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More states CUs inundated with phone scams

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MADISON, Wis. (8/29/08)--Credit unions in more states are reporting they've been targeted in this month's waves of voice phishing or vishing attacks, which are occurring at credit unions and other institutions throughout the U.S. The robo-attacks involve automated telephone calls to members and nonmembers claiming to be from the credit union. The message, which goes to thousands of people, warns that the member's credit or debit card has been suspended. To reactivate it, the member must call a phone number. At the number, the member is asked for the credit number and personal identification number or other personal financial information. In all cases, credit unions are warning members and the public that they would never contact members in such a way and ask for information they already had. Two Pennsylvania credit unions--Members 1st FCU and New Cumberland FCU--posted scam alerts on their websites after members reported calls, said the Pennsylvania Credit Union Association (Life is a Highway Aug. 28). In Oneida, N.Y.,GPO FCU was targeted. "Fraudsters are blanketing the area with automated phone calls, as well as sending out e-mails requesting personal account information," John Prumo, president/CEO of GPO FCU told the Oneida Dispatch (Aug. 26). He advised consumers not to respond. "These criminals can't touch your account if you don't give out information." Sarasota Coastal CU, Sarasota, Fla., e-mailed warnings to 10,000 members on its e-alert system after it received several dozen calls from people who were contacted by phone and told to call a number in Quebec. Some received calls on their unlisted cell phones (Sarasota Herald-Tribune Aug. 25). In Great Falls, Mont., several credit unions were targeted, according to one of the credit unions, lst Liberty CU (Great Falls Tribune Aug. 27). Montana Credit Union Network President Tracie Kenyon noted that the incidents aren't data breaches. "This is a coordinated attempt to contact people directly and entice them to give out their personal information," Kenyon told the Tribune. The network advised people receiving the calls to hang up. According to Gartner Inc., a technology research firm, $3.2 billion was lost by Americans 3.6 millions, up from 2.3 million victims in 2006. Of those who received phishing e-mails last year, 3.3% lost money, up from 2.3% in 2006 and 2.9% in 2005. The average loss per incident in 2007 was $866, which is less than the $1,244 in average losses in 2006. However, 2007 had more victims. Roughly 1.6 million victims recovered about 64% of their losses last year, compared with 1.5 million recovering 54% in 2006, said Gartner.

Economy impacts online spending especially among women

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WILMINGTON, Del. (8/29/08)--The economy and credit crunch are affecting consumer buying online this quarter--especially among women, reports the eBillme Online Spending Index. The eBillme Online Spending Index, conducted quarterly by Javelin Strategy and Research, polled 1,600 consumers about their projected online spending for the quarter. It also measured influential factors such as the economy, available payment options, security and financial control. This quarter's index also polled consumers about their online spending for back-to-school shopping. Among the findings:
* Consumers surveyed plan to spend on average $100 to $250 online during the next 90 days; * 18%--mostly female and 18-24 years old--said they would make back-to-school purchases online; * 48% of consumers polled are delaying their purchases due to uncertainty in the economy; * 32% said they would spend more if they could purchase online with cash--revealing a general shift towards cash preferences; * Female consumers indicated a 5% decrease in using credit cards, further indicating a shift toward cash, said eBillme.
"The index results show a significant shift in consumer behavior, especially among female consumers," said Marwan Forzley, president/CEO of eBillme. Compared with men, "a higher percentage of women are concerned with fraud, identity theft and the economy. In fact, 38% of women said that they would purchase more online if they could control their finances and pay using cash."

College students view debt as normal

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WASHINGTON (8/29/08)--Nearly one-fourth of college students surveyed recently don't consider long-term ramifications when they use a credit card. Instead they will go into debt for months, simply to enjoy the moment, according to a new study. However, despite the "bad behavior," the students said they knew they must act responsibly or risk ruining their financial future. The survey underlines the importance of financial literacy programs. Credit unions involved in financial education need to educate students before they develop those bad habits. The online poll of 500 college students was sponsored by the National Association of Retail Collection Attorneys (NARCA). In its report released earlier this week, NARCA said the study revealed "alarming data" indicating that many young people aren't concerned about debt (PRNewswire Aug. 25). "Our poll suggests that too many young people are living for the moment and are not preparing for their financial future," said Robert Markoff, NARCA president. "Having good credit probably has more impact on your life than having a minor criminal record," Markoff said. "The type of impulsive behavior our data demonstrated can have significant and lasting effects on students' lives." Key findings:
* More than 25% of students polled said it is reasonable to run up a debt to splurge on a special celebration with friends at a restaurant or to use a credit card as a way to "raise cash." * Roughly 31% of the students said they do not worry about debt, because they can pay it back after they are out of school and earning a regular paycheck; * An average of 23% chooses to ignore overdraft penalties and the prospect of months or years of paying off a debt incurred for a moment of fun. * 92% agree that bad debt will significantly impact a person's ability to get credit in the future. Bad debt was defined as failure to pay bills for so long that a debt collector must contact the customer. * 46% said they always keep records of their spending and receipts. * 42% of those who had been contacted by a debt collector said they would develop a payment plan to repay the debt over time.

CU System briefs (08/28/2008)

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* DES MOINES, Iowa (8/29/09)--The Iowa Credit Union League (ICUL) announced a staff promotion and new hire Wednesday. Emily Oliver was promoted to director of public affairs and marketing of ICUL. She oversees media relations, marketing, member outreach, legislative advocacy and technology, and provides support for community outreach and general communications. Oliver was previously public affairs specialist at ICUL. Olivia Maiers has been hired as marketing specialist. She will develop and implement marketing plans and materials for the league and its subsidiaries, and ensure the league's brand identity is supported in all communications and marketing vehicles. Maiers previously was employed at Chandler Chicco Agency, Santa Monica, Calif. … * MADISON, Wis. (8/29/09)--UW CU began issuing flat, instant-issue debit cards Monday, the first financial institution in Dane County, Wis., to do so, said the credit union. The flat cards function like traditional debit cards but have no embossed characters. They are ready to use immediately upon issue and eliminate the waiting period for mailing a card and PIN. UW CU installed Dynamic Card Solutions' CardWizard software application and flat card printer in three branches in Madison and Milwaukee. In addition to attracting new members, the cards can save existing members time if they lose or damage their cards, said the credit union. Paul Kundert, president/CEO of the Madison-based credit union, said, "Flat cards are the standard in Europe and Canada." … * SACRAMENTO, Calif. (8/29/08)--Michael Edward Osgood, 47, of Sacramento, Calif., pleaded guilty to three counts of bank robbery before U.S. District Court Judge Lawrence K. Karlton, announced the U.S. Department of Justice’s U.S. Attorney’s office for the Eastern District of California Tuesday. The case results from an investigation by the Sacramento Violent Crimes Task Force, which dubbed the robber as the “straw hat bandit” because he wore large straw hats during robberies. He admitted to seven robberies of banks and credit unions. For each of his three bank robbery convictions, Osgood could face up to 20 years in prison, a three-year term of federal supervised release, a fine of $250,000 and an order of restitution (US Fed News Aug. 26) … * RANCHO CUCAMONGA, Calif. (8/29/08)--The eighth-annual Richard Myles Johnson (RMJ) Foundation/WesCorp Golf Classic Aug. 25 raised more than $30,000 for the foundation, which is the state foundation for California and Nevada credit unions. The tournament winners were Bob Siravo, president/CEO, WesCorp; Tony Boutelle, president/CEO, CUDL; Bill Cheney, president/CEO, California and Nevada Credit Union League; and Bill Birnie, CEO Eagle Community CU. The event drew 92 players and 30 sponsors. Pictured are: Cheney (left) and Boutelle. (Photo provided by the California Credit Union League) …

Two CUs win California Desjardins award

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SACRAMENTO, Calif. (8/29/08)--Educational Employees CU and Sonoma County Grange CU both received first-place honors in the California statewide Desjardins Youth Financial Education Awards. The Desjardins awards recognize leadership within the credit union movement on behalf of youth financial literacy. Educational Employees won the asset category of $250 million and above, while Sonoma County Grange won the less than $35 million asset category, announced the California Credit Union League. As first-place winners, the Fresno, Calif.-based Educational Employees CU and Santa Rosa, Calif.-based Sonoma County Grange CU advance to the national Desjardins Youth Financial Education Awards competition. The national award competition is overseen by the Credit Union National Association. Educational Employees CU was honored for its well-rounded series of programs, it’s depth of knowledge of its community, and the use of various avenues to provide youth financial literacy programs. The credit union partnered with eight libraries to offer workshops during the summer while children were out of school. Sonoma County Grange CU offered programs to reach out to a unique demographic for credit unions--young people involved in the agricultural field. This past year, young credit union members took out $50,000 in loans as part of its 4-H/FFA Agriculture Loan Program. As part of the program, the credit union gives up to $1,500 for initiation or expansion of a project. This teaches young people how to complete a loan application, and make timely loan repayments. The loan is reported to the credit bureau so that youths receive a credit score. L.A. Financial CU, Pasadena, Calif., received an honorable mention.

CUs on the Tube MCUL Mayes talk economy election CUs

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PLYMOUTH, Mich. (8/29/08)--Michigan Credit Union League (MCUL) President/CEO David Adams recently discussed the state economy, elections, and credit unions with State Rep. Jeff Mayes (D-Bay City) in a league podcast. Mayes began the podcast by thanking Adams for the league’s work. Mayes, who is a member of the state House Banking and Financial Services Committee, also talked about how credit unions can help the state’s economy recover. Financial institutions have the money to allow people to buy things and create business investment, Mayes said. “Credit unions are stable and doing well,” he added. Adams and Mayes also touched on financial literacy as well as the need to provide youth with financial literacy experiences and educate parents. “I commend credit unions for leading that charge,” Mayes said. To listen to the podcast, use the link.

CUNA closed Monday for holiday (08/28/2008)

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WASHINGTON and MADISON, Wis. (8/29/08)--The Washington, D.C. and Madison, Wis., offices of the Credit Union National Association will be closed on Monday in observance of the Labor Day holiday. News Now will not publish on Monday but will resume regular publication Tuesday.

NCUF WOCCU launch international DE program

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WASHINGTON (8/29/08)--The National Credit Union Foundation (NCUF), in partnership with World Council of Credit Unions (WOCCU), has launched a new international designation in NCUF’s Development Education (DE) program. The new program, first announced at WOCCU's World Credit Union Conference in Hong Kong, will certify its first class at WOCCU's 2009 World Credit Union Conference, scheduled for July 26-29 in Barcelona, Spain.
Charles Sim, a director for Scotwest CU, Glasgow, Scotland, distributed school supplies to needy children near Nabon, Ecuador, during a 2007 World Council of Credit Unions educational initiative. (Photo provided by the World Council of Credit Unions)
Charles Sim, a director with Scotwest CU in Glasgow, Scotland, plans to be among the first to receive the DE designation. The retired firefighter and longtime credit union volunteer views the new program as a way to promote and enhance global credit union development, and further extend the DE program's reach to other countries. “After seeing WOCCU's field work ‘at coal face,' as we say in Scotland, I value the importance of WOCCU's programs to the developing world,” Sim said. “I am looking forward to being in the first group to receive this certification, and I've already begun work on my independent study project.” The DE program, which links U.S. credit union advocates with the movement's philosophical roots through interactive group presentations and experiential learning, supports credit unions' global initiatives through volunteer projects and international exchanges. “It's a logical extension to where the DE program has been. We greatly appreciate WOCCU's continued support in helping direct the program's future on the international front,” said Tom Decker, NCUF's director of social impact management. International candidates must complete four steps to achieve an international DE designation:
* Complete their local DE program to build a solid foundation; * Attend WOCCU's Hispanic Marketing Immersion Program; * Attend either WOCCU's World Credit Union Conference or participate in another country's DE program. In addition to the U.S. DE program, other affiliated programs operate in the United Kingdom, in the Philippines and through the Association of Asian Confederation of Credit Unions, WOCCU's Asian affiliate organization headquartered in Thailand; and * Complete an independent studies project appropriate to the learning objectives of the same programs.
WOCCU expects the relationship to foster greater awareness of the impact of credit unions worldwide, explained Pete Crear, WOCCU president/CEO. Greater exposure of DE students to the global credit union movement also will enhance their educational opportunities and foster international credit union support and growth, he said. “Our goal has always been to build bridges among global credit union movements and we're pleased to have so many enthusiastic emissaries to help us in our mission going forward,” Crear said. WOCCU has been a long-time supporter of NCUF and its DE program. The program has received additional support from the Credit Union National Association and CUNA Mutual Group.

Pa. Family Savings Account introduced for underserved

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HARRISBURG, Pa. (8/29/08)--Pennsylvania’s Family Savings Account program (FSA) was introduced to the underserved of Lebanon County at a press conference Tuesday by PROBE Inc. in Lebanon, Pa. The presentation described how private enterprise and Pennsylvania can work together to help underserved consumers.
From left: Glenn Rambler, Lebanon (Pa.) FCU; Joe Wambach, Pennsylvania Credit Union Foundation; Kathy Verna and Theresa Trainer, PROBE; and State Rep. Mauree Gingrich attend a press conference announcing Pennsylvania’s Family Savings Account Program. (Photo provided by the Pennsylvania Credit Union Association)
Thirty-nine underserved consumers will benefit from FSA. Through this program, Pennsylvania provides money to community-based, nonprofit organizations to help individuals and families set up accounts and offers a match--of up to $2,000 over two years. FSAs can be used to buy a home, repair a home, purchase a vehicle, pay for education or daycare, and train for or start a business. Attending the ceremonies were: Joe Wambach, executive director, Pennsylvania Credit Union Foundation; Glenn Rambler, executive vice president, Lebanon (Pa.) FCU; Holly Chase, community-based financial education specialist for the Pennsylvania Office of Financial Education; Teresa Trainer, counselor, PROBE Inc.; and Kathy Verna, executive director of PROBE Inc. Also participating in the program was State Rep. Mauree A. Gingrich (R-101). The Pennsylvania Credit Union Foundation and Lebanon FCU support PROBE Inc. and Lebanon County’s local Financial Literacy Project, a collaborative effort between more than 20 Lebanon County health and human service agencies, government agencies, local financial institutions, businesses, and the Lebanon County Commission for Women. The total foundation grant over a three-and-a-half-year period of the project is $36,000. To date, the foundation and Lebanon FCU have contributed $20,000 to PROBE Inc.

Capital reform is this generations issue NASCUS told

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SEATTLE (8/28/08)--"Capital modernization is essential. The issue of capital reform is the issue of this generation," state regulators were told at the National Association of State Credit Union Supervisors (NASCUS) State System Summit in Seattle last week. Dennis Dollar, principal of Dollar and Associates, told the group, "If we don’t fix this now, I worry about the next generation of credit unions. The capital system for credit unions must be fixed. The time for this issue has come.” Dollar is a former chairman of the National Credit Union Administration (NCUA). The summit, which meet Aug. 21-23, provided a venue for regulators, credit union leaders and dual chartering supporters to discuss challenges and opportunities facing the state credit union system. Other highlights:
* National Credit Union Administration (NCUA) Chairman Michael E. Fryzel made his first speech since taking office at NCUA. His comments about his partnership approach with state regulators were covered in News Now's Aug. 21 (use the resource link). * Cathie Tierney, president of Community First CU, Appleton, Wis., discussed the credit union's unrelated business interest tax (UBIT) litigation, filed in January, against the Internal Revenue Service. A court date has been set for May 2009. “We are very pleased that this process is moving as quickly as it is, and we are optimistic about a positive outcome for state-chartered credit unions,” she said. * Jim Devine, CEO of Hipereon Inc., walked attendees through essential elements of a safe and sound member business lending (MBL) program. Few credit unions have studied their current membership base for existing business owners as a target audience for their MBL programs. “You should help your members build a business that is transferable,” he said, adding that MBL staff must be “business model structure experts” with long-term education. “You can’t pretend in this line of business,” he said. * Gavin Gee, director of the Idaho Department of Finance, discussed the new Nationwide Mortgage Licensing System (NMLS), which he said was essential to providing transparency and oversight of the nation’s mortgage industry. More than 20 states use or will begin using the NMLS this year. Credit union employees who are mortgage originators must register under the Housing and Economic Recovery Act of 2008. "States will have to pass legislation to meet the standards of the new law,” said Gee. A group of state regulators is working on model legislation to streamline implementation and provide uniformity, he said.
NASCUS President/CEO Mary Martha Fortney noted that "open dialogue and discussion between regulators and credit unions on the industry’s critical topics is essential to the longevity and safety and soundness of the credit union system.”

Mississippi Louisiana in full hurricane mode

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JACKSON, Miss., and HARAHAN, La. (8/28/08)--The Mississippi Credit Union Association (MSCUA) and the Louisiana Credit Union League are preparing for the possibility of a hurricane this weekend as Tropical Storm Gustav makes its way toward the Gulf Coast. The area was hit three years ago tomorrow by Hurricane Katrina. Gustav reached hurricane force in Haiti Tuesday afternoon, killing 22, then weakened into a tropical storm. It was expected to strengthen as it crosses the Gulf. Its projected path is anywhere from the Florida panhandle to Louisiana. In Mississippi, MSCUA is preparing to support credit unions, if needed, and has requested up-to-date contact information for key credit union personnel. It provided credit unions with cell phone numbers for MSCUA staff. The association also changed its board meeting, scheduled for today and Friday, to a webcast format so board members can use the traveling time to prepare their credit unions and homes. The Louisiana league and the Louisiana Office of Financial Institutions (LOFI) activated Telspan, the telephone response system for credit unions, Wednesday. Sid Seymour, who represents financial institutions on the Governor's Office of Homeland Security and Emergency Preparedness (GOHSEP), will leave the first recorded message. The league encouraged credit unions to dial in for the most current information. The league's 800 number (800-452-7221) and its website (www.lcul.com) will be in effect. The league gave a number of emergency phone numbers:
* New Orleans and Tri-Parish credit unions should contact Mary Wolfe at 504-487-8147; * Baton Rouge, Lafayette and Lake Charles credit unions should contact Jim Phillips, 225-603-2642; and * Shreveport, Alexandria and Monroe credit unions should contact Susie Fair at 318-663-7766.
It provided other league staff phone numbers and a list of emergency contact numbers for regulators, CUNA Mutual Group and disaster agencies. If the storm worsens, News Now will publish the full list of numbers on Friday. Credit unions along the Mississippi gulf coast also are busy preparing. “We are in full hurricane mode here already,” said Lora Michael, president/CEO of Jackson County CU, Pascagoula, Miss. “By Friday all preparations will be complete no matter what the predictions are,” she said. “We cannot risk a turn for the worse over the long weekend, especially being so close to the Gulf and with only one facility. We got prepared ahead of time for Katrina and it made a huge difference in the timeframe we were able to serve our members.” Singing River FCU (SRFCU), Moss Point, Miss., activated its hurricane preparedness plan Wednesday and also expects completion by close of business Friday. The plan includes, among other preparations, securing ample cash to meet post-hurricane member needs for up 10 days, as well the ability to operate manually for up to 10 work days in the event power is not restored. “As part of SRFCU’s disaster recovery plan, a satellite back-up system is in place, meaning credit union member information will be available, even if telephone lines are not restored,” said James Smith, SRFCU president/CEO. “Members will continue to have uninterrupted access to their accounts via home banking and audio response.” Other credit union preparations include plans to maintain communications with members, employees and vendors, activating disaster recovery teams and gathering emergency supplies and equipment.

CU educators reach unprecedented in 2007-08

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COLUMBIA, S.C. (8/28/08)--Credit unions had unprecedented impact in the classroom in 2007-08, reaching 374,099 students in 11,245 total presentations, according to statistics collected by the National Youth Involvement Board (NYIB). Those totals are gains of 29.4% in number of students and 14.6% in number of presentations over 2006-07 statistics (289,072 students in 9,812 classes). Increases over five years average 9% annually. In logging the data, NYIB’s network of credit union professionals far exceeded what the NYIB Executive Committee considered a stretch goal of 300,000 students reached. “What we saw this year appears to be the result of larger class sizes,” suggested NYIB Chairman Brandon Pugh, “particularly since just three more presenters than last year reported activity. "Optimistically, it’s showing that credit union volunteers are progressing, having more classes and more students in each.” It is also the reason the NYIB Executive Committee will consider another lofty goal for the coming year, Pugh said. "Chairman (John) Faries encouraged us to set the ‘stretch’ goal last year, believing there is plenty of activity going unreported. This year’s numbers represent an outstanding impact by credit union people, but they still suggest there’s more room for even bigger numbers,” Pugh added. For the second consecutive year, Marsha Lunden of Desert Schools CU, Phoenix, conducted the most classroom presentations--416. Erin Hodson of Kern Schools FCU, Bakersfield, Calif., reached the most students--22,619--in the 2007-08 reporting year. The NYIB “Top Classroom Presenter”--the person with the greatest percentage increase in classroom presentations over the previous year--was Juli Lewis of Suncoast Schools FCU, Tampa, Fla. During the 2007-08 reporting year, Lewis made 325% more presentations than in 2006-07. Likewise, “Most Students Reached” went to Jeff Williams of Educational Employees CU, Fresno, Calif., who reached 796.9% more students in 2007-08 than in 2006-07. NYIB is a volunteer organization of credit union professionals devoted to financial education and youth-oriented services. It is the only organization collecting classroom presentation data. Visitors to NYIB's website can create a “MyNYIB” profile for access to the classroom reporting feature, a searchable document sharing feature, and the ability to upload their own news stories. Membership in NYIB is voluntary and site features are at no cost to the network. NYIB's Executive Committee is accessible at www.nyib.org/contactus.php. The Credit Union National Association is tracking credit unions' adult financial education efforts. To record your adult educational sessions, go to cunapfi.org and click on "Report what you're doing."

For better banking check out a CU--IWall Street JournalI

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NEW YORK (8/28/08)--A columnist for the The Wall Street Journal is urging consumers to move their account to a local credit union. Noting that "many Americans are pretty unimpressed with the banking industry right now," Brett Arends writes, "Maybe it's a good time to look at an alternative--like moving your account to a local credit union instead" (The Wall Street Journal Aug. 26). That's just the first two paragraphs. Arends discusses credit unions' "sleepy, backwater image. They're often seen as the local libraries of banking. But that's too bad. The chances are they didn't pay their chief executive $10 million while writing off billions in subprime loans. And they can offer you some surprisingly good deals." Bankrate.com economist Greg McBride says in the article that credit unions often beat banking counterparts in rates on loans and deposits and that shoppers looking around for the best deal "has to include looking at credit unions." The lengthy article also uses statistics and historical information provided by the Credit Union National Association (CUNA) and urges readers to go to creditunion.coop to find credit unions near them. The entire article is available at the resource link.

CDCU in Syracuse granted 100000 to aid low-incomers

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SYRACUSE, N.Y. (8/28/08)--Syracuse Cooperative FCU will receive a $100,000 grant to better serve low-income communities in its area. The grant, issued to the $14 million asset, Syracuse, N.Y.-based credit union by the U.S. Department of the Treasury’s Community Development Financial Institutions Fund, was announced Tuesday by U.S. Sen. Charles E. Schumer (D-N.Y.) (Syracuse.com Aug. 27). The credit union will use the grant to open a third branch office, step up activity on the north side of Syracuse, train staff and acquire technology, Schumer said. “The Syracuse FCU already does a great job helping low-income Syracuse residents access banking and financial services,” Schumer said in a news release. “This money will go a long way in helping the credit union expand its outreach to more residents in need and in making financial services more accessible to the community.”

CU System briefs (08/27/2008)

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* RALEIGH, N.C. (8/28/08)--State Employees' CU (SECU) is enhancing its "Green" vehicle loan program to include vehicles with a higher rated fuel economy. Beginning in September, the Raleigh-based credit union's loan--which features an interest rate that's 1% lower than other new or used vehicle loans--will allow financing of new and used vehicles that have a combined city and highway miles per gallon rate of 28 mpg. Previously the loan program had been limited to new hybrid or alternative fuel vehicles. These are still eligible, provided they meet the 28 mpg combined rating, said the credit union in a press release … * PEMBROKE PINES, Fla. (8/28/08)--Power Financial CU signed up a few dozen accounts in advance of its gas card giveaway event with Mobil 1 Lube Express. The $480 million asset, Pembroke Pines-based credit union also opened several accounts during the event, which was designed to promote its new online account-opening service by giving away thousands of dollars in free gas cards and discounted oil changes. Power Financial members showed up for the free fuel injection service ($60 value) and free Purigen (nitrogen) for their tires ($30 value). Parents brought children who are NASCAR fans to meet “Sonny,” a Dale Earnhardt look-alike. Power Financial will repeat the event in November at another Mobil 1 Lube Express in Silver Lakes … * FORT WORTH, Texas (8/28/08)--U.S. Rep. Kenny Marchant (R-Texas) addressed about 50 employees on an Aug. 13 visit to a CUNA Mutual Group office in Fort Worth, Texas. After a tour of the facility, Marchant met with the group to discuss his experience working with credit unions and his background in local, state and federal government. Marchant, who serves on the Financial Services Committee, praised credit unions for their commitment to the financial needs of families and for providing quality services for the residents in his congressional district (US Fed News Aug. 13) … * HARRISBURG, Pa. (8/28/08)--A reception with credit union representatives and Jim McCormack, president/CEO of the Pennsylvania Credit Union Association was held Monday night for Kathy Dahlkemper, the Democratic nominee for Pennsylvania’s 3rd Congressional District (Life is a Highway Aug. 26). The event was chaired by McCormack; Gail Cook, president/CEO, Erie General Electric FCU; and Norb Kaczmarek, president/CEO, Erie FCU. More than 144,000 credit union members reside in Dahlkemper’s district, according to the association. From left are: Cook, Kaczmarek, Dahlkemper and McCormack. (Photo provided by the Pennsylvania Credit Union Association) ... * TULSA, Okla. (8/28/08)--Cynthia Jan Harris, 51, was charged in federal court in Tulsa with embezzling more than $1.6 million from Mayes County FCU, Pryor, Okla. Harris worked as assistant manager and chief financial officer at the credit union (Tulsa World Aug. 27). She is accused making fraudulent deposits into members’ accounts and then withdrawing the money from June 1, 2000, to July 10, 2007, the newspaper said ...

Article about financial industry courting kids cites CUNA

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MADISON, Wis. (8/28/08)--A Tuesday article in Investor’s Business Daily about the financial industry courting kids mentioned the Credit Union National Association’s (CUNA) National Financial Literacy Summit Report. The CUNA report indicated that 60% of teenagers don’t understand the difference among cash, checks and credit cards. Also, high school seniors this year correctly answered only 48% of basic questions regarding saving and investing, earning and spending in a JumpStart Coalition for Personal Financial Literacy Survey--down from 52% in 2006. The article mentions Monetta Young Investors Fund--a kids-themed mutual fund that attempts to persuade kids and young adults to adopt long-term investing. The fund uses online games and prizes, books, toys, activities and age-based financial kits to teach kids age four and up about long-term savings and investment. Also, the Treasury Department created the National Financial Literacy Challenge to inspire kids to learn about personal finance and financial literacy, the article said. More than 46,000 U.S. high school students took the voluntary 35-question test, with the average score being 56%. However, about 400 student scored a least a 94% mark on the test to earn a National Financial Literacy Award--a U.S. Treasury medal.

Check payments by online users at lowest point in six years

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BROOKFIELD, Wis. (8/28/08)--With more Americans paying their bills online rather than writing checks, credit unions will need to offer even more online banking services to members. An estimated 63.1 million households--75% of all U.S. households--are paying bills online, according to a survey by CheckFree, part of Fiserv, Inc., a provider of information technology services to the financial industry (BusinessWire Aug. 27). Among survey respondents who use the Internet, check payments dropped to their lowest level in six years--accounting for 31% of the total volume of household bill payments, compared with 34% in 2007. The survey also indicates that consumers have more confidence in online security because Americans are becoming more experienced in using Internet services, and therefore security concerns are not a much of a barrier to online bill payment adoption as they were in the past, said CheckFree. Other survey findings include:
* Households using the Internet pay about 11 bills per month. Consumers use an average of three different ways to pay bills with online, check, automatic debit and in-person at the heading the list of bill-payment methods. Online bill payments at bank and biller websites account for 42% of total monthly payments, compared with 31% of bills paid by check. * The environment was cited by 51% of survey respondents as a reason for choosing to view and pay bills online. Of these, 72% identified the lack of paper and clutter as main benefits, followed by tree conservation (19%) and reduction in gas consumption (16%). * Saving time and obtaining control over finances were major online bill-payment benefits cited by 44% of respondents. Those surveyed also cited other main reasons for paying bills online, including eliminating the hassle of writing checks; enabling them to pay all bills in one step; and saving on the cost of stamps.

Vantage CU makes it easy to register to vote

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ST. LOUIS (8/28/08)--Vantage CU has applications for residents to register to vote in the presidential elections this November. Voter registration applications will be accepted at all 15 Vantage branches through Sept. 29. The credit union will submit the applications as they are received to the proper election authority. Bridgeton, Mo.-based Vantage also launched the Missouri Kids Voting initiative, which teaches students the value of voting. Posters featuring St. Louis Cardinals pitcher Adam Wainwright were distributed to teach youth about the voting process. The initiative aims to reverse declining voter turnout in the U.S. Vantage has more than $500 million in assets.

60 of CU CEOs have supplemental retirement plans

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MADISON, Wis. (8/28/08)--More CEOs at larger credit unions have supplemental executive retirement plans than ever before, but the numbers still lag behind the financial services industry as a whole, reports a new Credit Union National Association (CUNA) survey.
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According to CUNA’s 2008-2009 CEO Total Compensation Survey, 61% of CEOs at credit union with $100 million or more in assets had a supplemental executive retirement plan (SERP) in place in 2007, up from 55% in 2006. In comparison, 86% of executives in the financial services industry have a supplemental executive retirement plan, according to CUNA Mutual Group. . As tax-exempt organizations, credit unions can offer two types of SERPs: 457(b), or “deferred compensation,” and 457(f). For an executive, a 457(b) plan is similar to an employee's 401(k) with limited contributions--up to $12,000 in 2003. A 457(f) plan has more flexibility with no contribution limits, but also has substantial risk that deferred funds could be forfeited before they are vested (News Now Nov. 17, 2004). In the past, 457(b) plans were more commonly offered to credit union CEOs, but 457(f) plans have gained in popularity in the past two years. In 2007, credit unions were nearly as likely to offer 457(f) plans as they were to offer 457(b) plans--37% versus 39%, respectively. “SERP numbers have remained fairly flat at credit unions over the last several surveys, but these gains are coming at a good time,” said Kristina Grebener, director of research and advisory services in CUNA’s center for research and advice. “As the pool of leadership talent continues to shrink, driving loyalty through executive benefit plans will be critical for retention.” The report provides nationwide data for credit unions with $100 million or more in assets and details CEO compensation, including: base pay, bonuses and incentives, perks and benefits, executive retirement plans, and employment contracts and severance. The report also includes estimated values of the CEO total compensation package comprised of cash compensation (base salary plus variable pay), the cost of benefits and perquisites provided by the credit union, and the average annual value of car and car allowances received. For general peer comparisons, the survey data is presented by seven asset categories (from $100 million to $150 million in assets to $1 billion or more in assets), region, contract status, number of branch offices, number of full-time employees, loans outstanding, and number of members. A customized peer analysis is also available to compare a credit union to aggregated data from 10 or more peers.

Filene research Whos joining CUs What do they want

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MADISON, Wis. (8/27/08)--"Who's joining credit unions?" is the key question addressed in new research from the Filene Research Institute that delves into how new members are different from legacy members. For years, credit unions knew the needs of their members because the members shared a common experience based on employment, affinity groups and close-knit communities, says the study's author, George A. Hofheimer, chief research officer at Filene. "A shift to community credit unions allows more consumers to enjoy the benefits of credit union membership, but it also leaves credit unions with a complexity of a much more heterogenous membership," he said in the report, "Who's Joining Credit Unions?" The study examines data from more than 90 credit unions and divides members according to their length of membership at the credit union. New members, for example, are those who have been with the credit union two years or less. The study also asks:
* Do new members look different than legacy members? * Do they use different products? * Do they behave differently? * Do they want different things?
New credit union members, says the report, tend to be:
* Younger; * Lower-income; * Driven to credit unions by recommendations from friends and family; * Influenced heavily by the perception of convenience, but they are not necessarily heavy users of convenience access points such as branches and ATM networks; * Low-deposit and low-loan volume consumers; and * Less aware of complex product offerings and delivery channels.
The research report will be available via Filene's website soon.

San Diego area CUs delinquencies minimal

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SAN DIEGO (8/27/08)--Credit unions in San Diego have the capital to weather the economic storm, according to Daniel Penrod, California Credit Union League analyst. Delinquencies at San Diego credit unions increased to 0.83% in 2008 from 0.48% in 2007. “Even though that number seems like a large jump, banks would kill for that number,” Penrod told News Now. “Below 1% is phenomenal.” In March, San Diego credit unions had capital levels of 10.30%. Six percent is the minimum that the National Credit Union Administration requires to be capitalized, and 7% is considered well-capitalized, he added. “I doubt you’ll see a fallout from San Diego credit unions,” Mary Cunningham, CEO, USA FCU, San Diego, told News Now. “It’s been tough, but we have good capital levels.” San Diego is one of the “hot pocket” boom areas, along with other areas in California, Florida, Arizona and Las Vegas that are being hurt by the tremendous devaluing of homes, she said. The San Diego Union-Tribune recently featured credit unions in an article about the local impact of the housing meltdown. In the beginning of the market turmoil, San Diego struggled more than other areas in the state. But San Diego credit unions might actually be leaders in becoming financially strong again. “They peaked earlier, and will come out earlier and stronger,” Penrod told News Now. USA FCU posted a $5.7 million loss last year and decided to “get ahead of the freight train” by dealing with the loss head-on. USA beefed up its reserves--taking the loss immediately would position itself to do better this year, the credit union reasoned. “Not all credit unions in San Diego did that,” Cunningham acknowledged. Credit unions who beef up their reserves aren’t interested in having losses trickle in, Penrod said. “They’re looking two to four quarters ahead. They have the money now and are putting it away now.” The challenge for credit unions is not to have a knee-jerk reaction to losses by pulling loan programs that members need. Some financial institutions are risk-averse and tighten belts when the going gets tough, Cunningham said. “You have to make sure you know what the risks are,” she said. It’s also important for a credit union’s board to be comfortable dealing with losses. “Posting losses every month will rattle even the most steady board. We don’t want a board to overreact and tighten credit and do a disservice to members. That played a lot into our decision [to beef up reserves],” she said. Credit unions are affected by the subprime housing market troubles, though credit unions didn’t offer the “liar loans” many consumers are trapped by. “Members were still enticed to go elsewhere and get [subprime loans],” Penrod said. Wall Street expects another large bank to fail, and if it does, credit unions will have an opportunity to tout their strength. Potential members will see the wisdom of credit unions and their conservative lending practices, he added. “The key is that, even with the economy, they’re still lending money, and their loans are very strong,” he said.

