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11 charged in TJX BJs Wholesale Club breaches

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BOSTON (8/6/08)--Eleven people have been charged with stealing more than 40 million credit and debit card numbers obtained from TJX Cos., BJ's Wholesale Club Inc., and seven other retailers. They were indicted Tuesday, in what the Justice Department calls the largest, most complex identity-theft case ever prosecuted (, and Aug. 5). Thousands of credit unions and their members were among those impacted in the thefts. Credit unions and other financial institutions were forced to reissue compromised cards and endure costs related to fraud. Some of the breaches sparked lawsuits by credit unions and by their insurance companies. The identity theft ring targeted nine U.S. retailers, including TJX, BJ's, DSW Shoe Warehouse, Office Max Inc., Boston Market, Barnes & Noble Inc., Sports Authority, Forever 21, and Dave & Buster's restaurants. Participants in the ring installed "sniffer" programs on the retailers' networks, allowing them to collect credit card and password information, said Michael Sullivan, U.S. attorney for the District of Massachusetts. Three people in Boston are charged with hacking into the retailers' wireless computer networks and installing sniffer. They allegedly concealed the data in computer servers they controlled in Eastern Europe and the U.S. The Justice Department said the charges allege the defendants sold the data over the Internet to others who encoded the stolen information on blank cards and used those cards to withdraw tens of thousands of dollars at a time from ATM machines (The New York Times Aug. 5). They laundered their proceeds through using anonymous Internet-based currencies and channeling funds through bank accounts in Eastern Europe. Eight people were charged in San Diego with operating an international distribution ring of stolen debit and credit cards. One defendant allegedly received $11 million in proceeds from selling stolen information. Three of the people charged are U.S. citizens. Others are from Estonia, Ukraine, China and Belarus. Some of the defendants will face identity theft charges in New York for hacking into the restaurant chain's computer network. Prosecutors say the scheme was spearheaded by Albert "Segvec" Gonzalez, a Miami man who is being held in jail on the New York charges. He is charged with computer fraud, wire fraud, access device fraud, aggravated identity theft and conspiracy.

IWSJI features Massachusetts CUs deposit insurance

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NEW YORK (8/6/08)--Massachusetts may be the only state in the nation that offers unlimited deposit protection, and state-chartered credit unions and banks there have been "inundated with inquiries from new and existing clients," reports The Wall Street Journal. The financial institutions in Massachusetts provide members/customers with unlimited coverage on their accounts, no matter the size or structure, the article says (Aug. 5). The coverage also applies to consumers who live outside the state but do their banking there. In the 1930s, the state opted out of coverage by the Federal Deposit Insurance Corp. (FDIC) and established its own insurance agencies: the Share Insurance Fund for cooperative banks, the Depositors Insurance Fund for savings banks, and the Massachusetts Credit Union Share Insurance Corp. for credit unions, the article said. Later, they added the federal coverage. The existing state insurance agencies began covering what the federal agencies didn't. The newspaper said that although the National Credit Union Share Insurance Fund protects up to $100,000 per account for a single accountholder, the state deposit insurance provides various levels of excess insurance for deposits beyond the federal limit. The Wall Street Journal notes that accounts in other states can be structured so they protect more than the guaranteed $100,000 by opening a joint account, an individual retirement account or a revocable trust.

