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Horizon FCU staff act to assist member in car crash

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HARRISBURG, Pa. (8/18/09)--Employees of Horizon FCU in Williamsport, Pa., sprang into action last week after witnessing an accident in front of the building. A member turning into the parking lot was hit from behind by a van. Several employees responded immediately to check on the drivers and one called 911 to report the incident and injuries, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Aug. 17). The member had planned to visit the credit union to deposit her paycheck and get some cash. While she waited for police and emergency personnel to arrive, a credit union employee returned to the credit union to process her transaction. In the meantime, other employees assisted people in the van until an ambulance arrived. Another employee directed traffic around the accident scene. The driver of the van was taken to the hospital by ambulance. Everyone else was okay, the credit union told PCUA.

CU robberies totaled 117 for 2Q says FBI

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WASHINGTON (8/18/09)--Robberies at credit unions totaled 117 out of the 1,278 robberies committed at financial institutions during second quarter, according to the Federal Bureau of Investigation (FBI). Credit unions also saw six burglaries out of 19 committed, and three larcenies out of seven reported to the FBI. Overall there were 1,304 violations of the Federal Bank Robbery and Incidental Crime Statute, a decrease from 1,444 for second quarter of 2008, reported the FBI's Bank Crime Statistics Report for federally insured financial institutions. More than $9.5 million total was stolen during 1,200, or 92%, of the incidents. Twenty-eight percent of incidents reported full or partial recovery of the loot, with a total of more than $1.4 million returned to the financial institutions. Friday continued to be the most popular day for robberies, followed by Monday. The most popular times were from 9 a.m. to 11 a.m. and from 11 a.m. to 1 p.m. Acts of violence were committed in 4% of the incidents, resulting in 30 injuries, two deaths (both robbery suspects), and four hostages taken. Robbers' preferred methods during second quarter included oral demand of money in 759 incidents, demand note in 678 incidents, and threatening or implying a weapon in 531 cases. Firearms were used in 336 incidents, and handguns were part of 320 crimes. Explosive devices were used or threatened in 49 incidents. The South experienced the most robberies--430--followed by the West, with 409. States with the most robberies reported included: California, with 160 robberies; Ohio and Florida, with 65 robberies each; Illinois with 54, and Pennsylvania and Arizona tied for 52.

Hackers indicted in Heartland Hannaford breaches

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WASHINGTON (8/18/09)--Credit unions who lost funds in data breaches at major retailers and payments processors the past three years will be interested in the indictment Monday of a Miami, Fla., man and two Russian-citizen cohorts for the biggest data breaches in history: Heartland Payment Systems, Hannaford Brothers Co. and more. The Justice Department is calling the Heartland-Hannaford indictment "the single largest hacking and identity theft case ever prosecuted." The hackers stole more than 130 million credit and debit cards numbers from the Princeton, N.J.-based card processor Heartland and the Maine-based grocery chain Hannaford combined. Thousands of credit unions and other financial institutions were forced to reissue credit and debit cards whose numbers and personal information were compromised in the data thefts. The true cost to credit unions of the breaches cannot be estimated, because the card companies have the actual loss figures but never report them, said CUNA Mutual Group Media Relations Manager Phil Tschudy. "We insure most, but not all credit unions, and not all losses are reported to us because of changes we made to deductible limits." Reporting losses from only CUNA Mutual's insured credit unions would "be significantly understated and a bit misleading," he told News Now. In addition to losses, hard costs to block existing cards and reissue new ones "is probably between $2.50 and $3.50 a card, and the soft dollars related to staff hours likely eclipses those," Tschudy said. In the indictment, Albert "Segvec" Gonzalez, 28--a former Secret Service informant already awaiting trial regarding earlier breaches of discount retailer TJX Cos. and others--was the only person named by the federal grand jury in New Jersey. The indictment was unsealed Monday (Wired.com and ComputerWorld Aug. 17). The three indicted, including a person identified only as "P.T.," are charged with conspiracy and conspiracy to engage in wire-fraud. The Justice Department said the three sought out Fortune 500 companies and attempted to identify the potential vulnerabilities in the companies' computer systems. They used a sophisticated "SQL injection attack" seeking to exploit computer networks by finding a back door into a network's firewall so they could upload credit and debit card information to servers acted as hacking platforms. Gonzalez and the co-conspirators then would try to sell the data to others for fraudulent purposes, the indictment said. They used computers they leased or controlled in California, Illinois, New Jersey, Latvia, Ukraine and the Netherlands to store malicious software, launch their attacks and receive the stolen numbers. Gonzalez, if convicted on the Heartland-Hannaford breaches alone, could face up to 20 years for a wire-fraud conspiracy and an additional five for conspiracy. He also faces fines of $250,000 per charge. In May and August 2008, Gonzalez was one of 11 people charged with the breaches of TJX Cos., OfficeMax, Dave & Busters restaurants and other unnamed companies. Their trial begins next month, with jury selection set for Sept. 14. On those charges, Gonzalez faces a maximum five years in prison and possible maximum fine of $250,000 on the computer fraud charge, plus on the wire charge he faces 30 years and $1 million fine, or twice the amount gained from the offense, whichever is greater (Wired.com Aug. 17).

