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Fraud report Call center fraud is evolving

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BEDFORD, Mass. (8/5/09)--Cybercriminals are infiltrating the call center, with scams evolving into a new criminal professional call service that can spoof any number in the U.S. and offer cash out in multiple languages. According to RSA Anti-Fraud Command Center's monthly Online Fraud Report for June, the service enables phone numbers to be customized depending on the state where the account holder resides. It also enables fraudsters to accept incoming calls, posing as the genuine account holder. "Service providers in the underground have evolved phone fraud services into a singular location to provide other fraudsters with the ability to conduct phone channel fraud to any destination and in any language," the report said. The service helps the cybercriminals to increase their profits while significantly lowering the risk of exposure, said RSA. Other findings for June:
* More than 13,000 phishing attacks were identified, a 10% increase from May and the highest in 11 months; * Attacks against credit union brands remained constant--at 18%, the same as in May. After peaking at 38% of attacks in February, attacks against credit unions dropped to 22% in March and 14% in April. * Attacks against regional bank brands increased 60% while national brand attacks dropped more than 50%; and * Fast-flux attacks, the denial of service using sophisticated networks of computers called botnets, increased by 5% to make up 56% of the hosting methods of attacks. Hijacked websites accounted for 26% of the attack methods.

CUSO applauds NCUAs letter on short-term loans

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LENEXA, Kan. (8/5/09)--A credit union service organization (CUSO) that specializes in payday lending alternative loans is commending the National Credit Union Administration's (NCUA) letter encouraging federal credit unions to service their members' small loan needs. The letter was released last week. The number of credit unions offering payday lending alternative loans has grown from about 50 a few years ago to more than 250 now, according to NCUA. Lon Neofotist, managing director of XtraCash LLC, the CUSO, said the letter underscores the reasons why the organization was formed: to provide a risk-free, affordable alternative to payday lenders, and to make a difference for the members by providing a lower-cost alternative and a pathway to financial stability. Nationally, more than 19 million U.S. households use payday loans, which total more than $42 billion annually, said XtraCash. "Credit unions should indeed 'step to the plate' and offer small dollar loans to their members," said Neofotist. "However, at 18% APR (annual percentage rate), the interest earned on a $100 loan computes to roughly 69 cents for a standard 14-day loan term. While credit unions should make it as affordable as possible, they should do so without having other members absorb the cost. At 18% APR, other members must subsidize the costs to process and service these loans," he added. The CUSO noted that payday lending APRs are much higher than standard loan rates because they are short-term, high-risk, high-loss loans. "Xtracash fully discloses fees as a dollar amount and as an APR on its website, as well as in all loan documents, so members are fully aware of the costs of the loans and are not misled," Neofotist said. Neofotist said that the CUSO has saved members and credit unions more than $1 million and assisted in providing member financial literacy. Members using XtraCash can complete more than 800 hours of online financial education. "Through this education and counseling, we are striving to move the member away from short-term loans and turn them toward more mainstream, lower-cost products and services," he said. He noted that XtraCash is already following several suggestions in NCUA's letter, which mirror the Community Financial Services Association of America (CFSA) Best Practices. They include:
* Clear and full disclosure of cost, both as a dollar amount and as an APR; * No false, misleading or deceptive advertising; * Encouragement of consumer responsibility; * Limit on the number of roll-overs allowed; * Right to rescind at no cost; and * Repayment over a longer time period/extended payment plans provided to consumers.