Wescom CU to close 11 branches

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PASADENA, Calif. (8/6/08)--Members of Wescom CU, Pasadena, Calif., were understanding when the $3.7 billion asset credit union announced that it would close 11 branches and continue Sunday hours only at in-store branch locations starting Sept. 12. “It was no surprise,” Darren Williams, Wescom CU CEO, told News Now. The credit union’s consolidation can be linked to troubles in Southern California’s housing market. Delinquencies are up, and many members who were first-time homebuyers and had modest down payments are seeing a significant decline in the equity of their homes, he said. After the consolidation, Wescom will have 44 branches. Its traditional branches will have extended hours Monday through Friday until 7 p.m. The call center will remain unchanged. The branches to be consolidated are smaller, slower-growth branches and are located close to other branches. “No member wants to see their branch close, but it is less [of an impact] because we still have 44,” Williams said. He also noted that younger members may not be affected by the branch closings because they bank online. Wescom has a strong online presence, and also belongs to a large ATM network, he added. About 100 positions could be impacted by the changes. “We don’t know how many ultimately will be released,” Williams said. The credit union has not recruited externally, and will try to match employees whose positions have been eliminated with open positions at other branches. “We recognize that we may not have a perfect match,” he said. “We also recognize that some people will say no to the transfers. Wescom eliminated 113 positions in January. Only 20 employees did not return to positions with the credit union. “We’re hopeful we can minimize the impact,” Williams said. The credit union has a young workforce that includes part-time employees and college students. Without external recruitment and normal attrition, “I think it’s going to open up a lot of opportunities,” he added. Wescom has a low market share of the mortgage market, but members who received loans elsewhere have struggled to keep up with auto loan payments and credit card payments. Williams isn’t sure the delinquencies will slow. “That’s the $64,000 question,” he said. “No one knows.” The last time California struggled with housing problems of this extreme was in the early 1990s, he said. “It took four to five years for values to come back to their previous levels. I don’t know if we’re at the bottom. But even if we are, there [isn’t going to be] a significant turnaround in the short-term.”

Michigan PAC states 25th largest

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PLYMOUTH, Mich. (8/6/08)--Michigan credit unions’ political action committee has retained its No. 25 spot in the state. The Michigan Campaign Finance Network released a list of the 150 largest state Political Action Committees (PACs) for the 2008 election cycle thus far, and MCULAF (credit unions’ PAC at the state level) has maintained a foothold in the top 25. From Jan. 1, 2007, to July 20, 2008, MCULAF earned the No. 25 spot by raising $256,167, a 48% increase compared with the amount raised during the same time period in the 2006 election cycle. At the end of 2007, MCULAF was the 23rd largest state PAC in Michigan, so while we have slipped a couple spots since then, a strong fund-raising effort can keep us in top 25 territory at the end of this election year,” said Michigan Credit Union League Executive Vice President Patrick La Pine. “With all credit unions pushing for 100% or more of their MCULAF fund-raising goal, we can stay ahead of the PACs ranked below us that will likely make a huge push over the next three months," he said. La Pine thanked credit unions for their efforts.

Murray takes helm of Mid-Atlantic Corporate

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MIDDLETOWN, Pa. (8/6/08)--Jay R. Murray began his term last Friday as president/CEO of Mid-Atlantic Corporate FCU, Middletown, Pa. Murray joined Mid-Atlantic Corporate as its first corporate account manager in 1991. He went on to serve as vice president of member services, and senior vice president, chief operating officer, and most recently, president and chief operating officer (Life is a Highway Aug. 5). Murray also is CEO for the Impel Consulting Group L.L.C., a credit union consulting company, and board member of MY CU Services L.L.C., Mid-Atlantic’s electronic bill payment company, and Sollievo Group L.L.C., Mid-Atlantic’s benefits and insurance company. He succeeds Edward J. Fox, who retired in July.