PCUA opposes AGs proposal to tax nonprofits

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HARRISBURG, Pa. (8/18/09)--The Pennsylvania Credit Union Association (PCUA) has sent a letter to state Auditor General Jack Wagner expressing strong opposition against one of Wagner's budget proposals: taxing non-profit entities. The suggestion is one of seven recommendations Wagner has made at least twice to the governor and General Assembly to explore during the state's budget impasse. He suggested evaluating the tax exemption and other non-profit entities as a possible funding source. "The Pennsylvania tax code is filled with tax breaks for special interests, and they should be thoroughly reviewed and either suspended, reduced, or eliminated for the duration of this crisis," Wagner said in a press release, adding that this suggestion could result in a minimum revenue gain of $100 million. In PCUA's letter, President/CEO Jim McCormack wrote that "we want to place our strong opposition on the record to your recommendation to evaluate and use tax-exempt entities as a funding source for the state budget crisis." McCormack outlined the reasons credit unions are tax-exempt financial institutions: democratic control, unpaid boards of directors, and earnings returned to members/owners in the form of increased or better products and services, dividends or other programs. "Consumers receive a 'better deal' in lower interest rates on loans and higher rates in savings due to the credit unions' cooperative structure," he said. "Credit unions focus on service to members, rather than squeezing the last dime from each and every transaction," he wrote. "Changing the tax status of credit unions would change the dynamics of the credit union business model. Earnings and profits would necessarily become a focal point rather than the current focus of providing quality services and attention at low to no cost to members and communities." He noted credit unions have hundreds of stories to illustrate how their tax-exempt status benefits residents and communities in the state. "Examples, relevant to the current state government dilemma, are the programs, voluntarily created by credit unions, to assist state employees during the state budget impasse." He outlined the loans credit unions designed to assist state employees until a state budget is passed, including 0% loans, skip-a-payment plans, and more. But he also emphasized that these efforts are "evident every day" while credit unions "fulfill their philosophy and mission of People Helping People. "All taxpayers, whether members or not, benefit from the presence of credit unions in the marketplace. Creating a tax on credit unions would disrupt the balance of market competition, but more importantly would endanger the services that they are able to provide to members and their communities," McCormack concluded.

IN.Y. TimesI discusses difficulties of attracting unbanked

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NEW YORK (8/18/09)--Despite a surge in the number of bank branches and credit unions--including a prominent credit union in the lower east side of New York City-- there still are a large number of unbanked consumers in the area, according to the The New York Times (Aug. 17). In Manhattan, 12% of households do not have an account at a financial institution, compared with a national average of 8%, according to data from the Pew Charitable Trusts. Lower East Side People’s FCU, a $22.7 million asset credit union, based in Manhattan, received its charter to open in 1986, replacing the only bank branch within a 100-block area, the newspaper said. Today, while almost every major bank has opened a branch there, the neighborhood still has one of the highest concentrations of unbanked households in Manhattan, according to Pew data. The reasons include a mistrust of financial institutions, reliance on check-cashers for cash and post offices for money orders, and the fact that many Manhattan households feel more comfortable placing their savings in pillow cases, closets and brown lunch bags than financial institutions, the paper said. In the meantime, a lower-east side restaurant owner, Humberto Vargas, has been trying for eight months to convince one of his deliverymen, Che Che Matos, to join a financial institution and build a credit history. Since Matos had bad experiences with banks and fees, Vargas suggested Matos join Lower East Side People’s FCU. However, Matos still refuses to put his money in any type of account, the paper said.

