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Three Wash. CUs OK prize-linked savings

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FEDERAL WAY, Wash. (9/4/12)--The boards of three Washington state credit unions have signed on to support a 2013 launch of prize-linked savings programs in the state, according to the Northwest Credit Union Association (NWCUA).

The credit unions are TwinStar CU in Olympia, Connection CU in Silverdale, and O Bee CU, Tumwater.

Prize-linked savings accounts allow consumers to build assets while earning chances to win monthly or annual cash prizes.

Additional Washington credit unions are considering the programs, said Lynn Heider, vice president of communications and public relations for NWCUA (Anthem Recap Aug. 30).

"The programs are definitely picking up traction in Nebraska, where after launching just seven months ago in 10 credit unions, members have saved over $1.1 million," Heider said, noting that Michigan's Save to Win program is offered by more than 40 credit unions to more than 16,000 members.

The Michigan Credit Union League (MCUL), which launched its program in 2009, will work with NWCUA to operate the Washington program. MCUL, which also operates Nebraska's program, has estimated that at least six Washington credit unions would be needed to launch the program successfully in 2013.

NWCUA said that if the program takes off in Washington, it will fund a prize pool offering multiple monthly prizes as well as an annual prize for three years. In addition to the operating structure, Michigan also will provide marketing materials and other support.

CU delays ad after Neil Armstrongs death

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LAFAYETTE, Ind. (9/4/12)--Purdue FCU, based in Lafayette, Ind., pulled the first advertisements about its new credit card spokesman out of respect for Neil Armstrong, the astronaut who was the first man on the moon and who died Aug. 25 at the age of 82.

The ads were to announce that another astronaut, Eugene Cernan--the last man on the moon--would be the new spokesman for the Purdue Alumni Visa credit card in time for the first football game at Purdue University (Journal & Courier Aug. 30)..

Instead, the credit union pulled the ads at the first football game because of the "unfortunate and ironic timing," Purdue President/CEO Bob Falk said.

Television and radio advertisements for the new credit card will be aired beginning Saturday, the date of Purdue's second football game. Cernan is a Purdue alumnus.

The new Visa credit card features a picture of Cernan walking on the moon.  It has no annual fee and offers a free rewards program. The credit union partnered with the Purdue Alumni Association and hosted a launch party Wednesday, where they screened the TV commercial, which features Cernan paying for a cup of coffee with the card in a local restaurant.

Cernan's endorsement, which is a three-year contract, replaces that of Purdue alumnus and National Football League quarterback Drew Brees of the New Orleans Saints. Brees' three year contract had expired.

Mid-Atlantic Corporate conference spotlights security (08/31/2012)

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MIDDLETOWN, Pa. (9/4/12)--"Americans are 40 times more likely to be defrauded than to have their cars stolen or their homes burgled," said identity theft expert James Munton, who keynoted Mid-Atlantic Corporate FCU's second annual IT and Security Conference.

More than 100 credit union and security professionals attended.

Munton, who is an authority on identity theft and security breaches--and a career magician--focused on data-protection methods.

"No one thinks it can happen to him, but the [Federal Trade Commission] reports that every year, more than 30 million Americans are fraud victims. The first step to combating fraud is to understand it," Munton said.

From social engineering to the latest internet scams, conference breakout sessions covered vulnerability assessments and incident response plans, as well as virtual security and other new technologies that increase fraud exposure and add member convenience, said the Middletown, Pa.-based corporate.

Scott Sutherland, special agent with the Federal Bureau of Investigation, wrapped up the conference with a discussion on preventing and detecting fraud and cybercrime.

"Speakers used real-world examples of attacks on financial institutions to help credit unions better understand the techniques attackers may use to infiltrate their credit union's systems," said Richard Carberry, security administrator for Mid-Atlantic Corporate. He noted that turnout was 50% greater than last year and that the event "affirmed what we've been hearing from our members. There's a strong desire for security education catered specifically to credit unions."

The conference also included the latest virtualization trends, highlighting the rapidly growing cloud services industry. Sponsors included Arraya Solutions, Core BTS, EMC Corp., MY CU Services LLC, and Ongoing Operations LLC.

(Editor's note: The Credit Union National Association offers a number of security training events. Use the links for more information.)

Dozen more CU branches report Isaac water damage

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MADISON, Wis. (9/4/12)--Credit union leagues in the Gulf Coast states affected by Tropical Storm Isaac were reporting more credit unions with damages, mostly minor, on Friday.

