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CU System briefs (08/18/2010)

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* KALAMAZOO, Mich. (8/19/10)--A robbery suspect was nabbed 40 minutes after Kalamazoo, Mich.-based Consumers CU was robbed Monday--because she left her identification on the teller counter. Kimberly Ramirez was arrested after allegedly leaving her personal debit card and a demand note written on the back of a prescription made out in her name on the counter as she fled. The robbery occurred at about 12:57 p.m. She was arrested at 1:30 p.m. outside her apartment. Police found almost $10,000 and a hat, sunglasses and purse identical to those worn by the bank robber. The driver of a car matching the getaway vehicle told police he had picked up a woman at the credit union and been paid $1,235 to drive her around. Police recovered that cash, also (Chicago Tribune Aug. 17) ... * WAYNESBORO, Va. (8/19/10)--A driver who mistook the accelerator on her car for her brake slammed into DuPont Community CU's Lucy Lane branch in Waynesboro, Va., and caused between $35,000 and $45,000 to the credit union's building. The incident, involving an 81-year-old driver, occurred Tuesday at about 9:30. Her vehicle sustained about $1,500 in damage. No one was hurt (The News Virginian Aug. 17) ... * FRANKLIN, Ohio (8/19/10)--MidFirst CU, a $186 million asset credit union based in Franklin, Ohio, has changed its name to MidUSA CU Inc. The change occurred because the credit union is interested in expanding into new markets while serving existing members, and because the credit union was challenged on the use of its name by a competing financial institution, MidUSA President/CEO Jim Miles told local media. The credit union will take a phased-in approach to the transition, he added (Timestcnewsnet.com Aug. 17) ... * MACON, Ga. (8/19/10)--Two Georgia-based credit unions and a bank have been targeted in a widespread credit card fraud affecting employees of Robins Air Force, said Warner Robins police (The Telegraph Aug. 17). Police received about 30 reports between Friday and Tuesday that fraudulent charges were made in New Jersey, California, and as far away as Canada and Australia on the local institutions' accounts. Members of Robins FCU, a $1.3 billion asset credit union in Warner Robins, and Macon, Ga.-based $124 million asset MidSouth FCU's Warner Robins branch experienced compromised accounts. Fraudulent purchases ranged from $2 to $200 ...

Banks drag feet on Nevadas hard-hit fund CUs may step in

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RENO, Nevada (8/19/10)--A disagreement between the Nevada Housing Division and some big-bank lenders is placing a new state emergency assistance program for homeowners in limbo, according to local media reports. If banks don’t participate in the program, however, the division will turn to credit unions for help. Nevada was approved in June to receive $102.8 million as part of the $1.5 billion national “Hardest Hit Fund” to help struggling homeowners through mortgage modifications. The division had planned to launch a program in September. Under terms of the program, lenders would match funds from the program with a principal reduction of equal value, said The Reno Gazette-Journal (Aug. 12). Major lenders, such as Wells Fargo, U.S. Bank and Bank of America, oppose the principal matching requirement, said Charles Horsey, division administrator. A representative of a state banking group also told the newspaper that the matching requirements would continue to be an item of contention for major lenders. The division is going forward with the program, and if banks don’t participate, Nevada credit unions will, Horsey told the newspaper. “We will concentrate our efforts on mortgages originated by credit unions,” he said. The California and Nevada Credit Union League said it is following the situation to see if there are any credit unions that become involved with the program. Roughly 200 Michigan credit unions are involved with the Help for Hardest Hit Homeowners Fund, which is a program to help struggling Michigan homeowners. Michigan Gov. Jennifer Granholm recently announced an additional $128.4 million from the federal government for the statewide program. The money will be distributed by the Michigan State Housing Development Authority through lenders, such as credit unions, to help homeowners avoid foreclosure (News Now Aug. 18).