Virginia governor State employee loans pilot a success

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RICHMOND, Va. (8/18/09)--A pilot for the Virginia State Employee Loan Program--a partnership between Virginia CU (VACU) and the Commonwealth of Virginia Campaign--has been called a success after one month of operation by Gov. Tim Kaine. The program offers loans of $100 to $500 to state employees facing financial hardships. To date, it has issued $641,657 worth of loans to 1,300 state employees (M2 Presswire Aug. 15). “I believe the early success of this pilot program clearly demonstrates that there is a need for these types of loans,” Kaine said. “More important, it allows state employees the opportunity to receive small loans without having to go to predatory lenders. The success of this program demonstrates that other large employers can implement similar initiatives as a service to their own employees.” Program participants must be non-probationary state employees and members in good standing with VACU. To qualify for a loan, participants must successfully complete an online financial fitness course and a 10-question financial literacy exam. The loans carry an annual percentage rate of 24.99% and are payable over six months with no prepayment penalty. Loans are repaid through direct debit from the employee's VACU checking or savings accounts, in up to 12 semi-monthly payments. Employees can have only one loan at a time and may apply for a maximum of two loans per year. There is no credit check for loans and they are not reported to credit agencies. The $1.689 billion asset VACU is based in Richmond, Va.

CUs back-to-school projects in full swing

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MADISON, Wis. (8/18/09)--Credit unions nationwide are helping to prepare students for the start of school by collecting and distributing school supplies and other materials for those in need.
Click to view larger image Waukesha Randolph shops for back-to-school clothes with a student. Waukesha was one of 52 Virginia CU employees who shopped with schoolchildren as part of the credit union’s support for the YMCA Bright Beginnings program
Click to view larger image Virginia CU (VACU) employees, from left, Natasha McDonald-Henley, Jamie Hart and Andrea Seaborn deliver a few of the 150 backpacks of school supplies collected by VACU employees to the Downtown YMCA. (Photos provided by the Virginia Credit Union League)
Fifty-two employees of Virginia CU, Richmond, Va., helped youth shop for new back-to-school clothes at a local Target store as part of the YMCA’s Bright Beginnings program. Contributions from the community helped pay for the clothes. Virginia CU employees also donated money to stock more than 150 backpacks with school supplies for youth at the YMCA. Other credit union supply drives:
* Tempe (Ariz.) Schools CU employees donated more than 1,000 school supplies to Communities in Schools of Arizona, an organization that helps youth stay in school. The credit union also donated 75 pairs of shoes and 75 backpacks. The credit union said this year’s school supply drive was the most successful in the four years since the program was established; * Omni Community CU, Battle Creek, Mich., purchased more than 500 backpacks and invited members and area residents to donate school supplies for its annual Project Backpack program. They will be distributed to schools throughout Southeastern Michigan; and * MaPS CU, Salem, Ore., recently kicked off a school supply drive. It is encouraging members to donate supplies at MaPS CU branches for students in the Salem-Keizer School District.

Baltimore council OKs league-backed fin ed measure

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BALTIMORE (8/18/09)--The Baltimore City Council approved a financial literacy bill Aug. 10 that was supported by the Maryland and District of Columbia Credit Union Association (MDDCCUA). The bill, introduced by Rep. Helen Holton (D-8) and co-sponsored by 11 members on the council, requests that the New Board of School Commissioners and the CEO of Baltimore City Schools examine the feasibility of requiring students to pass a course in financial literacy to graduate from Baltimore City schools (FOCUS newsletter Aug. 17). MDDCCUA supports the measure and hopes it will continue to facilitate a dialogue between community leaders, education leaders, legislators and community residents regarding the importance of financial literacy education. In July, MDDCCUA Vice President of Legislative Affairs Brian Tate testified in support of the resolution before the Baltimore City Council Education Subcommittee. Dorothea Stierhoff, Municipal Employees CU of Baltimore public affairs specialist, also testified in support. MDDCCUA said it continues to monitor the issue and will provide updates on future developments.