Strike ends at Cornerstone Community

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LOCKPORT, N.Y. (8/27/08)--A strike at Cornerstone Community FCU, Lockport, N.Y., has ended. The Office of Professional Employees International Union (OPEIU) Local 212 voted Monday to ratify a negotiated agreement on a new collective bargaining agreement (BusinessFirst Aug. 26). Union members will return to work on Wednesday, according to the credit union. On Aug. 15, more than 70 union employees went on strike, which shut down two branches. At issue was the cost of health insurance premiums the credit union provides for staff. The employees were asked to contribute 5% of the monthly health insurance premium starting November 2009 (News Now Aug. 18). Terms of the new contract were not disclosed.

CU System briefs (08/26/2008)

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* KANSAS CITY (8/27/08)--Free State CU, a $9 million asset credit union in Lawrence, Kan., has agreed to merge into Credit Union of Johnson County, a $196.6 million asset based in Lenexa, Kan. Free State emerged from a regulatory conservatorship in May 2007. It operates a branch inside the larger credit union's Lenexa headquarters and has two Lawrence locations. Members of both credit unions will vote on the proposal next week. If they approve, the merger could be completed Sept. 15. Credit Union of Johnson County said the merger will allow its outlet in Douglas County and provide a new group of members seeking additional services (Kansas City Daily Star Aug. 26) … * KAHULUI, Hawaii (8/27/08)--Two credit unions in Hawaii expect to close a merger in October (Financial Deals Tracker Aug. 19). Lahaina (Hawaii) FCU, with $6.1 million in assets, would merge into the $80 million asset Valley Isle Community FCU based in Kahului. They expect to close the merger on Oct. 1. The merged credit union would retain the Valley Isle Community FCU name. The National Credit Union Administration approved the merger earlier, said the publication … * SAN FRANCISCO (8/27/08)--Arthur Eli Cheney, 65, of Napa, Calif., pleaded guilty Monday to robbing 20 banks and credit unions from June 18, 2007, through Dec. 12, 2007, along the Highway 101 corridor in California and in Utah (States News Service Aug. 25). According to an announcement by U.S. Attorney's Office for the Northern District of California, Cheney admitted he took a total of $46,040 from the institutions and threatened to use a pistol in at least seven incidents although he displayed no weapon. The heists earned him the nickname, the "Highway 101 Bandit." In addition to the highway corridor robberies, he robbed banks and credit unions in Vacaville, Fairfield, West Lake Village, San Diego, Carlsbad, Palm Desert and Sandy City, Utah. Sentencing is scheduled for Oct. 20. Maximum penalty on each charge is 20 years, plus a $250,000 fine and restitution …

Visterra CU SoCal discontinue proposed merger plans

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MORENO VALLEY and BREA, Calif. (8/27/08)--Two California based credit unions that had announced a proposed merger in April have discontinued the plans, saying the merger would not meet the economies of scale they had sought. Visterra CU, based in Moreno Valley, and Brea-based Credit Union of Southern California (CU SoCal) told a local newspaper the plans had been discontinued several weeks ago. They did not rule out the possibility of approaching a merger in the future (The Press-Enterprise Aug. 22). Visterra President/CEO Robert Cameron said the economy-of-scale issue was one of the upfront additions the two credit unions wanted. He left open the possibility that the credit unions may revisit the issue in a year or two, but a merger now would not make sense, he told the newspaper. CU SoCal Chief Operating Officer Edward Fox said the original merger goal had been to bring value to its members and employees, but the credit unions "mutually recognized the value to our members wouldn't be as significant or as immediate as when we first entered into the agreement." The credit unions had announced in April that the merger would be completed 45 to 90 days after the initial agreement. The proposed combined credit union would have taken the Visterra name and remained headquartered at Moreno Valley. It would have had more than $1 billion in assets, 86,000 members, 11 branches and 260 employees. Visterra serves Riverside County while CU SoCal serves Orange County, the San Gabriel Valley and nearby cities.

NASCUS Advisory Council leaders announced

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SEATTLE (8/27/08)--The National Association of Credit Union Supervisors (NASCUS) Credit Union Advisory Council announced new council directors to the membership during its annual meeting Aug. 22. Linda Childs, CEO, Knoxville (Tenn.) Post Office CU, was re-elected to a three-year term representing Advisory Council District II. Jason Boesch, CEO, Oklahoma RE&T CU, Oklahoma City, Okla., was elected to his first three-year term, representing District III. Council Chairman Mendell Thompson appointed Steven Behler, CEO, Kemba CU, West Chester, Ohio, to the at-large council director position for three years. Thompson, CEO, America’s Christian CU, Glendora, Calif., will continue as chairman for one year. Parker Cann, Columbia CU, Vancouver, Wash., was elected to serve as chairman-elect, and Cathie Tierney, Community First CU, Appleton, Wis., was elected as secretary. The council also recognized several credit union CEOs for their service as council directors:
* Lori Rush, Universal 1 CU, Dayton, Ohio; * Gary Peterson, Financial Plus CU, Ottawa, Ill.; and * Rick Schmidkte, Harborstone CU, Tacoma, Wash.

CUs mark new milestones at in-school-branches

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MADISON, Wis. (8/27/08)--The credit union movement broke two barriers in August, with 200 credit unions reporting that they are operating student-run branches in more than 700 K-12 schools nationwide. The 27% increase in schools represents the year-to-date growth spurt in reported in-school credit union branches since the Credit Union National Association (CUNA) began tracking the phenomenon in 2001. CUNA’s new Model Youth Program Guide reveals that--depending on setup and hours--a single in-school branch can cost between $700 and $25,000 per year to operate. In most cases, then, the primary motive for setting up a student-run branch is educational. “There are many ways to teach children about smart money management,” said Jim Hanson, vice president of CUNA’s center for personal finance, “but making it as easy as possible for them to save is one of the best.” Hanson noted that the No. 1 factor influencing how adults choose a financial institution is convenience “Why would youth be any different?" he said. "Kids and teenagers spend a fourth of their lives in school. Having a credit union as close as the cafeteria makes money management as convenient as choosing pizza versus mac and cheese.” But financial education is not the only reason to open a branch in a local school. The branch also represents a potential competitive edge. “As far as we can tell, the credit union movement has a much greater presence in schools that the banking industry. We expect that to change, however, once banks calculate the lifelong advantage that comes from being a third-grader’s primary financial institution,” Hanson said. According to CUNA’s online directory, credit unions have set up shop in elementary, middle, and high schools in 32 states and the District of Columbia. Credit unions can report their in-school branches or update their record on CUNA’s website. Use the resource links for more information.

How do CUs collect members e-mail addresses

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PORTSMOUTH, N.H. (8/27/08)--Credit unions collect members’ e-mail addresses primarily through teller incentives, according to a recent survey. About 17% of respondents said they used teller incentives to collect e-mail addresses, compared with account opening practices at 13% and through the credit union’s website at 13%. “The optimal time to gather the e-mail address is right at the beginning of the relationship,” said Rick Blaisdell, co-founder of MailMethods, the company that conducted the survey. “A best practice is to capture the e-mail address as early as possible in the relationship, even if the credit union does not have any current plans to use it.” Credit unions also obtain the addresses through signage in the credit union, direct mail and telemarketing, the survey said. MailMethods, based in Portsmouth, N.H., develops e-mail appliances for financial and retail markets.

Pesky phone scams head west

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MADISON, Wis. (8/26/08)--"It's a scam" is becoming a mantra among credit unions and other financial institutions. Phone scams, which have plagued credit unions in several states in waves the past several weeks, are heading west. Last week, more credit unions reported they were targets in the scams, which involved voice phishing or "vishing"--where fraudsters leave automated messages on the victim's telephone answering machine instructing them to call a number and provide card or account data. Credit unions from South Dakota, Oregon, Indiana, and Kansas were among the latest targets. In Aberdeen, S.D., police told consumers to ignore any calls from a six-digit number, most starting with "206" (American News Aug. 23). An automated voice says the call is from Aberdeen FCU. It instructs people m to press a number to talk to an operator about their credit card. Even Capt. Neil Bittner of the Aberdeen Police Department received one. Both members and nonmembers have been called. The calls began Friday morning. In Oregon, two credit unions--St. Helens Community FCU, St. Helens, and Wauna FCU, Clatskanie--reported computer-generated telephone scams similar to the others (The Spotlight and The Daily News Aug. 22). The Better Business Bureau of Northern Indiana received repeated calls from consumers who were told by a voice posing as Three Rivers FCU, Fort Wayne, Ind., to reactivate their cards by calling a number and entering their 16-digit account number (South Bend Tribune Aug. 21). In Arkansas City, Kan., the name of Ark Valley CU, was used in similar calls to both members and nonmembers, who received the calls on home phones and cell phones (NewsCow Aug. 25). Credit unions aren't alone. Parents who use debit cards to access their child support payments in the EPPICard system also are receiving similar calls (LoneStar Leaguer Aug. 25). And the Pennsylvania Department of Banking has alerted financial institutions of fraudulent phone calls from an "examiner," requesting information about their computer systems (Life is a Highway Aug. 22). In all cases, authorities or the institutions involved said, "It's a scam."

CDCU Institute graduates 12 plans 10th-year event

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MADISON, Wis. (8/26/08)--Twelve credit union staff and board members have graduated as the eighth class of the CDCU Institute, presented by the National Federation of Community Development Credit Unions (NFCDCU) in Madison, Wis. The graduates completed a three-year program for credit unions specializing in serving low-income and underserved markets. Fifty students attended this year's week-long training program. Clifford Rosenthal, federation president/CEO, told the graduates that the credit union movement and America are at a turning point. "We face multiple crises that represent the great challenges of today: the crisis in banking, the economy, healthcare, and last but not least the environment," he said. Graduates "will use their most important resource--their members' trust--to grow their credit unions and make the world a better place." The 2008 graduates are:
* Derrick Cameron,Self-Help CU, Durham, N.C.; * Edgar Cosner, The United FCU, Morgantown, W.Va.; * Eric Cowell, Toledo Urban FCU, Toledo, Ohio; * Maria Estrella, Bethex FCU, Bronx, N.Y.; * Gloria Feliciano, Community Trust FCU, Apopka, Fla.; * Renee Llorens, Our Mother of Mercy CU, Houston, Texas; * Evelyn Ramos Santiago, Lower East Side People’s FCU, New York; * Patti Robertson-Panduro, Kern Central FCU, Bakersfield, Calif.; * Saundra Scales, First Legacy FCU, Charlotte, N.C.; * Sherley Soto, Lower East Side People’s FCU; * Shirley Spruill, Renaissance Community Development CU, Somerset, N.J.; and * Meagan Weatherby, Cooperative FCU, Syracuse, N.Y.
The federation said it is planning a special celebration in 2009 to mark the CDCU Institute's 10th year in operation. Supporters sponsoring the institute include: National Credit Union Foundation; JP Morgan Chase; CUNA Mutual Group; Suncoast Schools FCU, Tampa, Fla.; Faith Community United CU, Cleveland, Ohio; and Northeast Community FCU, San Francisco. Many institute attendees also received financial support from the National Credit Union Administration.

IWashington PostI on advance-fee loans Join a CU

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WASHINGTON (8/26/08)--A Kiplinger's Personal Finance columnist writing in the Washington Post Sunday about advance-fee loans cites credit unions as a way to avoid those fees. Military personnel, often susceptible to exorbitant fees from payday lenders, are now being targeted with so-called advance-fee loans. Because military personnel are often young and transient, when they apply for a loan, they are told they are credit risks. The lender asks them to pay $900 to $1,800 or more upfront before getting the loan. Then the money disappears. The article cited advice from the Better Business Bureau Military Line, which noted two things a borrower can do to avoid advance-fee loans. One of them was "Join a credit union. Credit unions on base often offer short-term loans at competitive interest rates." The other was to get a zero-interest loan through a military emergency relief fund.

Calif. regulators appointment caught in budget impasse

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SACRAMENTO, Calif. (8/26/08)--The California state budget impasse is delaying the appointment of a new deputy credit union commissioner, but the California Credit Union League is hopeful that the budget will be passed by the end of this week. “The vacancy is being held up because of a government hiring freeze,” Keri Bailey, league director of state government affairs, told News Now. “We’re in suspended animation.” The league is keeping in close contact with the state officials and is confident they can appoint a new deputy commissioner as soon as the budget passes, she said. The budget could be passed by Sunday. If the state legislature adjourns without agreeing on the budget, it will have to hold a special session in September. “We hope that this week something will pop,” Bailey said. Three weeks ago, California State Gov. Arnold Schwarzenegger approved a hiring freeze, terminated part-time and temporary state employees, and reduced state employees’ salaries to minimum wage until the budget is passed.

CU System briefs (08/25/2008)

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* HARRISBURG, Pa. (8/26/08)--The Pennsylvania Credit Union Association (PCUA) says a credit union in the western part of the state reported suspicious circumstances when a potential new member inquired about opening a "business deposit account." The person said to expect a large wire transfer deposit but later wanted to open the account with a $10,000 check deposit. Staff told the individual the credit union would place a hold on the check and perform due diligence on the business. "At that point, the individual began acting suspiciously 'too nice,' and claimed to have other credit union deposit accounts," said PCUA (Life is a Highway Aug 25). When asked for the names of the credit unions, the person said he (or she) would back to the credit union later. A due diligence check on the business entity and credit report contained little or no information about the company. The credit union decided not to open the account and filed a Suspicious Activity Report. Another credit union nearby was approached in the same way. PCUA urged credit unions to implement a Bank Secrecy Act/ Anti-Money Laundering (BSA/AML) program, which requires due diligence for both consumer and business account activities … * FRANKFORT, Ky. (8/26/08)--The Kentucky Credit Union League hosted a legislative appreciation breakfast for the Kentucky delegation attending the National Conference of State Legislators, during July in New Orleans. Of the more than 6,000 conference attendees, Kentucky 56 legislators plus some staff represented the state. Twenty lawmakers and family members attended the league's breakfast, including Majority Whip Rocky Adams, right, shown with league President Wendell Lyons. The league also assisted the Credit Union National Association with its booth in the exhibit hall. In 2010, Kentucky will be the host state for the conference, which will be in Louisville.(Photo provided by the Kentucky Credit Union League) … * KNOXVILLE, Tenn. (8/26/08)--The Knoxville (Tenn.) Area Chapter of Credit Unions (KACCU) and the Knoxville Police Department hosted a ribbon-cutting ceremony and open house for the new "My Credit Union" building at Safety City Aug. 15. Safety City is a police department
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community service project that provides "hands on" safety education for elementary school children, within a child-size setting complete with buildings, paved streets and sidewalks, working traffic signals and traffic signs. About 15,000 people visit the site each year. KACCU conducted six years of activities to raise more than $22,000 to build "My Credit Union." From left are: Vickie Dagnan, Safety City director; Tom Gaines; Sterling Owens, chief of police; Becky Lawson, KACCU official, Knoxville TVA CU; Jeremy Hodges, president KACCU, KPO CU; Lea Ann Swann, KACCU official, Covenant Health FCU; Griffen Hipple, KACCU official, Alcoa TN FCU; Becca Montgomery, CEO of Covenant Health FCU and league director; Terry Brawley, CEO, Knox County Employees CU; and Sandy Lingerfel, CEO, Clinchfield CU and Credit Union National Association director. (Photo provided by the Knoxville Area Chapter of Credit Unions) … * MIRAMAR, Fla. (8/26/08)--Eastern Financial Florida CU, based in Miramar, raised more than $5,000 to help Haiti with its emergency food crisis. The $1.786 billion asset credit union's month-long Help for Haiti campaign which included making donations to Food for the Poor, a Broward-based charity that fights poverty in the Caribbean. The organization said the funds raised by the credit union would feed 430 Haitian families for a month (The Miami Herald Aug. 24) …

Missouri CU Association endorses six state candidates

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ST. LOUIS (8/26/08)--The Missouri Credit Union Association (MCUA) is endorsing political candidates for the first time in its history. Six Missouri state legislators were endorsed by MCUA as of Monday. They include:
* Sen. Delbert Scott (R-28); * Sen. Chuck Graham (D-19); * Sen. Tim Green (D-13); * Rep. Cynthia Davis (R-19): * Rep. Charlie Denison (R-135); and * Rep. Paul LeVota (R-52).
MCUA endorses candidates based on these criteria:
* Lawmakers who have worked to pass credit union-sponsored legislation or support credit union statutory and regulatory initiatives; and * Candidates who have stated in a public forum their support of credit union statutory and regulatory initiatives.
Such initiatives include credit union field of memberships, financial education service to the financially underserved, increasing the value of the state credit union charter, and preserving and protecting an operational environment that promotes growth of Missouri credit unions. “The fact that candidates seek our endorsement demonstrates that credit union and their members are recognized as an influential voting block, representing the interests of Missouri consumers,” said Rosie Holub, MCUA president/CEO.

NASCUS announces new board officers

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SEATTLE (8/26/08)--The National Association of State Credit Union Supervisors (NASCUS) elected new officers and board members during its annual meeting Aug. 22 in Seattle. The board elected Tom Candon, deputy commissioner, Vermont Department of Banking, Insurance Securities and Health Care Administration, as chairman-elect, and Suzanne Cowan, director of the Wisconsin Office of Credit Unions, as secretary/treasurer. NASCUS Chairman George Reynolds, Georgia, will remain chairman one more year. Mary Hughes, financial institutions bureau chief of the Idaho Department of Finance, was elected to a one-year term on the board. The board also elected three incumbents to three-year board terms:
* Jim Forney, director, Iowa Department of Commerce; * Roger Little, deputy commissioner, Michigan Office of Insurance and Regulation; and * Orla Beth Peck, supervisor of credit unions, Utah Department of Financial Institutions.
The board recognized Harold Feeney, commissioner of the Texas Credit Union Department, for his service on the NASCUS Board. He is a past chairman and has been on the board more than 20 years.

ColoradoWyoming association in new headquarters

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DENVER (8/26/08)--The Credit Union Associations of Colorado (CUAC) and Wyoming (CUAW) have officially moved into the Capitol Hill neighborhood in downtown Denver.
Click to view larger image John Dill, president/CEO of the Credit Union Associations of Colorado and Wyoming, and Pat Sterner cut the ribbon on the new Sterner Center, named for Bill Sterner, who died earlier this year. (Photos provided by the Credit Union Associations of Colorado and Wyoming)
The associations hosted a grand opening Aug. 19, with more than 200 people attending. The fully renovated 1929 historic building is four blocks from the Colorado Capitol. Festivities included a ribbon-cutting ceremony for the building's new 3,500 square foot education and training center, named posthumously The Sterner Center after former CUAC Board Chairman Bill Sterner. "The building's strategic location allows us to be close to our elected officials and able to easily brand credit unions as the preferred financial service provider in our two states,” said John Dill, president/CEO of the associations. "The 23,000-square foot, state-of-the-art facility is what credit unions have come to expect from their state-wide trade associations." He noted the associations looked forward to hosting VIPs and other credit union leaders at the facility during this week's Democratic National Convention. The building is owned by Credit Union Strategic Partners (CUSP),
Click to view larger image Pat Sterner addresses the crowd at the ribbon-cutting ceremony for The Sterner Center, named for her late husband, Bill Sterner, former Credit Union Association of Colorado board chairman. The learning center is located at the new headquarters of the Credit Union Associations of Colorado and Wyoming.
the league service corporation for Colorado and Wyoming. "The new building increases the visibility of the credit union movement and supports our advocacy efforts,” said Dill. “Even though our staff works here, the facility is owned by and belongs to our members--the credit unions of Colorado and Wyoming.” Among those attending the ceremony were Pat Sterner and family; Sen. Ted Harvey; Rep. Jim Kerr; Sean Conway, chief of staff for Sen. Wayne Allard; Rep. Mary Hodge; State Security Commissioner Fred Joseph; Rep. Anne McGihon; Colorado Financial Services Commissioner Chris Myklebust; Rep. Ken Summers; Sen. Dan Gibbs; Councilman Charlie Brown; Greenwood Village Mayor Ron Rakowski; and representatives from U.S. Reps Ed Perlmutter and John Salazar’s offices.

Florida regulator receives NASCUS Pierre Jay award

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SEATTLE (8/26/08)--Florida credit union regulator Sharon Whiddon was awarded the National Association of State Credit Union Supervisors (NASCUS) 2008 Pierre Jay Award at the NASCUS State Summit, which ended Saturday in Seattle.
Pictured are: (from left) National Association of State Credit Union Supervisors (NASCUS) Chairman George Reynolds of Georgia; Sharon Whiddon, Pierre Jay Award recipient; and NASCUS CEO Mary Martha Fortney. (Photo provided by the National Association of State Credit Union Supervisors)
NASCUS Chairman George Reynolds of Georgia presented Whiddon with the award. She is a past NASCUS chairman, board member, education committee chairman and participant in the NASCUS Accreditation Program. Whiddon joined the Florida Office of Financial Regulation as an examiner in 1972. She was chief of the Bureau of Credit Union Regulation, overseeing Florida’s state-chartered credit unions until her retirement this summer. The award honors individuals who demonstrate outstanding service, leadership, achievement and efforts that benefit NASCUS and the dual chartering system. Pierre Jay was a Massachusetts banking commissioner responsible for the First State Credit Union Act.

Study FIs need to improve prepaid gift card sales

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NEW YORK (8/25/08)--Financial institutions need to improve their marketing of prepaid gift cards, according to a study by PULSE. The Pulse 2008 Debit Issuer Study, which surveyed 62 financial institutions including credit unions, found that only 1% of consumers buy Visa and MasterCard-branded, open-loop prepaid gift cards from financial institutions. However, 61% of financial institutions offer the cards and an additional 16% plan to enter the market. Open-loop prepaid cards are distributed better at heavy traffic locations such as supermarkets, convenience stores, and malls, says the Network Branded Prepaid Card Association (ATM & Debit News Aug. 21). The PULSE report's author, Tony Hayes, director of New York-based management consulting firm Oliver Wyman, says banks are not the best retailers. Banks, especially large ones, do better with payroll, health savings account and flexible spending account cards, the study said. The prepaid card association said many consumers also perceive giving gift cards as giving cash and they don't prefer to give cash. The association suggested that financial institutions promote their gift cards on peak gift-giving holidays, such as Christmas and Father's Day.

Bankers file brief ask for FOM reversals

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HARRISBURG, Pa. (8/25/08)--Bankers have filed a brief in the U.S. District Court in Pennsylvania asking that approvals of three field-of-membership (FOM) expansions be set aside and returned to the National Credit Union Administration (NCUA) for more review. NCUA had approved FOM expansions involving three six-county communities in central Pennsylvania in 2003. The brief was filed in response to U.S. District Court Judge Yvette Kane’s decision in July that NCUA’s record was insufficient to sustain the agency's decision to grant the six-county-area, according to the Pennsylvania Credit Union Association (Life is a Highway Aug. 22). Bankers are asking the court to return AmeriChoice FCU, Mechanicsburg; Members 1st FCU, Mechanicsburg; and New Cumberland (Pa.) FCU to their original fields of membership. The document filed by the bankers does not ask for the credit unions to divest the members who were added as a result of the six-county area approved by NCUA. NCUA and the credit unions’ responses are due Sept. 4.

CUs get a lucky break in Fay members not so lucky

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BREVARD COUNTY, Fla. (8/25/08)--Most Florida credit unions were luckier than some of their members during the Tropical Storm Fay's record-breaking deluge in the state last week. Friday credit unions in hard-hit Brevard County were operating again, while those farther north were closed in preparation for the storm to re-enter the state. "You know the saying, 'It's raining cats and dogs? Well, here it was raining elephants and gorillas," said Sara Stern, vice president of marketing at Community Educators CU, Rockledge. "We even had koi fish in the streets." "People could get around in some areas with four-wheel drives," Stern told News Now, adding that she canoed from her home to the street. "My home was an island," she said. Seven branches of Community Educators are located in Brevard County, which has 72 miles of coastline. The branches closed Tuesday and reopened at noon on Thursday. "We found no flooding damage, but a number of people who work in the facilities have damage to their homes," said Stern. "A few homes are flooded. My home was an island." Stern's mother, a credit union member, found six inches of water standing in her home and has moved in with Stern. The credit union will announce Tropical Storm Loans this week for members who need help. "We've launched this for members in the past hurricanes. It's a low-rate loan up to $3,000 to help bridge the gap before insurance kicks in," said Stern. The credit union's executive team is meeting today to determine the loan's rate. "The last time we had the loan, 400 members took advantage of them," she added. To keep communications open with members during the storm, the credit union updated its phone message system and website two to three times a day. "We tried to give alternative ways members could access their money," including ATMs and Internet banking. When the credit union opened Thursday, "members were waiting at the door," Stern said. Not all employees made it back to work on Thursday and the credit union operated through its drive-through. Everyone was at work Friday. "Everyone is helping everyone else, just like a family," Stern said. The credit union's business continuity plan worked. "Overall, the electronic services were fine and kept things going. Having connectivity to the website was very important because everyone needed access to their account and account information," Stern said. Every day, the executive team caucused and individuals were assigned their responsibilities. What would Stern change about the process? "I'd make sure to do more education on the front end for members to get them to prepare for the storm. I'd tell them to have cash and prescriptions ready when a storm is coming," she said, adding, "We learned a lot through the past hurricanes," she said. "There's not a lot of wind damage. It's more the flooding. But our branches did very well," Stern said. "Our new branch in Palm Bay came through fine." Many credit unions News Now contacted reported no damage. “It was a non-event [for us],” said Thomas Randle, CEO, Sarasota Coastal CU. “There was very little rain and wind.” Several Jacksonville credit unions were closed. VyStar CU had a message on its answering service stating that the credit union was closed and would re-open Saturday at 9 a.m. VyStar planned to have extended hours if needed. All ATMs and direct deposit services were in operation, the credit union said. Florida Telco CU said it would re-open Saturday at 9 a.m. First Florida CU planned to re-open today. Container Mutual CU, Fernandina Beach, also was not open Friday when contacted by NewsNow. Space Coast CU, Melbourne, said its primary issue wasn’t building damage, but making sure employees could get to work. “Some employees had damage,” Meredith Gibson, senior vice president of marketing, told News Now. The credit union anticipates that its members will need assistance. “This is often a wake-up call to people who don’t have flood insurance,” she said. “This type of situation is always a wake-up call of what types of things insurance covers.” Because Fay is a tropical storm and was never declared a hurricane, member's hurricane insurance deductibles will not apply, she added. There was no flooding at the credit union’s 31 branches. Space Coast’s business continuity plan went as expected. The credit union has a central resource for employees that is updated by date and time. Space Coast also uses its website and phone greeting to communicate with members. “It was a good opportunity to see how current plans work together,” she said. “Living in a hurricane area, we’ve prepared for this. It doesn’t throw us for a loop,” she said.

Irelands CUs help fight poverty in Ghana

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DUBLIN, Ireland (8/25/08)--Northern Ireland credit unions are participating in the Irish League of Credit Unions' (ILCU) campaign to fight poverty, malnutrition, HIV and AIDS in Ghana--a country in Africa. ILCU is providing nearly US$89,000 plus technical assistance to support the development of credit unions in Ghana (Belfast Telegraph July 28). Some of the funding will be used to help credit unions in Ghana become self-sustaining units that support poor local communities, according to Kevin Helferty, chairman of the ILCU Foundation, which provides assistance in developing credit unions in Third World countries. ICLU contributes more than $740,000 annually to the foundation’s efforts worldwide.

Two CU leaders in Texas tout CU difference

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FARMERS BRANCH, Texas (8/25/08)--Two credit union leaders were featured in a Texas newspaper about the credit union difference. Kay Rankin, president, Ward County Teachers CU, Monahans, Texas, and Carolyn Jones, manager, Complex Community CU’s Monahan branch, were featured in the Aug. 13 issue of The Mudville News, says the Texas Credit Union League (LoneStar Leaguer Aug. 22). “From the outside, a credit union and a bank appear similar, with both offering basic financial services, but it is within our corporate structure that we differ,” Rankin told the newspaper. Rankin and Jones explained credit unions’ non-profit status, and their mission to help people. They also assured the paper that members’ money is safe at a credit union and is backed by the National Credit Union Administration Share Insurance Fund. Credit unions avoided the subprime mortgage mess and have operated responsibly, Rankin said.

CUNA Mutual takes in child care group after fire

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MADISON, Wis. (8/25/08)--CUNA Mutual Group is offering a temporary home for Community Coordinated Child Care (4-C) after the child care group’s building was destroyed by fire. 4-C began conducting business Aug. 18 at CUNA Mutual in Madison, Wis. CUNA Mutual has converted a meeting room and provided work stations, computers, printers, fax machine and technology support to 4-C staff members until they can move into permanent office space. “In a matter of hours, we were set up with temporary computers, Internet and phone lines, all of which have helped to prevent service interruption to our clients,” said Jody Bartnick, 4-C executive director. “We are pleased to be able to help 4-Cs serve their clients so quickly after the devastating fire,” said Steve Goldberg, CUNA Mutual Foundation executive director. “They have such a positive impact on child care, since they provide training and support for most of the day care facilities in southern Wisconsin.” 4-Cs expects to have office space arranged in a few weeks. Contributions to help 4-Cs can be made on its website.

CU System briefs (08/22/2008)

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* TULSA, Okla. (8/25/08)--No one was hurt when an armed man robbed a Tulsa branch of the Credit Union Service Center Inc.'s shared-branching network and fired a shot into the wall as he exited the building. The bullet went through the wall and out the building, and entered the ceiling of a Taco Bell restaurant next door (Associated Press and Tulsa World Aug. 22). The man entered the credit union at about 6:20 p.m. Thursday and demanded money. He was last seen getting into a black SUV with a license plate of 910-JAO, said police. A second man was waiting in the vehicle … * FARMINGVILLE, N.Y. (8/25/08)--U.S. Rep. Timothy Bishop, left, (D-N.Y.) was keynote speaker at a breakfast meeting attended by Long Island credit union executives last week. Robert G. Allen, right, president/CEO of Teachers FCU, thanked the congressman for his active support on credit union issues. Bishop spoke about the economy, the housing crisis, and energy, and then answered credit unions' questions. Other executives attending represented Sperry Associates FCU, People's Alliance FCU, Oceanside Christopher FCU, Nassau Financial FCU, Nassau Educators FCU, Island FCU, Bethpage FCU, and the Credit Union Association of New York. (Photo provided by the Credit Union Association of New York) … * HARRISBURG, Pa. (8/25/08)--U.S. Rep. Paul Kanjorski (D-Pa.) visited three credit unions in the Wilkes-Barre area Thursday. He was accompanied by Pennsylvania Credit Union Association President/CEO Jim McCormack and Governmental Affairs Specialist Christine Seitz (Life is a Highway Aug. 22). Visits were to Choice One Community FCU, headed by CEO John Kebles; UFCW FCU, headed by CEO John Hayduk; and Cross Valley FCU, headed by CEO Len Shimko. Kanjorski met with staff, directors, and members at the first two credit unions and discussed local economic concerns and issues impacting credit unions. At the third, Board Chair Richard Shields introduced Kanjorski and announced the credit union's new community charter, covering Lackawanna, Luzerne and Wyoming counties … * MONTEREY PARK, Calif. (8/25/08)--E1 Financial CU, a $361 million asset credit union based in Monterey Park, participated in U.S. Rep. Hilda Solis' (D-Calif.) annual Community Resource Fair Aug. 16. The credit union has a new branch in East Los Angeles and was well-positioned for the event. More than 500 guests and families attended. The event showcased information and resources, including foreclosure prevention and financial education programs available at the credit union's East Los Angeles branch. From left are E1 Financial representatives Yanni Jucaban, Liza Grajeda, Luis Cisneros and Vada Vanettes, and Holis. (Photo provided by E1 Financial CU) … * ST. LOUIS (8/25/08)--12 Missouri credit unions have achieved the "You Make the Difference" Advocacy Program rewards. The newest platinum award recipients are Electro Savings CU, St. Louis, and United CU, Mexico. They reached platinum--the highest level--by taking part in activities in five key areas: political advocacy, contributions, financial education, philosophy in action, and community involvement, says the Missouri Credit Union Association (CourierNet Aug. 20) … * SAN DIEGO (8/25/08)--To reduce its ecological footprint and conserve energy, Cabrillo CU has turned up the thermostat and temporarily changed its dress code to shorts. It changed the code from "standard business" to "very business casual," allowing staff to wear cropped pants or shorts with credit union-logo shirts during summer. "We haven't forgotten the energy crises of the past, and we want to help out," said CEO Robin Lentz. "It also raises our staff members' morale as they enjoy dressing casually for a while." From left are Cabrillo employees Darcy Keener, loan account specialist; Julie Smith, lending manager; Kristin Halvin, card service and call center manager; and Marilyn Silveira, file clerk. (Photo provided by Cabrillo CU) … * MEDFORD, Ore. (8/25/08)--Rogue FCU is the state winner of the 2008 Oregon Governor's Outstanding Employee Volunteer Program. The award is presented by the Oregon Volunteers, State Commission for Voluntary Action and Service. Rogue, which also won a regional award, participates in numerous projects throughout Jackson, Josephine and Klamath counties. It encourages employees to participate in at least four hours of community service every year. Many of its employees have exceeded 100 hours of personal time volunteering each year. In 2007, staff volunteered more than 9,200 hours combined for projects such as Access Food repacking, United Way Day of Caring, and various painting projects …

Membership Growth Series North East Texas CU

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LONE STAR, Texas (8/25/08)--By using “very direct forms of marketing,” striving to be the first in the area in technology, and designing programs that target specific groups, North East Texas CU (NETCU) has realized solid membership growth, which it projects will continue. The $94 million asset, Lone Star, Texas-based credit union experienced 5.7% membership growth from 2006 to 2007, and projects 8.2% growth this year. NETCU is a community credit union serving members who live or work in Morris, Marion and Upshur counties, and anyone who lives, works or attends school in Titus County. This is the eighth installment of News Now’s Membership Growth series of interviews with fast-growing-membership credit unions. The series is part of an initiative of the Credit Union National Association (CUNA) Membership Growth Task Force. The series focuses on fast "organic" membership growth, not growth by merger or indirect loans. The task force, chaired by Dick Ensweiler, president of the Texas Credit Union League, was convened at the request of CUNA's Immediate Past Board Chair Allan Kemp McMorris. Its purpose is to investigate, report on, and encourage credit unions to embrace opportunities, techniques and processes that will increase credit unions' membership retention and growth. By conducting direct visits with small groups, and participating in community events both formal and informal, NETCU has successfully reached out to members, Kay Stewart, president/CEO of the credit union, told News Now. “We are located in a rural area, and we found that these very direct forms of marketing have better served us than print and broadcast advertising,” Stewart explained. “We tried TV commercials, but the TV viewing area is so broad that the advertising went out of our area. And it was so expensive. It wasn’t cost effective. “The key for us is working in the community and community events,” she added. “For example, it is raining today. So we are handing out free rainwear containing our credit union logo. We also hand out our rainwear at football games. Whatever fits with an event, we try to get involved somehow.” The credit union targets Hispanics, youth and small businesses, and “anyone else we can find,” Stewart said. For Hispanic members, NETCU uses financial literature and loan applications printed in Spanish, and an audio response system that allow members to choose English or Spanish when they call in for information or to check on accounts. “We also have Hispanic employees at all our branches and a Hispanic loan officer,” Stewart said. Regarding the youth market, the credit union has always offered a youth savings account, but also started a program called “Dollar Dog,” for kids up to 12 years old, in three schools. Now it is in seven. One NETCU employee dresses up in a Dollar Dog costume and goes into schools to tell students about NETCU’s youth savings program. Students in this age group can open a savings account with as little as $5 and can make deposits as small as 25 cents. They also can go the NETCU website and play games. Students initially receive program T-shirts, and the credit union goes to the schools once a month to take students’ deposits and present students with little gifts for making the deposits. From January to May of this year, 150 new youth members signed up, and their average account balance was $100, Stewart said. Two new NETCU youth programs will start this fall. One is called Cha-Ching, which targets 13- to 17-year-olds. The program will feature a website for participants to download music, and will teach them how to open a checking account. As part of the program, credit union employees also will go to schools to teach financial literacy using materials from the National Endowment for Financial Education program. NETCU also will introduce the Edge Account program in the fall for 18- to 24-year-olds. The program will offer young adults their first credit cards and first loans, and will in essence be a bridge into financial adulthood. All three youth programs will have spots on NETCU’s website, which allows participants to enhance their financial education online. The credit union also goes directly to small businesses to recruit members. “We’ll go anywhere to get in front of people,” Stewart said. “We buy lunch for employees at their place of work and make presentations with PowerPoint. We have had a lot of success with this. We’ll sign people up for the credit union on the spot. ” Not only does NETCU attempt to attract employees, it also tries to attract small businesses as a whole. “We have maxed out our small-business loans, and we’ve started our own CUSO (credit union service organization) to make more business loans,” Stewart said. NETCU became a community credit union in 2000 when it went from a federal to a state-charter to serve a broader area of people, Stewart said. NETCU has always strived to be the first in technology in its area, and this is a key priority for the credit union. “We’ve been the first to use ATMs and an audio response system,” Stewart explained. The credit union also sends e-alerts to notify members when their accounts drop down to a certain amount so they don’t get overdrawn. Another technology first for NETCU is its online banking product called Net Teller. The credit union is upgrading the product in 2009 so members can join the credit union and obtain loans online. In a month, NETCU will start its Easy Saver Program, in which NETCU will deposit funds in the savings account of members for every debit card purchase they make. NETCU, which has five branches and one real estate office, will add one more branch by the end of the year. “We’re in the process of installing electronic informational signs at all seven locations to advertise and to disseminate information to our members,” Stewart said. To contact the CUNA Membership Growth Task Force, e-mail its account at cunamgtf@cuna.coop.