Indiana CU reps host July events for congressman

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EVANSVILLE and TERRE HAUTE, Ind. (8/6/08)--Two events were hosted by representatives of a credit union in Indiana's eighth district for U.S. Rep. Brad Ellsworth (D-Ind.) last month. On July 12, Evansville Teachers FCU (ETFCU) CEO Mike Phipps and his wife Amy hosted a successful fundraiser at their home. Mike Phipps is a member of the Indiana League Governmental Affairs Committee.
Click to view larger image Attendees at an event for U.S. Rep Brad Ellsworth (D-Ind.) and hosted by Mike and Amy Phipps of Evansville (Ind.) Teachers FCU, included, from left: Indiana Credit Union League President John McKenzie; Mike Phipps; league Vice Chairman George McNichols, Hoosier Hills FCU; Rep. Ellsworth; Mike Sills, Evansville FCU; ICUPAC Trustee Steve Kuebler, ETFCU; and league Vice President Governmental Affairs Chris Beaumont. (Photo provided by the Indiana Credit Union League)
The event raised $10,430, making it one of the largest campaign fundraising events ever hosted for an Indiana candidate for the House at a credit union CEO's home, said the Indiana Credit Union League. The event was attended almost exclusively by credit union representatives from Evansville. There were 55 contributors from ETFCU. Also attending from other areas of the state were George McNichols, CEO of Hoosier Hills CU and chairman of the league's Governmental Affairs Committee; committee member Don Weaver of Indiana University CU; league President John McKenzie; and Chris Beaumont, league vice president of governmental affairs. Ellsworth, who attended a similar event at the Phipps' home in 2006, told those attending he appreciates credit unions' help and told of how he is trying to work across the political aisle to solve the many difficult issues facing Congress. "We want to do all that we can to be sure that he knows how much we appreciate his support," said McKenzie. "Mike, Amy, and others have done a terrific job in building the foundation for this strong relationship between credit unions, Congressman Ellsworth and his campaign." A second event was so-hosted by ETFCU Vice President Kim Shirk and her parents at their home in Terre Haute. The July 19 event raised $3,000 toward Ellsworth's campaign. Shirk's father, Paul Fulford, was a long-time board member of Indianapolis-based Hoosier Farm Bureau CU.

NYIB leaders elected for 2008-09

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COLUMBIA, S.C. (8/6/08)--The National Youth Involvement Board (NYIB) re-elected two regional coordinators, confirmed a new coordinator, and elected the chairman of the NYIB Executive Committee during the annual meeting in Las Vegas July 31. Brandon Pugh, director of communications and public relations at the South Carolina Credit Union League, will chair the NYIB for 2008-09. He succeeds John Faries, Credit Union Development Educator, and vice president of accounting and marketing at Space Age FCU, Aurora, Colo. NYIB regional coordinators elected to two years terms include:
* Incumbent Rebecca Isaacs, business development director, Credit Union Association of New Mexico, South West regional coordinator; * Joni Herrmann, public relations officer, Neighbors FCU, Baton Rouge, La., South Central regional coordinator; and * Incumbent Pugh, South East regional coordinator.
Continuing the second year of their terms are:
* Karen Smith, director of outreach services, Montana Credit Unions for Community Development, Helena, Mont., North West regional coordinator; * Pamela Swope, marketing manager, FinancialEdge Community CU, Bay City, Mich., North Central regional coordinator; and * Mary Ann Demczak, financial counselor, Clearview FCU, Moon Township, Pa., North East regional coordinator.
Afterward, the executive committee elected as officers:
* Swope, vice chairman; * Smith, secretary; * Isaacs, treasurer; and * Herrmann, media manager.
The group will reconvene Sept. 27-30 for its annual planning session.