About "a dozen" credit union branches, mainly along the Gulf Coast, had experienced water damage, said Charles Elliott, president/CEO of the Mississippi Credit Union Association.  Much of the damage was the result of wind-blown water and roof damage rather than flooding.

Elliott said the homes of many credit union employees along the Gulf had experienced damage as well, although he didn't have an exact number.

Singing River CU's main branch in Moss Point, Miss., experienced flooding from Hurricane Isaac. Flooding was caused by a damaged roof and "blow-in water," according to CEO Jimmy Smith. A clean-up crew had bailed out about 600 gallons of water from the branch by early afternoon Friday and was using fans and dehumidifiers to prevent mold from growing.

About 25% of the branch had been damaged, Smith estimated. The credit union's loan department was serving members from the branch lobby.

"We have damage, but our credit unions look at things from the perspective of Katrina," Elliott said. "This damage is minimal compared to what we had with Katrina. On a scale of one to 10, with Katrina being a 10, this was a one or less. That's just how we look at things. We're thanking God that it wasn't any worse than it was."

Smith echoed Elliott's comments. "My staff is absolutely amazing," Smith said. "I can't say enough about their high spirits. They are looking at this as another chance to excel at member service." Smith said some of his employees' homes had suffered damages in the storms. "Thank goodness it's only minor damage," he said.

The Louisiana Credit Union League said Friday its member service representatives had starting contacting credit unions in the regions along the coast Thursday to determine their storm losses, but many credit unions remained closed on Thursday and Friday.

"We're very fortunate," said Lacey Hyer, the league's vice president of communications and public relations. "Some have minor losses."

"The league's office has no power yet," she said Friday morning, "so we're closed, but the staff is working remotely."  She added that "all league staff are safe. Some haven't been back into their homes yet to determine damages."

The league's foundation was starting the paperwork to activate financial assistance and would be sending a notice to its members as soon as possible.

CO-OP Shared Branching has been receiving requests to assist Louisiana credit union members impacted by Isaac with offline transactions, said the Pennsylvania Credit Union Association in its newsletter, Life is a Highway (Aug. 31). "With credit unions working together through the shared branching network, members will continue to receive financial services they need as they recover from the storm," it said.

Credit unions in Florida and Alabama, which had closed Tuesday and Wednesday, began reopening on Thursday and all were open by Friday, according to the League of Southeastern Credit Unions' listing on its website.

CUNA Mutual Group, which had said Thursday that one credit union had reported major losses to a branch and seven others with minor losses, said later Friday afternoon that there was no change. "Reported losses have been relatively few, and with a couple of exceptions, damages have been confined mostly to minor interior water issues and minor exterior damage such as roofing, signs, windows and siding," said Phil Tschudy, media relations manager at CUNA Mutual..

"We will continue to monitor and respond to any new losses reported over the weekend. A lot of rain is forecast for Tennessee through the Carolinas over the next few days, but we do not expect our corporate policyholders to be impacted," he told News Now

Credit unions with damages or losses can contact CUNA Mutual's toll-free emergency number (800-637-2676), which is answered live, 24 hours a day, seven days a week.

Scams follow disasters warns agencies

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WASHINGTON (9/4/12)--Several federal and state agencies and consumer groups have issued warnings to consumers to beware of scams that typically occur after a natural disaster--both in the affected areas and across the country. Credit unions should be alert to two of the most popular: charity donation scams and home improvement loan scams.

The Federal Trade Commission, the Better Business Bureau, the Consumer Financial Protection Board and several state agencies all have issued alerts to consumers. Credit unions, especially in states that have flooding from Hurricane/Tropical Storm Isaac, should also be alert to members withdrawing or transferring funds to possible fraudulent entities posing as charities and home repair specialists.

Because credit union employees and members tend to be "people helping people," they could be at risk for encountering scam artists posing as charities collecting funds for victims in a disaster area. The Better Business Bureau (BBB) in Chicago has warned  consumers to fully check out anyone soliciting donations (The Sacramento Bee Aug. 31). The bureau particularly warned consumers to avoid donation pitches that come through e-mail and to be wary of claims that 100% of the donation will go to victims. All charities have expenses, said BBB.