Liquidated CU drops injunction quest hearing delayed

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WASHINGTON (8/19/10)--The now-liquidated Kappa Alpha Psi FCU, which went to court seeking an injunction against the National Credit Union Administration (NCUA) to stop the liquidation, said Wednesday it will drop the injunction request. The statement was made during a status hearing in the U.S. District Court for District of Columbia in Washington Wednesday morning. Attorneys for the Texas-based credit union said it no longer seeks an injunction because of a court order issued Aug. 11 requiring NCUA to show cause for the liquidation. Also at Wednesday's hearing, NCUA and the credit union agreed to extend the time for briefing and the hearing on the order to show cause. The court vacated the briefing schedule. Instead, NCUA must file its renewed response to the show-cause order by Aug. 30, the credit union must file its reply to the government's response by Sept. 15, and NCUA must file its sur-reply by Sept. 22. U.S. District Judge Emmet G. Sullivan set a hearing on the order to show cause for Oct. 15 at 11 a.m. ET. NCUA ordered the liquidation of the $750,000 asset credit union on Aug. 3 and formally carried out the liquidation orders Friday by distributing all shares to members (News Now Aug. 18). Earlier this month, the credit union challenged the liquidation, claiming it was unjust and that its net worth ratio was affected by "full accrual accounting" and NCUA's assessments related to the Temporary Corporate Credit Union Stabilization Fund. NCUA countered that the liquidation was the result of the credit union's inability to generate consistent operational profits, build its net worth position, maintain its records in a sound manner, grant quality loans, and adequately collect on delinquent loans.

Time a key roadblock to third-party vendor management

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MADISON, Wis. (8/19/10)--More than 90% of credit union executives believe vendor management will be a top priority for their CEOs, their third-party auditors and their regulators during the next 24 months, according to a new survey. Federal regulators require credit unions to perform an appropriate level of due diligence on their third-party relationships. Effective vendor management is about time: Too much and too little of it, according to the survey from Abound Resources, a new alliance provider for CUNA Strategic Services. Additional findings are available in the resulting white paper, “The Vendor Management Disconnect: Why Credit Unions Are Unhappy with Their Vendor Management Program.” To read the paper, use the link. Chief financial officers, chief information officers, chief operating officers and compliance executives with executive-level responsibility for vendor management say they are spending more than a quarter of their own time on vendor management--often on a program that doesn’t meet their expectations. A third of those executives are dissatisfied with their programs, the study revealed. The main reasons for their frustration are a lack of time to do what is required; vendors not providing the due diligence documents; and the lack of expertise to evaluate financials and Statements on Auditing Standards No. 70: Service Organizations, or SAS 70s. “Our job is to dramatically reduce the time credit unions spend on vendor management while providing an objective, repeatable and defensible program that meets or exceeds regulatory guidelines,” said Brad Smith, CEO of Abound Resources. Abound Resources’ vmRisk module helps credit unions comply with the ongoing risk monitoring regulatory requirement by providing:
* Vendor risk assessments and risk ratings; * Due diligence document gathering, evaluation and scoring; * vmRisk reports that highlight areas of concern from vendor due diligence documents and suggest risk mitigation strategies; * vmNotify service that updates executives on their vendors’ “bad news”; * Integration with CUNA Strategic Services’ VendorTrack program; and * Compliance guarantee.
Smith is the speaker for the upcoming webinar “Six Ways to Save Time and Improve Compliance with Vendor Management,” scheduled for 3 p.m. CT today, and 10 a.m. CT Tuesday. For more information, use the link.

La. league Interchange outside scope of reform bill

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HARAHAN, La. (8/19/10)--Louisiana credit unions and banks reiterated their opposition to recently enacted legislation regulating debit interchange rates. “Louisiana banks and credit unions ask Louisiana’s [lawmakers] to oppose the price-fixing and anti-consumer interchange language adopted by the Senate,” said a letter to the Tri-ParishTimes.com editor published Aug. 18 that was co-written by Anne Cochran, president/CEO of the Louisiana Credit Union League, and Robert T. Taylor of the Louisiana Bankers Association. “The impact of the Senate amendment is not limited to interchange price fixing,” said the letter. “The amendment grants merchants the unlimited ability to discriminate against certain ‘forms of payment.’ This provision is intended to encourage large retailers to enter into preferential arrangements with large institutions, with discounts and incentives for consumers who use these cards. Consumers who carry cards issued by Louisiana credit unions and banks will be out of luck. “Interchange rates had nothing to do with the financial crisis and are outside the scope of this bill,” the letter said. “The bottom line is this: A coalition of large merchants is seeking to reduce overhead costs by shifting the responsibility for the payments system entirely onto issuers and, ultimately, consumers.” To read the letter, use the link.

