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CUs make most of their soundness in media

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MADISON, Wis. (8/19/08)--Credit unions continue to make the most of the opportunity from banks' failures to explain their soundness for the media. PeoplesChoice CU, a $125 million asset credit union based in Saco, noted that bank failures have prompted Maine consumers' concern about the safety of their funds in Maine's credit unions. "The failure of Indymac and others has its roots in some very aggressive and questionable mortgage loans including no down payments, now verification of borrowers' income, loans made to borrowers with poor credit, and artificially low payments for a short time with a large upward adjustment," said a press release from the credit union. "At PeoplesChoice CU, we never participated in this type of lending. In fact, we have no mortgages in foreclosure today and have not had one in over 20 years," the credit union said. The credit union suggested that now is a good time for consumers to review their accounts to maximize insurance coverage. It directs consumers to review the balance sheet and income statement of their financial institution online at www.ncua.gov or www.fdic.gov. "Over half a million in Maine belong to credit unions and they should feel assured that their money is safe," said PeoplesChoice CU. Saugus Advertiser (Aug. 15) also wrote that deposits in Saugus (Mass.) FCU are safe. Saugus FCU President John Smolinsky explains that members should know their credit union deposits are insured up to $100,000 and their individual retirement accounts (IRAs) are insured up to $250,000 by the National Credit Union Share Insurance Fund. Also, the deposits are insured with an additional $500,000 to $550,000 in Excess Share and Deposit Insurance coverage through the Massachusetts Credit Union Share Insurance Corp. (MSIC). "I am pleased to report that no member of an MSIC-insured credit union has ever lost any of their savings," Smolinsky said. "SFCU has made sure that no portion of your share or deposit account will be uninsured." Portsmouth (N.H>) Herald News also looked at the Indy Mac fallout and wrote about the deposit insurance that credit unions have Seacoastonline.com (Aug. 17). Author Elaine Morgillo, president of Morgillo Financial Management Inc. based in York Maine, and North Andover, Mass., wrote that to date, no depositor has ever lost FDIC or NCUSIF-insured funds as a result of a failure of an insured bank or credit union. Citizens Equity First CU (CEFCU) in Peoria, Ill., educated the Peoria Journal Star (Aug. 9) columnist Paul Gordon about the limited exposure it has had to the subprime crisis. CEFCU President/CEO Mark Spenny told Gordon that the credit union is "very strong" and that the subprime loan situation is non-issue for CEFCU and other local institutions because they didn't participate in subprime or the more exotic loans. At a time when mortgage delinquencies were skyrocketing across the nation, the credit union's delinquency rate dropped, he said. Spenny also explains credit unions' deposits are insured.

Florida CUs prepared for Fay

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TALLAHASSEE, Fla. (8/19/08)--As Tropical Storm Fay drenched southwestern Florida Monday with 60 mph winds as of 5 p.m. EDT, credit unions all along the way were preparing for a possible hurricane. Florida's Office of Financial Regulation (OFR) issued a proclamation Monday allowing financial institutions to remain closed until emergency conditions have passed, said Amy Jowers, vice president of communications at the Florida Credit Union League (FCUL). "With that, we've received notification from several credit unions that they have closed their branches and call centers in the Pembroke Pines and Sarasota areas," she told News Now late Monday afternoon. "Some are saying they will remain closed all day Tuesday; others have said they will reopen if the storm passes over." In May, the league conducted its annual disaster workshop in May "to provide strategies to our credit unions to assist them in preparing for the hurricane season, i.e. how to safe-guard their credit union, and provide valuable tips on how to create a well-prepared plan of action," Jowers said. FCUL also provides credit unions with two communications tools that assist in disseminating important information in a disaster to their members (through CU LOCATE) and to their staff. For members, credit unions can offer CU Locate. And the FCUL Disaster Hotline, 888-FCULSOS (888-328-5767), is available 24/7 for credit unions' use in communicating with their staff. "It was specifically established as a way for our credit unions to provide information to their employees during a disaster such as a hurricane or other crisis in which the credit union's primary communications are down," she said. "Once a message is set up, if a disaster occurs, employees can call the toll-free number and punch in the credit union's assigned store ID/extension to hear important information regarding the status of the credit union." Also, each year the league asks credit unions to update the emergency contact information for CEOs and key staffers so they can be reached on their cell phone or a number other than the credit union's. Today, the league will start daily conference calls with the National Credit Union Administration and OFR, she said. Last year, the league, NCUA and OFR arranged to share information about credit unions in need through a special page on the league's website, www.fcul.org. "It is already up and running with the latest status of credit union closings," Jowers said. Jowers noted that the league also has five generators, as well as satellite phones, that can be shipped to credit unions in need. "I'm keeping my fingers crossed and saying a little prayer that Fay will dissipate fairly fast without much damage," Jowers told News Now.