16 graduate with honors at Western CUNA Management School

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RANCHO CUCAMONGA. Calif. (8/6/08)--For the fifth time in Western CUNA Management School (WCMS) history, one student earned high honors in the school’s five academic categories, and was awarded Highest Honors as the 47th session of WCMS recently came to a close at Pomona College in Claremont, Calif.
From left are: Western CUNA Management School (WCMS) President and Dean James D. Likens; Highest Honors and Charles M. Clark Memorial Award recipient Matt Stephenson of Rogue FCU, Medford, Ore.; and WCMS Associate Dean Michael Steinberger. (Photo provided by the California Credit Union League)
Honors recipient Matt Stephenson, Rogue FCU, Medford, Ore., also was presented the Charles M. Clark Memorial Award, which is given to the senior student nominated by his or her class who best represents high moral character, leadership, credit union dedication and academic achievement. Nine other students graduated with High Honors, while six students graduated with Honors. Out of the 421 students attending this year, 147 were first-year students, 143 were second-year students, and 131 were third-year students. This year’s session was held July 13-25. Over a three-year period, students have five opportunities to earn academic honors. Honors and High Honors are awarded to the highest achievers on the examinations taken by all students at the end of each school year. Students may also earn Honors and High Honors for each of their two projects. Students earning High Honors were:
* Debbie Browning, Idahy FCU, Boise, Idaho; * Linda Crosby, Kern FCU, Bakersfield, Calif.; * Craig Gummow, Beehive FCU, Rexburg, Idaho; * Daniel Kitchen, North Island CU, San Diego; * KayCee Murray, Numerica CU, Spokane, Wash.; * Norm Phillips, SELCO Community CU, Eugene, Ore.; * Glen Shimada, Hawaii USA FCU, Honolulu, Hawaii; * Raymond Spreier, Mid Oregon FCU, Bend, Ore.; and * Donna Stillman, HFS FCU, Hilo, Hawaii.
Honors students this year were:
* Kim Diaz, Arrowhead CU, San Bernardino, Calif.; * Angie Douglas, Clark County CU, Las Vegas, Nev.; * Sandra Ferguson, Great Basin FCU, Reno, Nev.; * Marty Mattox, USE CU, San Diego; * Don Seeman, Coast-Tel FCU, Salinas, Calif.; and * Dan Terada, Pearl Harbor FCU, Waipahu, Hawaii.
Ken Facer, who recently retired from Arrowhead CU in San Bernardino, Calif., was named the 18th recipient of the James D. Likens Alumni Recognition Award, founded by the Alumni Association of WCMS. He was a project reader at WCMS and in charge of providing transportation for students for 20 years. California is one of 13 states participating in WCMS. School administration is conducted from the California Credit Union League headquarters in Rancho Cucamonga, Calif.

CU name change spurred by trademark holders request

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GOSHEN, Ind. (8/6/08)--Elkhart County Farm Bureau CU has changed its name to Interra CU. The change, effective Monday, was spurred by a request from a group holding the trademark to the words "farm bureau." The Goshen, Ind.-based credit union made the change as a result of a request from the American Farm Bureau Federation. The federation owns the trademark to the words "farm bureau" and the acronym "FB." The group had asked the credit union to change the name last summer, the credit union said in a press release. The "In" in the new name represents Indiana and "terra" means land, said the credit union. "We wanted a name that spoke to the area and our members," said Jack Sheets, president. Credit union members were notified of the process late last year and after a week-long voting process, approved the new name by a 96% majority in March. A committee of board members, management, staff and members chose the new name after considering more than 100 options and working with a professional naming firm. "We feel Interra honors the credit union's roots in the agricultural community," Sheets said. "At the same time, it allows us to move forward and create the best credit union for our members and potential members in the future." As part of the transition, the $455 million asset credit union introduced a new website,, and expanded its hours of service. Several smaller credit unions with "Farm Bureau" in their name exist in various states. They include: Arkansas Farm Bureau FCU, Little Rock; Farm Bureau Family FCU, Lansing, Mich.; Hoosier Farm Bureau CU, Indianapolis; Louisiana Farm Bureau CU, Baton Rouge, La.; and Texas Farm Bureau FCU, Waco, Texas. The largest has $12.7 million in assets.

CU System briefs (08/05/2008)