For Ohio foundation 2008 is a record year

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DUBLIN, Ohio (8/22/08)--2008 is turning out to be a record-breaking year so far for the Ohio Credit Union Foundation (OCUF), which turns 10 years old. As of June 30, the foundation had awarded more than $120,000 through 29 grants for outreach, financial education, professional development and disaster relief, according to the Ohio Credit Union League's eLumination Newsletter (Aug. 14). In the state, 46 credit unions have invested $18.1 million in the Community Investment Fund, which has provided nearly $78,000 to the foundation year to date. Earlier this year, OCUF reached the $1 million grant mark for the year. Among its accomplishments:
* A grant application for $69,500 from the National Credit Union Foundation to help establish a new community credit union in Toledo to serve the Latino neighborhood. * A survey of credit unions about their community outreach initiatives to share with legislators, regulators, the media and consumers. * A new website, with expanding information.

No reports of CUs with flooding wind damage--yet

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MADISON, Wis. (8/22/08)--CUNA Mutual Group hasn't received reports of damage to Florida credit unions from Tropical Storm Fay, but that could change, the credit union insurer said. "Heavy flooding has resulted from Tropical Storm Fay, which has been a real slow mover," said Phil Tschudy, media relations manager for CUNA Mutual. "Fortunately for Florida, the winds associated with this storm are expected to greatly diminish over the next several hours," he told News Now early Thursday afternoon. "We currently have no credit unions reporting flood- or wind-related problems; however, the longer Fay stays around, the greater the chance that may change," he said. Tschudy said CUNA Mutual has activated its Property and Casualty Disaster Team, and any storm-related losses reported will be handled on a priority basis. The CUNA Mutual Group Disaster Claim hotline is 800-637-2676. It is answered 24/7/365, said Tschudy. Fay has been stalled off Florida's northeast Atlantic coast, about 15 miles from Daytona Beach, and has produced torrential rains--up to 30 inches in Brevard County, home of NASA's Kennedy Space Center, which has been closed since Tuesday. Hundreds of homes were flooded from St. Lucie to Brevard counties, and more than 10,200 homes and businesses in Brevard County were without power. Gov. Charlie Crist said the storm was "becoming a serious catastrophic flooding event," according to Associated Press (Aug. 21). And the storm isn't over. Jacksonville residents were told to expect the brunt of the storm's return to land later Thursday. The southern half of Georgia's coastline also is under a tropical storm warning. The storm first hit the Florida Keys Monday, then veered into the Gulf of Mexico before hitting land again. It would be the fourth storm in history to hit Florida three times with tropical storm intensity.

New phone scams hit CUs in Alabama and Virginia

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MADISON, Wis. (8/22/08)--Add Alabama and Virginia credit unions to the growing list of credit unions throughout the nation whose members are being hit with vishing (voice phishing). Heritage South CU, Sylacauga, Ala., warned Talladega County residents earlier this week of a phone scam in which an automated system asks for credit and debit card information (The Daily Home Aug. 20). The scam began Monday evening. The $66 million asset credit union told the newspaper it received an equal number of calls from members and nonmembers contacted by an automated system claiming to be Heritage South and saying their card had expired. The recipients were asked to call a long distance number to reactivate the card and the bogus "Heritage South Security Center" would ask for the card number, PIN and the card's expiration date. Few members gave out the information, said the credit union, whose member database was not compromised. The credit union said it would never contact members asking for information it already has. Members of Martinsville Dupont Employees CU (MDCU), Martinsville, Va., received similar calls, the credit union said Thursday in a press release. "Someone has obtained a list of phone numbers in the Martinsville and Henry County area and is calling individuals" with a similar ruse, said Darrell L. Minniear, president/CEO of MDCU. "MDCU will never contact you by phone or e-mail and ask you for personal information such as your Social Security number, account number, or credit card number," Minniear said. Meanwhile, the Ohio Credit Union League said Wednesday "thousands of Ohioans" received messages via text, e-mail and voicemail, stating that their services at their credit union had been suspended. (News Now Aug. 21). Thursday the league said five unique phishing scams purported to be from credit unions in the previous two days. "Information at credit unions has not been compromised and this is not a data theft. This is an attempt to contact people directly and prompt them to give their personal information," said Paul Mercer, president of the Ohio league in a press release. "We want to make sure Ohioans are aware of this attempt and encourage them to call their financial institution if they get a message to help us thwart future phishing attacks," he said. The league asked its member credit unions to communicate directly with their members and post notifications on their websites. It also alerted the Ohio Attorney General's Office, the FBI, the Federal Communications Commission, and the Federal Trade Commission. Special Agent Harry Trombitas of the Federal Bureau of Investigation (FBI) said people receiving the messages should report the information directly to the FBI at www.ic3.gov for investigation. Anyone who provided their personal information to the fraudsters should go immediately to the Federal Trade Commission (FTC) website at www.ftc.gov/idtheft and follow the steps provided to minimize their losses and protect their credit, he said in the league's press release. Last week, Commonwealth CU, Frankfort, Ky., reported a second round within three weeks of vishing to thousands of Kentuckians. Florida CU, Gainesville, also reported similar attacks (News Now Aug. 18). Several credit unions in Wisconsin were hit earlier, and at least one, Bull's Eye FCU, experienced two waves of the attacks. In July, credit unions in seven states--Pennsylvania, New York, Connecticut, Wisconsin, Indiana, Texas and Illinois--reported vish attempts.

CUs take measures to ease gas prices impact

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MADISON, Wis. (8/22/08)--Credit unions continue to help members struggling with high gas prices with special deals. Aside from what News Now has already reported about high gas prices:
* Truliant FCU, Winston-Salem, N.C., is offering a fuel-efficient auto loan for any new or used vehicle that receives 29 miles a gallon or more on the highway (CarolinaNewswire.com Aug. 18). The loan offers a 0.5% rate discount to help individuals save on financing. Members also can finance up to 135% of the vehicle’s total value, said Joseph Whitaker, executive vice president/CEO; * Cabrillo CU, San Diego, is allowing members to skip their auto, computer or personal loan payments next month. “We recognize that high gas prices are affecting our members’ budgets,” said Robin Lentz, Cabrillo CEO. Cabrillo members will be notified of the program through online banking next week; * Service CU, Portsmouth, N.H., will match $--up to $25,000--for every $2 contributed by members to the New Hampshire Fuel Assistance Community Action Agencies (Fosters.com Aug. 12). The agencies help residents who can’t afford to heat their homes in winter. The credit union, which recently gave an additional $25,000, expects its contribution could total $100,000. Donations can be made through Sept. 30 ... * NationsHeritage CU, Attleboro, Mass., introduced a “free gas” campaign that brought new members into its lobby (Deposit Growth Strategies Aug. 1). The campaign offers $25 gas cards, discounted car insurance and low-fixed rates on auto loans; * Fitchburg (Mass.) FCU announced that it is offering 0% annual percentage rate loans up to $10,000 for members who install qualified energy efficiency projects. The loans, called HEAT loans, can be used for air and duct sealing; insulation; domestic hot water systems; high-efficiency heating systems; and Energy Star windows. Do-it-yourself installations are ineligible, and borrowers must occupy owners of one- to four-family homes and have an electric account with a local electrical company; and * Credit Union Service Network (CUSN) reminded its credit unions that shared branching can help cut down on the amount of gas members use to travel to credit union branch locations. CUSN offers shared branching for more than 87 credit unions at 244 locations nationwide.

Pennsylvania foundation grant to develop fin-ed program

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HARRISBURG, Pa. (8/22/08)--Cross Valley FCU, Wikes Barre, recently presented Luzerne Community College’s Multicultural Learning Center with a $8,175 grant, according to the Pennsylvania Credit Union Association. Funding from the grant came from the Pennsylvania Credit Union Foundation. The money will go toward financial education services to Spanish GED and English as a Second Language students taking courses at the multicultural center (Life is a Highway Aug. 21). Topics to be taught include budgeting, savings, and dealing with financial problems. “Financial literacy is an extremely important component of a strong financial future,” Leonard V. Shimko, Cross Valley CEO, told the association.

CU System briefs (08/21/2008)

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* HARRISBURG, Pa. (8/22/08)--Rep. Paul Kanjorski (D-Pa.) visited three Scranton, Pa., credit unions Tuesday with Pennsylvania Credit Union Association President/CEO Jim McCormack and Governmental Affairs Specialist Christine Seitz (Life is a Highway Aug. 22). Kanjorski met with Jeff DeBree, Penn East FCU; Jim Kanaley, Tobyhanna Army Depot FCU; and Larry Bordi, NET FCU. He also met with employees, board directors and credit union members ... * GREENSBORO, N.C. (8/22/08)--State Rep. Ray Rapp (D), Sen. Joe Sam Queen (D), and John Mitchell, U.S. Sen. Richard Burr’s field representative, attended Champion CU’s annual member appreciation day in Canton, N.C. Mickey Fanney, the North Carolina Credit Union League grassroots/political action specialist, also traveled to Canton to visit with credit union staffers, members and dignitaries (Weekly Update Aug. 15). Sen. Joe Sam Queen (left) encourages members to register to vote at the event. (Photo provided by the North Carolina Credit Union League) ... * PORTSMOUTH, N.H. (8/22/08)--Service CU, Portsmouth, N.H., received the 2007 Army Credit Union of the Year Award at the Defense Credit Union Counsils’ meeting in Chicago. The credit union offers products and services geared toward military personnel. It also donated $130,000 for military events and programs (SeacoastOnline.com Aug. 20). The credit union was recommended for the award by U.S. Army Garrison Mannheim Commander Jeffery Fletcher. Service CU has $1.194 billion in assets ... * RANCHO CUCAMONGA, Calif. (8/22/08)--Wescom CU, Pasadena, Calif., and CO-OP Financial Services were among the top three donors of a radio-a-thon that raised more than $762,000 for Children’s Hospital in Los Angeles and Children’s Miracle Network. Wescom and CO-OP presented a check for $22,000 during the live broadcast. More than 400 Wescom CU employees donated $5 to wear jeans on Fridays during July. They raised $6,500, which was matched by WeCare, the credit union’s employee-run charitable foundation. CO-OP contributed an additional $10,000 to bring the total to $22,000. From left: Chris Riccitelli, CO-OP Financial Services National Relationship Manager, and Jane Wood, Wescom CU chief operating officer, presented the check to Louise Skosey, assistant director, Children’s Miracle Network. (Photo provided by Wescom CU) ... * HONOLULU (8/22/08)--The U.S. Small Business Administration (SBA) in Hawaii signed off on 145 loans during 10 months ending July 31 (Pacific Business News Aug. 15). Thirty-eight loans were approved through the 504 loan program for fixed-asset projects of $4 million, while 377 were given through the SBA 7(a) program, which caps commercial loans at $2 million. The SBA also added Hawaii Community FCU, Kailuakona, and Honolulu FCU as preferred loan providers ...

What should CUs do when members are phished

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MADISON, Wis. (8/21/08)--A rash of recent phishing and vishing attacks against financial institutions has many credit unions looking for procedures for reporting and squelching the attacks. "Credit unions should have a contingency plan for these types of situations, similar to other business continuity plans," said Dorothy Steffens, vice president of web services at the Credit Union National Association (CUNA). "The important piece is communication, to members and to staff." she said. "Also, get the phishing site shut down and get the phone numbers disabled if it is a vishing scam, Steffens said. Credit unions can start by reporting the scam to its regulator and insurer. But to shut down a scam attempt, the credit union will need help. "IC3 (Internet Crime Complaint Center) has a website to report scams and it is very helpful in getting vishing phone numbers shut down," said Steffens. "I also always send every phish or vish to the Anti-Phishing WorkingGroup e-mail address." (See the resource links). How does a credit union get a phishing site shut down? "Credit unions with websites should have a procedure in place to check their Web logs for traffic that is indicative of phishes," Steffens said. "There are a number of companies (such as CUNA Strategic Services partner, Perimeter) that will monitor the website for phishing activity. You can trace the URL address of the phishing site using http://www.betterwhois.com, which is the Internet Registrar," she said. "Most phishing collection sites have been hacked into, and the owners of those servers usually are not aware that their systems have been compromised," she said. "The Internet Registrar will provide an e-mail address of the technical contact and owner of the site, but in many cases these are in foreign countries, so having a relationship with a vendor will expedite the process for you," she explained. How should a credit union alert its members about a phish? "As soon as a phishing scam is discovered, the credit union should put a notice on its website, possibly add a statement to its after hours mailbox, and let the tellers and call center staff know that the credit union is aware of the scam. Communication is critical," Steffens said. "At the time of a phish, the message should always be: the credit union would never ask for personal identification information via an e-mail or a website. Never, ever," Steffens emphasized. "And if it is a vishing scam, where the recipients are asked to call an unknown number, the credit union again needs to remind its members that they should never call a number that they receive via an e-mail." CUNA Mutual Group also has addressed the issue of phishing in a risk alert it sent Aug. 1 to policyholders, according to Vince Wagner, risk manager in credit union protection. If a member is a victim of phishing/smishing/vishing, take the appropriate steps, he said:
* Block and reissue the compromised credit/debit cards or the account that is at risk; * If not blocking the at-risk card number or account, use an authorization strategy to prevent fraud exposure; * Have the member report the incident to the credit bureau; and * Encourage the member to order a credit report.
CUNA Mutual's risk alert has an extensive checklist of steps to take to shut down a site and suggests using protective monitoring tools to ensure the credit union isn't susceptible to spoofing.

More CUs in storms path close in Florida

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TALLAHASSEE, Fla., and MADISON, Wis. (8/21/08)--Tropical Storm Fay's slow, soggy march across east Central Florida closed more credit unions but as of 8 p.m. EDT Wednesday, none had reported damage from winds or flooding from the nearly 15 inches of rain. "CUNA Mutual has had no reports of credit unions suffering any damages from Fay, although we understand many credit unions in the storm's path are closed," said Phil Tschudy, media relations manger for CUNA Mutual Group. "We will continue to monitor this storm and respond to any credit union that suffers a loss," he said. CUNA Mutual's Disaster Team can provide coordinated assistance to policyholders, Tschudy said. Credit union policyholders needing assistance can contact the CUNA Mutual Group Disaster Team at 800-637-2676. The number is answered 24 hours a day, 365 days a year, by a corporate property and casualty claims manager. Anyone reporting a claim should be prepared to give:
* The nature of the loss; * Any special claim needs; and * The phone number and main contact for the credit union.
The Florida Credit Union League reported more closings, although some expect to reopen today. The league's website provided the following updates on credit unions' status as of 8 p.m. EDT Wednesday:
* Community Educators CU, expected to reopen today; * Community First CU of Florida, closed Wednesday and Thursday; * First Florida CU, closed Wednesday and Thursday; * Indian River FCU, opened Wednesday, with no impact from the storm; * JetStream FCU, all branches closed Tuesday, but planned to reopen Wednesday if warning was lifted; * Kennedy Space Center FCU, closed Wednesday, expects to reopen today; * Lee County Mosquito Control CU, reopened Wednesday; * Lee County Postal Employees CU, reopened Wednesday; * Multi-Media CU, closed Wednesday, expects to reopen today; * Power Financial CU, all branches closed until further notice; * Priority One CU, all branches and call center closed until further notice; * Sarasota Coastal CU, expected to reopen Tuesday; * Space Coast CU, closed Wednesday, planned to reopen today; * Tropical Financial CU, all branches closed until further notice; and * VyStar CU, closed at 3 p.m. Wednesday and will be closed today. It plans to reopen Friday, pending weather conditions.
Tropical Storm Fay was responsible for one death, spawned seven tornadoes, damaged as many as 8,000 homes in two low-lying areas, and prompted flooding in several areas. In Brevard County, Melbourne received nearly 22 inches of rainfall, shattering its 50-year record, and surfers in nearby Vero Beach in discovered a beached whale. The storm moved off coast but was expected to return and head north into Georgia (CNN.com Aug. 20).

Ohio league Vishingphishing all over state

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DUBLIN, Ohio (8/21/08)--Phishing and vishing are "running rampant" in Ohio, with "people all over the state receiving messages" Tuesday and Wednesday purporting to be from three credit unions, says the Ohio Credit Union League. "We've taken dozens of calls from credit unions saying they're getting a ton of calls from their members," said Katie Walton, director of member communications at the league. The league has taken measures to assist the three credit unions: Credit Union of Ohio and CME FCU, both based in the Columbus area, and Superior CU, based in Lima. Both members and nonmembers received the calls. The messages were sent by e-mails, text messages, and auto-dialers leaving messages on consumers' answering machines. They claim the recipient's account has been suspended for suspicious activity. They provide a toll free number, but recipients who call the number get an automated answer that asks for debit-card and credit-card account information. "Some members submitted information such as their account numbers," Walton told News Now Tuesday. Credit unions have put a hold on those accounts. "The credit unions leapt to action to inform their members about the scam," Walton said. "The league is doing some legwork in case it reoccurs or continues to develop," she added. "We have an advisory for credit unions set up on our website, ohiocreditunions.org," Walton said. The league helped alert its members and notified the press. An article appeared in Wednesday's The Columbus Dispatch warning of the phishing scam and providing information for consumers about the attacks. The league also contacted the Federal Trade Commission, the Federal Bureau of Investigation, the National Credit Union Administration, and the Ohio Attorney General's office. The league's advice to credit unions in similar situations:
* Send an immediate alert to members and the media. * Call the credit union's regulator and insurer. * Try to determine the phone carrier of the suspicious phone number using a reverse search Web site, such as www.411.com. Ask the carrier to investigate and shut down the number.
Some companies, such as Perimeter, a CUNA Strategic Services provider, can conduct the take downs for the credit union. (For more information, use the resource link.) Also, credit unions are using their websites to educate members about how they will communicate with them. In essence, they're saying, "don't trust any text messages or auto dialers. Contact the credit union from a number that's different from the one listed in the message, such as the number listed on their statement." "It's important that credit unions regularly communicate with their members," Walton said. See "What should CUs do when members are phished?" in News Now's System section, for procedures to follow when phishing and other attacks occur.

Online fraud attacks vs. FCUs drop 50 since May

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BEDFORD, Mass. (8/21/08)--Phishing attacks against federal credit unions for the month of July decreased nearly 50% since May, according to the July Online Fraud Report from RSA's Anti-Fraud Command Center (AFCC). However, attacks against regional banks rose, said RSA. Those attacks were more than attacks against nationwide banks and federal credit unions combined during July. Although the total number of phishing attacks decreased in July to its lowest rate since February, first-time attacks against new entities rose by about 30%, said the Bedford, Mass., company. Twenty-nine new organizations were targeted in July. During July, the U.S. continued to dominate in distribution of targeted banking brands with about 60%. RSA also reported the demise of Neosploit, a professional malware infection kit that exploited system vulnerabilities to infect computers worldwide. Neosploit was considered the most advanced infection kit and was adopted widely among online criminals, RSA said. The company attributed Neosploit's demise of to the burden of a rapidly growing customer acquisition rate and a lack of substantial revenue.

How to measure whether CUs fin-ed program works

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MADISON, Wis. (8/21/08)--What role does financial education play in improving credit union members' financial performance? The Credit Union National Association's (CUNA) Personal Finance Institute, Sept. 10-12, in Lansdowne, Va., aims to shed new light on the question. "It stands to reason that members who understand money management will make better decisions than those who do not," said Jim Hanson, Credit Union National Association vice president of personal finance. "But one of the biggest unknowns about financial education is how to measure its success." The institute will feature Angela Lyons, Ph.D., associate professor in the department of consumer economics at the University of Illinois at Urbana-Champaign, discussing "How to Measure the Results of Your Financial Literacy Efforts." A former advisor to the U.S. Department of Justice providing expertise on debtor education for U.S. bankruptcy filers, Lyons is the director at the University of Illinois Center for Economic and Financial Education and editor of The Journal of Consumer Education. She has been interviewed by The Wall Street Journal, U.S. News & World Reports, CBS MarketWatch, and Money magazine. Today's turbulent economic environment is presenting financial challenges for consumers in every demographic category, Hanson noted. "Many financial institutions, including credit unions, are responding by providing financial education tools online and in person, but how do we know what works? And how does that translate into sales at your credit union?" For more information, use the link.

Visa issuers pilot fraud-warning system

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NEW YORK (8/21/08)--Visa Inc. and eight credit card issuers are piloting a system that notifies cardholders of suspicious transactions by sending them e-mails and text messages. Announced Monday, the test is part of efforts to expand its mobile capabilities, Visa said. These type of alerts could make consumers more comfortable using their phones for financial services, analysts said (American Banker Aug. 20). Visa employees started testing the alerts last year. The company is expanding the tests to 2,000 employees of eight issuers in the U.S. and Canada, including Vancouver City Savings CU in British Columbia. For transactions made with Visa cards, the service lets consumers set up as many as four triggers for transactions, including:
* Cash withdrawals at ATMs; * Purchases that exceed a set limit; * Purchases made abroad; and * Online purchases.
The cardholder will receive an alert by e-mail or text message if a transaction trips any of the triggers. The alert thresholds can be set with a mobile phone or at the issuers’ online banking sites.

Rogue FCU auctions repossessed vehicles online

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MEDFORD, Ore. (8/21/08)--Rogue FCU, Medford, Ore., has sold 13 repossessed vehicles through its online auctions program since July. The online auctions can be accessed from the credit union’s website, opening the door to anyone in the market for a new vehicle. Some buyers live as far away as New Mexico and Texas, according to the credit union. “Anyone can view, get information and bid on vehicles just like they might on eBay,” said Gene Pelham, Rogue FCU president/CEO. All vehicles are inspected for safety and mechanical problems prior to the auctions. “Our reputation is on the line, so we want to not only make sure that people are getting a good deal, but also a safe and sound vehicle for their family,” Pelham said. The credit union partnered with cuAuctions to sell the vehicles. “We’re not a car dealership. We’re a credit union--so we’re anxious to sell the repossessed cars, trucks and recreational vehicles we have available,” he added. Rogue FCU has more than $330 million in assets.

CDCU Mortgage Center aids New Orleans revival

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NEW YORK (8/21/08)--A pilot program developed by ASI FCU, New Orleans, and the National Federation of Community Development Credit Unions has helped several New Orleans homeowners refinance their mortgage loans. One homeowner, “Helen,” was struggling to make her loan payments before Hurricane Katrina hit in 2005. Her interest rate jumped to 14% from 9%, and because she had made late payments, she was unable to refinance. Helen received help from the federation’s Community Development Credit Union (CDCU) Mortgage Center, which provided funds to ASI FCU to purchase the loan it refinanced to Helen. With a new rate of 6.125%, Helen’s monthly payment dropped by $724. Another ASI member, “Belinda,” also was struggling to make her payments. Belinda had taken out a home equity loan to pay for surgery. With a 14.75% interest rate, her monthly payments surpassed $1,000. With the ASI and the federation’s program, Belinda refinanced her loan at a new rate of 6.125%. Like Helen, her monthly payment dropped by $724. “It’s so very important to stabilize our population in New Orleans,” said Mignhon Tourne, ASI CEO. Credit unions have helped thousands of members rebuild, she added. The CDCU Mortgage Center was created to help CDCUs expand their affordable-mortgage lending programs to low-income people by purchasing CDCU loans. “We definitely see possibilities to expand this pilot program,” Tourne said. “People come to us with high-priced loans from finance companies and brokers, even without us advertising or marketing the program.” Contributors to the program include the John D. and Catherine T. MacArthur Foundation, the National Credit Union Foundation and the Jewish Funds for Justice.

FSCC Shared Branching awards top fraud busters

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SAN DIMAS, Calif. (8/21/08)--Financial Service Centers Cooperative (FSCC) announced recipients of its Fraud Buster Awards. The awards recognize credit unions for protecting their members and those of other credit unions from fraud for the first and second quarters. Awards for stopping more than $1 million in fraudulent activities were given to:
* First Metropolitan CU, Concord, Calif.; * Global CU, Spokane, Wash.; * Numerica CU, Spokane, Wash.; * Patelco CU, San Francisco; * Pearl Harbor FCU, Waipahu, Hawaii; * Point Loma CU, San Diego; * Point West CU, Portland, Ore.; * San Francisco Fire CU, San Francisco; * Sound CU, Tacoma, Wash.; and * First Future CU, San Diego.
The awards program was organized in 2000 by the Operation Advisory Committee comprising stockholder credit unions. The first Fraud Buster Awards were presented in 2001. In seven years, credit unions have stopped more than $6.5 million in fraud and FSCC has presented more than 200 awards.

Sunset staff recommends 12 more years for Texas regulator

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FARMERS BRANCH, Texas (8/21/08)--A Texas Sunset Commission staff report recommends the Texas Credit Union Department continue existing for 12 more years, according to the Texas Credit Union League. The commission regularly reviews state agencies to determine if any should be eliminated. The report is available online with recommendations that are being reviewed by the Texas Credit Union League’s advocacy department (LoneStar Leaguer Aug. 20). The commission will conduct a hearing Sept. 23-24 with public comment on the report. In December, the commission will meet to adopt final recommendations it will make to the 81st Legislature. The commission is an independent regulator that routinely up for review every 12 years. To view the staff report, use the link.

Minnesota foundation elects board officers

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ST. PAUL, Minn. (8/21/08)--The Minnesota Credit Union Foundation (MNCUF) Board of Directors named its table officers during a meeting Aug. 14. Four incumbents and one new board member were elected at MNCUF’s Annual Meeting in July. Elected to serve one-year terms on the board are:
* Chuck Albrecht, Mid-Minnesota FCU, Baxter; * Mary Hansen, Mayo Employees FCU, Rochester; * Lynn Kothe, North Memorial FCU, Robbinsdale; * Kristi Mukomela, Novation CU, Oakdale; and * Judy Root, Bluestone FCU, Eagan.
Mukomela was re-elected as the MNCUF board chair, along with Kothe as vice chair and Root as secretary/treasurer. Mukomela is serving her fifth year on the board, Kothe and Root are in their fourth terms, and Hansen is in her third. This is Albrecht’s first year on the board. “The foundation has created a three-year strategic plan and is currently working toward achieving the goals we set in that plan,” Mukomela said. “Our vision is to have all Minnesotans achieve financial independence, and our mission is to provide resources for credit unions and communities to prosper and thrive.” In 2007, the foundation helped fund the Minnesota Credit Union Network’s Small Credit Union Conference and the international partnership with Paraguay, and it provided educational grants for credit union professionals and volunteers.

More CUs close as Fay gains strength

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TALLAHASSEE, Fla. (8/20/08)--More credit unions closed Tuesday as Tropical Storm Fay hit southwest Florida and traveled northeast across the state, gathering strength and spawning at least seven tornadoes. Fay was expected to become a hurricane off the coast of Daytona Beach sometime today and be at hurricane strength when it swings back over Florida again Thursday. Georgia is also under a hurricane watch (Orlando Sentinel.com Aug. 19). More than 93,000 Florida Power & Light customers were without power in 20 counties. About one-third of the outages were in Collier County, where Fay came ashore at 5 a.m. Tuesday near Cape Romano, just south of Naples (MiamiHerald.com Aug. 19). As of 2 p.m. Tuesday, eight credit unions were in contact with the Florida Credit Union League, according to the league's website. Lee County Mosquito Control CU, a $424,483 asset credit union in Fort Myers, closed Tuesday and indicated it would open during normal hours today, "pending weather." Lee County Postal Employees CU, a $3.9 million asset credit union, also based in Fort Myers, also said it would be closed Tuesday and open on normal hours today. Community Educators CU, a $300 million asset credit union based in Rockledge, said its Palm Bay branch remained open but all other branches closed at noon Tuesday. They planned to reopen today. Sarasota Coastal CU, with $235 million asset credit union and based in Sarasota, was closed Tuesday morning but said it might be open Tuesday afternoon. All branches at these credit unions were closed until further notice: Power Financial CU, Pembroke Pines, with $455 million assets; JetStream FCU, Miami Lakes, $99.5 million assets; Tropical Financial CU, Pembroke Pines, $721.7 million assets; and Priority One CU, Sunrise, $73.3 million assets. Priority One also said its call center would be closed. However, these credit unions' reports were before the storm began strengthening. News reports said the storm's maximum sustained winds remained at 65 mph, with higher gusts. (A hurricane has winds of at least 74 mph.) A storm tracker in Moore Haven, near Lake Okeechobee, reported winds of up to 81 mph (CNN.com Aug. 19). Residents and businesses, including credit unions, were preparing for flooding generated by 10 to 15 inches of rain. One vendor, Herndon, Va.-based DigitalMailer, helped a credit union in Key West get an update to its members quickly with information on accessing their funds, branch closures and plans for the credit union's contingency operations. DigitalMailer staff created an emergency e-mail alert and distributed it to more than 3,000 members of Key FCU within minutes, said the e-mail marketing firm. "You prepare for situations like these, but when an emergency hits, there's a million things a credit union needs to take care of," said Ron Daly, president/CEO of DigitalMailer. The company's Crisis Management Notification System is an e-mail alert and text-messaging tool that distributes messages to members and employees for disaster planning and training. It replaces manual disaster-planning phone trees and paging systems. "In an emergency, traditional communication methods may not be accessible or reliable," said Daly. "But with e-mail and text, members can access messages on their laptops or mobile phones. It doesn't negate the need for recording phone messages or posting website notices, but it certainly enhances the effectiveness of communications and gets the word out quickly," he added.

Florida league on state CFOs financial action team

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TALLAHASSEE, Fla. (8/20/08)--The Florida Credit Union League (FCUL) will represent credit unions on a new Financial Action Team formed by state Chief Financial Officer Alex Sink to help Floridians get assistance in an economic crisis. Sink announced Friday that she created the team to identify federal assistance available to Florida in an effort to increase the amount of aid to Floridians facing economic crisis. The team will analyze the recently passed Housing and Economic Recovery Act of 2008 to maximize Florida's share of the billions available in federal dollars to help the state's taxpayers weather economic challenges. Florida had the second-highest number of foreclosures in the nation in July, posting 45,884 foreclosures, according to RealtyTrac's July 2008 U.W. Foreclosure Market Report. That is a 14% increase from June. Florida's foreclosure rate was the third-highest in the nation, with one foreclosure for every 186 households. Florida has a 6.1% unemployment rate, the highest since January 1995. The Agency of Workforce Innovation attributes the negative growth to a decline in construction. In addition to FCUL, members of the team include representatives from 11 other organizations.