The FTC has advised people to: donate to charities they know and trust; ask if a caller is a paid fundraiser, who they work form and what percentage of the donation goes to the charity and the fundraiser; avoid giving out personal or financial information such as credit card and credit union account numbers unless they know the charity is reputable; never send cash; and check out the charity before donating to it.

Home and business repair contractors may be fraudulent if they:

  • Are unable or unwilling to provide proof of licensing, bonding and insurance;
  • Insist on full payment or a large down payment before beginning work or pressure the consumer into signing a contract.
  • Offer a great deal because of materials "left over" from a previous job or offer a discount for finding other customers.
 

Other common scams, according to information from the Office of the Attorney General in Bismarck, N.D., include:

  • Form completion services. Advise members to avoid people who charge a fee to help them complete a disaster assistance form for agencies such as the Small Business Administration (SBA) or the Federal Emergency Assistance Agency (FEMA). These services are provided free by FEMA and the American Red Cross.
  • Phony inspectors. Advise members to verify the credentials before letting anyone in the home and to ask for a telephone number to confirm the inspector is working for an authorized agency.
  • Government grant offers. Members should be told to be aware of entities that offer "free grant money" for flood repair or disaster relief. A true grant is free and does not require upfront fees or repayment. Advise members to check with a regional or state economic development office to learn about grant programs they may be eligible for. Local social service agencies can also provide information or assistance.
  • Advance fee loans.  It is illegal to charge an up-front fee for a loan. Tell members to ignore any company that "guarantees" they will receive a loan. Scamsters will charge a processing fee, then promise to find a lender. Members should check to see if the "lender" is registered with the state department of financial institutions in order to lend funds in the state.
  • Water testing and purifiers. Warn members to avoid offers for "free" home water testing or be skeptical if an in-home "test" indicates they have unsafe water. They can monitor local news media for instructions from health authorities regarding water safety and purification or they can contact their local public health authority directly.

ATM fire temporarily closes APG FCU branch

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EDGEWOOD, Md. (9/4/12)--A fire at an outdoor ATM closed down a branch of Aberdeen Proving Ground FCU (APGFCU) for a few hours Friday morning.

The ATM at the $876 million asset credit union's Forest Hill, Md. branch caught fire at 9:05 a.m.  The Bel Air Volunteer Fire Co. extinguished the fire and all members and employees at the credit union were safe and unharmed, the credit union said in a press release (Baltimore Sun Aug. 31).

The freestanding ATM is located in a drive through lane at the branch and the fire was isolated in the ATM.  Fire officials indicated the fire may have been caused by an electrical wire connected to an air conditioning unit within the machine.

"All of our people are safe and they are our priority," said APGFCU President/CEO Don Lewis in the press release. "Our next steps are to determine the cause, repair the damage and review our facility."

The credit union reopened at noon.

CU is backdrop for football program news story

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AUSTIN, Texas (9/4/12)--United Heritage CU, based in Austin, Texas, hosted Austin's FOX 7 News  for a news story to kick off the high school football season. 

Austin, Texas-based United Heritage CU was the backdrop for a recent news story featuring the Lake Travis High School football program. (Photo provided by the Texas Credit Union League)
FOX 7 News set up shop at United Heritage CU's Lakeway branch on Aug. 20 for a feature on the Lake Travis High School football team, the first stop on a FOX 7 Football Fieldtrip, according to the Texas Credit Union League (LoneStar Leaguer Aug. 31).

Lake Travis High School is located across the street from the credit union's branch.

The station used the United Heritage CU branch as the location for the live 5 p.m. evening news feature.  Dave Cody, sports anchor for FOX 7, discussed the school's football program, including its reigning status as five-time state champions in the 4A conference.

CU System briefs (08/31/2012)