NYIB honors exemplary youth work

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LAS VEGAS (8/19/08)--Four credit union leaders were honored for exemplary work in youth marketing, youth education and leadership development at the National Youth Involvement Board's 2008 Annual Conference last month in Las Vegas. Juli Lewis, youth marketing manager for Suncoast Schools CU, Tampa, Fla., was named Outstanding Delegate of the Year. Lewis is involved with many youth organizations and school communities, participating on several advisory boards and facilitating financial education programs in 15 counties. Dawn Lindley, director of marketing and financial literacy at the Virginia Credit Union League, was named NYIB's Outstanding Volunteer of the Year. Lindley serves on the board of Jump$tart Coalition, the advisory board of the Center for Economic Education at Lynchburg College, and the Leadership Council for the Virginia Cooperative Extension. A former recipient of NYIB's Robert L. Curry and Credit Union Development Education scholarships, she helped the league win a national Desjardins Award for Financial Literacy in 2007. Danielle Scott, financial education leader at LA DOTD FCU, Baton Rouge, La., received the Robert L. Curry Scholarship and Award, a leadership development award named for the former president/CEO of CUNA Mutual Group. Scott created multiple student programs to encourage more than 370 youth, parents and teachers to deposit more than $26,923. She is a member of the Louisiana Jump$tart Coalition and volunteer for Junior Achievement, and she has partnered with numerous organizations for financial education in the community. LeAnn Achtenberg, vice president of marketing at Anoka Hennepin CU, Coon Rapids, Minn., was presented the inaugural NYIB Advocate Award. She was active with NYIB from 1997 to 2004, serving as chair from 2002 to 2004. She is chair of the Minnesota Credit Union Foundation's Family Involvement Council and supports the Minnesota Credit Union Network as a planning committee member of Minnesota Young Credit Union Professionals.

PULSE study Surcharge-free access on the rise

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HOUSTON (8/19/08)--Surcharge-free ATM access is becoming more popular among debit card issuers, according to the PULSE 2008 Debit Issuer Study. Sixty-two financial institutions, including credit unions, participated in the study. The institutions issue a combined 74 million debit cards, or 28% of all U.S. debit cards. About 56% of survey respondents said they participate in a surcharge-free ATM network. Also, 84% of credit union respondents offer surcharge-free service to their members for certain “off-us” transactions, or transactions conducted at ATMs owned by other organizations. The study also indicated:
* ATM transaction activity is increasingly “on-us,” which means that cardholders are using issuers’ ATMs, limiting surcharges; * Active debit cardholders conduct 3.4 transactions per month; and * Heavy ATM users are also heavy debit card users, implying that cardholders do not use the “cash back” option often.
About 51% of respondents said they offer rewards programs, compared with 37% in 2006. Of those, 42% offer debit rewards programs, compared with 16% in 2006. Points-based rewards are the most common program type. Prepaid cards are gaining popularity, the survey said. About 61% of respondents said they offer the cards, with 16% looking to offer the cards in the future. The survey also addressed growth challenges, such as:
* Contactless cards--10% of respondents offer the cards, but only 24% of their cardholders use the technology. Key barriers to contactless adoption include merchant acceptance, unfavorable cost/benefit ratios and low demand; * Mobile banking--15% of respondents support mobile banking, while 28% said they will offer it soon; and * Mobile payments--56% of issuers said they are exploring the possibility of implementing this feature.
PULSE, an ATM/debit network, serves more than 4,500 financial institutions, including credit unions, nationwide.