Texas University FCU helps 11 scammed homeowners

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AUSTIN, Texas (8/20/08)--Eleven Hispanic families victimized by local home purchase fraud have been thrown a lifeline by University FCU (UFCU), Austin, Texas. The credit union will provide fixed-rate mortgage loans and a property deed that will allow the homeowners to retain the residences they bought earlier this decade in what turned out to be a scam, according to Texas Attorney General Greg Abbott. The scam--conducted by Robert L. Flores of Cedar Park, Texas, and a company he operated, Galindo Trust--was directed at Hispanic home buyers who don’t speak English. Many lacked Social Security numbers or the documentation usually required of home purchasers, Abbott said. Abbott successfully sued Flores and Galindo Trust in May. Permanent injunctions with civil penalties totaling $1.4 million were ordered against the defendants. Flores’ company sold a group of homes it purchased from a healthcare organization that financed the purchase. Flores then resold the homes to buyers, but did not inform them of the pre-existing liens he owed. The homes were financed through a contract for deed--a mechanism that allows the seller to collect a down payment and monthly payments, but not deliver ownership to the buyer until the contract is paid in full. Flores collected taxes and insurance fees on the homes but failed to make payments, Abbott said. The credit union became aware of the situation in the fall of 2006 when UFCU employee Monica Muñoz alerted them to it and suggested that the credit union assist. Yvonne Lopez-Noack, mortgage lending officer at UFCU, began helping the families finance their homes through conventional means with a legitimate title. The closing of the new loans was conducted Friday at the Austin Bar Association. Why did the credit union get involved? “Part of a credit union’s mission is to help people of modest means,” Noack said. “These people made a down payment and paid their monthly installments in good faith, and they deserve to enjoy the benefits of homeownership. We’re thrilled to be able to assist them as a public service.”

Thanks to CUs Wisconsin students return eager to save

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PEWAUKEE, Wis. (8/20/08)--Wisconsin students are heading back to school this fall ready to put their money into personal savings accounts held at 77 youth-run credit unions inside the state’s elementary, junior high and high schools, according to the Wisconsin Credit Union League. The savings push is no accident, said Brett Thompson, league president. “Wisconsin is a progressive and award-winning state for financial education,” he said. Credit unions have provided financial education to students through the student-run branches and have sponsored 67 teachers at the National Institute for Financial and Economic Literacy, a summer workshop held at Edgewood College in Madison. The workshop provides teachers with resources to improve their personal finance lessons. Savings at Wisconsin credit unions increased more than 7% in the year ending in March. National savings rates were at 2.6% in the second quarter of this year. “While Americans are nowhere near to achieving the savings habit that defined today’s students’ grandparents’ generation--something our country needs right now--Wisconsin students appear to have the discipline to make some important strides in saving,” Thompson said. “The fact that young people save regularly is a sign that they grasp the need to save in light of the economic pain that’s affected families, as well as entire sectors of the economy,” he added. “Young people are recognizing the need to put one’s financial house in order.”

Sterner to receive Wegner Award posthumously

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BOULDER, Colo. (8/20/08)--The 2009 Herb Wegner Memorial Award for Lifetime Achievement will be presented posthumously to the late William Charles “Bill” Sterner. Sterner, former CEO of Boulder-based Elevations CU, died at age 66 while at the Credit Union Association of Colorado’s Legislative Forum in March (News Now April 1). The award will be presented at the 21st Annual Wegner Awards Dinner presented by the National Credit Union Foundation. Sterner was former chairman of the Credit Union Association of Colorado (CUAC) and former vice president of the Credit Union National Association (CUNA). “Bill’s memory shines on in all our lives,” said Wegner Award nominator John Dill, president/CEO of CUAC and the Credit Union Foundation of Colorado and Wyoming. “Bill’s strong commitment, vision, and innovation to foster growth in the credit union industry will continue to inspire and help advance future generations and new frontiers.” Decades before most credit unions learned to “reach out to new markets” and “serve the underserved,” Sterner taught these concepts around the world. He promoted new and sustained membership in cooperatives and helped save the Credit Union Development Education (DE) program from elimination during budget cuts. In 1990, Sterner was appointed to lead CUNA’s Credit Union Moonshot, an outreach program. He trained credit union leagues and built the first credit union template to reach the Hispanic community. In 1997, Sterner joined the University of Colorado FCU and became interim CEO in 2000. He oversaw its transition to Elevations CU, with asset growth from $350 million to $790 million, increased membership to 76,000, and recognition as Boulder's "Best Financial Institution" for nine consecutive years. “Bill’s underlying operational focus was on the basic credit union tenets: providing for the underserved and meeting the needs of members,” said Immediate Past Chair Lynn Walloch. Sterner’s memorial will be the final presentation during the Wegner Awards Dinner at the Grand Hyatt Washington on Feb. 23, opening night of CUNA’s 2009 Governmental Affairs Conference.

WOCCU Manager Certification Program meets in Guatemala

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GUATEMALA CITY, Guatemala (8/20/08)--More than 69 participants from seven countries in Central America and South America gathered for the World Council of Credit Unions’ (WOCCU) Manager Certification Program.
Mark Cifuentes, World Council of Credit Unions technical services senior vice president, leads a second-year class at the Latin American Manager Certification program in Guatemala.
Luis Jara (standing), World Council of Credit Unions Mexico SAGARPA project director, asks Latin American Manager Certification Program students a question. (Photos provided by the World Council of Credit Unions)
The two-year program focuses on training current and aspiring credit union managers in the global credit union movement. Instructors taught first-year participants about historical trends, the regulatory environment, competition and appropriate product pricing to better forecast and drive the growth of their financial institutions. Second-year students showed progress after putting first-year lessons into practice, according to Mark Cifuentes, senior vice president and head of WOCCU’s global services efforts. Cifuentes facilitates and teaches the program with WOCCU staff. “It’s incredible to see the change in people when they learn about cooperative and financial principles,” Cifuentes said. “Now that they have completed their second year, they have a clearer vision for the future and are ready to turn their credit unions into model institutions.” The first-year class of 53 participants included representatives from credit unions in Bolivia, Columbia, Guatemala, Mexico and Nicaragua. The second-year class of 16 included attendees from the Dominican Republic, Nicaragua and Peru. The next program will be held Sept. 29-Oct. 3 in Nadi, Fiji.

PCUAs Better Choice saves consumers 3.2 million

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HARRISBURG, Pa. (8/20/08)--Since launching in October 2006, Pennsylvania's payday loan-alternative program, Credit Union Better Choice, has saved consumers more than $3.2 million dollars in interest and fees. The Pennsylvania Credit Union Association (PCUA) reported its semi-annual figures for the program, which was developed with the Pennsylvania Treasury Department. Since the program began, 73 credit unions with 198 locations have agreed to offer the loans, with additional participants continuing to sign on. Of the participating credit unions, 66 made nearly 9,500 loans totaling more than $4.47 million. The average loan amount was $470.92. "The success of the Credit Union Better Choice program continues to indicate that Pennsylvanians need access to low-cost short-term loans," said Jim McCormack, PCUA president/CEO. "I'm pleased that credit unions are fulfilling that need in Pennsylvania and clearly demonstrating our mission of People Helping People." A typical $500 payday loan costs consumers $15 for every $100 borrowed for two weeks, or roughly $450 over 90 days. The same loan would cost Credit Union Better Choice borrowers about $42.50 for 90 days, plus it would put $50 in their savings account. The program also provides financial education to consumers. Pennsylvania consumers saved an average 80 cents in loan fees and costs for every dollar borrowed through Credit Union Better Choice. That translates to more than $3.2 million consumers saved. Borrowers also placed $447,327 into savings accounts for future needs. "At a time when high gas and food prices continue to strain budgets across the Commonwealth, Pennsylvanians who need quick access to funding should not have to worry about getting trapped in a predatory debt cycle," said Robin Wiessmann, state treasurer. Wiessman noted those using the Better Choice loans received "the short-term loan they need but also practical financial skills."

Shared branching key in disaster recovery says CU

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ATLANTA (8/20/08)--With hurricane season under way, a New Orleans-based credit union is reminding credit unions that preparation is key in providing uninterrupted account access to members during an emergency, and that shared branching can play an important role in business continuity. New Orleans Firemen’s FFCU (NOFFCU) encouraged credit unions to become part of a shared-branching network. When Hurricane Katrina battered the Gulf Coast in 2005, NOFFCU turned to CO-OP Shared Branching for assistance. While NOFFCU's offices were closed, it directed members to shared branches to get the money they direly needed. Those branches are still used by members today. “After the storm, many members were permanently scattered outside of our proprietary branch network,” says Cami Crouchet, chief operating officer of NOFFCU. “We expected a decline in membership, but instead our numbers remained flat," she said. "Shared branching was an integral part of our disaster recovery plan because our members who moved were able to keep their accounts active by making shared locations their regular branches," said Crouchet who added that members said they were "very impressed by how well they were treated at these locations.” After Katrina, Crouchet attended a conference that included bank counterparts. “In discussing the impact of Katrina, we realized we didn’t experience what banks went through, because of shared branching. We may not be as big as banks, but we’re better, and we have a wonderful sense of community.” “Credit unions really reached out when the hurricanes hit in 2005, and that compassionate spirit made us proud to be part of the movement,” says Carroll Beach, president/chief operating officer of CO-OP Shared Branching. “Credit union members needed access to shared branching in the aftermath of the storm. Maintaining the Next Generation Network switch in-house gave us the flexibility to sign up impacted credit unions, some in a matter of hours, and help get them on the road to recovery,” Beach said. CO-OP said credit unions must avoid a false sense of security--emergencies are not limited to coastal regions. Man-made or natural, large-scale or small, disasters come in many forms. Family First of New York FCU (FFFCU)is prepared to serve members through shared branching in case fires, snowstorms, or power outages close their doors for even a short period of time. “Our credit union branches are vulnerable to various events that a location 25 miles away might escape, such as an ice storm,” says Christine Peters, president/CEO of FFFCU. “It’s important for credit unions to develop the best plan they can to protect members. Why not consider shared branching for business continuity? It is well received in everyday use, and it has its place in disaster recovery.” “Large scale events, such as Katrina, elevate the need for and visibility of the benefits of disaster recovery planning,” said Peters. “Shared branching is a great way to partner with other credit unions to take advantage of each other’s branches when your members need them.” CO-OP Shared Branching offers 3,400 locations, including 120 international branches.

First-half net income up 23 at Wisconsin CUs

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MADISON, Wis. (8/20/08)--Wisconsin credit unions saw a nearly 23% rise in net income and an 8.5% increase in savings in the first half of the year. Net income totaled about $62.1 million at mid-year 2008, compared with $50.5 million for the first six months of 2007, according to the State of Wisconsin Office of Credit Unions Bulletin for mid-year 2008. Also, savings rose to more than $15 billion. “Overall, the financial indicators for Wisconsin credit unions exhibit sound financial performance for the first half of 2008 amid volatile challenging markets,” Suzanne T. Cowan, director of the Office of Credit Unions, wrote in the bulletin. Total assets as of June 30 were $17.8 billion, representing growth of $1.2 billion--a 7.4% increase--during the first half of the year. The net worth ratio remained strong at 10.78%, the bulletin said. Delinquency was 1.14%, down from 1.27% as of Dec. 31, 2007. The return on average assets grew slightly to 0.72%, compared with 0.66% in June 2007. Loans outstanding increased by $629 million and savings grew by $1.1 billion. The loan to share ratio for Wisconsin credit unions continues to be high at 92.89%, Cowan wrote in the bulletin.

Maine CUs post gains during first-half 08

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WESTBROOK, Maine (8/20/08)--The first six months of 2008 revealed that Maine’s credit unions posted increases in all major categories--assets, shares, loans and membership--they reported to the Maine Credit Union League. As of June 30, assets at Maine credit unions increased 5.86%, loans grew by 2.22%, and shares (savings) showed the highest growth at 6% from January to June. Membership at Maine’s credit unions grew by nearly 5,000 members to 600,000 statewide. Nationally, Maine has been ranked as the fifth strongest credit union state for the past six years, the league said. “During these difficult economic times, credit unions remain a safe and sound option for quality, low-cost financial services for consumers,” said John Murphy, league president. “Maine credit unions hold a trusted position in the communities they serve and that translates into more consumers taking advantage of the benefits that using a credit union offers. In recent months, Maine credit unions have responded to the worries of many Maine consumers about the high cost of heating their homes this winter. “A number of Maine credit unions have introduced no or low-interest energy assistance loans as well as weatherization loans to help make members’ homes more energy efficient,” he continued. “These special loan programs mean even more benefits and savings for credit union members on top of the millions that Maine consumers collectively saved last year by using a credit union.” The mid-year statistics also indicate that credit unions continue to outpace most competitors in convenience and access. The number of credit union locations in Maine now stands at nearly 200 across the state, the league said. Also, the Maine Credit Union SurF ATM Network has more than 200 surcharge-free ATMs, making it one of the largest networks in the state. In the first six months of the year, the Maine Credit Union shared branch network, which enables members of participating credit unions to conduct most financial transactions at other credit unions, increased 20%. It has 85 locations in Maine and 3,400 nationwide.

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.

SCMS class focused on building CU activists

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DALLAS (8/18/08)--Southwest CUNA Management School (SCMS) opted to take a different tack with its advocacy class this year. With increasing political and legislative pressure on the credit union movement, the leadership at the SCMS wanted a class that would transform credit union leaders into credit union activists. Advocacy ROCKS! featured practical hands-on exercises for meeting with elected representatives, and hot issues facing credit unions, including the Treasury blueprint, proposed reforms to overdraft and interchange, and other bottom-line credit union issues. The class was developed and led by the Texas Credit Union League's grassroots director, Jim Phelps, and advocacy communications director, Winter Prosapio. "I think a number of my classmates who may not have grasped the importance of advocacy had their eyes opened by the session," said Ben Newcomb, vice president of Transtar FCU in Houston. He noted that this year's SCMS graduates "are both the current and future leaders in the movement, and we must take it upon ourselves to personally get involved politically if this industry is going to continue to thrive. "We can't leave it up to others to form our message. We are the ones living, breathing and working in credit unions every day; therefore, we know our story better than anyone else possibly could," Newcomb added. Instilling a passion for advocacy in the next generation of leaders is a focus for Janine McBee, director of SCMS. "The world credit unions operate in is in flux like never before," noted McBee. "We have to increase the level of engagement in activism of all our credit union leaders. This class is one step toward making that happen." Scott Slattery, assistant vice president for Texas Dow Employees CU, Lake Jackson, found the class hit the mark. "We all know that our credit unions can die due to financial reasons, but if we're not careful, our credit unions can die due to legislative issues as well," he said, adding "It helped me better understand our position on Capitol Hill and gave me a new desire to help our advocates succeed." SCMS is a three-year course study focused on enhancing credit union leadership skills. Students compete to enroll in one of only 50 available slots in each class year. They develop a real-world strategic business plan for their own credit union. For more information, use the resource link.

CEO In tough economy CU marketers must learn numbers

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TEMPE, Ariz. (8/18/08)--"The challenge for any credit union CEO today is trying to maintain balance and aggressiveness, while watching out for potential land mines." So says Michael Poulos, CEO, Michigan First CU, Lathrop Village, Mich., referring to why credit union marketing professionals should learn the credit unions numbers. By learning the numbers that contribute to the bottom line, they can better drive marketing efforts to get results that the CEO and senior management team want. "Without any question, any marketing professional should understand the financial condition of the credit union and all the numbers that go along with it. "Understanding the financial condition of your credit union and being in sync with the financial goals is the foundation for being successful with the senior management team," he said. He noted that the marketing professional also needs to be aware of the issues facing the CEO and senior managers. "My biggest concern is that we might miss out on business opportunities because of what it going on in the economy," Poulos said. "Any business can make money in good times, but only good ones make money in bad times. Being reticent and overcautious are the major concerns I have." He teaches a session on financial ratios and assists students with the financial aspects of a group project during Credit Union Marketing University, which meets in Scottsdale, Ariz., Sept. 22-26.

CU in IFast CompanyI on savings account strategy

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NEW YORK (8/18/08)--A credit union's savings promotion is featured in Fast Company's September issue as part of an article on innovative new programs that make saving fun. The article, "Break the Bank," reports that banks have drawn consumers' ire with their high-interest lending, rising fees and penalties, and that "a range of financial institutions now are trying a new business model: being good." They're nudging and even paying consumers to save money. In breaks down its discussion of savings programs by type of financial institution: banks, online startups, and credit unions. "As community-based nonprofits, credit unions have always promoted saving as part of their mission," the article says. "But with an aging membership, they're going further to attract new customers." The article features Matt Davis, director of public relations at Members CU, Winston-Salem, N.C., and a Filene Research Institute '30 under 30' member. The credit union's What Are You Saving For? program offers "a paltry" 1.8% interest rate, but it includes monthly drawings for additional cash prizes. He got the idea from Peter Tufano, a Harvard Business School professor who has spent a decade studying and testing new policies to promote savings. Tufano was a speaker at a recent 30 Under 30 meeting in Chicago. The article concludes that the something-for-nothing strategy is "where the future of American savings may lie."

Workers on strike at CU over insurance premiums

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LOCKPORT, N.Y. (8/18/08)--Cornerstone Community FCU, based in Lockport, N.Y., has confirmed that more than 70 union employees went on strike Friday, shutting down two branches. At issue is the cost of the health insurance premiums the credit union provides for staff. The union, Office and Professional Employees International Union Local 212, represents 73 of the credit union's 94 employees, Ann M. Brittin, Cornerstone president/CEO, said. It includes all tellers, loan personnel, member service representatives and clerks. In a press release, the $234 million asset credit union said negotiations had been underway since October 2007 to reach a new labor agreement to replace a four-year contract that expired in November. "Cornerstone and Union negotiators reached a tentative agreement, later rejected by Union membership, that would continue to provide employees with a more-than-competitive benefit package, including single and family health insurance coverage for full-time employees and a 401(k) retirement plan," said Brittin. Brittin told News Now that the rejected agreement asked employees to contribute 5% of the monthly health insurance premium, starting in November 2009. The plan also had slightly higher co-pays on physicians' visits and prescriptions, she added. Health insurance costs had risen 53% between 2004 and 2008. The credit union's press release noted New York State Department of Labor statistics indicate the credit union's current average wage rate for its union employees falls above the 90th percentile when compared with wages of employees at other regional and statewide financial institutions. "As a member-owned credit union, we must also maintain a fiscal responsibility to our members as stewards of their assets," she said. The credit union stated that its historical roots and ties to the union concept means it supports the position of a union as representative of its members' best interests. Six of the nine members of Cornerstone's board are affiliated with unions. Until the matter is resolved, the main office in Lockport will continue all functions and regular hours, the credit union said. ATMs are open at its Stevens Street and Middleport branches. Members also were directed to several local shared-service centers the credit union participates in with three other local credit unions for full services. No new negotiations have been scheduled, Brittin told News Now.

Colorado CUs advance their cause during primary

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DENVER (8/18/08)--Although not all of them won, credit union candidates were strongly supported during Tuesday’s primary in Colorado, and credit unions dramatically advanced their cause, according to the Credit Union Association of Colorado (CUAC). “CUAC has gained a stronger voice in the political arena, creating benefits, regardless of the outcome,” said John Dill, CUAC president/CEO. “Even though the results may not be what we wished on election day, our efforts in the election process give us opportunities to work with whoever wins as we are seen as a political player.” CUAC-endorsed candidate Rollie Heath won his bid for state Senate District 16, and endorsed candidate Sean Conway won his bid for Weld County commissioner. Other CUAC-endorsed candidates:
* Joan Fitz-Gerland lost to Jared Polis in the 2nd congressional district; * Jeff Crank was second place in the 5th congressional district to Doug Lamborn. Lamborn reinforced his desire to work with CUAC; * Ted Harvey came in third to Mike Coffman in the 6th congressional district race. Coffman told CUAC he looks forward to working with the association; and * Matt Bergles lost in State House District 8.
Colorado credit unions actively participated in campaigning by walking precincts and calling members, the association said. Its CU Get Out the Vote program had nearly 100 campaign volunteers and made more than 115,000 communications on behalf of the credit union-supported candidates.

Convention volunteers landscape wounded vets home

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WOODBURY, Minn. (8/18/08)--On Friday, volunteers from the 2008 Republican National Convention staff and local Minnesota credit unions landscaped a home built for a wounded Iraq war veteran with Homes for Our Troops and the National Journal Group.
Click to view larger imageLynn Kothe (left), vice chair of the Minnesota Credit Union Foundation, and Dawn Dunkelberger of North Memorial FCU, Robbinsdale, Minn., fill in rock around shrubbery and flowers planted during Homes for Our Troops’ volunteer day Aug. 15. (Photo provided by the Minnesota Credit Union Network)
The home is the result of a joint project of Homes for Our Troops, the Republican National Convention, America’s Credit Unions, the Minnesota Credit Union Network, the Credit Union National Association (CUNA) and the National Journal Group. It will be presented to Sgt. Marcus Kuboy in September during the Republican National Convention in St. Paul. “This project has allowed credit unions to put our ‘people helping people’ philosophy into action,” said Daniel A. Mica, CUNA president/CEO. “This volunteer day brings us one step closer to completing the home for Sgt. Kuboy and making the American dream of home ownership a reality for this bravee soldier.” Kuboy, 30, a member of the Minnesota National Guard, was injured in March 2007 when an improvised explosive device exploded underneath the vehicle in which he was riding. The home will be specially adapted for him and is being built at no cost to his family. CUNA, the Credit Union Associations of Colorado and Wyoming, and the National Journal also are working with Homes for Our Troops and the Democratic National Convention Committee on a companion project for a veteran’s home with the Democratic National Convention near Denver.

Commonwealth CU reports new vishing attacks

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FRANKFORT, Ky. (8/18/08)--For the second time in three weeks, a Frankfort, Ky.-based credit union, Commonwealth CU, has been the target of an extensive vishing or "voice phishing" scam. Commonwealth sent a scam alert Friday about the latest attempt to gather information for possible identity theft purposes via automated telephone messages purporting to be from the credit union. Gloria S. Thomas, fraud and loss prevention manager at the -based credit union, said that Thursday and early Friday morning individuals began receiving telephone calls with an automated message that said the recipients' credit card had been suspended. The message left a phone number to contact to reactivate the card. "If you called the number you got an automated message that said, 'Press one to activate your card,'" she said. "When you pressed one, you were asked for your 16-digit credit card number." A variety of numbers were used, including some of the same phone numbers employed in the previous attack, three weeks ago. In that attack, thousands of Kentuckians received the recorded phone calls. The incidents prompted a warning to the public about the scam from the state's attorney general (News Now Aug. 11). New numbers used in Thursday's and Friday's scams are:
* 214-556-5796 in Plano, Texas; * 404-419-7498 and 404-498-4197, both in Atlanta, Ga.; * 604-484-9400, Vancouver, B.C., Canada; * 714-442-3659, Santa Ana, Calif.; * 800-909-9690, Port St. Lucie, Fla.; * 909-923-6441, Ontario, Calif.
Several numbers were used in both scam attempts. Many were companies that were "Masked for Caller ID." Three of the numbers were disconnected. Numbers that were used in both scan attempts are:
* 303-773-8228, Englewood, Colo.; * 412-729-9885, Elizabeth, Pa.; * 503-924-4505, Beaverton, Ore.; * 563-386-2311, Davenport, Iowa; * 617-507-6706, Boston, Mass.; * 720-204-1286, Longmont, Colo.; * 860-359-4493, Columbia, Conn.; * 909-474-7070; San Bernardino, Calif.; and * 949-225-3939, Irvine, Calif.
Another vishing scam was reported by Florida CU, Gainesville, Fla. It began receiving calls last week from members and nonmembers reporting they received an automated call or text message to their cell phones with the same tactic as the other attempts (Ocala.com Aug. 13).

Filene examines financial behaviors of young adults

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MADISON, Wis. (8/18/08)--Young adult households frequent credit unions at roughly the same levels as do all U.S. households. However, credit unions lag behind commercial banks, three to one, according to a new Filene Research Institute report. As credit unions seek to better serve the next generation of consumers, it becomes essential to understand how young adults are creating their financial lives, said the institute. Its report, Attracting Young Adults: What Do We Know About Their Use of Financial Institutions and Payment Behaviors?, looks at the financial behaviors of young adults and compares these behaviors to all households. Author Jinkook Lee, a professor of consumer sciences at Ohio State University (OSU) and a Filene Research Fellow, used the Consumer Finance Monthly, a nationally representative sample of U.S. households from a monthly survey conducted by OSU, to conduct the research. The study found that young adults rank convenience, product features, and service as the top three reasons, respectively, for choosing their primary financial institution. Young adults use a variety of payment instruments to manage their funds, the study found. Which type of instrument an individual uses depends upon the type of transaction and the socio-demographic characteristics of the payer. “Today’s 18- to 34-year-old population represents the next generation of credit union borrowers and savers,” says George Hofheimer, Filene chief research officer. “The Credit Union National Association reports that since the mid-1980s credit unions have struggled to convert this demographic into full-service members. Careful study of how this new generation is different from past generations could help reverse this long-term trend," Hofheimer said. "More important than careful study, though, is action," he said. "Every day that credit unions delay a young-adult strategy is another day their competitors gain in cementing a relationship with this demographic." Hofheimer proposes three activities credit unions can perform to effectively reach out to the 18-34 year-old market:
* When describing your value proposition to a young adult market, study the top reasons this segment chooses their primary financial institution; * Understand what elements of convenience matter most to young adults; and * Use data on specific payment choices to understand how young consumers are creating their financial relationship.
Copies of Attracting Young Adults: What Do We Know About Their Use of Financial Institutions and Payment Behaviors? are available free to institute members; $125 to non-members. For more information call 608-231-8550 or use the resource link.

Louisiana league op-ed CUs strong in tough times

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HARAHAN, La. (8/18/08)--The Louisiana Credit Union League has responded to news reports about the economy with an op-ed newspaper article noting that "one positive remains steady--Louisiana's credit unions." The article, written by league President/CEO Anne Cochran, appeared in theadvertiser.com (Aug. 15). It points out that 72% of all credit unions in Louisiana were rated in the highest two categories based on safety and soundness in 2007. The CAMEL (capital adequacy, asset quality, management, earnings and liquidity) ratings indicate that credit unions' management is "experienced, capable and operated under adverse conditions following hurricanes Katrina and Rita in 2005," wrote Cochran. She explained that all Louisiana credit unions are covered by the National Credit Union Share Insurance Fund and backed by "the full faith and credit of the U.S. government." Cochran referred to other financial institutions pushing through the up and down economy while credit unions "remain strong, offering good rates on savings accounts and low rates on loans. "In these uncertain economic times, individual and businesses are looking for a safe place to put their hard-earned money. The credit union is that place," the letter concluded.

Kinectas venture into check cashing marks first year

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MANHATTAN BEACH, Calif. (8/18/08)--Kinecta FCU’s purchase of Nix Check Cashing of Carson, Calif., one year ago brought 15,000 Nix customers into the credit union’s membership. The credit union acquired 53 Nix stores, added ATMs to 36 and opened service windows at five. “We have created a revolutionary business model that will bring credit union services to underbanked areas where nearly five million people live,” said Simone Lagomarsino, Kinecta president/CEO. The credit union also introduced three alternative financial products and services:
* A $300 payday loan alternative for the same fee that others charge on a $255 loan; * A rewards program that returns one-third of the loan fee into a savings account for qualified customers and currently is a pilot program in three stores; and * Change for Tomorrow, a savings program that allows Nix customers to put any amount of change, no matter how small, into a savings account. The program launches next month.
“Many Nix stores are in locations where few banks exist, leaving consumers with limited options,” said Tom Nix, Kinecta senior vice president and Nix Check Cashing president. “Kinecta’s acquisition of Nix has returned banking products to areas that have not had them for many years.” Kinecta has $4.4 billion in assets.

Ohio CUs work hard to inform candidates

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Keith Brooks, Capital Advocates; Ohio Senate candidate Karen Gillmor; and John Kozlowski, Ohio Credit Union League general counsel, recently met to discuss credit unions.
DUBLIN, Ohio (8/18/08)--Several Ohio credit unions and the Ohio Credit Union League worked to inform candidates about credit union issues at recent meetings and events. John Kozlowski, league general counsel, and Keith Brooks of Capitol Advocates, a Columbus lobbying firm, met with state Senate candidate Karen Gillmor about credit union issues. Gillmor was pleased to hear about credit unions’ sound mortgage lending practices, the league said (eLumination Aug. 13). “Sen. Gillmor was especially interested in the financial education initiatives put forth by the league and Ohio’s credit unions,” Kozlowski said. With one son in high school and two in middle school, she understands the importance and value of learning wise money management at a young age.” Midwest Community FCU, Defiance, gave U.S. Rep. Bob Latta (R-Bowling Green) a tour of the credit union Aug. 11. Latta met with credit union CEO Sonja Delaney, board members and management staff.
U.S. Rep. Bob Latta, right, (R-Bowling Green) visited Midwest Community FCU, Defiance, Ohio.
The Mahoning Valley Chapter hosted a golf outing with U.S. Rep. Tim Ryan (D-Niles), and state Reps. Ron Gerberry (D-Austintownship) and Tom Letson (D-Warren). It also hosted an evening reception with state Rep. Sandra Harwood and Rose Bartolomucci, Ohio Division of Financial Institutions deputy superintendent for credit unions. Western CU, Columbus, invited State Sen. Steve Stivers (R-Columbus) to the credit union Aug. 7. Credit unions play an important economic role in the communities they serve, he told credit union staff. Stivers said he would support legislation that gives credit unions more capacity to serve members, particularly in member business lending. Kozlowski and John Florian, league vice president of government affairs, also attended the meeting.
The Mahoning Valley Chapter hosted a golf outing with U.S. Rep. Tim Ryan (D-Niles). Pictured are: Paul Mercer, Ohio Credit Union League (OCUL) president; John Florian, OCUL vice president of government affairs; state Reps. Ryan, Ron Gerberry and Tom Letson; and Michael Kurish, CEO, Associated School Employees CU, Youngstown.
Western CU, Columbus, recently hosted Ohio Credit Union League Vice President of Governmental Affairs John Florian; State Sen. Steve Stivers (R-Columbus); Tom Furrey, CEO, Western CU; and John Kozlowski, OCUL general counsel. (Photos provided by the Ohio Credit Union League)

Will mobile banking change remittances

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NEEDHAM, Mass. (8/15/08)--Mobile remittances are moving in on the global remittances market and the accelerating investments in mobile payment platforms will be a disruptive industry force, says a new TowerGroup study. However, the World Council of Credit Unions (WOCCU) doesn't see that happening anytime soon. Mobile remittances are a person-to-person payment system that is cross-border in nature and involves mobile data applications at either end of the transaction, according to TowerGroup, a Needham, Mass.-based research group. TowerGroup maintains that an emerging revolution occurring for sending and receiving remittances may undercut existing fee structures and traffic volume of incumbent brick-and-mortar money transfer operators, which the firm says already appear to be under pressure in the economic climate. However, WOCCU is hesitant to agree with the assertion that mobility will change the nature of remittances, said Tiffany Kultgen, WOCCU's program manager, technical services responsible for credit unions' international remittance program, IRnet. "There are two major components to a remittance--the transfer of data and the transfer of funds," she told News Now. "While mobile solutions may enhance the ease of data transfer for many, they don't circumvent the need for physical locations in order to realize the transfer of funds for the market as a whole. "I think more pieces must be added to the puzzle before we'll see a complete transformation of the remittance market," Kultgen added. Kulgen noted there has been talk about mobile remittances "for quite some time, and to my awareness there hasn't been any major shifting of the market from cash-based transfers to mobile transfers--at least not in the U.S. or Latin America. "There has been a lot of hype about mobile remittances in Kenya and the Philippines, but the demographics of those markets are quite distinct from individuals who have migrated to the U.S. from Latin America," she said, adding that she has read that M-Pesa isn't having much luck opening up remittance corridors outside of Kenya due to security and compliance concerns. Kulgen noted that "WOCCU is continuously exploring new developments within the remittance market to assure that the credit unions are able to meet their members' need. Thus far, we haven't experienced a significant demand for mobile remittances; however, that is not to say we won't see changes in the future." TowerGroup says its analysis indicates that the benefactors of mobile remittances may be banks, especially those that emphasize growth among unbanked customer segments. That's because remittances are "an avenue for banks to initiate relationships with unbanked consumers who are heavy users of both remittance products and mobile phones." The relationships then can fuel deposits through later cross-sale of more traditional banking products such as share draft/checking accounts, the firm's report said. On the receiving side, mobile remittances will spur evolution of the financial sector in developing countries and economies so recipients can direct their remittances to checking accounts, bill payments and microfinance applications, said TowerGroup. "The inevitable convergence of remittances and mobility offers new opportunities for banks to grow this market by making payments faster, more convenient, more secure, and more accessible to a greater number of senders and recipients," said the report. Virginia Garcia, senior research director in TowerGroup's Cross-Industry practice, and Charul Vyas, an analyst in the Emerging Technologies practice at TowerGroup, co-authored the report, titled, "Disruptive Technology Spawns Market Revolution: The Ascent of Mobile Remittances into the Mainstream."

Oklahoma Texas outsourcing deal in the works

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TULSA, Okla. (8/15/08)--The Oklahoma Credit Union League is working to complete a partnership and outsourcing plan with the Texas Credit Union League. It will be at least six months before everything is finished, and at least nine months until the league moves to its new headquarters building, Credit Union House, in Oklahoma City, Debra “DJ” Morrow, league interim president/CEO, told News Now. The one-year partnership will allow Oklahoma to partner and outsource credit union assistance, training and education, the Oklahoma Credit Union Foundation and chapter leadership with Texas. The league also expects to gain some back office efficiencies. Oklahoma will maintain its independence as a league, with its own board and staff, Morrow said. “We’re looking forward to implementing the partnership,” she said. “Everyone’s looking forward to seeing what we’ll bring forth.” Dick Ensweiler, president/CEO of the Texas league, said there is a longstanding natural relationship in the southwest between Texas and Oklahoma. "We look forward to concluding the negotiation process and working even close together," he said. "Just as credit unions are finding that outsourcing, partnerships and other types of collaboration generate efficiencies in operations, so do we find that leagues can also benefit this way," he added. Regionalizing leagues makes the most sense, Morrow said. “We will continue to seek partnerships with other leagues.” Oklahoma also will partner with the Missouri Credit Union Association on a volunteer and leadership conference next year. Leagues that Oklahoma contacted for advice on merging were “forthcoming,” Morrow said. “The spirit of cooperation is alive and well in the leagues.” Morrow recently sent a letter to credit union CEOs about the proposed partnership. The letter noted that Oklahoma’s Credit Union House would open next May. Next year is the league’s 75th anniversary, she said. “It’s an appropriate time to open Credit Union House.”

