article underscored important differences between courtesy payment programs of credit unions and those of banks: credit unions charge less than banks and typically use the fee to subsidize favorable interest rates on other services. Credit unions realize their obligation to educate their members about the financial responsibility, he said. Beall's letter was published on the newspaper's editorial/opinion page and online. For the full letter, use the link.

Missouri CUs meet with congressional reps in state

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JEFFERSON CITY, Mo. (8/13/09)--Missouri credit union staff are meeting in person with Missouri congressional members during their August recess.
Click to view larger image Meeting in Kansas City Monday to discuss credit union issues were, from left, Phil Weber, Central Communications CU, Independence; Amy McLard, Missouri Credit Union Association (MCUA); Rob Givens, Mazuma CU, Kansas City; U.S. Rep. Emanuel Cleaver (D-Mo.); Pat Yokley, CommunityAmerica CU, Lenexa; Glenna Osborn, Missouri Central CU, Lees Summit; and Peggy Nalls, MCUA. (Photo provided by the Missouri Credit Union Association)
U.S. Rep. Emanuel Cleaver (D-5) met with a group of credit union representatives Monday in Kansas City. They discussed the impact of the Credit Accountability, Responsibility and Disclosure (CARD) Act of 2009, member business lending, interchange fees and the Community Reinvestment Act on Missouri credit unions (The Missouri difference Aug. 12). “Cleaver indicated his support that credit unions should not be included in the Community Reinvestment Act,” said Phil Weber, president, Central Communications CU, Independence. “The biggest topic discussed was the Credit CARD Act, which we all pointed out has some serious compliance problems and conflicts.” Participants in the meeting included:
* Rob Givens, Mazuma CU, Kansas City; * Glenna Osborn, Missouri Central CU, Lees Summit; * Phil Weber, Central Communications CU, Independence; * Pat Yokley, CommunityAmerica CU, Lenexa; and * Peggy Nalls and Amy McLard, Missouri Credit Union Association.
Also, Poplar Bluff (Mo.) FCU took part in local legislative meetings with U.S. Sen. Claire McCaskill (D) and Missouri Lt. Gov. Peter Kinder Monday. McCaskill hosted a health care forum, and Kinder spoke about state economic issues during a chamber of commerce luncheon. Poplar Bluff President Kirk Mondy and Vice President Diane Powell attended the events. “It is a tremendous privilege and responsibility to be able to meet and address, when possible, our public officials,” Mondy said. “They need to know what their constituents value and believe in order to properly represent us. I also hope that by meeting them personally, we can build a relationship that could help us when credit unions need to be heard.”

PCUA launches ICU NowI online videos

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HARRISBURG, Pa. (8/13/09)--The Pennsylvania Credit Union Association (PCUA) has created a series of online videos to inform members about PCUA initiatives and credit union issues. The first video is now available. The videos, called CU Now, are sponsored through a grant from PCUA’s Service Corp. They profile PCUA’s advocacy, credit union awareness, collaboration and governmental affairs activities. The first segment features PCUA President/CEO Jim McCormack, with other staff scheduled to follow. “In this day of 24-hour news, Twitter and YouTube, we’re launching CU Now as a new information channel to more effectively communicate with our members,” McCormack said. “We know video messaging is gaining in popularity; however, we’re moving forward cautiously, seeking input from our members to ensure quality and relevance.” PCUA will email all Pennsylvania credit unions CEOs as each video becomes available.

Kennebec Valley members petition vs. merger

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AUGUSTA, Maine (8/13/09)--Members of Kennebec Valley FCU (KV FCU) were asked to sign a petition against a proposed merger with a local bank, according to a letter published Tuesday in the Kennebec Journal. KV FCU last year proposed converting to a bank and then merging with Kennebec Savings Bank. The proposal was approved by KV FCU’s board last fall and is awaiting approval from a member vote (News Now Aug. 11). In a letter to the editor, KV FCU member Elaine Carpentier, who worked at the credit union for 15 years, noted some of the concerns that members have about the proposed merger. Some members feel the heritage of KV FCU has been lost, she said. Carpentier also noted in her letter that several mistruths have been circulating about the proposed conversion and merger. KV FCU CEO Beverly Beaucage and the KV FCU board have put members’ interests first, she said. On Tuesday, News Now reported on an earlier letter to the editor in the Journal, by KV FCU member Lucille Cloutier. She questioned the advantage KV FCU would have if it converted to a bank and then merged with Kennebec Savings.