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  • WACO, Texas (9/4/12)--A former church treasurer whose hay operation encountered financial difficulties worsened by recent droughts was placed on deferred felony probation Wednesday for allegedly stealing $66,000 from the church and improperly selling more than $40,000 in tractors and other equipment he had used to secure loans at a credit union. The deferred probation places Michael Lynn Hooper, 64, of Robinson, Texas, under court supervision for five years. He also was ordered to pay restitution of $16,000 to Bethel Methodist Church of Robinson and $42,000 to Educators CU, Waco. Hooper had already paid back $50,000 to the church before pleading guilty to felony theft and hindering secured creditors. In deferred probation cases, there is no final judgment of guilt if the defendant completes the probation  (Waco Herald-Tribune Aug. 30) …
  • DES MOINES, Iowa (9/4/12)--A credit union in Des Moines, Iowa, was robbed Wednesday for the second time within a month. Employees at the $40 million asset Edco Community CU told Des Moines police that a man entered the credit union before 10 a.m. and demanded money. He escaped with an undisclosed amount. On Aug. 1, a man entered the credit union and produced a note demanding money to the teller. He, too, left with an undisclosed amount, said police. Police have released surveillance images from both robberies (Des Moines Register Aug. 30) …
  • DALLAS (9/4/12)--Dallas-based Neighborhood CU dropped by long-time member Laura Dawson's home in Grand Prairie with a big surprise--an oversized check for $10,000, a reward for saving money.  "Holy Macanoli! How did this happen?" said the shocked Dawson.  Neighborhood CEO Chet Kimmell and Senior Vice President Carolyn Jordan explained she was the big quarterly Prize Savings Account winner. The credit union created the account to encourage members to save money and plan for their future by rewarding good savings habits with drawings on a monthly ($1,000), quarterly ($10,000) and annual ($25,000) basis. Dawson's name was drawn from among all Prize Savings Account holders. Members receive one drawing entry for every $25 monthly average balance in their account. Dawson and her husband, William, have been members of the credit union for 37 years (LoneStar Leaguer Aug. 31) …
  • HIGHTSTOWN, N.J. (9/4/12)--Two key staffers of U.S. Sen. Robert Menendez (D-N.J.) Thursday met with New Jersey credit union advocates who pressed the case for member business lending (MBL) reform, said the New Jersey Credit Union League (The Daily Exchange Aug. 31). Legislative Counsel Michael Passante and Constituent Outreach Coordinator Catherine Best visited the league offices for an update of credit union concerns. The league and the advocates have met a number of times with Passante during Hike-the-Hill visits. The Credit Union National Association, leagues and credit unions are urging Congress to pass legislation that would raise credit unions' MBL cap to 27.5% of assets from 12.25%. Doing so would inject $13 billion into the economy through new small business loans and contribute to the creation of 140,000 new jobs, all without costing taxpayers a dime. "We are at a critical juncture when it comes to MBL reform," said league President/CEO Paul Gentile. "A vote could come at any time after Congress returns from its August recess. It's extremely important we keep up the pressure." From left: Chris Abeel, league director of governmental affairs; Eddie Daniels, CEO, Newark Board of Education Employees CU; Lourdes Cortez, president/CEO, North Jersey FCU; Andy Jaeger, president/CEO of Credit Union of New Jersey and CULAC trustee; Lou Vetere, president/CE, Garden Savings FCU and league chairman; Gentile; Passante; Mark Sovelove, senior vice president, lending, and David Bell, MBL loan officer, Financial Resources FCU; and Linda McFadden, president/CEO, XCEL FCU and league board member. (Photo provided by the New Jersey Credit Union League) …

Catalyst Corp. looks back on first year

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PLANO, Texas (9/4/12)--Wednesday will mark the one-year anniversary of Catalyst Corporate CU's formation, when the corporate credit union consolidated Georgia Corporate FCU and Southwest Bridge Corporate FCU.

"It's not 'whew,' it's 'wow,'" said Kathy Garner, president/CEO of Catalyst Corporate, where everything has been on a fast track the past 12 months. "It has been busy, but at the same time, it has been energizing," Garner added.

When Catalyst launched in September 2011, about 860 credit unions had put up $90 million in capital for the new entity. At the end of August 2012 Catalyst has more than 1,230 credit union members. Its capital grew to more than $150 million during its first year.

Much of Garner's time in her early months on the job has been on the road visiting credit unions and attending credit union events to welcome new members into Catalyst's expanded membership.

"Credit unions have been nothing but supportive during the past year," Garner said. "They have expressed that they see Catalyst's growth as delivering on our business objectives to create efficiency and value by growing scale."

In June, Catalyst Corporate conducted a member satisfaction survey. More than 2,000 contacts among its member credit unions were invited to participate, and 540 from more than 300 credit unions responded.

One goal was to attain a Net Promoter Score (NPS) by asking: "How likely are you to recommend Catalyst to a friend or colleague?"

Catalyst received an NPS score of 64%, placing it slightly behind such companies as Amazon and eBay, and above companies such as Schwab and American Express, Garner said.  The average score in the banking industry is 18%, according to the book, The Ultimate Question 2.0.