Pennsylvania judge sets conference date in tax uniformity case

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HARRISBURG, Pa. (8/15/08)--Pennsylvania Commonwealth Court Judge Dante Pelligrini has scheduled a status conference for Sept. 9 with legal counsel for all parties in a uniformity of taxation case. The conference's purpose is to discuss moving the case forward, said the Pennsylvania Credit Union Association (PCUA). The case stems from a lawsuit by bankers involving the applications for community charters by Trumark Financial CU, based in Trevose, and Freedom CU, based in Warminster. At issue is whether credit unions and banks are sufficiently distinguishable to merit different tax treatment consistent with the Pennsylvania Constitution. A provision in the state constitution states that like entities should be taxed in a like manner, said Rick Wargo, general counsel at PCUA. That tax uniformity issue is different from the tax exemption issue, which the Pennsylvania Supreme Court ruled on in June, he told News Now. In that ruling the Supreme Court unanimously upheld PCUA's arguments and said banks are not entitled to appeal the lower court's dismissal of several claims. The case had stalled for about two years while the appeals went to the Supreme Court to address procedural and community chartering matters, said PCUA. A status conference is an informal meeting where attorneys for the parties in the case discuss with the judge the procedural posture of the case and what the parties anticipate they will need in terms of discovery. PCUA said the court likely will set a schedule to proceed forward at the conference.

Study CUs look good trust drives wallet shares

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BOSTON (8/15/08)--Consumers’ trust in their primary financial institution is directly correlated to wallet capture--and credit unions are doing well, indicates a study released this week. Credit unions are outperforming banks in rates, fees, pricing, products, reliability and engagement, according to the study, by Mercatus LLC, a financial services consulting firm (MarketWatch Aug. 13). The average wallet capture share for financial institutions increased by 18 percentage points on a five-point scale, from 34% at a trust score of 1, to 52% with a trust score of 5, the study said. Trust relationship scores for credit unions and banks ranged from 64% to 84%. Credit unions and local banks scored higher in transparency than other financial institutions at 75%, compared with national banks’ average score of 63%. Factors affecting trust include transparency of costs, employees’ willingness to go “above and beyond,” and operational processes clarity. Trust also drives retention and cross-selling. To build trust, the study said financial services providers should:
* Disclose fees for products and services; * Explain steps to open new accounts or address service issues; * Ensure safety of members’ information; and * Maintain fees at levels members expect.

Mobile banking on a growth spurt in CUs banks

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NEEDHAM, Mass. (8/15/08)--Mobile banking overall is emerging fast as an indispensable business asset to financial institutions to retain member/customers and reach new segments, says new research. Every month until the beginning of 2009, between 150 and 300 U.S. credit unions and banks will sign contracts for mobile banking solutions, according to TowerGroup, a Needham, Mass.-based research firm.
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Mobile banking will reach nearly six million users by the end of 2008, says TowerGroup's report, "Transforming Customer Interaction: Mobile Banking Delivers Adoption as Wheels of the Market Align." The firm forecasts that 42 million U.S. active users of mobile banking will exist by 2012. "We believe the rise of next-generation mobile banking and payment solutions will forever change banks and payments companies," said Virginia Garcia, co-author of the research and senior research director in TowerGroup's Cross-Industry practice. "Mobility has the potential to enable timely, relevant and actionable outreach that will ignite customer engagement unlike any other channel," she said. "Ultimately, TowerGroup expects mobile phones will do for financial services what Apple iPods did for music--spur a sea change in the way consumers access services and suppliers deliver them," said Garcia.

CU System briefs (08/14/2008)

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* BLOOMFIELD HILLS, Mich. (8/15/08)--Members of T&C FCU based in Bloomfield Hills, Mich., have approved a merger of the credit union with USA CU, Auburn Hills, with 91% of voters approving the merger. The merger already had been endorsed unanimously by both credit unions' boards, and approved by state and federal regulators. "We are absolutely delighted so many of our members agreed with our plan to merge," said Dianne Addington, T&C president/CEO and the CEO-designate of the merged credit union, Genisys CU. "We did everything we could to ensure that our members understood the reasons behind the merger and what it will mean to them, and they obviously listened." Genisys will have 130,000 members and $1.2 billion in assets, making it the fourth largest credit union in Michigan … * OGDEN, Utah (8/15/08)--The Federal Bureau of Investigation (FBI) has placed on its Most Wanted List a man accused of the armed robbery of Goldenwest CU July 3. Curtis Brad Cordery allegedly forced two tellers into the vault and filled a bag with money, then left in one teller's car. Authorities found the abandoned car four blocks from the credit union. A teller, Jeffery Lyle Nay, who was a friend of Cordery, admitted to being part of the heist, the FBI said. Cordery made a call to Nay from the San Francisco area afterward. Both men are charged with armed robbery. Nay faces a maximum of 25 years in prison and a $250,000 fine, but prosecutors believe there may be a plea deal in the works (ksl.com Aug. 13) … * LOS ANGELES (8/15/08)--Albert Talton, 45, of Lawndale, Calif., pleaded guilty to federal conspiracy and counterfeiting charges related to a large-scale ring that produced more than $7 million in fake currency. He is among six people charged with making bogus bills using an inkjet printer, newspaper and special paper, computer software, and hairspray. The ring had brokers sell the bogus bills. A raid by federal agents on Talton's home yielded nearly $250,000 in completed bogus bills and about $825,000 in partially completed bills. Co-defendants David Goldberg, Paul Tracy McCorry, Cory Nero, Troy Stroud and Ernest Alexander are charged with conspiracy, and distributing and manufacturing counterfeit currency. Stroud pleaded guilty. The trials for Goldberg McCorry and Nero are Sept. 16. Alexander is still at large (The Mercury News and DailyBreeze.com Aug. 11) … * HARRISBURG (8/15/08)--Leaders from two State College, Pa.-based credit unions--SPE FCU and Penn State FCU--meet with Glenn Thompson (seated at right), a candidate in the Fifth District congressional race. Christina Milhalik, Pennsylvania Credit Union Association (PCUA) assistant vice president, also attended the event at SPE FCU (Life is a Highway Aug. 14). Russ Brooks (standing), CEO of SPE FCU and member of PCUA's Governmental Affairs Committee, discusses credit union history during a Meet and Greet. Thompson, a long-time credit union member, said credit unions provide a launching pad of affordable services for new and existing members. He said credit unions will be needed more than ever during the credit crunch. (Photo provided by the Pennsylvania Credit Union Association) …

Illinois leagues small CU conference attracts 80

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(From left) John Bratsakis, Illinois Credit Union League (ICUL) chairman; Dan Plauda, ICUL president/CEO; and National Credit Union Administration Vice Chairman Rodney Hood at the league’s Small Asset Size Credit Union Conference. (Photo provided by the Illinois Credit Union League)
NAPERVILLE, Ill. (8/15/08)--More than 80 credit union staff and board members attended the Illinois Credit Union League’s seventh-annual Small Asset Size Conference for credit unions under $20 million in assets. At the conference, Rodney Hood, vice chairman of the National Credit Union Administration (NCUA), discussed the state of small credit unions. He said Illinois’ small credit unions are strong, with a net worth of 15.5%, compared with 11.1% nationally. About 98% of those credit unions have CAMEL ratings of 1, 2, or 3, he added. “We are committed to small credit unions,” Hood said. “As vice chairman, I want to keep you healthy and vibrant.” Small credit unions should reach out to NCUA’s Office of Small Credit Union Initiatives for resources, including community development grants, economic specialists and partnerships, he added. Other topics at the conference included disaster recovery, bankruptcy and collections, compliance updates and networking. “We strive to be a focal point to help our small credit unions succeed,” said Dan Plauda, ICUL president/CEO. Small credit unions represent 75% of ICUL’s members. The conference was sponsored by the league; the Illinois Credit Union Foundation; Members United Corporate FCU, Warrenville, Ill.; and CUNA Mutual Group.

Latin American Regulators Roundtable at forum

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GUATEMALA CITY, Guatemala (8/15/08)--The World Council of Credit Unions (WOCCU) and Sistema Cooperativo Federado de Ahorro y Credito de Guatemala (FENACOAC), the Guatemalan credit union association, are hosting credit union representatives and regulators from 12 countries this week at WOCCU’s Latin American Regional Forum.
Manuel Bolanos (left), CEO, Federacion de Cooperativas de Ahorro y Credito de Costa Rica, and Berta Silvia Mena, financial manager of the Federacion de Asociaciones Cooperatives de Ahorro y Credito de El Salvador, speak with participants during the regulators roundtable sponsored by the World Council of Credit Unions and the Guatemalan credit union association in Guatemala.
The forum is taking place in Guatemala City, Guatemala, with 300 attending. This is the first time the forum is open to non-WOCCU members and the first time Latin American regulators have participated in regional roundtable discussions. A regulators roundtable was last hosted at the WOCCU World Credit Union Conference in Hong Kong in July. Twenty-five regulators from 10 countries attended Tuesday’s Latin American Regulators’ Roundtable. “Throughout Latin America today, credit unions are in a strong and stable position, and both regulators as well as participants in the forum are using this time of growth and stability in the systems to ensure the preparedness of the organizations,” said David Grace, WOCCU vice president, association services.
Regional and local Guatemalan culture was displayed for participants of the Latin American Regional Forum. (Photos provided by the World Council of Credit Unions)
“If you have a good system of supervision and control but do not have the capacity in credit unions, not much will happen. If you have capacity but not control, you will see problems. This week, with the roundtable, forum and Manager Certification Program, WOCCU is working on both of these issues in the region--systems of control and building capacity,” he added. The Manager Certification Program is a two-year training program for current and aspiring credit union managers. Other roundtable discussions included building credit unions’ managerial and governance capacity, and applying risk-based and prudential credit union supervision in the region. A representative from Costa Rica’s Superintendent of Financial Institutions led a discussion where regulators reviewed Costa Rica’s 1998 credit union crisis and lessons learned. Participants also are visiting five area credit unions and viewing cultural displays by FENACOAC. Anne Cochran, president/CEO, Louisiana Credit Union League and WOCCU board member, delivered the forum’s opening address. “This shows the dedication and commitment evident in Latin America for enhancing people’s lives through access to credit and savings cooperatives, thus providing financial dignity to thousands of people.”

African-American group asks help in history search

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SHREVEPORT, La. (8/14/08)--The African-American Credit Union Coalition (AACUC) is looking for historical contributions to an exhibit, “A Journey of Hope--A Destination of Dreams,” set to be unveiled Oct. 16 at the American Credit Union Museum in Manchester, N.H. The AACUC, which is celebrating its 10-year anniversary, is looking for more information to add to the exhibit. “We’re asking people to put in a nutshell the pivotal things they’ve accomplished,” Helen Godfrey-Smith, AACUC archive chairman and president/CEO of Shreveport (La.) FCU, told News Now. Examples of information include: the first African American credit union employee, member, league president, manager or CEO of a credit union with more than $100 million in assets. The exhibit will provide a history of African Americans in the credit union movement through touch-screen technology. Viewers can watch eight-minute vignettes of stories about African American credit union trailblazers. The exhibit also will feature photos.
Part of the African-American Credit Union Coalition (AACUC)’s exhibit was unveiled at a recent AACUC conference in Houston, Texas. From left are AACUC members Sheilah Montgomery, president/CEO, 1st Choice CU, Atlanta, and Helen Godfrey Smith, president/CEO, Shreveport (La.) FCU. (Photo provided by the African-American Credit Union Coalition)
“This year is the centennial of credit unions,” she said. “There are a lot of great stories. It’s so exciting to uncover tidbits of awesome work that has been done in the credit union movement to benefit African American communities.” The importance of the exhibit lies not only in its ability to show the past, but to look at the philosophies of the credit union movement that are “strong and solid today,” Godfrey-Smith said. Godfrey-Smith already has received responses and is searching for more. “Hopefully it will be an ongoing project for the next several years,” she said. “It’s really a labor of love. It’s an exciting time to uncover good tidbits about this movement I love so much.” Part of the exhibit was recently shown at an AACUC conference in Houston, Texas. Godfrey-Smith's research indicates that the first credit union, St. Mary’s Bank, opened its doors in 1908 just six months before the National Association for the Advancement of Colored People (NAACP) was formed. The NAACP adopted a strategy to charter credit unions in communities with its chapters, she said. The first African American credit union opened in Rowan County, N.C., in 1916. “From that point, the idea of community and access to [financial services] was essential for communities to develop,” Godfrey-Smith said. Godfrey-Smith, who has worked in the credit union movement since 1979, said the project is a “perfect match” for her. “I’ve been a student of history all my life,” she said.

Achtenberg honored by NYIB

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LAS VEGAS (8/14/08)--LeAnn Achtenberg, vice president of marketing for Anoka Hennepin CU, Coon Rapids, Minn., was recognized with the National Youth Involvement Board (NYIB) Advocate Award at the NYIB Annual Conference July 28-31. The new award recognizes an individual’s continued dedication to the NYIB as an advocate of the organization and as an active member of the NYIB Network. Achtenberg is the first recipient of the NYIB Advocate Award, which will be presented annually. “As the NYIB Network continues to grow, we are proud to thank and honor those individuals who have been dedicated to improving the NYIB and are committed to youth financial literacy,” said John Faries, NYIB chairman emeritus. Achtenberg has been actively involved in NYIB for more than a decade. From 1997 to 2004, she volunteered with the NYIB as regional coordinator, secretary and media manager. She also served as chair from 2002 to 2004. During that time, Achtenberg spearheaded the creation of the Googolplex@school program, a financial literacy program for middle schools. She also serves as chair of the Minnesota Family Involvement Council, a committee of the Minnesota Credit Union Foundation dedicated to enhancing the future of the credit union movement by promoting financial awareness, financial education and full-family involvement in Minnesota credit unions.

New papers address consumer-driven health care debit cards

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MADISON, Wis. (8/14/08)--Two new white papers from the CUNA Councils address consumer-driven health care and debit card programs. Consumer-Driven Health Care: Involving Employees and Members in Managing Their Own Health Care, by the CUNA Human Resources/Training Development Council, examines consumer-driven health care (CDHC), including trends and credit union case studies. The paper analyzes the health insurance industry, reasons for moving to CDHC, and available CDHC options. It then offers nationwide credit union case studies, tips to start a CDHC, and key success factors. Maximizing Debit Profitability and Usage, by the CUNA Operations, Sales, and Service (OpSS) Council, shows how credit union professionals can create a successful debit card program that deepens member relationships and generates revenue. The paper illustrates a strategic approach to actively managing a credit union debit card program that focuses on debit transactions and use. Debit rewards are used by roughly one-third of financial institutions to increase activation, usage and retention, according to the white paper. Options for designing effective debit reward programs are offered, including factors in deciding whether to reward personal identification number transactions and signature transactions. “In today’s environment, we are all looking at ways to increase revenue that does not result in a negative effect on our members,” said Carolyn Jordan, OpSS Council vice chair and senior vice president of Neighborhood CU in Dallas. “The white paper can show you how to go beyond just using the debit card as a convenient access device, and position it as a cornerstone to enhancing the profitability of your overall checking portfolio while increasing member loyalty.”

CU System briefs (08/13/2008)

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* AUGUSTA, Maine (8/14/08)--The Maine Human Rights Commission Monday ruled that a credit union discriminated against a woman when it failed to hire her for a teller's job last year. The commission, whose findings are not law but can be used in lawsuits, found in favor of Denise Cyr, who filed the claim against Rainbow FCU, Lewiston. Cyr, who uses crutches, claims the credit union asked illegal questions about her disability during a job interview. The credit union's attorneys deny the allegation. The commission voted on the case as part of its consent agenda. No oral arguments were heard (MaineToday.com Aug. 13) … * INDIANAPOLIS (8/14/08)--A former manager of Health Care Professionals FCU, Indianapolis, was sentenced Tuesday to 21 months in prison for embezzling about $400,000. The judge also ordered Jill Carey, 35, to make restitution of $394,941 to the credit union, which is based in Richmond, Ind., and undergo five years of supervised release after she leaves prison. Carey, who now lives in Florida, pleaded guilty to the embezzlement charge (Associated Press Newswires and pal-item.com Aug. 12) … * Pittsfield, Mass. (8/14/08)--Greylock FCU, which has been renewed by the U.S. Small Business Administration (SBA) as a preferred lender, has passed the $100 million mark in business loans, announced the $985.5 million asset credit union. Under the Preferred Lender Program, Greylock can continue approving SBA loans with no additional reviews by government underwriters. "The SBA is crucial to continued economic development in the Berkshires," said Angelo C. Stracuzzi, Greylock's president. Last year SBA recognized Greylock as the 10th largest SBA financial lender in the state out of 119 financial institutions, the top SBA credit union lender in the state, and the 10th most active credit union in the nation for the fiscal year ending September 2007 … * PORTLAND, Ore. (8/14/08)--Point West CEO Robert Barzler has been named treasurer of the Oregon Business Leadership Network's (OBLN) board of directors. Barzler's accomplishments include serving as board member of the Oregon Credit Union Foundation and the Credit Union Financial Alliance board. The OBLN is an employer-led organization that seeks to improve employment prospects and consumer choices for people with disabilities by raising employer awareness of how business benefits in including people with disabilities in the work force. Point West, with assets of $104 million, is located in Portland … * ROCHESTER, N.Y. (8/14/08)--Family First of New York FCU CEO Christine Peters has added the responsibilities of president to her leadership role. In addition to assuming responsibility for creating a strategy for the Rochester-based credit union's growth, as president she will oversee its day-to-day operations. Peters has been CEO since 2006 and chief financial officer for eight years before that. She is also a new board member of the New York Credit Union Foundation and USNET (Universal Sharing Network) …

Iowa disaster relief donations top 460000

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DES MOINES, Iowa (8/14/08)--More than $460,000 has been raised for the Iowa Credit Union Foundation’s disaster relief grant program. Nearly 900 credit union members have received grants of $500 each to help with immediate needs, after their homes were damaged by spring floods. The foundation has received funds from 47 members of the Iowa Credit Union League. Also, 18 credit unions, credit union foundations and companies nationwide have contributed to relief efforts. Several Iowa credit unions added to their original contributions, including: Linn Area CU, Cedar Rapids ($50,000); Collins Community CU, Cedar Rapids ($58,000); Affinity CU, Des Moines ($2,000); Chemical CU, Clinton ($1,000); Premier CU, Des Moines ($3,385); and River Valley CU, Ames ($1,500). Also, University of Iowa Community CU donated $15,000 to help its members affected by flooding. Out-of-state contributions were received from Kansas, Missouri, Texas, Wisconsin, Illinois, Minnesota, Pennsylvania, West Virginia, Georgia, Louisiana, Ohio and Florida. “The road to recovery is going to be a lengthy process for many members, and Iowa credit unions and the foundation will continue to provide support along the way,” said Marybeth Foster, foundation executive director.

CUs on the Tube CU gears up for financial olympics

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LEXINGTON, Ky. (4/14/08)--The University of Kentucky FCU (UKFCU) has created a video, “Don’t Bank It,” with an Olympic theme to target members of Generation Y during the 2008 Olympics. The video features the 2008 Financial Olympics, with the credit unions v. banks in the “cornhole” money bag toss event. The credit union team wins, with credit union team supporters cheering in the background. “Our members, especially those in the Gen Y segment responded very positively to the first video we produced,” said David Kennedy, UKFCU president/CEO. “With this new video, we are showing a young, energetic environment in contrast to the old, inflexible bank. “We want the viewer to think about who they choose as their life-long financial partner and understand that the credit union is the better alternative,” he added. The video is posted on YouTube, Facebook, and UKFCU’s website. It received more than 600 views in the first week of posting on YouTube. UKFCU’s primary field of membership is college students, faculty and staff of the University of Kentucky, Eastern Kentucky University and Kentucky Community and Technical College System. The Lexington, Ky.-based credit union has $244 million in assets. To see the video, use the link.

Community CU Conference around the corner

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SAN DIEGO (8/14/08)--The 2008 Community Credit Union Conference, sponsored by the Credit Union National Association (CUNA), will be held Oct. 8-11 in San Diego. The conference is designed for all credit union leaders who want to move beyond the status quo. Two keynote sessions will be featured at the conference. “The Art of Leadership” will be presented by Bill Strickland, president/CEO of Manchester Bidwell Corp. He built an organization, employing and training thousands of people. His work has brought him a MacArthur Genius Grant, a Grammy award, an invitation to lecture at Harvard University, and a seat on the board of the National Endowment for the Arts. “CU 20/20: Insight Into the American Credit Union Movement” will be presented by Dennis Dollar, president of Dollar & Associates consulting firm. The former National Credit Union Administration Chairman offers his perspective on the challenges and opportunities facing America’s credit unions into the year 2020. Dollar will talk about where credit unions, particularly community credit unions, could be in the 2020 marketplace. General sessions include:
* “An Economic Outlook,” Terrin Griffiths, economist/analyst, California/Nevada Credit Union League; * “What’s in a Performance? A Comparison of Community Credit Unions to Community Banks,” Steve Williams, principal, Cornerstone Advisors; and * “Compliance Issues Impacting Community Credit Unions,” Kathy Thompson, CUNA’s senior vice president for compliance.
The conference also will feature 12 breakout sessions. For more information or to register, use the link.

Southwest Corporate overall credit quality remains high

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DALLAS (8/14/08)--The overall credit quality of residential mortgage-backed securities (RMBS) held by Southwest Corporate remains high, says John Cassidy, CEO. All those securities are "paying as expected and the overwhelming majority are rated AAA," he said in the corporate's newsletter (eFacts Aug. 12). Cassidy was responding to an article in The Wall Street Journal Monday that focused on the effect of the mortgage market dislocation on several large corporate credit unions, including Southwest Corporate, and U.S. Central. The article "really did not present anything new related to Southwest Corporate," Cassidy said. "We have been communicating the same facts and assessments to our members for almost a year." The corporate increased the level of information and frequency of communications to its members about the market dislocation and plans to expand its communication efforts with these steps:
* Increasing the frequency of quarterly financial webinars to monthly; * Scheduling in-person presentations to Southwest's membership to supplement the webinars and providing opportunity for expanded discussion. The schedule and locations will be announced in the next few weeks; * Focusing on the mortgage market during the upcoming annual Economic Forum as a venue to share updated information about the impact on the corporate; and * Providing forward-looking assessments of the mortgage market impact during webinars and meetings.
The communications efforts aims to "clearly explain to our members why we believe our asset quality remains high, and why we believe any losses we experience will be manageable and therefore not represent a credit concern for our members," he said.

White paper CUs need remote deposit

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FARMERS BRANCH, Texas (8/13/08)--Credit unions need remote deposit to compete with banking competitors who have more convenient branch locations, according to a free white paper from Southwest Corporate FCU. “Remote Deposit for Small Businesses: Greater Convenience Should Not Mean Less Service” encourages credit unions to stagger their offerings of new member business services, including remote deposit. It also gives credit unions a procedure to follow (LoneStar Leaguer Aug. 12). In the paper, Larry Middleman, president/CEO of CU Business Group, a corporate credit union-owned credit union service organization, states that remote deposit “removes geographic constraints and puts a whole new light on credit union capabilities.” The 10-page paper also answers the following questions:
* What opportunities does remote deposit afford the credit union seeking to attract and retain business members? * What businesses benefit most from remote deposit? * Can the credit union maintain personal relationships and cross-sell services to business members who manage their finances remotely? * Where will this technology lead? and * What should a credit union look for in a remote deposit service provider?

CU System briefs (08/12/2008)

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* COLUMBIA, Md. (8/13/08)--Members of the Maryland and District of Columbia Credit Union Association (MDDCCUA) are voting on a proposed bylaw change and dues reallocation plan, according to MDDCCUA (Focus Newsletter Aug. 11). Votes are due by Sept. 5 at midnight … * SAN DIMAS, Calif.(8/13/08)--Operation Best Wishes, an annual holiday program sponsored on behalf of America's credit unions through a partnership of the Defense Credit Union Council, Overland Studies, and Western Corporate FCU (WesCorp), received an Award of Distinction during the 14th Annual Communicator Awards. The international group honors creative excellence for communications professionals. More than 5,000 entries were judged. Operation Best Wishes is a national campaign that visits military-affiliated credit unions having heavy deployment among their membership. It sets up a mobile webcast studio where spouses and families can send holiday greetings free to their loved ones from Halloween through New Year's … * MADISON, Wis. (8/13/08)--A member praised Madison-based Summit CU on livejournal.com after he saved roughly $1,440 in interest by switching to the credit union's credit card. The Summit card charges 10% interest. That compares with 26%--estimated at $2,340 a year in interest--charged on his former card. He also noted that credit unions are cooperatives that don't pay huge CEO salaries, employee incentive bonuses or dividends to investors." The member said all his finances are now handled through the credit union. "Frankly, I was an idiot for not looking into this sooner," he said … * PONTIAC, Mich. (8/13/08)--T&C FCU members were voting Tuesday on whether the Pontiac, Mich.-based credit union would merge with $588.7 million asset USA CU, based in Auburn Hills, Mich. T&C announced its plan to merge in May. The merger, if passed by a majority, would create a new financial institution, named Genisys and have $1.2 billion in assets and 130,000 members. The pending merger was endorsed by the credit union's board and by the leadership of United Auto Workers Local 594, which maintains close ties to the credit union (The Oakland Press Aug. 10) … * LAKE JACKSON, Texas (8/13/08)--Texas Dow Employees CU has launched a new financial management program called Young & Free for 19- to 25-year olds to help them manage their money effectively. The $1.222 billion asset credit union based in Lake Jackson is taking entries online for a prospective spokesperson position for this age group. Young adults can submit and view entries, and vote for their favorites online at www.youngfreetexas.com. The winner will serve as the voice for Young & Free members by attending events and keeping the site fresh with blogs, vlogs and polls that educate, entertain and engage Generation Y. The program uses nontraditional media including Facebook, Flickr, Twitter and YouTube …

Mid-Atlantic Corporate solidly positioned says letter

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MIDDLETOWN, Pa. (8/13/08)--Mid-Atlantic Corporate FCU remains “as solidly positioned as ever,” wrote President/CEO Jay Murray Monday in a letter to members. Murray’s letter was written in response to a Wall Street Journal article that reported the market’s impact on corporate credit unions and their central bank, U.S. Central. As of May 31, five corporate credit unions reported $5.7 billion in unrealized losses. The paper didn’t mention Mid-Atlantic by name (The Wall Street Journal Aug. 11). “Certainly no financial institution is untouched by the current dislocation in the marketplace; however Mid-Atlantic has and continues to manage our investment portfolio very conservatively,” Murray said. Mid-Atlantic does not invest directly in residential mortgaged backed securities, commercial mortgage backed securities, collateralized debt obligations or specialized investment vehicles, said the letter. “Mid-Atlantic continues to monitor and conduct our due diligence on all our investment sources,” Murray said. “We have also continued to diversify our portfolio, and have added additional lines of credit. Because we have structured our portfolio in this manner, our equity position remains very strong.”

Thursday is deadline for Youth Week theme ideas

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MADISON, Wis. (8/13/08)--Thursday is the last day to submit ideas for next year’s National Credit Union Youth Week theme. “We’re looking for a theme that appeals to youth (birth to age 18) and credit unions,” said Joanne Sepich, National Youth Week coordinator. Short themes of four to seven words are preferred. The theme will be on posters, handouts, pencils, balloons and other materials. Previous themes include:
* Got Green? Grow it at Your Credit Union; * Stash Your Cash at the Credit Union; * My Money, My Credit Union, Where I Belong; * Want it ... Save it ... Get it; * YOUth Make a Difference; * Youth Count at Credit Unions; and * Your Future. Your Money. Your Choice.
For more information or to submit a theme, use the link.

Convention CU volunteers to landscape vets home Friday

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ST. PAUL, Minn. (8/13/08)--More than 60 volunteers from local credit unions and staff of the Republican National Convention will join Homes for Our Troops and the National Journal Group Friday for a "Volunteer Day" to landscape a home being built for a wounded Iraq war veteran in Minnesota. The event will be in Woodbury, Minn., where the home is being built for Sgt. Marcus Kuboy. His home is one of two specially adapted homes built for wounded veterans in conjunction with the 2008 Republican and Democratic National Conventions in St. Paul and Denver, respectively. Minnesota's credit unions, the Minnesota Credit Union Network, and state and national partners and organizations raised more than $150,000 to finance building the home. Kuboy, a Minnesota native who served three years' active duty with the Minnesota National Guard, was wounded when an improvised explosive device exploded under his vehicle. Homes for Our Troops, a non-profit organization that builds homes around the country for seriously injured American soldiers, is working with the Credit Union National Association, the Republican National Convention and the Democratic National Convention Committee on the projects. The Republican National Convention will be Sept. 1-4. The Democratic National Convention will be Aug. 25-28. Deeding ceremonies for the homes will take place during the conventions.

IParade magazineI Apply for a card with a CU

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NEW YORK (8/13/08)--Parade magazine Sunday encouraged readers to apply for credit cards at a credit union because credit unions are “less likely to impose burdensome fees.” Parade, which has nationwide distribution, also advised readers to pay their monthly balances, avoid using cards when traveling abroad because of high conversion fees, and to be aware of changes in rules or rates. Consumers are being hit with high interest rates and fees, and are being burned by credit card agreements they don’t understand, the magazine said. The article also noted that Congress has proposed rules to ban deceptive and unfair credit card practices. Rep. Carolyn Maloney (D-N.Y.) introduced legislation that would create a Credit Cardholders Bill of Rights, which would require credit card companies to give consumers notice of rate changes and 25 days to pay bills. Sen. Christopher Dodd (D-Conn.) has introduced a bill that would prevent card companies from charging consumers for paying their bills online or through mail. His bill also would stop companies from marketing to consumers under age 21. Credit card debt in the U.S. has reached $1 trillion. As of 2007, the average American household has $9,840 in debt, compared with $2966 in 1990 (Parade Aug. 10).

ICU Day materials available online

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MADISON, Wis. (8/13/08)--Artwork for his year’s International Credit Union (ICU) Day theme “It Belongs to Me” and sample materials for marketing and public relations are available online from the Credit Union National Association and the World Council of Credit Unions. ICU Day will be celebrated Oct. 16. Credit unions can download materials, which can be customized and include a press release, advertisement, model letter to the editor, newsletter article, proclamation, talking points and a speech. The materials soon will be available in Spanish. Graphics are available in English and Spanish and include the “It Belongs to Me” poster featuring a globe of photos of credit union members. Four different logo icons and coloring pages for kids also can be downloaded. International Credit Union Day has been celebrated every year on the third Thursday in October since 1948. On that day, credit unions offer open houses, picnics and community service events to show appreciation for their members and staff. This year’s theme was developed by Laquita Normore, marketing and communications manager, Eagle River CU, L'Anse au Loup, Newfoundland, Canada. For more information, use the link.

Safety via NCUSIF highlighted in Dallas newspaper

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DALLAS (8/12/08)--After recent bank failures hit the news, queries to a Dallas newspaper provided an opportunity for readers to learn more about credit unions' National Credit Union Share Insurance Fund (NCUSIF). Columnist Pamela Yip writes in Monday's issue of The Dallas Morning News that she received queries from readers about the insurance that covers credit unions. She reassures that the deposit insurance at credit unions is similar to the Federal Deposit Insurance Corp. and is backed by the U.S. government, and explains the individual account and joint account insurance limits as well as limits on retirement accounts. The article quotes former National Credit Union Administration Chairman JoAnn Johnson saying that NCUSIF is strong and "enters the second half of 2008 secure and well-capitalized." Dick Ensweiler, CEO of the Texas Credit Union League, notes credit unions "simply haven't experienced the problems to the degree some of our for-profit counterparts have. Our loan portfolios are performing quite well, despite current economic conditions." Also interviewed is Jim Brisendine, CEO of Resource One CU, a $255 million asset Dallas-based credit union, who noted that although the banking industry has a credit crunch, there's "nothing to worry about" at his credit union. And Charles R. Idol of ALM Consulting & Research, Edgewood, N.M., says Texas credit unions are well-capitalized. The article mentions banks raising the tax-credit-unions rhetoric but concludes credit unions offer many benefits in rates and that consumers have many options to decide where to put their money. To read the entire article, use the link.

MDDCCUA widens scope of community outreach efforts

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COLUMBIA, Md. (8/12/08)--The board of the Maryland and District of Columbia Credit Union Association (MDDCCUA) has moved to unite two key committees and widen the scope of the combined committee's outreach efforts. "MDDCCUA wants to expand and enhance the outreach efforts of the association and credit unions by having talented, credit union officials work together to help consumers understand the strengths and opportunities available at the 179 Maryland and DC credit unions," announced MDDCCUA Chairman J. Wesley Bone. The Community Outreach and Cooperative Marketing committees will combine into a single Community Outreach Committee, chaired by Bert Hash. Hash is president/CEO of MECU of Baltimore and vice chairman of MDDCCUA. Mike Dilworth, chief of marketing and business development at Freedom FCU will be vice chair. He formerly chaired the Cooperative Marketing Committee. "Both committees have proven strong voices and perform great work," said Hash. "Working together will give those efforts one voice representing credit unions throughout Maryland and District of Columbia." The new committee's scope will be broadened to include:
* Credit union awareness. The committee will develop a credit union "Safety and Soundness" media campaign for Maryland and DC to run in fourth quarter; * Financial empowerment events for consumers. Credit unions can act as partners in developing and sponsoring new and established events in the region; * REAL Solutions. The committee will expand area credit unions' involvement in activities that provide outreach tools and learning opportunities for consumers; and * The Credit Union Cherry Blossom 10K Run. The committee will promote the charity event, which raised more than $1 million this year for the Children's Miracle Network with more than $500l000 going directly to local children's hospitals.