WOCCUs MatchSavings program featured on Wis. Public Radio

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MADISON, Wis. (8/19/10)--The World Council of Credit Unions’ (WOCCU) MatchSavings program was featured Wednesday on Wisconsin Public Radio in Madison, Wis. Jenny Bernhardt, WOCCU development communications manager, spoke with Wisconsin Public Radio’s Kathleen Dunn about the program. MatchSavings, which is based in Madison, Wis., gives the working poor in Mexico the ability to open savings accounts and provides them incentives to continue saving. Here’s how MatchSavings works:
* Savers open their first savings account at one of WOCCU's partner credit unions in a developing country--currently rural Mexico. Savers establish a six-month savings goal and commit to regular monthly deposits. * Givers go to MatchSavings.org, choose which types of savings accounts (housing, education, microbusiness or health) they want to match and make a donation. * At the end of the saving period, savers receive the match on their savings principal, realize their savings goal and become members of a credit union that will help them reach their financial goals in the future.
Once savers complete the program, they are not eligible to participate again, but they have a credit union membership and a savings habit on which to build. “We’ve had a really high success rate,” Bernhardt said. WOCCU hopes to expand the program to other countries, she added. It’s difficult for residents of rural Mexico to open savings accounts because many of the savings institutions are located so far from where they live. Bernhardt, who has traveled to Mexico to visit credit union branch offices as a part of the program, said the road conditions could prevent residents from visiting their local savings institutions. The journey also could cost a day’s wages, she said. “There isn’t a whole lot of incentive for people to open a savings account if it means they have to go [to the credit union] themselves to do this,” she said. MatchSavings also has garnered mentions in national media. The New York Times op-ed columnist Nicholas D. Kristof noted MatchSavings in, “Sparking a Savings Revolution” which focused on savings programs for individuals worldwide to fight poverty and save for their futures (Dec. 30). The article provided a link to matchsavings.org and prompted donations. To listen to the program, use the link.

Heartland CU launches Go Local initiative

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MADISON, Wis. (8/19/10)--Heartland CU, Madison, Wis., announced the launch of its “Go Local” initiative, to make consumers aware of locally oriented decisions, critical to developing strong communities throughout southwestern Wisconsin. Heartland will donate more than $75,000 to organizations and causes in the Dodgeville, Lancaster, Madison, Platteville and Verona areas through 2011. The amount includes a $10,000 cash donation to a non-profit organization, awarded by community vote. The $10,000 winner will be nominated by visitors to the Heartland CU Go Local Community Page, with finalists unveiled later this year. “For 75 years, Heartland CU has grown because our members know we are a trusted partner who truly cares about the financial well-being of our members and their surrounding communities,” said Sally Dischler, Heartland president/CEO. “With ‘Go Local,’ we get to walk the walk--honestly, we can’t wait to see how our neighbors choose to help each other,” she added. “We’re all making a real difference here." Heartland CU will celebrate the launch of its “Go Local” campaign Aug. 28 in Madison at the Marquette Neighborhood Association’s 45th Annual Orton Park Festival. Heartland CU has been a sponsor of the festival since 1988. Heartland CU has $165.6 million in assets.

Community CU and Growth Conference announces scholarships

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MADISON, Wis. (8/19/10)--The Credit Union National Association (CUNA) and CO-OP Financial Services announced a scholarship fund to help credit union professionals attend the CUNA Community Credit Union & Growth Conference, Oct. 6-9 in Boston. The scholarship entry deadline is Sept. 16. CO-OP Financial Services will provide tuition assistance to 12 credit union staffers. The conference offers educational sessions for credit unions looking to grow membership and revenue. CO-OP Financial Services is a credit union service organization that provides debit and ATM processing, 28,000 surcharge-free ATMs, shared branching, call centers and other services for credit unions. For more information, use the link.

Study FIs identify fraud as top debit concern

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DALLAS (8/19/10)--About 71% of financial institutions in the electronic payments industry identified fraud as their main concern related to debit cards, according to a recent SWACHA study. SWACHA, an electronic payments resource, commissioned a study among its members, which includes credit unions, to identify concerns associated with debit card use (Transactiondirectory.com Aug. 17). Nearly 43% of those surveyed said they spent up to 40 or more hours in 2009 dealing with fraud--specifically, with fraud from skimmers and data breaches. More than 19.2% of respondents spent up to $50,000 with the cases. SWACHA said it plans to offer additional educational resources to help its member financial institutions mitigate fraud risks.