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* RANCHO CUCAMONGA, Calif. (8/6/08)--The California and Nevada Credit Union Leagues were Champion level sponsors at this year's National Youth Involvement Board's annual meeting and convention
Click to view larger image Click for larger view
July 28-31 in Las Vegas. Of the record 171 attendees, 27 were from the two states. California was second nationally in the number of students reached through financial education presentations (47,478) and fourth for number of classroom presentations--698. Among those attending were, from left: seated, Jennifer Grove, The Golden 1 CU, Sacramento, Calif., and Cathy Arra of the leagues; standing, Tena Lozano, RMJ Foundation; Marlene Myers, Travis CU, Vacaville, Calif.; Jenny Wagner, Silver State Schools, Las Vegas; Kate Robinson, Greater Nevada CU, Carson City, Nev.; Mike Jones, Educational Employees CU, Fresno, Calif.; Mike Lee, The Golden 1 CU; and Neal Schwartz, the leagues. (Photo provided by the California and Nevada Credit Union Leagues) … * ALBANY, N.Y. (8/6/08)--The Credit Union Association of New York received three awards of excellence from the APEX Awards for Publication Excellence. Recognition was in three categories: Marketing and PR for its public service initiative, "Who Are You? Identity Thieves Really Want to Know"; Member and Customer Communications, for its "Want a Quarter Percent Off Your New Mortgage" promotion; and Magazines and Journals (print over 32 publications, for the October 2007 issue of its quarterly publication, Connection. APEX awards are based on graphic design, editorial content and the ability to achieve overall communications excellence. Nearly 4,500 entries were submitted … * SALT LAKE CITY (8/6/08)--Mountain America's mobile banking service saw a 200% increase in users over year-end 2007, the $2.7 billion asset credit union announced. MACU2GO mobile banking allows members to access their accounts from their phones rather than a regular computer. "Consumers gravitate towards products and services that are convenient and meet their needs," said Senior Vice President Tony Rasmussen. "As our world becomes more mobile, global and multi-task oriented, having financial information at their finger tips becomes increasingly important to our members." … * WINSTON-SALEM, N.C. (8/6/08)--Latino Community CU opened its sixth branch Monday, in a restored Wachovia building in Winston-Salem, N.C. The Durham-based credit union's newest branch will anchor a revitalization project for the Waughtown area. Local officials and state legislators joined more than 50 people at the grand opening. Councilwoman Evelyn Terry said the credit union is the "nucleus" of the development. Latino Community CU President/Co-founder John Herrara said credit unions help reduce crime by giving people a place to store their money so they aren't carrying large sums of cash (Winston-Salem Journal and WFMY News 2 Aug. 5) … *
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READING, Pa. (8/6/08)--Pagoda FCU cooked up a hot deal for members this summer. Automobile loan applicants could pick a "burger" or a "steak" from a Weber Grill. Under the toy burgers and steaks were loan rate discounts, ranging from 0.25% to 0.75%, that the member could apply to their loan in addition to the member's Loan Incentive Program Score. Many members enjoyed low rates as a result, and two members, including Beth, shown here, took home the Weber Grills. Also, the squeaky toy burgers and steaks will go to the dogs--Pagoda CU is donating them to the Animal Rescue League. serves up hot deal on auto loans (Photo provided by Pagoda FCU) …

California-Nevada summit attracts 49 from small CUs

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RANCHO CUCAMONGA, Calif. (8/6/08)--Forty-nine credit unions leaders who are members of the California and Nevada Credit Union League attended the first annual Shapiro Summit, hosted by the league’s Shapiro Advisory Committee, July 26 in Rancho Cucamonga, Calif.
Click to view larger image The Shapiro Advisory Committee, which pools the resources of the credit union community to help small credit unions, held its first annual Shapiro Summit July 26 in Rancho Cucamonga, Calif. Jon Hernandez, CALCOM CU CEO and Shapiro Advisory Committee member, led one of the breakout sessions. (Photo provided by the California and Nevada Credit Union Leagues)
The Shapiro committee is a cooperative effort that pools the resources of the credit union community to help small credit unions operate efficiently. The group consists of credit unions with less than $39 million in assets. An industry expert discussed strategic planning for credit unions. They also participated in speed dating-style discussion on cost-based pricing; loan, deposit and membership growth; and staff development. “It was a very successful event, with many participants saying it provided them with practical ideas they could go home and apply at their credit unions,” said Cathy Arra, league staff liaison to the Shapiro Advisory Committee.