CU System briefs (08/11/2008)

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* MEMPHIS, Tenn. (8/12/08)--HOPE Community CU, a community development credit union based in Jackson, Miss., has opened its first Tennessee-based branch in the Midtown neighborhood of Memphis, said the U.S. Department of Treasury's Community Development Financial Institutions (CDFI) Fund. The branch will provide a full range of affordable financial services and affordable alternatives to predatory and subprime lenders. HOPE is a certified CDFI sponsored by the Enterprise Corp. of the Delta (ECD). "By working with a range of partners, both public and private, ECD/HOPE has become one of the nation's most effective CDFIs," said CDFI Director Donna J. Gambrell, noting it had used a $15 million allocation and converted it into more than $50 million in loans for economically distressed communities (US Fed News Aug. 1) … * NAPERVILLE, Ill. (8/12/08)--The Illinois Credit Union League (ICUL) is promoting healthy lifestyles for its staff. ICUL just concluded its first "Biggest Loser" competition, a 12-week competition with 20 staff losing 214.6 pounds total. Nearly 80 employees participated in ICUL's first wellness screenings, which test blood pressure, body mass, and check for cholesterol, diabetes and more, and health risk appraisals, where participants answer dietary and lifestyle questions IN addition to flu shots and blood drives, the league also has incorporated healthier food choices at its staff social functions and added an "ICU Well" page on its intranet with nutrition and fitness website references, healthy recipes and other information. "We even quit putting out the candy dish at our reception area," said Dan Plauda, ICUL president/CEO … * SAN JOSE, Calif. (8/12/08)--Four people have been arrested after two masked men, who had been thwarted by Pacific Postal CU's bandit barrier earlier in the week, returned Friday and held up the credit union, threatening to shoot the tellers and members. They fled with more than $76,000. Alert witnesses helped identify the assailants after they were seen getting out of a Jeep and into a sedan. Witnesses said one of the men resembled a relative of a former employee who had been fired over a shortage in her cash drawer. Arrested were Sefo Sagote, 26; Elisara Taito, 25; the former employee Angelica Sagote; and Donnisha Harrell (San Francisco Chronicle Aug. 10) … * WARNER ROBINS, Ga. (8/12/08)--Robins FCU President/CEO John Ruffin announced he will retire Dec. 31, after 37 years in the credit union industry. Ruffin was hired at the credit union as executive vice president in 1997. He became CEO in 2003. Previously Ruffin was retired from the National Credit Union Administration (NCUA), where he served for 26 years in several positions, the last of which was as Regional Director in Austin, Texas. John Rhea, current executive vice president at Robins Federal, will succeed Ruffin in the CEO position on Jan. 1, 2009. Rhea started his career at Robins Federal in 1996. He has 30 years' experience in the financial industry … * OSHKOSH, Wis. (8/12/08)--Douglas (Doug) Arent, former board chair of CitizensFirst CU, Oshkosh, Wis., died Aug. 6 at his residence. He was 75. An employee of Rockwell International until he retired in 1988, Arent served on the board Wisconsin Axle CU (now CitizensFirst CU) and on the CitizensFirst board from 1973 to 2000. He was board chair from 1978 to 1993. Arent served on the board of directors of the Wisconsin Credit Union League from 1984 to 1999 and was a member of numerous committees (The League Aug. 11). He is survived by his wife Carol, a daughter, two grandchildren, two sisters, a brother, two stepchildren and four stepgrandchildren. Funeral services were Monday. (The Northwestern.com Aug. 10) …

CUs help San Diego employees receive pay after error

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SAN DIEGO (8/12/08)--San Diego Metropolitan CU received an overwhelming response from other credit unions who helped make sure San Diego City employees were paid after an employee error at the credit union slowed the posting of payroll deposits Friday. All employees were paid by Monday, Adele Sandberg, San Diego Metropolitan CU senior vice president of finance, told News Now. Many of the deposits were posted on Saturday, she added. The error occurred when the City of San Diego’s payroll automated clearinghouse (ACH) origination file didn’t settle Friday because it had not been cleared for processing by the credit union’s ACH department. The credit union re-sent the file Friday around 8 a.m. and contacted each of the 171 financial institutions requesting that each institution perform an additional ACH receive session to process the payroll transactions, according to a letter San Diego Metropolitan CU President/CEO Joseph Schroeder sent to the city. San Diego Metropolitan CU told the financial institutions that their funds would be guaranteed once the deposits were posted. “Credit unions help credit unions,” Sandberg said of the outcome. San Diego Metropolitan CU’s members were not affected by the error because their funds are held at the credit union, Sandberg said. San Diego Metropolitan CU has disbursed pay to city employees for 15 years.

Educators CU creates at-home savings challenge

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RACINE, Wis. (8/12/08)--Educators CU members can compete to win $10,000 in the credit union’s first-annual savings challenge. More than 90 have applied for the challenge, which is part of the Filene i3 Savings Revolution. Six families will compete for the prize while improving their financial well-being. Winners will be announced Thursday. Participating families will be paired with financial counselors for nine months in attempts to reduce the families’ debt by 3%, increase their savings by 5%, improve their credit history and become more financially savvy, according to the Wisconsin Credit Union League (The League Aug. 11). Members also can play the challenge from home. Educators CU is the first credit union to create a home version of the challenge. Members must pick a goal to achieve over the next seven to nine months, obtain a credit report, open and maintain a VIP Savings account, keep a spending plan, and attend three Educators financial education workshops or three online courses from Balance, a financial fitness program. Online participants will be entered into a drawing to win $1,000; $750; $500; or $250. They must sign up by Oct. 31. Educators is one of 10 credit unions to offer the Savings Challenge.

HandFF Radio spotlighted in radio trade publication

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WASHINGTON (8/12/08)--H&FF Radio, the Credit Union National Association's (CUNA) consumer finance issues show broadcast by the Radio America Network, was spotlighted recently in a radio industry trade publication. Radio and Records magazine featured Home & Family Finance's show, which airs Sundays at 3 p.m. EDT. The one-hour program is devoted to consumer finance issues and is brought to the public by America's credit unions and their 90 million members, and presented by CO-OP Network. "Being spotlighted in this prominent radio industry trade publication indicates our show is gaining notice, and the added exposure should help bring the program to the attention of more local stations around the country," said Mark Wolff, senior vice president of communications at CUNA. The R&R article reports there are a number of "well-produced, credible syndicated weekend shows to help listeners navigate today's economic challenges." It cites two programs, including "Home & Family Finance." A sidebar and photo feature Paul Berry, host of the program, saying that the orogram isn't about sophisticated investments or making a killing in the market. "We bring it down to the kitchen table level," he told the publication. Home & Family Finance is a resource center for personal finance information from CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; Visa; and Western Corporate FCU and its member credit unions. Each Friday, News Now features the next Sunday's H&FF Radio lineup in its "Consumer News" section.

Wisconsin TV station features shared branches

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MADISON, Wis. (8/12/08)--Just after NBC's broadcast of Friday's opening ceremonies at the Olympics in Beijing, a local newscast on the NBC affiliate in Madison, Wis., featured a story on credit unions and shared branching. John Stofflet and Leigh Mills, anchors on "15 News at Ten," noted that credit unions have a lot of benefits, including lower interest rates on loans and higher rates on savings. "So why don't more people use them?" they asked. The answer was convenience. "They don't have as many branches" as competitors, said Stofflet, who added, "Or do they?" They interviewed Sandra Smith, identified as a "credit union manager," who explained that many credit unions are joining shared-branch networks. "Credit unions are banding together to offer services in networks, like a credit union cooperative," said Stofflet. The broadcast also noted that some networks have kiosks in 7-Eleven stores. It displayed a list of CU Service Centers. The newscast also noted viewers could check out credit unions on the station's website. To view the broadcast, use the link.

Georgia foundation raises 34K for Iowa disaster relief

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DULUTH, Ga. (8/12/08)--The Georgia Credit Union Foundation rallied the support of the state’s credit unions to raise more than $34,000 to assist credit unions affected by the floods in Iowa this spring. Georgia credit unions contributed more than $29,000. The remaining $5,000 was donated by the foundation. The Georgia group donated the funds to the Iowa Credit Union Foundation, which will disburse 100% of the money to credit unions and members throughout Iowa who are struggling to get back on their feet following the floods. Excessive rains caused flooding in Iowa during May and June. Total damages are estimated to be in the tens of billions of dollars. The floods left 13 dead with another 65,000 injured, displaced or otherwise affected. Georgia credit union’ contribution is in the top five in the nation from the credit union movement, said the Iowa Credit Union League. The funds will help fulfill more than 2,100 requests to the Iowa league for assistance. About 800 have been met so far. “The floods in Iowa and other parts of the Midwest have unfortunately touched the lives of many of our friends and colleagues in the credit union movement,” said Dan Denning, vice president credit union development, Georgia Credit Union Affiliates, adding, “We can always count on our credit unions to step up and offer financial support in times of need.” Patrick Jury, CEO of the Iowa league, said: “I’ve heard the good folks of Georgia have made some serious contributions to Iowans impacted by the flooding. I doubt I could ever thank you enough for this generosity. We’ll make sure the money is put in the hands of the credit union members who need it most. “The folks we are working with have lost most everything. Please extend my thanks to others who have worked to help improve the lives of our members,” he added.

NCUF report CUs help car buyers avoid predatory loans

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WASHINGTON (8/12/08)--A new research report published by the National Credit Union Foundation (NCUF) details seven lessons from credit unions making sustainable used-auto loans to non-prime borrowers. Steer Clear: How Credit Unions Help Car Buyers Avoid Predatory Loans, demonstrates how credit unions can gain a sustainable share of the “non-prime” market, where eight million used cars are sold each year to borrowers with less than prime credit scores. The free 57-page report is available on NCUF’s website. The non-prime auto loan market is dominated by sub prime lenders (60% market share) and banks (30% market share) that charge much higher interest rates than credit unions. “Non-prime auto lending represents a substantial opportunity for credit unions to expand their markets, build net income, and attract new loyal members by giving them a substantially better deal,” said report author Bill Myers, field coach for NCUF’s REAL Solutions program and senior fellow at The Aspen Institute. The report’s seven lessons are based on experiences from more than 250 credit union lenders who responded to a survey commissioned by NCUF, and on Myers’ follow-up research on best practices from credit unions making “large and sustainable inroads” into non-prime auto lending. These credit unions have learned to:
* Recognize that non-prime used-auto lending is a financially viable line of business; * Reduce the underwriting gap by transferring traditional character lending techniques into an automated decision-making process; * Get in front of dealers by assisting members in finding cars; * Employ a “hard close” to cement bonds with members; * Insure borrowers against events out of the realm of their control; * Export risks by using available loan loss insurance products and guarantees; and * Keep in touch with borrowers by allocating resources to monitor and collect loans at the first sign of trouble.
NCUF will be taking model auto loan programs on the road. “We plan to bring the Steer Clear project to a national scale by adding non-prime auto lending options for credit unions to offer through REAL Solutions,” says NCUF Executive Director Steve Delfin. “By saving used-car buyers thousands of dollars on reliable transportation to work, we hope to create more discretionary income for these low-wealth borrowers. The Steer Clear project has the potential to achieve transformational philanthropy that will strengthen the financial security of households across America,” he added.”

Faith-based CUs affinity card donates to mission work

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NAMPA, Idaho (8/12/08)--Christian Community CU (CCCU) is offering its members a credit card that will donate $25 to mission work each time the card is approved. The credit union will donate additional funds each time the card is used for a purchase or pay a bill. The card is offered through a partnership the credit union has with Mission Aviation Fellowship (MAF). CCCU designed the card, MAF Platinum Rewards Visa, and created the donation program. “Every time there’s an MAF card account opened, and cardholders use it exclusively, the potential donations to MAF are tremendous,” CCCU President John Walling said. CCU also will double rewards points when the card is used to make donations to MAF and most churches. MAF’s missionary teams help 1,000 organizations worldwide and MAF pilots transport missionaries, medical personnel, medicines and relief supplies. The teams serve in 51 countries and pilots fly an average of 281 flights per day across Africa, Asia, Eurasia and Latin America. MAF also provides telecommunications services, such as satellite Internet access, in isolated areas. CCCU, of San Dimas, Calif., has more than $450 million in assets.

CUs fare well in Michigans primary says league

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NORTHVILLE TOWNSHIP, Mich. (8/12/08)--Credit union-friendly candidates fared well in the Michigan primary election Aug. 5, says the Michigan Credit Union League (MCUL). Of the 66 State House candidates supported by the league's political action committee, MCULAF, 64 will move on to the general election Nov. 4, said Patrick La Pine, MCUL executive vice president (Michigan Monitor Aug. 11). In the federal races, one of the closest and most widely publicized races was in the 13th House District, where U.S. Rep. Carolyn Cheeks Kilpatrick (D-Detroit), a co-sponsor of the Credit Union Regulatory Improvements Act (CURIA), narrowly defeated challenger and former State Rep. Mary Waters of Detroit. The vote was 39% for Kilpatrick and 36% for Waters. State Sen. Martha Scott (D-Highland Park) received 25%. MCULAF-supported State Rep. Ted Hammon (D-Burton) lost to Jim Slezak of Davidson, and Gibraltar Mayor Jim Beaubien (D-23), also endorsed by MCULAF, lost to Woodhaven Brownstown Board of Education member Deb Kennedy. La Pine told the Monitor that in the coming weeks, the league's governmental affairs staff will prepare a list of targeted races and ask credit unions to turn out grassroots support.

Minnesota CUs hit soldiers home fundraiser goal early

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ST. PAUL, Minn. (8/12/08)--Nearly a month ahead of the projected timeline, Minnesota's credit unions have surpassed their $150,000 fundraising goal for financing the building of a home for an injured Iraq war veteran.
Click to view larger image Minnesota credit unions reached their $150,000 fundraising goal to build a home for Sgt. Marcus Kuboy in Woodbury, Minn. Shown at the home are, from left: Pat Brekken, chair of Minnesota's Home For Our Troops fundraising committee; Kristi Mukomela, chair of the Minnesota Credit Union Foundation; and Peter Skaalen, executive vice president of Minnesota Credit Union Network. (Photo provided by the Minnesota Credit Union Network)
Working with Homes for Our Troops, credit unions in Minnesota and across the country raised funds to build two specially-adapted homes in St. Paul and Denver, the sites of the 2008 Republican and Democratic National Conventions, respectively. Roughly $300,000 is needed to finance the building of both homes. More than 40 Minnesota credit unions participated in fundraisers, with contributions from credit unions, their members, the Minnesota Credit Union Network (MnCUN), several state partners and organizations, and other credit unions nationwide. "The outpouring of support for this initiative is symbolic of the way our credit unions support the military and thank them for the defense of our country," said Mark D. Cummins, president/CEO of MnCUN. The home is for Sgt. Marcus Kuboy, a Minnesota native who served three years' active duty with the Minnesota National Guard. He sustained serious injuries in March 2007 when an improvised explosive device exploded under his vehicle. Homes for Our Troops, a non-profit organization, builds homes around the country for American soldiers who return home from war with serious injuries and disabilities. The organization works with local contractors to build the specially adapted homes at no cost to the soldiers or their families. Credit unions around the country are committed to giving something back to the communities that host the national conventions. Homes for Our Troops is working closely with the Credit Union National Association, the Republican National Convention and the Democratic National Convention Committee. The Republican National Convention will be Sept. 1-4 in St. Paul. The Democratic National Convention will take place in Denver Aug. 25-28. The deeding ceremonies for the homes will take place during the conventions.

Belize league Southwest Corporate sign partnership

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PLANO, Texas (8/12/08)--Southwest Corporate FCU and the Belize Credit Union League (BCUL) signed an international partnership agreement Friday as a part of the World Council of Credit Unions’ (WOCCU) International Partnerships program.
Click to view larger image The Belize Credit Union League and Southwest Corporate FCU Friday signed a partnership agreement through the World Council of Credit Unions’ (WOCCU) International Partnership Program. Participating in the signing of the document are (seated, from left): Belize Credit Union League (BCUL) Director Leopoldo Romero, CEO, Toledo Teachers CU; BCUL Executive Director Natalie Goff; Southwest Corporate President/CEO John Cassidy; and Victor Miguel Corro, WOCCU International Partnerships manager. (Photo provided by the World Council of Credit Unions)
Thirteen Belize credit union delegates, including five from Belize’s 13 member credit unions, traveled to Southwest Corporate in Plano, Texas, for the event. The Belize credit union contingent represented La Inmaculada CU, St. John’s CU, Holy Redeemer CU, Toledo Teacher’s CU and St. Martin’s CU. The hosts organized roundtable educational sessions with local credit union executives to discuss technology operations and security, business continuity, product development, and marketing and loan operations. Delegates also participated in a training session on board governance and took operational tours of local credit unions. Natalie Goff, BCUL executive director, visited the Texas Credit Union League’s Bob Gallman, senior vice president and chief operations officer, and Mike Delker, vice president of credit union relations. The visit concluded with the partnership-agreement signing. Corporate credit unions offer services that allow natural-person credit unions to better meet member needs, said Victor Miguel Corro, WOCCU International Partnerships manager. “We have been working with corporates very closely for a long time; they play a very important role in WOCCU’s development overseas,” he said. “We view Southwest Corporate as part of an evolved credit union system and hope that the knowledge that they share with us will help Belize in its mission to have stronger credit unions,” Goff said. “We also hope that Southwest Corporate can learn from the passion that Belize credit unionists have for their credit unions.”

Experts Triton purchase will affect ATM prices

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CHICAGO (8/11/08)--After Nautilus Hyosung buys ATM manufacturer Triton Systems, the two will have a majority of the off-premise ATM market and will control prices, according to a rival manufacturer. Nautilus Hyosung, a Korean ATM manufacturer, announced plans to buy Long Beach, Miss.-based Triton last month. Bill Dunn, vice president of sales for Tranax Technologies, told ATM and Debit News (Aug. 7) that he expects the combined company to control 85% of the off-premise market. Tranax is a competitor of the two companies, and was partnered with Nautilus until January 2007. Leon Majors, president, Phoenix ESP Payments Research Group Inc., said Nautilus and Triton would control 70% of the off-premise market. Independent sales organizations (ISOs), which buy ATMs and resell them, could handle a price increase of a few hundred dollars because ATM prices are already low, Majors told the newspaper. ATM manufacturers charge $2,500 to $3,000 per off-premise ATM. ISOs replace about 30,000 ATMs each year, ATM and Debit News said. Some experts say Nautilus will keep prices low to put the competition out of business. A lawsuit Triton recently filed against six of its former executives states that Nautilus offers ATMs at low prices to drive other manufacturers, such as Tranax and Triton, out of business. Nautilus cut its prices when it entered the U.S. market in 2006. Prices for ISOs dropped 30% to 40%. With the reduction in price, some companies, including Greenlink Technologies, cut their production of off-premise ATMs. Triton sold 10,454 ATMs in 2007, compared with 12,300 in 2006. Tranax shipped 9,000 units in 2007, compared with 14,500 the year before. Last year, Nautlius shipped 14,433 ATMs, according to ATM and Debit News.

N.J. league postpones election until after bylaw vote

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HIGHTSTOWN, N.J. (8/11/08)--The New Jersey Credit Union league has suspended new election rules until after its member credit unions vote on a bylaw amendment. The league board of directors created a governance task force last year to examine the league’s existing governance model and recommend changes to improve it. The result is a bylaw amendment which will be voted on in Atlantic City in September (The Weekly Exchange Aug. 8). Because the amendment would create historic potential changes in the league’s governance model, the board decided to suspend election rules. The bylaw amendment needs two-thirds approval of delegates present at the annual meeting to pass. The nomination process should begin around Oct. 1, the league said. If the amendment is approved, approved, the new election rules will be immediately implemented for the 2009 election cycle, with the newly elected board seated in January.

Georgia CUs donate 39000 for CMN

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DULUTH, Ga. (8/11/08)--Not-for-profit Georgia financial institutions raised more than $39,000 for Children’s Miracle Network (CMN) through the Credit Unions for Kids fundraising campaign, which included sales of a specially designed cookbook.
From left: Maureen Bock, director of card services, Georgia Credit Union Affiliates (GCUA); Terilyn Walton, program coordinator, Children’s Healthcare Atlanta; singer LeAnn Rimes; and Kristi Arrington, GCUA vice president of information development, presented a check to Children’s Miracle Network in Atlanta at a July concert, featuring Rimes. (Photo provided by Georgia Credit Union Affiliates)
Patients at Georgia’s children’s hospitals will benefit from this contribution by Georgia credit unions, said the Georgia Credit Union Affilaites. The cookbooks included recipes submitted by credit union staff and members throughout the six-month campaign. Thirty-three credit unions across Georgia collaborated to raise funds to help sick and injured children receive quality health care. One hundred percent of the funds have been donated to CMN. “Children’s Miracle Network is such a worthy charity; how could we not participate in this fundraising effort?” said Marshall Boutwell, CEO, Gwinnett FCU, Lawrenceville, Ga. Credit union representatives presented the check to Children’s Miracle Network at a LeAnn Rimes concert held at Turner Field in July. Rimes, a long time supporter of CMN, is the face of the 2008 Georgia credit union awareness campaign. She contributed a recipe for the cookbook as an extension of her support for the Children’s Miracle Network charity. Georgia credit unions have supported the efforts of CMN since 1999. There are six Children’s Hospitals in Georgia. “The support we have received from Georgia credit unions over the years has been phenomenal,” says Terilyn Walton, program coordinator at Children’s Healthcare Atlanta. “The monies contributed from this cookbook fundraiser will go a long way to help treat the thousands of children who come through our doors each day.”

Second-quarter debit transactions are up

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MADISON, Wis. (8/11/08)--MasterCard and Visa both reported that debit transactions were up in the second quarter, which is good news for credit unions, according to the Credit Union National Association (CUNA). U.S. Visa debit cardholders initiated 4.9 billion ATM and purchase transactions during the second quarter, up from 4.24 billion during the same period last year--a 15.6% increase (ATM & Debit News Aug. 7). While the U.S. economic downturn has reduced credit card purchases, spending in other areas, including debit, remains strong, Joseph W. Saunders, Visa chairman/CEO, told analysts during a recent conference call (ATM & Debit News). MasterCard transactions initiated in the U.S. totaled 1.9 billion in the second quarter, up from 1.6 billion for the same period last year--an 18.8% increase. CUNA’s Credit Union Service Profile for 2007 indicates that 94.5% of credit unions nationwide offer ATM cards. How does the increase in debit transactions affect credit unions? “This is good news for the credit union industry, assuming there is increasing debit usage and decreasing credit usage,” Doug Benzine, CUNA vice president of research and advice, told News Now. “If people are not adding to their debt load, that’s a good thing for credit union members. “In this economy, a lot of people are watching what is happening to the debt load overall,” he added. “If members are trying to stay within their means and put money away as the economy moves through tough times, that’s a good development.”

Thousands in Kentucky receive vish scam targeting CU

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FRANKFORT, Ky. (8/11/08)--A state official issued a warning in the aftermath of thousand of Kentuckians receiving scam recorded phone calls last week claiming their credit cards had been suspended and their accounts at Commonwealth CU frozen. Attorney General Jack Conway said the calls are a scam and that state investigators received many complaints. They confirmed with Commonwealth CU that the calls are a hoax intended to compromise members’ accounts. He told Kentucky citizens not to respond to the calls. (US Fed News Aug. 7). The bogus message asks people to call a toll-free number and enter their credit card numbers to reactivate their accounts. Members of the $717.4 million asset, Frankfort, Ky.-based credit union and nonmembers reported receiving the calls on their home, work and cell phones.

CU System briefs (08/08/2008)

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* WEST COVINA, Calif. (8/11/08)--Three armed men in ski masks and mittens robbed a branch of First City CU Los Angeles Thursday after wrestling with a security guard for his gun, according to news reports (Daily Bulletin.com and Pasadena Star-News Aug. 7). No one was injured. The take-over heist occurred at 9:30 a.m. while at least 10 people were in the credit union. The three men ordered everyone to the ground and told a staffer to open the vault. When she explained she couldn't open it, the men emptied the cash registers and fled in a gold car. The branch is located in a busy shopping center next to Wescom CU … * FARMERS BRANCH, Texas (8/11/08)--Two Texas credit union chapters--the Fort Worth Chapter and Big Spring Chapter--were named the 2007 Chapters of the Year by the Texas Credit Union League, the league announced Friday (LoneStar Leaguer Aug. 8). Three additional chapters--Texoma, Dallas and Austin--were also recognized as Star Award performers. Chapters are judged in seven categories: education, credit union fundraising, public relations, chapter involvement, community activism, participation in the credit union system and political advocacy … * NEW YORK (8/11/08)--Two community development credit unions are semifinalists in the 2008 Wachovia NEXT Awards for Opportunity Finance, which recognize excellence among community development financial institutions that responsibly serve low-income and low-wealth people and communities. ASI FCU, Harahan, La., and Lower East Side Peoples' FCU, New York, N.Y., are among the 10 semifinalists. They are not in direct competition with each other because they are in different categories, based on their lending activities. ASI FCU is competing in the more than $50 million in lending capital category while LESPFCU is in the $10 million-$50 million in lending capital. The announcement was made by the National Federation of Community Development Credit Unions … * LAHAINA, Hawaii (8/11/08)--Lahaina FCU members will vote on whether to merge the $6.6 million asset credit union with the $77 million asset, Kahului-based Valley Isle Community FCU. The final tally will be announced at a special membership meeting on Aug. 16, said Lahaina FCU (The Lahaina News Aug. 7). Its board already has voted in favor of the merger, and the credit union has obtained permission to proceed with the merger process from the National Credit Union Administration. Through the merger, Lahaina's members will receive higher dividend rates on savings, access to more than 30 shared branches and a network of 500 surcharge-free ATMs as well as more products and services, the two credit unions said … * DENVER (8/11/08)--The Credit Union Foundation of Colorado and Wyoming has awarded a $5,000 Brayman-Beach scholarship to Ericca McCutchen, a member of Bellco CU based in Greenwood Village. McCutchen is shown, at left, with Susan J. Brayman. The award, named for Brayman and Carroll D. Beach, is awarded to undergraduate credit union members pursuing a business degree. McCutchen will enter her sophomore year at Denver University as an International Business major with a Public Policy and Leadership minor. She plans to go to law school. (Photo provided by the Credit Union Foundation of Colorado and Wyoming) …

Membership Growth Series Generations FCU

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SAN ANTONIO (8/11/08)--Participation in the Volunteer Income Tax Assistance (VITA) program and increased emphasis on print and broadcast advertising over the past several years has led to solid membership growth for Generations CU, a $316 million asset, San Antonio-based credit union. The credit union realized 7% membership growth from 2006 to 2007. Anyone who lives, works, attends school, worships or volunteers in Bexar County, Texas, is eligible for membership. This is the seventh installment of the News Now Membership Growth series of interviews with fast-growing-membership credit unions. The series is part of an initiative of the Credit Union National Association (CUNA) Membership Growth Task Force. The series focuses on fast "organic" membership growth, not growth by merger or indirect loans. The task force, chaired by Dick Ensweiler, president of the Texas Credit Union League, was convened at the request of CUNA's Immediate Past Board Chair Allan Kemp McMorris. Its purpose is to investigate, report on, and encourage credit unions to embrace opportunities, techniques and processes that will increase credit unions' membership retention and growth. “One of the primary growth engines for our credit union has been the VITA program,” Eve Hernandez, Generations vice president of marketing, told News Now. “Not only has it brought in new members, but it also has been part of the commitment from our board to serve the underserved. So it fulfills our growth strategy and serves low- and moderate-income members.” In 2004, Generations significantly stepped up print and broadcast advertising efforts. In 2005, the credit union began to see a return on the investment--not only from advertising but also from the VITA program, Hernandez said. Earlier this year, the credit union changed its name from San Antonio City Employees FCU to Generations FCU. “Those three things [VITA program, advertising, name change] improved recognition, and awareness of our credit union helped our membership growth,” Hernandez explained. Generations specifically targets the 18-34 age group, Hispanics, immigrants and African Americans. Hispanics are a majority population in San Antonio, Hernandez noted. While Generations sees that other financial institutions target 18-34 year olds because they are less educated on financial products and services, the credit union targets this group to provide products that are more easily understandable. Two such products are: the Alternative Refund Anticipation Loan sponsored by the Internal Revenue Service (IRS) through the VITA program, and the Second Chance Checking Program. With the Alternative Refund Anticipation Loan, the credit funds a 0% annual percentage loan once it gets IRS confirmation of the member’s tax refund. The Second Chance Checking Program is geared toward members who have had past financial difficulties. There are several parameters affixed to the program, Hernandez said, including: Participants are limited to 10-15 checks per member, they can incur no non-sufficient funds fees, they must attend financial literacy classes and they must pay off any balances that they owe merchants. “Once members are successful with the second chance program, they can migrate to a traditional checking program,” Hernandez explained. Generations targets 18-34 year olds because it is the credit union’s mission, Hernandez said. “We can make a real difference for them,” she added. “We see a lot of young families and we see a lot of individuals using non-traditional financial services, so their income is chipped away by high-interest loans, money orders and check-cashing places. “By providing traditional financial services to help them, we’re turning that relationship into a more long-term and beneficial one. A lot of the parents of these members always used cash, so they don’t understand direct deposit, and different financial products and services offered,” she said. An example of a product that helps this younger group is an alternative to payday loans that charges an 18% interest rate, and is a more traditional, humane loan, Hernandez said. Generations became a community credit union in 2006, serving residents of Bexar County after starting out as a credit union for municipal employees in 1940. Hernandez explained the reasoning behind the charter change. “We found that the credit union was very successful having its roots as a good community service for city employees,” Hernandez said. “Our board of directors is really dedicated to providing public service--bringing down interest rates on loans, as well as debt consolidation and interest-rate relief. We looked for ways to extend our positive influence on the community.” Between 2001 and 2006, before the switch to a community charter, the credit union was part of a National Credit Union Administration program called Investment Area. Under the guidelines of the program, the credit union could serve census tracts--based on income level--within three-and-a-half miles of each credit union branch for members who earned 80% or less of the median income in the area. “That program was so confusing and cumbersome to manage,” Hernandez said. “That’s one of reasons we switched to community charter, so we could more easily serve the underserved in our area.” For credit unions, there always has to be a balance between getting new members and deepening that relationship with new members, Hernandez said. “While membership growth is good, we want to build relationships with members early on and retain them for as long as possible,” Hernandez explained. “To serve the underserved, you need a board commitment to do that. You have to take some risk on the loan side. My hat is off to our board for doing that. That comes from our VITA and Second Chance Checking programs.” Anyone who wants to contact the CUNA Membership Growth Task Force can e-mail the account established for this purpose at cunamgtf@cuna.coop.

CU in Texas tells how it weathered hurricane

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HARLINGEN, Texas (8/11/08)--When Hurricane Dolly hit July 23, residents and businesses in Harlingen and Pharr, Texas, were left without power. But Security Service FCU, Harlingen, was open and ready for business the day after the storm hit.
Click to view larger image Security Service FCU, Harlingen, Texas, opened the next day to serve members after Hurricane Dolly hit the area. From left are its Disaster Response Team employees: Manager James Ayala, David Marin, Julian Alcorta and Feliz Cavazos. (Photo provided by Security Service FCU)
The credit union relied on a generator installed at the credit union’s service center. Manager James Ayala ran the credit union by himself the first day after the hurricane, and was able to get additional staff at the Harlingen and Pharr branches soon after. “We were able to get our computer systems booted up and connected to the corporate system thanks to the generator, but we had no air conditioning and we were pretty much in the dark because the windows were still boarded up,” he said. Ayala said it was important to open the locations because he knew members were going to need access to cash to buy gas and groceries. By the weekend, the credit union managed to get everything back to normal, including the air conditioning. “I’m really glad we had the capability to operate so that we could help our members during this difficult time,” he said. Security Service also put together a disaster relief program to help members affected by the storms. The credit union is offering emergency relief loans up to $2,500 for new and existing members, with a 30-day skip-payment option without fees. After one week, Security Service issued 126 loans and granted 36 skip-payment requests. Security Service has more than $4.6 billion in assets.

OpSS Council conference focuses on leadership

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MADISON, Wis. (8/11/08)--Credit union professionals will learn what to focus on to build stronger, more successful industry leaders with a general session presentation at the 11th annual CUNA Operations, Sales and Service (OpSS) Council Conference, Sept. 17-20 in Williamsburg, Va. In his presentation, Mark Elliott, president, Onboarding Services, will discuss “The Leadership That Really Determines Success.” Tapping 25 years of experience in executive recruitment and coaching, Elliott will share what makes great leaders. He also will debunk several myths that often confuse the leadership development process and offer a practical approach for leadership development. During the “You Have the Power” general session presentation, consultant Carol Schillios will focus on how to take charge and make choices to achieve goals. Motivational speaker Steve Sobel will offer the keys to building enduring relationships and enjoying future opportunities in his “Leadership and Life Lessons” presentation. The conference also includes a number of other sessions covering: growth strategies, hot topic compliance issues, generating deposits, branch delivery efficiency, sales culture development, call centers, social engineering and fraud, and more. For more information, use the link.

How will auto leasing cutbacks affect CUs

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MADISON, Wis. (8/8/08)--Credit unions should step up marketing their auto loan programs because several factors are working in their favor. Cutbanks in the auto leasing market, home equity woes and big banks pulling back on lending are opening up more opportunities for credit unions. Last month, Chrysler and Wells Fargo announced that they are pulling out of the leasing market. U.S. Bank announced that it would no longer accept leases for used cars. Chrysler and Wells Fargo are leaving the market because securitization is dying, and used- car values are dropping, said Greg Gandolfo, Credit Union Leasing of America (CULA) vice president of business development, CULA is a provider of new- and used- auto leasing for credit unions. With big lenders pulling out of the market, auto dealers are looking to smaller lenders for leasing. Leasing volume at CULA is up, Gandolfo told News Now. CULA doesn’t have a heavy portfolio concentration of any make or model, according to Gandolfo. The company’s highest concentration is with Honda, Toyota and Nissan--though each one equals less than 5% of its total portfolio. “With this kind of diversification, it is much easier for our remarketing team to sell off our lease vehicles in 15- to 25- vehicle packages directly to auto dealerships for their used-vehicle inventory, instead of sending them to auction,” he said. CU Direct Corp. (CUDL), which does indirect auto lending for credit unions, saw a spike in the number of auto loans it made last month--55,000--“the best month of the year,” Tony Boutelle, CUDL president/CEO, told News Now. The top vehicle funded by CUDL from January 2008 to June 2008 was the Nissan Altima, followed by the Chevrolet Silverado, according to CUDL data. Besides leasing, home equity woes and banks pulling back on lending are increasing opportunities for credit unions to make auto loans, Boutelle said. “It’s an opportunity [for credit unions] to let members and dealers know they’re there to make loans,” Boutelle said. “Members need options.” The 72-month and 84-month auto loan programs were created to compete with leases, and now is the time to market them, he added. About 60% of CUDL’s loans are for new credit union members, while 40% are for existing members. As credit unions focus more on existing members, those numbers may shift, Boutelle said. In general, auto leasing at credit unions is minimal--about 179 credit unions in the U.S. do auto leasing, Boutelle said, citing National Credit Union Administration data. “Credit union leases represented less than 1% of all credit union auto originations in the first six months of 2008,” Bill Meyers, CUDL communications coordinator, told News Now. CUDL has looked into auto leasing for the past 10-12 years, holding study groups on the subject, but hasn’t “gone down that path,” Boutelle said. The corporation may choose to get into leasing if its credit unions want it, but will need to figure out how to mitigate the risk involved. Leasing isn’t for everyone, Michael Foti, vice president of lending, Prime Financial CU, Cudahy, Wis., told News Now. “It depends on the person’s situation,” he said. Leasing can help make pricier cars, such as BMWs, more attainable. If consumers don’t drive over the specified mileage, they can return the car at the end of the lease and receive a new one, he said. Leasing isn’t a good option for drivers who frequently travel long distances. Prime Financial leases through Donald Driver Motors, formerly known as CU Fleet Auto. The credit union receives about 15 to 25 new leases each month.