Efforts add depth to IUSA TODAYI payday loan update

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WASHINGTON (8/5/09)--Efforts by the credit union movement Monday resulted in a second, more comprehensive and more positive article in Tuesday's USA TODAY about credit unions' short-term loans or payday loan alternatives. The newspaper received a number of comments from consumers questioning an article in Monday's issue, which quoted a consumer group as saying that some loans at credit unions weren't a good deal. Many thought the article was prompted by banks; others criticized basing the article on a single credit union example. Tuesday's article, which features broader credit union perspectives, included Credit Union Development Educator Lois Kitsch responding to the consumer group's criticism. Kitsch is program coordinator of the National Credit Union Foundation's (NCUF) REAL Solutions program. The program helps low- and moderate-income people with their finances so they can accumulate more wealth. Some credit unions working with REAL Solutions offer short-term loans or payday loan alternatives to help get people off the payday loan debt cycle. NCUF Executive Director Steve Delfin spent part of the day Monday providing background perspective about the program to personal finance writer Sandra Block, author of both articles. In the second article, Block wrote that credit unions provide options to payday loans "in response to concerns that many low-income credit union members were relying heavily on payday loans. "Ideally, a credit union loan should offer a low-cost alternative to a payday loan, and many do." But she also advised scrutinizing the details. Credit unions' short-term loan programs featured in the article, included Kinecta FCU, Manhattan Beach, Calif., and Prospera CU, Appleton, Wis. Kitsch noted that virtually all credit unions offering the loans prohibit rollovers, many give members longer time to repay their loans, and many tie their short-term loans to financial education programs to help members out of the debt cycle. Monday, the Credit Union National Association worked to help leagues and credit unions address requests from other media responding to the initial USA TODAY article. Scott Earl, CEO of the Arizona Credit Union League, told a local station KTAR Monday that borrowers come out ahead by using a credit union payday loan alternative--even with minimal fees that cover the cost of staff time with the loan. "If you borrow money for 30 days versus borrowing it for five years, the staff time to get that done is still about the same," Earl said. He also noted that credit union loans work to help the member boost their credit score. NCUF also is appealing to credit union development educators to spread the good news about credit unions by posting comments on any column related to credit unions, using the newspaper's Twitter account, and weighing in on the discussions on blogs and listservs. It also advised putting a human face on such complex issues, by using first-person stories from members and entering them in REAL Solutions' video contest, and noted it has a Payday Lending Toolkit with examples of credit unions offering sound payday lending programs.

Savings challenge pays off for six Wisconsin families

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RACINE, Wis. (8/5/09)--Six families who embarked in September on a Savings Challenge created by Educators CU in Racine Wis., have increased their savings by more than $21,000 and reduced their collective debt by more than $49,000. The families also increased their collective credit scores by 533 points, said the $1 billion asset credit union (The League Aug. 4). With help from a financial coach, all the families set a goal to increase their savings by 10% and reduce their debt by 3%. Each family developed a spending plan and attended monthly financial education workshops conducted by the credit union. The family that achieved its goals would be awarded a grand prize of $10,000. However, when four families reached their goals, Educators’ board of directors decided to award each family $10,000. “It was wonderful to see what families did and how much they achieved,” said Educators spokeswoman Shannon Huot. “We just wanted to reward all four families for their hard work.” The other two families each were awarded $2,500. To involve its membership and community in the challenge, the credit union shared monthly interviews with each family through videos, podcasts, blog posts and webinars posted on the credit union’s website and also provided an at-home version of the challenge. The at-home version asked participants to fulfill requirements similar to the main challenge. They included creating a spending plan, setting a financial goal, opening and maintaining a VIP savings account and attending three of the credit union’s financial education workshops. At the end of the challenge, at-home participants had a chance to win $1,000, $750, $500 or $250. Although the first challenge has ended, the credit union intends to help more members during its second Savings Challenge, which is slated to begin this fall.

Maine CUs grow during first-half 2009

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WESTBROOK, Maine (8/5/09)--Maine credit unions experienced significant growth in the first half of the year and even more robust growth during the past twelve months, according to statistics from the Maine Credit Union League. For the six-month period ending June 30, combined assets of Maine’s 67 credit unions topped $5 billion for the first time, increasing 5.95%. Loans grew 1.16% despite a slowdown in loan demand. Shares/savings climbed 7.75% with members depositing more than $307 million in the state’s credit unions during the first half of 2009. Also, membership at the credit unions rose by more than a full percentage point to 608,187--the largest membership growth in several years. The state’s credit unions had a net gain of 6,328 new members since the beginning of the year. Since June 2008, assets at Maine credit unions have increased 7.77%, loans increased 4.00% and shares/savings surged 7.82%. Nationally, Maine has been ranked the fifth strongest credit union state for the past seven years. John Murphy, league president, called the statistics “validation of the positive impact and leadership role of credit unions during this difficult economic period. “As we move forward and begin to emerge from this recession, Maine’s credit unions are well-positioned as sound financial institutions that will be remembered for developing a number of creative programs to provide valuable assistance to members during a period of great need,” Murphy said. “Credit unions will be an important participant in the new economy offering consumers a full menu of the latest technology-based products available, the convenience of shared branching, a surcharge-free ATM network, along with a comprehensive offering of consumer, mortgage and small business loans and related services,” he continued. He noted, “A recent study, which found that Maine consumers saved $73 million last year by using a credit union, underscores the value of using a credit union.”