"Respondents cited Catalyst's quality of service and helpful staff among the reasons for recommending the corporate," Garner said.

Earlier this year, Catalyst formed three regional councils. They have met twice to discuss product enhancements, member communication and the member satisfaction survey.

The 36 volunteers serve on the councils. They and more than a dozen credit union professionals serving on various committees join a board of directors that has expanded to 11 positions to provide additional West Coast representation.

Paper Multi-layered approach can curb fraud

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MIAMI (9/4/12)--Financial institutions must deploy multiple layers of protection to stay ahead of fraudsters, according to a new white paper from Compass Plus.

Compass Plus is a provider of retail banking software and electronic payments systems to financial institutions.

The financial services industry has undergone a transformation in the past 10 years, with consumers visiting branches less, according to the paper, The Rise and Fall of a Fraudulent Transaction. The Internet, mobile and self-service kiosks, including ATMs, now provide access to services at all times. This shift to online banking, e-commerce and mobile wallets has presented a new range of opportunities for criminals, and fraud has become a more pervasive global issue, says the paper.

When it comes to fraud, financial institutions, including credit unions, have to bear hidden costs, including loss of customer confidence and damage to their brand and integrity. In the white paper, Compass Plus outlines the various types of fraud prevalent today and the numerous layers of protection that can be used to combat them.

The paper outlines eight layers of protection:

  1. User authentication. For Internet banking and mobile banking, credit unions can use a number of increasingly sophisticated methods of user authentication, including virtual keyboards, dynamic passwords, hardware tokens, one-time passcodes and Visa Dynamic Passcode Authentication and MasterCard Chip Authentication Protocol.
  1. 3D secure and virtual cards. With 3D Secure member/customers must opt in, and will recognize 3D Secure in the Verified by Visa or MasterCard SecureCode authentication window that appears as part of an online transaction process. With virtual cards, a one-off 'card' is issued online or at an ATM, with disposable details. Usage parameters are set by the member/customer--these could include an expiration date and number of transactions allowed.
  1. Limits and customer notifications. Member/customer notifications via e-mail and text messaging can be used to alert a member to account activity. If that activity has not been initiated by the member, an instant call to the financial institution's fraud department will prevent further unauthorized transactions. Financial institutions can also also be able to set and revise usage limits.
  1. Transaction flow analysis. This is a methodology that compares the parameters of the current and previous transactions with statistical parameters. Each transaction is analyzed, based on rules and algorithms defined by the credit union/bank to detect suspicious transactions.
  1. Object behavior analysis. The statistical analysis of object activity, such as cards, and merchants, enables the tracking of changes in an object's behavior by analyzing its activity over a certain time to accumulate statistics.
  1. Internal access rights control. A system that controls internal access rights to sensitive information, requires permissions from more than one individual to access sensitive information, encrypts all data as a matter of course, and maintains automatic and detailed audit trails will provide a strong deterrent to anyone looking to perpetrate internal fraud.
  1. Payment card industry data security standards. Industry standards add an additional layer of security for financial institutions. In 2006, card companies formed the Payment Card Industry Security Standards Council, which mandates security standards for payment card processing and management.
  1. Europay-MasterCard-Visa. Physical card fraud--commonly known as skimming--has been reduced by the introduction of the EMV card, which has been widely implemented across Europe but not the U.S.

Fisher presented N.C. CU advocate award

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RALEIGH, N.C. (9/4/12)--North Carolina State Rep. Susan Fisher (D-114th) accepted the CU Advocate Award Aug. 28 at the North Carolina Credit Union League's Western Chapter meeting in Waynesville, N.C.

Fisher was one of three members of the state's General Assembly the league recognized with Credit Union Advocate Awards for their support in helping credit unions pass Save to Win legislation. Also honored were Reps. Efton Sager (R) and Sen. Rick Gunn (R). Sager attended the league's annual meeting in June to accept the award.

"I have to share this award with other people in the General Assembly because the bill we shepherded was really an example of the miracle of bi-partisanship," Fisher told the league (Weekly Conversation Aug. 31). "Any time I can find a chance to work across the aisle with my colleagues I will do that."

Fisher added that Save to Win will "spur on savings from among all your (members) during a really difficult financial time. North Carolina Credit Unions are to be applauded for providing an innovative incentive program for savings."

The league's Credit Union Advocate Award honors state and federal legislators who have demonstrated a clear and consistent understanding of and appreciation for credit unions.