Two phish sites spoofing CSS no longer in play

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MADISON, Wis. (8/8/08)--The Credit Union National Association (CUNA) has shut down two websites that purported to offer a new service through CUNA Strategic Services. The sites were promoted in a phishing e-mail that aimed to gather information for possible identity theft. Both sites were closed Thursday morning, said Kevin Knope, director of Web Services. More than 100 recipients received the e-mail phishing message and the response rate was high, he said. CUNA has issued a fraud alert. "This phish has a new twist in that it's the first phish to use the look of CUNA Strategic Services' website," Knope told News Now. The phishing e-mail targeted AOL users and came from domestic internet service providers in Texas and Georgia, said Knope. The phish noted that "Credit Union National Association is one of the largest credit union groups in America. In partnership with state credit union leagues, CUNA provides many services to credit unions, including representation, information, public relations, continuing professional education, and business development." It claimed the newest service added at CUNA on Aug. 1 is "Your Credit Union Rewards You," for credit union members. "Daily 10 random credit union account holders are e-mailed to take the 300$ reward. Completing the application forms on our website takes only 5 minutes," the fake site says. Neither CUNA nor CUNA Strategic Services offers such a program. CUNA warned recipients not to respond to the sites. CUNA does not maintain any type of customer/member financial information. No financial institution would request personal identification information over the phone via an e-mail solicitation. "If you did respond to this e-mail, you should contact your financial institution directly using the phone number provided by that institution," said CUNA.

CU acts to mitigate accidental posting of data online

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ORLANDO, Fla. (8/8/08)--A Florida credit union is taking steps to mitigate the effect on members after their personal information was accidentally posted online. Information from an internal auditing document at Central Florida Healthcare FCU, a $57.5 million asset, Orlando, Fla.-based credit union, showed up online when some members conducted Google searches on their names. In all, a maximum of 187 accounts were exposed on the Web, but preliminary indications show that only two or three were looked at, Trudy Prince, Central Florida Healthcare CEO, told News Now. “Contrary to some media accounts, our entire database is not at risk; it is secure,” Prince emphasized. The credit union has hired forensic experts trained by the FBI to determine the number of hits on the compromised data and where the hits came from. The investigation is ongoing, and there is no data available yet, but it looks like there is a limited amount of activity, Prince said. “We have another team of specialists checking to see if human error or a glitch with the computer program caused the problem,” Prince added. “We’re making sure it doesn’t happen again.” The problem began on July 10 when a glitch occurred during a switch between Web-hosting companies for the credit union’s website. In the process of setting up passwords, an internal audit report used to review closed accounts, delinquencies and charge-offs was exposed on the Web, Prince explained. Last month, a credit union member entered her name into Google, and when it came up, she clicked on a link with information from the credit union. The member and her spouse then called an attorney on July 28. When the attorney called the credit union on July 30 to inform it of the situation, the credit union immediately shut down the site. “This couple is filing a lawsuit against us, and their attorney is looking to make it a class-action suit,” Prince said. The credit union talked to 400-500 members Thursday about the situation, and all are comfortable that their accounts are secure, Prince said. “It’s been time-consuming for us, but worth the effort,” she added. “All our members have been sent letters about the incident. We’ve given them information on how to get a free credit report, and we’ve provided a toll-free number for them to call and get free ID theft protection, which we are offering for up to a year.” Most members have been extremely positive and supportive of the efforts the credit union has undertaken to deal with the situation, Prince said. “Eight people on our credit union staff, including myself, have talked to members,” Prince said. “I talked to about 50 people today and all were positive. I also took the opportunity to talk to them about other credit union issues, and made the conversations educational and informative as well.”

ID theft ring leader--a fed informant--could get life

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NEW YORK (8/8/08)--A key figure in data breach theft indictments earlier this week was an informant working with the U.S. Secret Service while he allegedly led an international ring that stole millions of dollars through data breaches against nine retailers, including TJX Cos. If convicted of all charges, Albert "Segvec" Gonzalez of Miami faces a life term in prison, said U.S. Attorney General Michael B. Mukasey at a news conference in Boston (OrlandoSentinel.com Aug. 6 and Miami Herald Aug. 6). Gonzalez is in custody in New York. He is accused of masterminding the series of data breaches that cost credit unions and other card issuers and their insurance companies millions of dollars. The indictment said as an informant for the Secret Service, Gonzalez "used sensitive law enforcement information…to warn off conspirators." The series of breaches took place over four years, beginning in 2004 with the restaurant chain Boston Market. The largest breach, announced in January of 2007 by TJX Cos., compromised at least 45 million cards. Some estimates doubled that figure. Two other Miami men, Christopher Scott and Damon Patrick Toey, were charged with "wardriving," or driving around commercial areas and using wireless networks to hack into computers. Other indictments were against Maksym "Maksik" Yastremskiy of Ukraine; Aleksandr "Jonny Hell" Suvorov of Estonia; Hung-Ming Chiu and Zhi Zhi Wang, both of China; Sergey Pavlovich of Belarus; and Dzmitry Burak and Sergey Storchak of Ukraine. A final indictment is known only by an online moniker, "Delpiero." Yastremiskiy allegedly received more than $11 million from operating the ring. The arrests were the result of a three-year undercover investigation.

Sound decisions helped CU stay the course

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PEMBROKE PINES, Fla. (8/8/08)--With financial turmoil taking place in South Florida and across the U.S., Power Financial CU is weathering the storm by following a conservative business model that is exceptionally well capitalized, says CEO Allan M. Prindle. Power Financial is a $480 million asset, Pembroke Pines, Fla.-based credit union with 10 branches and more than 55,000 members. Recent news has chronicled financial troubles for Fannie Mae, Freddie Mac, IndyMac and Wachovia Corp. Several other large U.S. banks posted weak second-quarter results, and losses have soared from mortgages and other debt. “Nobody can deny there are challenges facing the financial markets, and as a financial institution, we are highly correlated to those markets,” Prindle said. “Our members are our primary focus, and we manage the credit union accordingly. We are not immune from economic downturns, but we ‘stayed the course’ for the first half of the year while many others made decisions which now prove to be decisions that were not sound nor prudent,” he said. “Power Financial CU will continue on that course because we think our members deserve financial peace of mind in addition to outstanding service, competitive products and unsurpassed convenience,” he added. Power Financial CU holds no securities with underlying sub-prime backed securities, no commercial mortgage-backed securities or collateralized debt obligations, Prindle said. “This is the culprit for the majority of the stress that this sector of the financial markets is under, and we are not impacted by those announcements, thanks to our conservative investment strategies,” added Prindle. “In fact, we have maintained a more than ample level of liquidity, and as of June 30, had nearly 40% of total assets in available funds that can be accessed immediately. We are certain that this level is far superior to our peers.” In terms of its loan portfolio, Power Financial CU not only has no subprime mortgages in the collection, but also avoided Option Adjustable Rate Mortgage products, no Income Verification products, Negative Amortization products and others that make up the current mortgage financing debacle, Prindle said. “For unexpected losses, we have always relied on our strong capital, which as of June 30, 2008, is exceptionally well-capitalized with a superior capital ratio in excess of 13%,” noted Prindle. “This is what gives us the ability to deal with an economic slowdown, and for our members, [provide] the comfort in our financial soundness. After all, for the last 50-plus years, we have received outstanding satisfaction ratings from our members.”

Federation to open Frisco field office

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NEW YORK (8/8/08)--The National Federation of Community Development Credit Unions will open a regional office in San Francisco. Rafael O. Morales, public affairs officer for the federation, will relocate from New York City to open the new office. He will to continue to focus on federation communications as a primary duty. However, he also will provide leadership and support to regional initiatives and events, including: working with the California Low Income Credit Union Network; acting as a liaison to the California and Nevada Credit Union Leagues, the Federal Reserve Bank of San Francisco, state and local government agencies and officials, and working on other special projects as required. “We are extremely pleased to be able to have a physical presence in California where a larger percentage of the federation’s western region members are located,” said Cliff Rosenthal, federation president/CEO. “Rafael has been with federation for five years and is very familiar with the organization and our work. I’m confident that he will be able to hit the ground running to promote new partnerships and initiatives that leverage the capacity of community development credit unions, credit unions in general and other institutions across the [San Francisco] area and statewide,” he continued. The federation’s San Francisco office will be operational in early September. Specific information will be made available on the federation’s website.

CEOs op-ed CUs an option for consumers

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WICHITA, Kan. (8/8/08)--Because they can make a difference in peoples’ lives, credit unions are an important financial alternative for about 90 million Americans, said a credit union CEO in a Thursday op-ed piece in The Wichita Eagle. Jim Holt, president/CEO of Mid-American CU, a $121.5 million asset, Wichita, Kan.-based credit union, said credit unions save members about $10.9 billion per year due to lower fees and better rates, according to data provided by the Credit Union National Association. “Perhaps the best reason people belong to credit unions is because we exist to help people--not to make a profit,” Holt said in the op-ed. “A voluntary and member-elected board of directors from the membership governs each credit union. This keeps us focused on meeting the financial needs and satisfaction of our members.” Members of credit unions share a common bond--usually through an employer group--but also through a church or community, Holt said. Credit unions have become important partners in facilitating the financial well-being of members by offering free seminars on topics such as planning for retirement or purchasing a new home, Holt added. Having a credit union also benefits consumers in other ways, Holt added. “Studies have shown that when there is a credit union in the community, savings rates tend to be higher, and loan rates and fees tend to be lower at other financial institutions,” he explained.

NCUF to present two Wegner Awards for Individual Achievement

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WASHINGTON (8/8/08)--For only the third time in 21 years, the National Credit Union Foundation (NCUF) Awards & Recognition Committee has seen fit to name two winners in a single category for the Herb Wegner Memorial Awards. Winners of the 21st Annual Herb Wegner Memorial Awards for Individual Achievement will be:
* Rita Haynes, manager and CEO of Faith Community United CU in Cleveland, Ohio; and * Tom Sargent, president/CEO of First Tech CU in Beaverton, Ore.
“Rita and Tom’s achievements are both extraordinary and unique,” said NCUF Awards & Recognition Committee Chairman and Wegner Awards Dinner Emcee Bob Schumacher, CEO of MountainCrest CU, Arlington, Wash. “Rita’s achievements in payday loan alternatives, second chance auto loans and foreclosure preventions are shining examples of how credit unions can change lives by providing affordable financial services in low-income communities,” Schumacher said. “And her achievements are especially amazing coming from a credit union with only $10 million in assets and four full-time staff.” “Tom’s achievements in fundraising for ‘Credit Unions for Kids’ transcend even the largest individual credit unions,” Schumacher said. “Inspired by a personal commitment, Tom has achieved what only the most effective national credit union leaders have done throughout our history--uniting credit unions across the country around a single cause. Tom has motivated credit unions of all sizes to do life-changing charity work in communities supporting Children’s Hospitals,” he added. Haynes and Sargent will be honored at the 21st Annual Wegner Awards Dinner presented by NCUF on Feb. 23 at the Grand Hyatt Washington on the opening night of the Credit Union National Association’s (CUNA's) 2009 Governmental Affairs Conference. Online registration will be available this fall. The Wegner Awards are named in honor of the late CUNA CEO Herb Wegner For more on innovations by Haynes and Sargent, use the Resource Link.

Nearly two-thirds of Maine CUs offer fuel assistance loans

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WESTBROOK, Maine (8/8/08)--Nearly two-thirds of Maine's credit unions are offering fuel assistance loans with low rates, says the Maine Credit Union League. Some of the loans have rates as low as 0%, and the average loan rate is 4.97%, the league told Bangor Daily News (Aug. 6). Many credit unions are offering special weatherization loans to help members make their homes more energy-efficient or to help them buy alternative energy sources, such as pellet stoves, said the league. "Hopefully, these special rates and other initiatives to help with energy costs being offered by Maine credit unions will provide consumers some relief next winter," said John Murphy, league president. University of Maine Prof. Habib Dagher told the U.S. Senate's Homeland Security Committee recently that "Maine will likely be the first state to experience a heating state of emergency" (The Ellsworth American Aug. 7). Eight of every 10 families in the state rely on heating oil to fuel their furnaces. With next winter's heating oil costs predicted to be at least $5 a gallon, the average Maine family will pay $5,000 to heat their home next winter. Ten years ago Maine families spent less than 5% of their household budgets on energy; today energy accounts for almost 25% of household budgets.

CU System briefs (08/07/2008)

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* NEW YORK (8/8/08)--Credit unions interested in cloak-and-dagger stories need go no further than a data breach investigation conducted after someone hacked into Citigroup ATMs at 7-Eleven stores and stole millions of dollars earlier this year. Wired.com (June 24) has a riveting account of how a single high-value breach can reverberate through the international carding community of bank-card fraudsters. It describes stakeouts, attempted muggings and chases, undercover work, and a lucky break at a routine traffic stop. Six months after personal identification numbers (PINs) and account numbers were stolen from Citi ATMs, customers were still discovering unauthorized withdrawals. To read the story, use the link … * DENVER, Colo. (8/8/08)--The Credit Union Foundation of Colorado and Wyoming partnered with the Denver Chapter of Credit Unions to host its 20th annual golf tournament and fundraiser at The Ranch Country Club, Westminster, Colo., on July 22. Participating were 96 golfers, who competed on the 18-hole, 6,600-yard course designed by Dick Phelps. From left are: Greg Hill, senior vice president, Premier Members FCU; Mark Lau, president/CEO, Denver Fire Department FCU; John Dill, president/CEO of the Credit Union Associations of Colorado and Wyoming; and Tom Graham, president/CEO, SunCorp. (Photo provided by the Credit Union Associations of Colorado and Wyoming) … * HARRISBURG, Pa. (8/8/08)--PA HealthCare CU's Crazy 8's promo kicks off today--08/08/08--at 08:08:08 a.m. (Life is a Highway Aug. 7). For eight hours, eight minutes and eight seconds, members can apply for a $1,000 six-month certificate of deposit (CD) at 8% annual percentage yield (APY). Also, for eight days, the Sewickley, Pa.-based credit union is offering a three-month CD at 2.88% APY and a 12-month CD at 3.88% APY. On the lending side, for the next 88 days, members can apply for a five-year auto loan for 2008 or new model years at 3.88% annual percentage rate (APR) and a five-year home equity loan, also at 3.88% APR. CEO Paul Fero told the Pennsylvania Credit Union Association that more than 10% of the credit union's membership pre-ordered the 8% CD. The $22 million asset credit union also experienced a 1% increase in new members within a month of the announcement of the promo … * GURNEE, Ill. (8/8/08)--Community Trust CU recently gave away a $750 gas card in a member appreciation drawing to celebrate the credit union's 75th anniversary. Member James Jorgenson won the drawing. More than 5,000 entries were received by the credit union. "For the first time in a long time, I'm going to enjoy filling up at the pump," Jorgenson said. "Like everyone, I'm still going to try and keep my driving to a minimum." The credit union also has encouraged members to save fuel by logging onto the credit union's website to sign up for its eBranch, which allows members to conduct transactions online. "There are lots of ways we can all save gas money and reduce our impact on the environment, like conducting financial transactions via a secure online portal or banking by phone," said Michelle Fairbanks, Community Trust community relations coordinator. "Of course we still love to see our members in person, but we want to provide as many convenient service options as possible." From left are Fairbanks, Jorgenson and Community Trust President/CEO Madeline Lipka. (Photo provided by Community Trust CU) ... * HARRISBURG, Pa. (8/8/08)--The Pennsylvania Credit Union Association announced that this week's Pennsylvania Newsmakers programming schedule has been adjusted because of the Summer Olympics (Life is a Highway Aug. 7). The segment will run on: WGAL Channel 8 Saturday at 7 a.m. and Sunday at 1:30 a.m.; WBPH, Sunday, 8:30 p.m., WKBS 47, Aug. 16, 11:30 a.m.; and CATV Channel 8, Aug. 12, 7 p.m. and Aug. 13, 1 p.m. ...

Despite arrests dont let guard down on ID thefts

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MADISON, Wis. (8/7/08)--The indictments of 11 people in the largest data breaches in history may be comforting news for consumers, but credit unions must stay on guard to protect their members' data, says CUNA Mutual Group. "The efforts of law enforcement to bring the perpetrators of these data thefts to justice are commendable," said Jeff Post, president/CEO of CUNA Mutual Group, commenting on the Justice Department's announcement Tuesday that 11 people had been indicted on fraud charges related to thefts at nine retailers, including TJX Cos. and BJ's Wholesale Club. "These breaches remain a crime of opportunity," Post added. "Data breaches such as TJX are enabled by retailers who continue to store personal account information against card association rules and with disregard for the safety of these very organizations' customer' credit card information. "If merchants would simply follow the card association rules, this supply of plastic card data would not be available to steal," Post said. Continued vigilance is needed, according to Chuck Cashman, director, credit union protection product management at CUNA Mutual. "This is just the tip of the iceberg. For every arrest of this magnitude, there are multiple other professional and amateur thieves trying to exploit the system," Cashman said. "If anything, more vigilance is needed since high profile cases inspire copy-cat crimes and challenge the fraud community to further 'beat the system.'" He noted that the total figure of losses for all these breaches isn't known "but obviously it is in the multi-millions." The data breaches hurt credit unions, which were among those footing the bill for costs related to reissuing compromised cards, helping members fix problems, and monitoring fraudulent transactions. CUNA Mutual Group had sued BJ's Wholesale Club to recoup credit unions' claims for losses in that breach. On June 12, the company learned the Massachusetts State Court in Boston granted BJ's and its bank, Fifth Third Bank, their motions for summary judgment in the lawsuit. "Essentially, we lost the first round at the trial court level," said Phil Tschudy, media relations manager at CUNA Mutual. "We respectfully disagree with the Trial Court's decision and have since appealed this decision. "CUNA Mutual will continue its efforts on behalf of the credit union system to hold merchants accountable and establish a right to fully recover for the losses caused by the failure of merchants and their acquirers to follow the rules prohibiting the storage and retention of credit and debit card data," Tschudy said. CUNA Mutual views as a "positive development" an appellate court's recent overturning a trial court decision in favor of Pennsylvania State Employees CU in a data breach case. The company "will also continue to support various league efforts to adopt legislation in their states that would make it clear that merchants are responsible for losses resulting from their failure to follow the rules," Tschudy said. TJX Cos., whose massive computer data breach affected an estimated 45 million to 94 million credit and debit card numbers, said banks and credit card agencies must work closely with retailers to protect customer privacy. "The sheer number of retailers attacked by these cyber-criminals demonstrates the much broader challenges in protecting sensitive customer data from this increasing threat," said TJX spokeswoman Sherry Lang (Orlando Sentinel Aug. 6). The international ring allegedly gained millions of dollars from ATMs using the stolen card numbers and laundered the funds in banks in Eastern Europe (News Now Aug. 6).

New trend uses admin software to hijack PCs

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NEW YORK (8/7/08)--Credit unions looking to protect themselves from malicious software should take note of a recent incident involving a Russian gang that used computer network administrative software to hack into thousands of computers. Joe Stewart, director of malware research at SecureWorks, a computer security firm in Atlanta, identified the gang, which used malicious software to control as many as 100,000 computers from a computer center in Wisconsin (The New York Times Aug. 6). To prevent hacking, credit unions should educate their staff against installing unknown software programs, Jim Stickley, chief technology officer, TraceSecurity, told News Now. TraceSecurity is a CUNA Strategic Services provider that provides security compliance management services. Hackers often coerce users to install malware without their knowledge. Stickley used the example of an e-mail greeting card. Hackers often send e-mails under the guise of a greeting card company, asking users to click on a link to see the message. When the recipients click on the link, they receive an error message telling them they don’t have the latest software installed to view the card. The message also invites them to download software so that they can view the card. Most people opt to install the suggested software and don’t realize that it is malicious. Once the malware has been installed, hackers can monitor users’ personal information. “When you install something on a computer, you have to be so careful,” Stickley said. Credit unions can block e-mail attachments with executable files and can lock down desktop computers to prevent them from installing programs. Credit unions also should monitor computer traffic. “If you’re seeing a lot of traffic from one computer, be very concerned,” Stickley said. Monitoring traffic may be easier for larger credit unions that have a large information technology (IT) staff. Smaller credit unions, who may have only one person devoted to IT operations, will have to educate their staff against installing software from an unknown source if they can’t monitor all traffic. TraceSecurity constantly reviews the different threats on the Internet. “There’s so many different things out there,” Stickley said. “It’s awful.” Most of the threats are similar. “It’s always a repeat, just packaged in a new way,” he said.

More CUs report phishing vishing scams

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MADISON, Wis. (8/7/08)--Several more credit unions reported that they have been fraudulently used in phishing and vishing scams that target consumers:
* E-mails were sent to Vermont residents by scammers purporting to be from Vermont State Employees CU (VSECU), a $366 million asset, Montpelier, Vt.-based credit union, informing consumers of attempts to steal their personal information by compromising their credit card accounts. The e-mail tells recipients to call a Vermont phone number and asks them for their 16-digit credit card number to reactivate their card. Exploiting the public’s increasing knowledge of scams, the e-mail even uses a copyright notice from VSECU at the bottom of the e-mail (The Barre Montpelier Times Argus Aug. 5). * Fraudsters posed as officials from Chesterfield (Va.) FCU, a $52 million asset credit union. The scam began with automated phone calls and then progressed to e-mails--all claiming to come from the credit union. Respondents were given a phone number to call and asked for personal information. In some instances, the phone number was toll free; in others, the phone connection went to Iowa and Oregon. The scam targeted members and nonmembers (Richmond Times-Dispatch Aug 6). * In a scam known as spoofing, thousands of members of Langley FCU, a $1.224 billion asset, Hampton, Va.-based credit union, received telephone calls Friday afternoon, with a recording asking them to call an 877 number that appeared to be from the credit union. When members called the number, they were asked for personal information such as a personal identification number for an account. The phone number has been deactivated by the phone company, according to the credit union (WAVY.com Aug. 3). * Scammers targeted members of Three Rivers FCU, a $455.5 million asset, Fort Wayne, Ind.-based credit union, with a recorded message telling them to call in because security at the credit union had been breached. Once connected, the respondents are told to press “1” and enter their account number, making the information available to identity thieves. The credit union warned members that its security has not been compromised and that they should not respond to the recording (The Journal Gazette Aug. 6). * A fraudulent e-mail that appeared to be from the National Credit Union Administration (NCUA) that was sent to various credit union members provided a link to a mock-up of the NCUA website. Recipients were asked to provide credit card information and other personal data (Targeted News Service July 29).

Northwest FCU implements gas subsidies for employees

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HERNDON, Va. (8/7/08)--Northwest FCU (NWFCU) has taken steps to ease its employees’ pain at the pump by implementing a temporary gas subsidy program. The six-month program is designed to aid non-management staff who commute 10 miles or more from their homes to their branch/office location. As gas prices continue to impact employees’ budgets, the subsidy is a step toward providing employees and their families some relief, said the credit union. Like employees in many metropolitan areas, many NWFCU employees live well outside of counties close to Washington, D.C. Several staffers live as far as West Virginia, southern Virginia and northern Maryland and travel more than 70 miles one-way to the credit union. NWFCU’s gas subsidy program is in effect at least through year-end. Currently, 30% of the credit union’s 300-employee work force has enrolled in the confidential program. “When the gas subsidy was announced, I was touched by the gesture. Even though NWFCU can’t fix gas prices, it is nice to know it is trying to help,” commented one employee through the credit union’s anonymous Intranet e-mail. “It’s a good feeling to know your employer is in touch with the [impact of] high gas prices on us.” NWFCU also has added a carpool directory on its Intranet to help employees locate co-workers in their neighborhood who are interested in ride sharing. “The gas subsidy program is just one way we are trying to help our employees during this turbulent economy,” said Gerrianne “Winky” Burks, NWFCU president/CEO. “Application for the subsidy is kept completely confidential, as our goal is to ensure any employee who needs help, gets help--without reservation.” NWFCU is a $1.5 billion asset, Herndon Va.- based credit union.

China tent-based CU Quake had financial consequences

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CHENGDU, China (8/7/08)--A credit union--now operating from a tent in the earthquake stricken Sichuan Province of China--says the May 12 earthquake has had surprising financial consequences, both for the credit union and the people there. Xu Yongjun, an employee of the credit union, which was not identified by name, reported that its savings has gone up by $1.5 million since the May 12 earthquake struck the region and left nearly 90,000 people dead or missing (National Public Radio Aug. 6). Xu Yongjun told NPR that savings rose because people no longer have houses in which to hide their money. He expressed confidence that China's economy would bounce back to the way it was before May 12, but estimated it would take five years "if things are good," and 10 years, if they are bad. The earthquake, which registered 8.0 on the Richter scale, caused economic losses of $150 billion, NPR said. Many people are living in tent cities until they move into new prefabricated buildings. But many have a can-do attitude and already have started microbusinesses from the tents. Examples include a tent supermarket, drink shops, hot pot restaurants, lawyers' offices and accessories stores. Since May 12, the region has felt 12,600 aftershocks, seven of them above 6.0 on the Richter scale (afp.google.com Aug. 6). The latest one, registering 6.0, was Tuesday.

Hispanic immersion program deadline extended

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MADISON, Wis. (8/7/08)--The World Council of Credit Unions (WOCCU) extended the deadline for enrollment in its 2008 Hispanic Marketing Immersion Program to Aug. 15. Applicants must submit completed registration forms for the few remaining spaces to WOCCU no later than 12 p.m.
From left, Guadalupe CU Loan Officer Daniel Rael and President/CEO Winona Nava compare Spanish class notes with Hannah Carriger, teller manager for Army Navy FCU, at the 2007 Hispanic Marketing Immersion Program. The trio honed language skills and learned about Hispanic culture in Guanajuato, Mexico. (Photo provided by the World Council of Credit Unions)
In the Hispanic Marketing Immersion Program, credit union staff and executives become immersed in Mexico's culture while working in Mexican credit unions and exploring their marketing strategies. The program's goal is to give participants insight into ways to reach Hispanic consumers back home. The dates for the program are Sept. 20-27 for a one-week experience, and Sept. 20-Oct. 3 for a two-week experience. This year's program, which takes place in Morelia in central Mexico, is a 360-degree experience, incorporating language instruction, total cultural immersion and an internship at a Mexican credit union, or caja. Participants begin each day with four hours of Spanish language instruction at a certified language school, and are classified according to their individual skill level--from beginner to native Spanish speaker. The participants can apply what they learn from language classes in a real-world setting while living with a Mexican host family. They also will serve a practical internship with either Caja Morelia-Valladolid or Caja Alianza. The program’s session are priced at $1,600 and $2,600. The cost includes attending the second annual U.S.-Mexico Marketing Workshop. Workshop attendees will view marketing presentations from the four largest Mexican cajas. The workshop will be held on Sept. 26 between the program's first and second weeks. For more information, use the link.

Massachusetts CU offers home-heating loans

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ACUSHNET, Mass. (8/7/08)--Acushnet FCU is offering its members a new home-heating loan program to offset the cost of heating bills this winter. Members can borrow up to $3,000. The loans are repaid over 11 months at a 4% interest rate (SouthCoast Today Aug. 6). The credit union already has started to receive applications for the program. Fall River Municipal Employees CU, Fall River, Mass., offered a similar program last year. The credit union is deciding whether or not to offer it again this year, Lisa Reid, consumer lending manager, told SouthCoast Today. Oil heating bills are expected to exceed $3,000 next year, according to a Donahue Institute report, the newspaper said. As of July 31, home heating oil cost $4.30 a gallon in Massachusetts.

Management school grads donate 27k for scholarships

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MADISON, Wis. (8/7/08)--This year’s 72 graduates of CUNA Management School in Madison, Wis., presented $27,000 toward scholarships during their July 24 graduation ceremony. Twenty students graduated with honors and five graduated with high honors. One student, Connie Lodde, Independent FCU, Anderson, Ind., graduated with highest honors. The scholarship money presented by the class was raised during the three-year professional development program through fundraising events held each summer in the school’s two-week session, and through individual donations from credit unions and the graduates themselves. The fundraisers included merchandise sales, silent auctions, game nights, raffles, golf outings, and more. The scholarship fund comprises donations from the graduating class, U.S. Central, CUNA Mutual Group, and the Credit Union National Association, and is earmarked to help smaller credit unions and individuals without available financial resources to become future CUNA Management School attendees. CUNA Management School in Madison is the longest-running continuing education program in the credit union movement. It consists of a two-week session each summer for three years. About 4,500 men and women have graduated from the program since its inception in 1954. Graduating with high honors were:
* Michael Augustine, United Consumers CU, Independence, Mo.; * Dave Cottone, Ohio HealthCare FCU, Dublin, Ohio; * Kurtis Neeper, Superior FCU, Lima, Ohio; * Anneliese Steen, New Mexico Educators FCU, Albuquerque, N.M.; and * Patrick Wohlfrom, Sharefax CU Inc., Batavia, Ohio.
Graduating with honors were:
* Susan Chadwick, America First FCU, Ogden, Utah; * Scott Chretien, York County FCU, Sanford, Maine; * Diana Davidson, Rock Valley FCU, Loves Park, Ill.; * Carla Day, Hawthorne CU, Naperville, Ill.; * Ronald Eide, Enterprise CU, Elm Grove, Wis.; * Laura Hassan, Market USA FCU, Laurel, Md.; * Lisa Holtman, Jackson Co Co-Op CU, Seymour, Ind.; * Eric Judy, Sangamon Schools CU, Springfield, Ill.; * Pamela Katin-Vetter, Railway CU, Mandan, N.D.; * Kenneth Kiefer, Abbott Laboratories Employees CU, Gurnee, Ill.; * Laurie Ann Moody, Belvoir FCU, Woodbridge, Va.; * Carrie O'Halloran, HarborOne CU, Brockton, Mass.; * Bruce Main, Alliant CU, Cedar Rapids, Iowa; * Michael Pierino, OPCS FCU, Orchard Park, N.Y.; * Laura Roberts, Chivaho FCU, Chillicothe, Ohio; * Shari Seney, UFirst FCU, Plattsburgh, N.Y.; * Janet Shaffer, Afena FCU, Marion, Ind.; * Kenneth Smith, TruGrocer FCU, Boise, Ind.; * Kara VanWert, Veridian CU, Waterloo, Iowa; * Cassandra Velasquez, Monroe Area FCU, Monroe, Mich.; * Joshua Vissering, Superior Iron Range Community FCU, Negaunee, Mich.; and * Richard Wall, Carolina Foothills FCU, Greenville, S.C.
For a complete list of graduates, use the link.

Fin-ed mandate nears CUs reach out to Ohio schools

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DUBLIN, Ohio (8/7/08)--The Ohio Credit Union League and Ohio credit unions are working with public high schools in the state to help the schools meet an upcoming financial education mandate. The league sent more than 800 letters to guidance counselors reminding them that all public high schools will be required to include financial education in their curricula by 2010. “Together, credit unions and educators can propel young people to a promising financial future,” wrote Laura Busque, league outreach manager, in a letter to the counselors. The letters also introduced the counselors to the league’s free Web portal, www.MoneyAndStuff.info, which offers free financial education lesson plans and curricula for students of all age groups. The lessons are provided by the National Endowment for Financial Education, Junior Achievement and Thrive by Five. “Credit unions are arming our educators with proven lesson plans so they can share this knowledge with students now, more than one year before the mandate deadline,” said Paul Mercer, league president. More than 350 credit unions received toolkits earlier this year so they could partner with area schools. Only 5% of Ohio adults were taught personal finance when they were young, and 23% said they encouraged financial literacy in their families, a 2007 league study indicated. “Good personal financial habits are developed at a young age,” Mercer said. “Financial literacy among our youth is a necessity.”

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 (ComputerWorld.com, CNNMoney.com and Bloomberg.com 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, interracu.com, 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
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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.

Union CU fesses up to mystery billboards

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SPOKANE, Wash. (8/5/08)--Spokane city residents have been talking for weeks about mystery billboards with a cryptic message, "It just works for me." The billboards had no name, no logo, and gave no clue what "it" meant. The work was the product of Union CU (formerly Inland Empire Trades CU), an $8 million asset credit union formed by a few Spokane Bricklayers Local 3 members with less than $200 in 1968. Union CU created the campaign to honor unions and union workers, it said in a press release. "It just works for me" is much larger than the credit union itself, honoring all that unions do for their members and all that unionized employees do for employers. "It" is the justice behind union pride, the credit union said. The credit union is a unique financial institution in Washington state and one of a handful in the country that is run by an all-union staff and board. Even CEO Demaris Krummel is a union member. "Union members deserve better than high-priced banking, outrageous credit card rates and payday lenders," Krummel said. "Instead of giving dividends to shareholders, we give profits back to the members in the form of lower interest rates on home and car loans and microloans for workplace equipment such as laptops, stethoscopes and other tools."