Pennsylvania AG warns of more scams

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HARRISBURG, Pa. (8/19/08)--Numerous complaints have been received by Pennsylvania Attorney General Tom Corbett’s office about scams targeting consumers, said the Pennsylvania Credit Union Association (PCUA). Consumers, especially senior citizens, have been targeted by scammers pretending to be family members acting on behalf of relatives injured or arrested while traveling. Other complaints involve telephone messages left by scammers posing as police officers or hospital officials and asking recipients to call a number to receive information about an injured relative (Life is a Highway Aug. 18). The phone numbers recipients are being asked to call are international numbers, which result in long-distance calling fees. Counterfeit check scams also have resurfaced, the attorney general said. Scammers are contacting consumers and telling them they won the lottery. Recipients are asked to deposit a fraudulent check and then wire a portion of the money to pay for fees. Corbett warned consumers to be wary of unusual telephone messages, unsolicited contest offers, or requests to wire money. Bull’s Eye CU, Wisconsin Rapids, Wis., reported a second instance of a scam with e-mails and text messages. The messages claim that the recipient’s account has been suspended and can only be reinstated by calling a number and providing personal account information (WSAW Aug. 18). Commonwealth CU, Frankfort, Ky., Friday reported instances of a vishing, or voice-phishing scam, aimed at its members (News Now Aug. 18).

Soldiers thank CU for Internet service

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MEDFORD, N.Y. (8/19/08)--Soldiers from a unit of the 82nd Airborne Division are thanking Suffolk FCU, Medford, N.Y., for providing them with Internet access after they were transferred to a remote region in Afghanistan last December and couldn’t call home. Patricia Gallagher, a Suffolk employee and the mother of one of the soldiers, asked the credit union to help. Suffolk FCU donated $5,700, which funded 18 laptops and Internet service from mid-December through April, when the unit’s duty ended (Newsday Aug. 18). To show the soldiers’ appreciation, Brian Gallagher, Patricia’s son, presented Suffolk with a flag that flew over the unit’s base. The gift lifted soldiers’ morale during the winter holidays, he said.

Vermont association asks CUs to document heating offers

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BURLINGTON, Vt. (8/19/08)--The Association of Vermont Credit Unions put together a survey and distributed it to credit union managers/CEOs this week to ask about what they’re doing to provide heating assistance for members. Credit unions were mentioned in government circles as being uniquely positioned to help members with the upcoming heating season, but those efforts should be documented, the association said. Association President Joe Bergeron recently met with Rep. Peter Welch's (D-Vt.) Business Advisory Council about energy costs and resolutions (Newsline Express Aug. 15). About 75% to 85% of all home heating oil consumed by Americans is in the northeast. Heating oil prices rose 72% in the past two years, and prices are expected to increase up to 21% this year, the association said.

CU System briefs (08/18/2008)

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* WASHINGTON (8/19/08)--Metropolitan Baptist Church FCU, based in Suffolk, Va., has merged with Alexandria, Va.-based HEW FCU, effective Aug. 1 (FOCUS Newsletter Aug. 18). HEW was selected because it can further the level of service and increase access to MBC FCU's members. According to Jeffrey Goff, vice president for administration at HEW FCU, the credit union's service in its Washington, D.C., underserved field of membership makes it a great fit. He noted that a similar church-based credit union merger in 2005 with Queen of Peace DC FCU was successful. The combined credit union has more than 20,500 members and $130 million in assets … * RICHMOND, Va. (8/19/08)--Byron Franklin Willard Jr., 64, died Aug. 14 in Richmond. He recently retired as president/CEO of Richmond Postal CU. Active in the credit union industry throughout his career, Willard served as a director and chapter president of the North Caroline Credit Union League and was elected Outstanding Credit Union Person of the Year in 1977. He is survived by his wife Sara Newpher Willard; two sons and five grandchildren (Winston-Salem Journal Aug. 17) …

State regulators headed for Seattle NASCUS summit

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ARLINGTON, Va. (8/19/08)--The 2008 National Association of State Credit Union Supervisors (NASCUS) State System Summit will be held Thursday through Saturday in Seattle. The summit offers speakers and breakout sessions. Topics include capital reform from the cooperative perspective, cyber crime, housing fraud, membership growth strategies, new Fair and Accurate Credit Transactions Act (FACT Act) and red flag provisions. Speakers include:
* Michael Fryzel, chairman, National Credit Union Administration; * Jeff Thredgold, economist; * Richard Hagar, real estate specialist; * Jim Devine, member business lending trainer; * Kevin Fincher, unrelated business income tax (UBIT) expert; and * Gavin Gee, director, Idaho Department of Finance.
NASCUS’ first Directors College will be held Wednesday. The event aims to enhance directors’ understanding of statutory, fiduciary and regulatory responsibilities. Dennis Dollar, partner, Dollar and Associates; and Linda Jekel, director of credit unions for the state of Washington, will speak. NASCUS will hold conduct annual meetings and Credit Union Advisory Council Friday. It also will present the Pierre Jay Award Thursday.