CU System briefs (08/04/2009)

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* HARRISBURG, Pa. (8/5/09)--Norb Kaczmarek, Pennsylvania Credit Union Association (PCUA) director and president/CEO of Erie FCU, and Mary Beth Wilcher, Erie FCU chief operating officer, met with U.S. Rep. Kathy Dahlkemper (R-3) to discuss credit union issues (Life is a Highway Aug. 4). They discussed member business lending (MBL), interchange legislation, fraud and small business lending. PCUA also encouraged credit unions to meet with their constituents for support for an MBL bill introduced by Rep. Paul Kanjorski (D-Pa.). The bill would more than double the current MBL cap of 12.25% for credit unions ... * FRESNO, Calif. (8/5/09)--Despite a troubled economy, Pacific Service CU in Fresno, Calif., donated more than $50,000 to nonprofits throughout Northern California between January and June 30. The donations helped provide more than 1,500 meals and 2,000 hygiene kits at Sanctuary Youth Services, the credit union said. Pacific Service also donated to the Easter Seals Child Development Center, City of Fresno Crime Prevention, Diabetic Youth Foundation and the Salvation Army. The credit union has more than $1 billion in assets ... * LANSING, Mich. (8/5/09)--Ninety-five Michigan credit union golfers participated in the CURE Golf Outing July 29 in East Lansing, an event to boost legislative advocacy and sponsored by 40 sponsors (Michigan Monitor Aug. 3). They raised $29,025 for scholarships for credit union staff to attend key grassroots advocacy events. Last year's event raised $28,425. The first place team, pictured here are, from left, Ron Darling of Lansing Automakers FCU (LAFCU); Doug Burroughs of CUNA Mutual Group; and Tommie Culpepper and Robin Frucci of LAFCU. ((Photo provided by the Michigan Credit Union League) … * DES MOINES, Iowa (8/5/09)--A man wearing a black veil robbed Federal Employees CU in Des Moines, Iowa, Mondaye. The man took an undisclosed amount of money. He did not use a weapon (DesMoinesRegister.com Aug. 4). Federal Employees CU of Des Moines has $13.7 million in assets ... * LANSING, Mich. (8/5/09)--Cheryl L Hurley, president/CEO of Motor City Co-op CU, died July 26 after a short illness, according to the Michigan Credit Union League. Hurley began her career at the $104.5 million-asset credit union based in Clinton Township in 1971 as a part-time teller. Seventeen years later, she was named CEO. She held various positions at the credit union, including payroll clerk, assistant manager and executive vice president. Hurley served as a director on the board of Mortgage Center LLC and on the executive committee of the Northeast Chapter (now Metro East). She is survived by her husband Drew, two children and four grandchildren (Michigan Monitor Aug. 3) …

La Pine takes helm of League of Southeastern CUs

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TALLAHASSEE, Fla. (8/5/09)--The League of Southeastern Credit Unions (LSCU) welcomed Patrick La Pine to its Florida offices Monday to begin his tenure as president/CEO of the league, created by the consolidation of the Florida and Alabama Credit Union Leagues. La Pine replaces retiring CEOs Guy Hood of the Florida league and Gary Wolter of the Alabama league. La Pine, previously executive vice president of association services at the Michigan Credit Union League, said he believes strongly in advocacy and service to LSCU's members. "Everything we do as a league will begin and end with what is in the best interest of our member credit unions in mind," said La Pine. "'Advocacy and Information' (legislative, regulatory/compliance, communications and education) will be the cornerstone of our new association." La Pine will spend the first several months dividing his time between the Tallahassee and Birmingham offices to get to know staff and better understand both leagues' functions. The league is also setting up town hall meetings across both states to provide opportunities for credit unions to meet and spend time with him. "I look forward to working with staff and our members as we mold the new LSCU," he said. "I start this job with two very strong and solid beliefs: a profound love for credit unions and the job they are doing every day to enrich the lives of their members, and the pride I feel in being given the opportunity to lead this organization and the people who work for it." The combined league represents 332 credit unions with $55 billion in total assets.