Volunteers landscape wounded vets new Colorado home

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GOLDEN, Colo. (8/5/08)--More than 100 volunteers from credit unions and interns of the Democratic National Convention Committee (DNCC) joined Homes for Our Troops and the National Journal Group in a “Volunteer Day” to landscape a home built for a wounded Iraq war veteran. The volunteers spent Saturday laying sod and landscaping the site around the nearly finished home for Staff Sergeant Travis Strong and his family. The home in Golden, Colo.--a joint project of Homes for Our Troops, the DNCC, America’s Credit Unions, and National Journal Group--will be presented to SSG Strong, his wife Misty, and their two children in a ceremony around this month’s Democratic National Convention. “It truly warms the heart to see so many volunteers spending their Saturday giving back to someone who has given so much to us,” said John Gonsalves, president and founder of Homes for Our Troops. Ground was broken on the home site in April. In June, more than 350 volunteers and skilled labor conducted a three-day “Build Brigade” to construct much of the home’s exterior. Since then, volunteers from the Colorado Building and Construction Trades Council have worked on the home’s interior. Saturday's effort focused on turning the construction site into a landscaped yard. Strong lost both legs above the knee as a result of injuries sustained in a rocket-propelled grenade attack in 2006 during his second tour of duty in Iraq for the U.S. Army. The specially adapted home is being built at no cost to his family. "We’re honored to help out in this good work to benefit the family of Staff Sergeant Strong, a true American hero who has served our country honorably at great personal sacrifice,” said Leah D. Daughtry, CEO of the DNCC. Credit unions played an integral part in the effort, through volunteer labor and fundraising to defray costs of both the house and a companion Minnesota project connected with the Republican National Convention. So far, credit unions nationally have raised over $225,000 for the two houses. "Credit unions operate every day with a ‘People Helping People’ philosophy," said Daniel A. Mica, president/CEO of the Credit Union National Association (CUNA). "That’s why our credit unions and their members have jumped at the opportunity to assist this very deserving soldier and his family, either through fundraising efforts across the country or by volunteering their time in person today.” John Dill, president/CEO of the Credit Union Associations of Colorado and Wyoming, added, “Credit unions here in Colorado are proud to be a part of this project. From the hundreds of volunteers who showed up in June and again here today (Saturday) to the tens of thousands of dollars our credit unions have raised, we are honored to help make real the American dream of a home to call one’s own for Travis and his family.” The undertaking is part of a year-long series of service projects the DNCC has organized to give back to the community hosting the 2008 Democratic National Convention. Since last July, the organization has centered its monthly “DNCC Service Days” outings around three areas of importance to the Denver-area community: youth, environmental projects and the combined issues of homelessness and hunger. CUNA, the Minnesota Credit Union Network, and National Journal Group also are working with Homes for Our Troops and the Republican National Committee on a similar Volunteer Day for the companion veteran’s home being built in conjunction with the Republican National Convention. The Volunteer Day for that project, a home in Woodbury, Minn., is scheduled for Aug. 15th.

Membership Growth Series UVA Community CU

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CHARLOTTESVILLE, Va. (8/5/08)--Last month, UVA Community CU, Charlottesville, Va., reported the lowest member turnover rate in the last six years. This could be because UVA Community, which reported a 3% increase in membership from 2006 to 2007, takes a proactive approach in growing its membership--and learning why some members leave. This is the sixth installment of News Now's Membership Growth series of interviews with fast credit union membership growers. The series is as part of an initiative of the Credit Union National Association (CUNA) Membership Growth Task Force. It focuses on fast "organic" membership growth, not growth by merger or indirect loans. The task force, chaired by Dick Ensweiler, president of the Texas Credit Union League, was convened at the request of CUNA's Immediate Past Board Chair Allan Kemp McMorris. Its purpose is to investigate, report on, and encourage credit unions to embrace opportunities, techniques and processes that will increase credit unions' membership retention and growth. The $373 million-asset UVA Community CU performed an analysis of accounts closed by members to find out what traits members who left the credit union shared. There was some concern that the number of closed accounts was increasing because members were dissatisfied with the credit union’s services, Peter Holman, UVA Community CU senior financial analyst, told News Now. However, the account analysis showed that wasn’t the case. About 85% of members who closed accounts did so because of factors beyond the credit union’s control--such as relocation. The account analysis looked at members’ traits and account transaction activity. It reviewed the services they used, the balances they kept, and the branches they visited. With this data, the credit union identified several key traits of members at risk for leaving. These members:
* Had used two or fewer services with the credit union; * Experienced steadily decreasing balances; and * Held no loans with the credit union.
Products and services that correlated with members having “sticky” accounts, or close relationships with the credit union, included debit cards, credit cards and money market accounts. “Credit cards are very good retention products for us,” Holman said. UVA Community CU also surveys members who close their accounts at the credit union to see if the closed accounts are avoidable. The response rate on the surveys is strong, making the data reliable, Holman said. The closed account survey was recently revamped from a fill-in-the-blank format to multiple choice and other formats. In the old fill-in-the-blank survey, there’s little incentive for the member to fill out the survey, Holman said. “We made the survey simpler,” Holman said. “There’s more info [for us] and much less effort on the member’s part.” Even though UVA Community CU’s name implies the University of Virginia, the credit union doesn’t target students as members. “We’re not close enough to serve them,” Janine Williams, vice president of marketing, told News Now. “We have a branch near the university and an ATM, but we’re not their [primary] banking institution.” UVA Community CU was founded in 1954 by a group of UVA hospital administrators. The credit union merged with other hospital and local government credit unions, and received a community charter in 1997 and changed its name to UVA Community CU. It currently serves seven counties. UVA’s growth strategy involves building locations in the seven counties to accommodate members. Its marketing strategy is to attract members to the branches, Williams said. The credit union opened a new branch in the first quarter of this year, and relocated two others. Holman and Williams commented that almost all of the credit union’s service goals were met because of the new facilities. To promote the branch opening and incentives, the credit union sent letters to members who lived within five miles of the new branch. Grand opening ads were published in local newspapers, and oversized four-color postcards were mailed to every resident within five miles of the new branch. UVA Community also ran a student photo contest in local high schools. The winning art was professionally framed and placed in the new branches. “The unveiling of the winners was the focal point around the grand openings and ribbon cutting ceremony. We actually had many parents stay after the event to open accounts,” Williams added. The credit union is working to secure land for a branch in another county, and a student-run branch will open this fall at a local high school. “They approached us,” Williams said of the school. “It’s great.” UVA Community CU has decreased its use of media advertising, and has earmarked that money into incentives for members to open accounts--such as $50 for a checking account. “The incentives drive those numbers,” she said. In March, the credit union opened a business lending program to include deposits. Though it has engaged in business lending since 2005, the credit union now offers businesses three types of checking accounts. “Every business is different,” Holman said. “So we have three accounts for different levels of activity with benefits in all three,” he said. The economy is an uphill battle for the credit union in terms of growth, but the challenge is making sure the word is out that the credit union is there. “We can’t just build and [assume] they will come,” Williams said. Several community banks operate in the area. When banks merge into larger ones, the credit union often sees a spike in membership. UVA Community CU doesn’t have formal initiatives to target youth, but is cognizant of the fact that young people will be the key to membership growth. The credit union keeps its technology services up-to-date, knowing that online technology attracts youth. “We’ve enhanced our bill payment and e-statements,” Williams said. “We are on the cutting edge of technology.” Service is one thing that sets credit unions apart from any other institution, she said. “Generally, services are going to keep us in the game,” she said. Anyone who wants to contact the CUNA Membership Growth Task Force can e-mail the account established for this purpose at cunamgtf@cuna.coop.

Carolinas foundation donates 60000 to Victory Junction

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GREENSBORO, N.C. (8/5/08)--The Carolinas Credit Union Foundation (CCUF) recently donated $60,000 to the Victory Junction Gang Camp in Randleman, N.C., a camp for children with chronic medical conditions or serious illnesses. Rising fuel prices have made it more difficult for families traveling long distances to drop their children off at the camp. During a recent field trip to the camp, State Credit Union Foundation Network leaders suggested that the CCUF donate gas cards or contribute to help campers’ families pay for the trip. The foundation provided $50 gas cards to all 1,200 campers’ families attending camp this summer. CCUF also provided an additional $1,500 to help with group travel to and from airports and drop off locations. “[CCUF Executive Director] John Slack and his team at the CCUF continue to be proactive in their support of Victory Junction,” said camp president Dean Kessel. “Their gracious donation of over $60,000 in purchase cards will provide much needed assistance with the increased transportation costs facing families of our campers this summer.” The foundation has partnered with the camp since 2002. Victory Junction was created by NASCAR driver Kyle Petty and his wife Pattie in memory of their son Adam, who also was a NASCAR driver. Adam was killed in an accident in 2000.

British reform would ease rules for CUs

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MANCHESTER, Eng. (8/5/08)--The Association of British Credit Unions Ltd. (ABCUL) says that government proposals to loosen rules and allow credit unions and other not-for-profit organizations to compete more evenly with private sector firms could lead to significant credit union growth. ABCUL CEO Mark Lyonette told Crains Manchester Business (Aug. 4) that he was delighted with the news that credit union rules would be modified, especially with a relaxation of the common bond. His comments were in response to consultation documents issued by HM Treasury on plans for a legislative reform order to amend the rules of credit unions and industrial and provident societies. It would replace "common bond" with a less restrict "field of membership" test; would open the door to lend money to businesses, partnerships and voluntary organizations; and scrap a 20,000-pound current lending and savings cap. Credit unions and others had expressed concern that the rules were out of date and restrictive on their development and competitiveness, the newspaper said. In the United Kingdom, just over 1% of the population has a credit union account. That compares with 40% in the U.S. and Canada and 25% in Australia. The consultation document notes that credit unions are perceived as a "poor persons bank" and suggests credit unions need to target more affluent members to remain viable. One credit union, Oldham CU, said the reform would be the first step toward greater cooperation between credit unions, especially on back office systems.

National expert touts benefits of Maine CUs

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WESTBROOK, Maine (8/5/08)--A financial expert who contributes his expertise to CNN, Bloomberg and other media outlets across the country touted Maine credit unions as a "great choice for consumers to receive the best value for savings, loans and other financial transactions" during a recent television program. During an interview with Portland-based WGME News 13, Gerard Cassidy of RBC Capital Markets, one of the world's largest investment banks, was asked about the state of the nation's financial institutions, said the Maine Credit Union League. The Portland-based expert responded enthusiastically, said the league, about "credit unions for better rates and lower fees." Cassidy compared credit unions and other financial institutions, and praised Maine's credit unions for "being focused on the consumer and the local community. People should consider credit unions as better, safer alternatives to all of the uncertainty going on in the financial services market." League President John Murphy said he appreciated Cassidy's praise of credit unions and the benefits that using a credit union provides to Maine's consumers. "Credit unions are not only safe and secure but the best value in financial services," Murphy said. "It is wonderful to have the positive advantages that credit unions offer to consumers recognized by a leading and well-respected financial expert not only in Maine but throughout the country."

SECU rolls out friendly reverse mortgage

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RALEIGH, N.C. (8/5/08)--State Employees’ CU (SECU), Raleigh, N.C., announced a consumer-friendly reverse mortgage designed to help senior members make use of the wealth in their homes. The loan offers a fixed rate of interest and an origination fee of 1%. There are no mortgage insurance or monthly service fees, SECU said. Borrowers must be 62, use the home as their primary residence and receive consumer education on the product from a North Carolina-certified reverse mortgage counselor. “SECU investigated the reverse mortgage marketplace and we saw numerous opportunities to provide this important product to our members, reducing the typical costs being assessed,” said Phil Greer, SECU senior vice president of loan administration. “Through reduced fees, a fixed rate of interest and a simple interest accrual method, we will provide the member with an enhanced use of their equity,” he added. A reverse mortgage is a loan against a residence to provide cash to assist with living expenses, typically in the form of a lump sum or fixed monthly disbursement to the borrower. SECU used assistance from senior-affiliated organizations to design a reverse mortgage product. It also published a booklet for members to learn about the product. “A reverse mortgage can be a useful financial option for older homeowners who need to supplement their retirement income to help pay for essential needs,” said Mary Reca Todd, manager of supportive housing for the North Carolina Housing Finance Agency. Seniors in the market for reverse mortgages can be vulnerable, according to Ed Regan, executive director of the North Carolina Retired Governmental Employees’ Association. Like Todd, he encouraged financial institutions to provide consumer education to seniors. “Consumer education is crucial in making sure the older population does not fall victim to what could be the next frontier for mortgage scams,” he said. SECU has $15 billion in assets.

Washington Supreme Court justices tour CUs league

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FEDERAL WAY, Wash. (8/5/08)--Two justices of the Washington Supreme Court have visited a number of credit unions and the Washington Credit Union League during recent weeks leading up to the state's primary election on Aug. 19.
Associate Chief Justice Charles Johnson, left, of the Washington State Supreme Court visits with Washington Credit Union League President/CEO John Annaloro during a tour of the league and several credit unions. (Photo provided by the Washington Credit Union League)
Associate Chief Justice Charles Johnson visited Prevail CU, Seattle; Woodstone CU, Federal Way; TAPCO CU, Tacoma; TwinStar CU, Olympia; and Our Community, Shelton; and Columbia CU, Vancouver. He is running for a six-year term against two opponents. Supreme Court Justice Mary Fairhurst visited Prevail CU, Woodstone CU, Columbia CU, Watermark CU, Seattle; Numerica CU, Spokane; Yakima Valley CU, Yakima; Spokane FCU; and Spokane Teachers CU. She is running against one opponent for a six-year term. The league worked with the justices in coordinating the visits to credit unions.
Numerica CU President/CEO Dennis Cutter shows Washington State Supreme Court Justice Mary Fairhurst around the credit union during the justice's tour of Numerica and other credit unions in the state. (Photo provided by Numerica CU)
"The Washington Credit Union League has a long history of working with elected leaders in a non-partisan manner," said League President John Annaloro. "Associate Chief Justice Charles Johnson's and Justice Mary Fairhurst's proven commitment to the rule of law and to our state's constitution has earned them the league's support and our assistance in reaching out to our member credit unions," he added. Justice Fairhurst stopped at Numerica's headquarters to talk to employees about the judicial system and her role as a Supreme Court justice, said the credit union. "It was refreshing to have a candidate show interest in your industry, the issues that affect us and our communities," said Numerica President/CEO Dennis Cutter.

Iowa league op-ed CUs were prepared for rainy day

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DES MOINES, Iowa (8/5/08)--Credit unions will emerge from the economic downturn in “great shape” because they are prepared for a rainy day, Patrick S. Jury, president/CEO of the Iowa Credit Union League, wrote in an op-ed piece for Saturday’s issue of the Des Moines Register. Credit unions have steered away from lending practices that contributed to the mortgage crisis but aren’t immune from economic conditions, he said. “Our members may have problems making payments on credit union loans because of subprime loans they’ve received elsewhere or because of lost jobs or income due to flooding. Building our capital through the years helps ensure that we remain strong institutions into the future,” Jury added. Jury also encouraged readers to save a portion of their money each week. “It will add up over time. Limit your credit and do your best to live within your means,” he said. He also noted that many credit unions offer confidential financial counseling. “Now more than ever, you need to be a financial advocate for yourself to ensure a stable and healthy future, and Iowa credit unions can help,” he said. To read the full article, use the link.

Two CUs sweep CUNA Tech Council awards

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MADISON, Wis. (8/5/08)--Technology CU and Purdue Employees FCU were honored as winners of the 2008 CUNA Technology Council Best Practices Awards at the council’s 13th annual summit, which took place Wednesday through Saturday in Williamsburg, Va. The awards recognize outstanding approaches to technology challenges with potential for universal application across the credit union movement. The winning credit unions presented the details of their success stories to conference attendees in the following categories:
* Technology Infrastructure--Technology CU, San Jose, Calif., for its job-applicant tracking system for all internal and external applications, advanced reporting features, and more. A new job-listing site provides a user-friendly interface for applicants, and allows human resources to quickly and efficiently track applications without using paper. The credit union received more than 12,000 applications and resumes and posted and filled 170 job openings. The new system was such a success that credit union plans to extend a 100% paperless system to the entire recruiting process; * Sales Management--Purdue Employees FCU, Lafayette, Ind., for creating a new sales reporting model with a member service measuring tool to help the credit union meet its goal as members’ financial partner for life. The sales staff now can follow up more quickly with members who express interest in specific products. Attempted cross sales are up nearly 300% from 2007. The new reports also help analyze productivity, contributions to specific corporate measures, monthly trend data, and branch production; and * Miscellaneous--Technology CU, for its online banking feature enhancement and new splash page to promote eStatement and electronic disclosures. The new business strategy included splash pages, with a disclosure agreement that requires members to opt out from all paper statements, electronic privacy notices, and any future notices electronically as they become available. One month after the launch, the number of eStatement enrollments realized a 63% increase. The program will have a big impact on cost savings over paper statements and will help the credit union “eSave the planet,” Technology CU said.

CU System briefs (08/04/2008)

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* BOULDER, Colo. (8/5/08)--Gerry Agnes has been named president/CEO at Boulder-based Elevations CU. According to the $850 million asset credit union's board, Agnes was selected from more than 200 candidates. Agnes has 22 years experience in the financial services industry, most recently with the $936 million asset Altura CU, Riverside, Calif. There he served in a series of positions, including president/chief operating officer, president of Altura's subsidiary holding company that managed insurance, mortgage, escrow and auto broker companies, and chief financial officer. Prior to joining Altura, Agnes was president/CEO of The Community Foundation serving Riverside and San Bernardino counties in California … * RIVERDALE, Ill. (8/5/08)--Asia Hill, formerly of Gary, Ind., was convicted Friday of aggravated bank robbery charges stemming from a 'Bonnie and Clyde' style robbery of Acme Continental CU in Riverdale on Jan. 19, 2006. Her then boyfriend, Charles Anderson, pleaded guilty earlier and testified against Hill during the two-week trial. The couple, armed with a sawed-off shotgun took over the credit union and escaped with more than $250,000. An informant's tip led to their arrest. Hill faces more than 12 years in prison. She will be sentenced in the fall (Chicago Tribune Aug. 1) … * LOMBARD, Ill. (8/5/08)--Gary Raddon, founder of Raddon Financial Group (RFG), a strategic business unit of Open Solutions Inc., died July 29 at the age of 72, according to a press release (Business Wire Aug. 1). Raddon formed RFG, a strategic research and consulting firm, in 1982. He became a well-known industry expert and speaker and served on the faculties of several state banking schools. He was author of a book, "Developing New Financial Products." Open Solutions acquired RFG in 2006 …

CU loans up savings down in June

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MADISON, Wis. (8/4/08)--Credit union loans are up and savings have declined, and that’s causing Credit Union National Association (CUNA) economists to reconsider their economic outlook.
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Credit unions loans outstanding increased 1.3% in June, while overall loan growth for the first six months of the year was at 4.1%, up from 2.4% for the same period in 2007, according to CUNA’s monthly sample of credit unions. Fixed-rate mortgage loans led loan growth, rising 2.4% during June and 13.1% year-to-date. Credit cards (1.9%) and adjustable-rate mortgages (1.5%) also increased, followed by unsecured personal loans, used-auto loans and other mortgages--all rising 1.3%. New auto loans dropped 0.5% and have decreased monthly since November 2007. Credit union savings balances declined 0.5% in June, but had grown 6.2% over the first six months of 2008, up from 4.3% for the same period in 2007. “The current numbers are causing CUNA economists to rethink their credit union outlook for the year,” Mike Schenk, CUNA vice president of economic and statistics, told News Now. “Normally in an economic slowdown, credit union savings growth speeds up significantly, and credit union loan growth declines significantly. Typically in this environment, savings growth exceeds loan growth. “What appears to be happening now though, is first, on the loan side of the balance sheet, credit unions are experiencing faster growth than expected,” he continued. “We think this is a reflection of their willingness to step up to the plate and help members who obtain toxic mortgages from other lenders.” Growing were money market accounts (1.4%), individual retirement accounts (1.1%) and regular shares (0.4%), while share drafts and one-year certificates declined 5.6% and 0.8%, respectively.
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With loan growth outpacing savings growth, the loan-to-savings ratio increased to 81.8% in June from 80.3% in May. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--decreased to 17.6% in June from 19.5% in May. Regarding asset quality, credit unions’ 60-plus-day delinquencies slightly rose from 1% in May to 1.1% in June. The movement’s overall capital-to-asset ratio is 11%. The total dollar amount of capital remains at $90 billion. “In general, consumers aren’t borrowing as much or spending as much, but relatively speaking, credit unions are doing more business than their competitors; they’re picking up market share on the loan side,” Schenk said. “In contrast, on the savings side, many credit union competitors are aggressively pricing up in an effort to stem outflow from savings accounts. “The spectacular failure of Indy Mac is undoubtedly driving some of this activity,” he concluded.

Indiana league article CUs a bright spot in economy

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INDIANAPOLIS (8/4/08)--Building Indiana magazine will feature in its September/October issue a column written by Indiana Credit Union League President John McKenzie promoting credit union mortgage and business lending successes. The column discusses how credit unions are expanding lending while other institutions pull back. It will be read by business owners, executives, management staff and board chairmen, and elected officials in a seven-county area of Northern Indiana. "During 2007 and into 2008, credit unions have represented a bright spot in the midst of a generally cloudy picture for the financial services industry," McKenzie wrote. He provided state statistics on the state's 208 credit unions and noted their asset growth continued at a strong pace. The article cited strong mortgage growth, with first mortgages growing 12% in 2007, as other mortgage lenders scaled back. Business lending "grew at a 17% pace last year" and surpassed $1 billion in loans outstanding" at time when credit availability for businesses has tightened, especially for small business owners, McKenzie said. As Congress considers how to stimulate the economy and create jobs, he wrote, "credit unions could do even more to make additional credit available to help businesses in their communities if Congress would pass H.R. 1537 (the Credit Union Regulatory Improvements Act)." Credit unions' services are based on the needs of their memberships, with an increasing number of credit unions offering business loans. "As locally owned financial institutions rooted in their communities, many credit unions are finding increased interest in being a source of borrowing for businesses for a number of reasons," McKenzie wrote. He also explained that credit unions have "steered clear of the subprime mortgage mess" by operating more conservatively and holding most mortgage loans in their portfolios, instead of selling them on the secondary market. He added that "credit unions focus on serving the consumers and business owners who are the members/owners of their credit unions. There is no separate group of stockholders with lofty profit expectations, which contributed to problems" at other types of financial institutions. The economy and financial environment had consumers considering whom they can trust, and this has "resulted in more people and business owners looking to credit unions as an attractive, safe option for financial services, especially during challenging economic times," he concluded.

Phone e-mail scams move westward

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MADISON, Wis. (8/4/08)--Several phone and e-mail scams that have affected credit unions in the eastern part of the U.S. are now moving westward. Some credit unions experiencing scams are:
* UW CU, Madison, Wis., whose members are targets of a hybrid e-mail/phone scam. An e-mail reads: “All UW credit union accounts were recently updated with a new security enhancement. For your security, we have temporary suspended your account.” The e-mail mail then provides a bogus 800 number to call to reactivate the account. The UW CU sent a message telling members to never access the credit union site by clicking on a link provided in an e-mail, and that the credit union will never solicit personal or financial information in this manner. * Oregon Community CU, Eugene, Ore., which said scammers call its members on their home and cell phones, telling them that there is an issue with their accounts (kezi.com July 31). The scammers are deploying an automated service that asks members to give person information over the phone. The credit union told members not to respond if they receive one of these calls. * Kitsap CU, Bremerton, Ore., which received hundreds of calls last week about scammers attempting to get members’ credit and debit card information (Kitsap.com July 31). The credit union said an unknown entity was blanketing the 360 area code with calls telling people that their credit or debit cards were suspended. Kitsap CU is one of the financial institutions the callers claim to represent. The credit union received 200 calls about the scam in a 15-minute period Thursday afternoon, said Ron Rogerson, Kitsap senior vice president of marketing. Kitsap CU reported the scam to companies that issue the cards, Bremerton Police, and the state attorney general’s office, Rogerson added. * The TVA Employees CU, Knoxville, Tenn., issued a security alert regarding a phishing e-mail scam that attempts to solicit personal financial information from members. The e-mail tells members to call a phone number to update financial information. The credit union notified members that it will not use e-mails for confidential account notifications.

Former CU extends stock repurchase plan

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WAYCROSS, Ga. (8/4/08)--Atlantic Coast Federal Corp., a holding company for Atlantic Coast Bank, a former credit union, announced Friday that it expanded and extended its stock repurchase program. Atlantic Coast Bank was organized in 1939 as a credit union to serve Atlantic Coast Line Railroad employees. The bank currently serves Georgia and northeastern Florida. Atlantic Coast’s board extended the stock program to July 31, 2009. The program was set to expire at the end of this month. The board also reauthorized the repurchase of up to 220,000 additional shares, increasing to 277,000 the total shares subject to repurchase. The corporation has more than 13.5 million shares outstanding, including over 4.4 million publicly held shares. Atlantic Coast Federal holds 8.7 million shares, or 64% of the company’s total outstanding stock. Those shares will not be publicly traded and are not included in the repurchase program. Atlantic Coast completed its initial public stock offering in October 2004.

CUNA Technology Council announces board members officers

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MADISON, Wis. (8/4/08)--The executive committee and officers of the CUNA Technology Council were announced during the council’s 13th annual summit, which took place Wednesday through Saturday in Williamsburg, Va. Rudy Pereira, senior vice president of operations and technology of Alliant CU, Chicago, was named chair. He replaces Brian Warfel, executive vice president of sales and service at Power Financial CU, Pembroke Pines, Fla. Warfel reached his term limit as chair but remains on the executive committee. Jackie Buchanan, chief information officer of T&C FCU, Pontiac, Mich., was appointed first vice chair. She supersedes outgoing member Gail Koehler, vice president of technology and retail delivery, Purdue Employees FCU, West Lafayette, Ind., who completed her term. Gordon Gregory, vice president of technology for Mazuma CU, Kansas City, Mo., is the second vice chair. In addition to Koehler, Robert Keubler, vice president of information technology for 1st Financial FCU, St. Charles, Mo., left the committee. The two newest members of the committee are: Robert Reh, chief information officer, Nassau Financial FCU, Garden City, N.Y., and Belinda Caillouet, vice president of information technology, Spokane Teachers CU, Spokane, Wash. The board also includes Ron Broaddus, chief information officer for Potlatch 1 FCU, Lewiston, Idaho; and John Morawski, chief technology officer, Massachusetts Credit Union League.

Cornell U REAL Solutions a successful strategy

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ITHACA, N.Y (8/4/08)--The REAL Solutions initiative illustrates the type of strategy credit unions could adopt to successfully engage the underserved financial market, according to research conducted by Cornell University and commissioned by the Filene Research Institute. REAL Solutions is the signature program of the National Credit Union Foundation (NCUF) and is available to credit unions through nearly 30 state credit union associations. "REAL" stands for "Relevant, Effective, Asset-building, Loyalty-producing" solutions. REAL Solutions helps credit unions provide financial services to serve working families with low wealth and modest means. Researchers at Cornell's Center for Sustainable Global Enterprise emphasized that, "This is important because underserved households--while at the bottom of the economic pyramid now--represent future savers, future car buyers, future homeowners, and future generations of credit union members." The research report, titled Back to the Future: Integrating Sustainability into Credit Union Strategy, touches on much of what REAL Solutions has learned so far about why and how credit unions can provide affordable services to the underserved financial market. Several strategies detailed in the report are based on REAL Solutions’ experience. “The most successful services are not only affordable for consumers, but also sustainable for credit unions,” said REAL Solutions National Program Director Lois Kitsch. “Sustainable services can become a permanent part of credit unions’ business plans--as opposed to ‘loss leaders’ that must be limited in volume or subsidized by other parts of the credit unions’ operations.” Report co-author Monica Touesnard, managing director of learning labs at Cornell University’s Center for Sustainable Global Enterprise, agreed. In a letter to NCUF Executive Director Steve Delfin, whom she interviewed for the report, Touesnard wrote, “This report gives credit unions a reliable working definition of sustainability, providing a variety of models to consider for integrating sustainability into credit union strategic plans.” “The opportunities identified in this report suggest that financial institutions are just beginning to experiment with programs and initiatives related to sustainability,” concluded Filene Chief Research Officer George Hofheimer. “As a result, we have yet to realize the challenges and opportunities implicit in sustainability strategies.”

Kenyan SACCO project proceeds in aftermath of riots

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MADISON, Wis. (8/4/08)--In the aftermath of deadly riots that broke out in Kenya at the end of 2007, the World Council of Credit Unions’ (WOCCU) SACCO Capacity Building Program is proceeding apace.
Erick Sile, World Council of Credit Unions (WOCCU) project director, Kenya, talked about how political unrest in Kenya affected WOCCU’s SACCO (credit union) Capacity Building Project. (Photo provided by the Credit Union National Association)
Credit unions in Kenya are known as SACCOs (savings and credit cooperatives). The broad goal of the project is to provide financial inclusion in the financial sector in Kenya, Erick Sile, WOCCU project director, Kenya, told News Now. “The project is about developing the market of Kenyan SACCOs on the demand and supply sides,” Sile explained. “We also work with financial service providers. Using different WOCCU tools, we provide technical assistance to train consultants who work with credit unions.” Funded by the British Department for International Development, the project is working with five credit unions, but hopes to add five more by the end of September, and 10 more for a total of 20 in the third round by the end of December, Sile added. The project is moving ahead, he added. Violence in Kenya resulted in the killing of several hundred people the week after Mwai Kibaki was re-elected. He was sworn as the country’s president Dec. 30. The opposition candidate claimed the election was rigged (News Now Jan. 3). The unrest, which Sile said lasted about two-and-a-half months, slowed down the project in the first quarter of this year. “You couldn’t travel in some areas; there were roadblocks and rallies,” he said. “The unrest affected some credit unions, but not all.” Sile did not feel any real threat from the violence. “I was relatively safe because in the city of Nairobi there was security. I didn’t feel threatened while at home. Most of the violence was going on in other poorer areas.” WOCCU has two other projects in Kenya. The SACCO Growth Project, which is funded by the Gates Foundation, is directed by Jesus Chavez. The project provides technical assistance to consultants who work with credit unions, in Kibera, a slum inside Nairobi. Another project is Mitigating the Impact of HIV/AIDS on Economic Growth through Credit Union Modernization; Institutional Restructuring; Agricultural Business Development and Services and Education. The project is run by Sam Dunlap in Kisumu, and is funded by the U.S. Department of Agriculture. Of the 30 million people in Kenya about four million (19.1%) are credit union members, according to WOCCU statistics.

Banks use switch kits to lure new depositors

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NORTH PALM BEACH, Fla. (8/4/08)--Banks are making it easier for depositors to ”jump ship” by using switch kits, which allow a near-seamless transition for depositors to move from one financial institution to another. Switch kits collect data from depositors’ services--such as automatic payments and savings plans--to help the new financial institution continue the transactions (Bankrate.com July 29). Some kits send letters to appropriate parties to redirect payments and switch direct deposits. The kits also help when a financial institution merges with another, or when a financial institution seeks to retain a depositor that moves to a city that has the institution’s branches, the news outlet said. Switch kits appear to target younger depositors who move around a lot, but they actually are geared toward older depositors who have a lot of assets. These depositors often have multiple accounts and may view switching institutions as cumbersome, Bankrate said. Digital Dialogue offers switch kit capabilities that help new members move existing accounts to credit unions (News Now May 24).

Broker for liquidated CU a suicide

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NEW LONDON, Conn. (8/4/08)--A broker who handled investments for a credit union in Connecticut that was liquidated last week committed suicide, according to local news media. Edwin F. Rachleff, 82, a broker for A.G. Edwards, handled the investments of New London Security FCU, based in New London, Conn. (theday.com July 30) Authorities did not tie his death with the credit union's situation. Rachleff, apparently despondent about failing eyesight, jumped from an apartment building. The National Credit Union Administration reported July 28 it had liquidated the $12 million asset credit union after determining it was insolvent.

CUs still fielding deposit insurance queries

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MADISON, Wis. (8/4/08)--More credit unions say they are fielding inquiries from their members and the media about whether their deposits are covered by share insurance. The uptick in interest stems from several notable bank failures and the woes generated by the subprime lending market. In Loveland, Colo., two credit unions were interviewed about the safety of their members' deposits by the Loveland Reporter-Herald (July 31). Bill Becker, CEO of Sunrise CU, a $3.9 million asset credit union based in Loveland, told the newspaper that bank failures are rare and credit union failures even rarer, because of their cooperative, nonprofit structure. Sondra Koberstein, president of Longs Peak CU, urged the $26 million asset credit union's members to speak to her when they want information about the credit union. The article noted that credit unions are insured by the National Credit Union Administration (NCUA) and that NCUA has information available online about the stability of credit unions. The Delaware Credit Union League reported the state's credit unions are responding to members' concerns (Together July 31). Dover, DPL, Provident and Sussex County FCUs issued talking points for front-line staff highlighting credit unions' financial strength. EWOD FCU plans to send a brochure on the insurance fund to all members. New Castle County School Employees FCU reported a "good number" of calls from members wanting to know whether their money was insured and for how much. In all cases, the credit unions assured members they were well-capitalized and had no relationships with the subprime market. In Winston-Salem, N.C., Truliant FCU is offering seminars to educate members about how their money is insured (Weekly Update July 31). Beginning Tuesday, the $ million asset credit union, will host eight seminars during the next two weeks to educate members about share insurance.

Missouri CUs meet with candidates before primary

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United CU Marketing Manager Heather DeMint (left) and Troy branch manager Jill Kiel met with State Rep. Ed Schieffer (D) before Missouri’s primary.
ST. LOUIS, Mo. (8/4/08)--Missouri credit unions have been stepping up their political activities in preparation for Tuesday’s primary in the state. Mexico, Mo.-based United CU Marketing Manager Heather DeMint and Troy branch manager Jill Kiel met with State Rep. Ed Schieffer (D) July 9 and discussed the credit union difference and issues, according to the Missouri Credit Union Association (MCUA) (CourietNet July 30). Crystal Cowan, an accounting clerk with Central Missouri
Crystal Cowan of Central Missouri Community CU, Warrensburg, volunteers at the Johnson County Democratic Headquarters. (Photos provided by the Missouri Credit Union Association)
Community CU, based in Warrensburg, volunteers at the Johnson County Democratic Headquarters, where she has educated both voters and candidates about the credit union difference. Today, St. Louis area credit union staff and volunteers are scheduled to meet with State Rep. Russ Carnahan (D) in St. Louis. Carnahan is a Credit Union Regulatory Improvements Act co-sponsor., said MCUA. Following tomorrow's election, MCUA will send out its bi-annual candidate’s survey on credit union issues to each Republican and Democratic primary winner. Their responses will be published in a future issue of MCUA's newsletter, Missouri Courier.