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CU System Briefs (09/11/2013)

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  • HARRISBURG, Pa. (9/11/13)--Counterfeit checks bearing the name of Grove City (Pa.) Area FCU are in circulation, according to the Pennsylvania Credit Union Association (Life is a Highway Sept. 10). The checks are drawn off of First National Bank. The routing number and account number are both valid, as is the check imprint. However, the color is different. The legitimate checks are green while the counterfeit checks are blue. PCUA said individuals who have been presenting the counterfeit checks reported receiving the checks in the mail although the individuals did not request them. The credit union advised using caution before processing any guaranteed funds check ...
  • DEER PARK, Texas (9/11/13)--Dawne Deanne Wilson, 43, former manager of Deer Park (Texas) FCU, was sentenced to six years in state jail for stealing about $218,825 from the credit union.  Wilson entered a guilty plea to first-degree felony theft charges on June 19 in a Harris County Court (Deer Park Broadcaster and yourhoustonnews.com Sept. 9). Wilson was manager and sole employee of the credit union from 2004 to 2011 and handled daily operations without direct supervision, said the newspaper. The thefts allegedly occurred from January 2007 until 2011, when an outside audit uncovered fraudulent loan activity. The money was stolen through several methods, including funding fake loans in members' names or under fictitious names and depositing the proceeds into a personal account ...
  • JACKSON, Mich. (9/11/13)--Kesean Wilson, 21, pleaded guilty Monday to two counts of armed robbery related to the Oct. 10 robbery of Jackson City County CU, Jackson, Mich. During the robbery, Wilson allegedly entered the credit union, put a handgun to the head of a member, jumped a counter and took money from two teller stations (mlive.com Sept. 9).  He also allegedly took $100 the member was withdrawing from an account. Witnesses said that during the robbery, he apologized and said he had to do it for his family. Police later found Wilson in a dumpster after he fled police and crashed into a house. The plea bargain involved dismissing one count of armed robbery and lesser charges of bank robbery and eluding police. Wilson's sister, Bre'Anna Crawford, 19, received a sentence of two years and two months to 15 years in prison for her role in the robbery. Wilson faces a minimum 12 1/2 to 19 1/2 years in prison ...

Amash Endorsement Makes Michigan CU Support Unanimous

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LANSING, Mich. (9/11/13)--U.S. Rep. Justin Amash (R-Mich.) offered credit unions a powerful endorsement when he released a statement saying he supports credit unions as Congress begins negotiations for tax code reform. The announcement was made by the Michigan Credit Union League on #DontTaxTuesday.
 
With Amash's statement, every member of the Michigan congressional delegation has issued a statement that either directly supports the credit union tax status or expresses general support for the credit union industry.
 
"I'm not in favor of increasing taxes or imposing unnecessary regulations," Amash said. "Achieving solid economic growth and expanded opportunity for all Americans means reducing government's burdens on the institutions that serve them. Financial entities like credit unions provide important services like being reliable places to deposit money and helping individuals and families afford the necessities of life."
 
Michigan Credit Union League CEO David Adams thanked Amash for his support.
 
"This very strong statement from Congressman Amash reinforces the high level of bi-partisan support that credit unions and their members have within the Michigan congressional delegation," Adams said. "We now have unanimous support from all 14 members of the House delegation as well as from our two U.S. senators. The credit union community should let all Michigan lawmakers know how much we appreciate their support as broad-based tax reform continues with this Congress."
 
Adams thanked the Battle Creek Chapter for hosting a meeting with Amash at Kellogg Community FCU, Battle Creek.
 
"This kind of grassroots advocacy is responsible for the unanimous support from our delegation in Michigan," Adams said.
 
While all of the credit union movement's current federal legislative issues were discussed, credit union leaders spent most of the time discussing the importance of the credit union tax exemption and the challenges faced with the new regulatory requirements.

Representatives from Kellogg Community FCU; United Educational CU, Battle Creek; OMNI Community CU, Battle Creek; Marshall (Mich.) Community CU; and Lake Trust CU, Lansing, communicated the need to support the credit union tax exemption and regulatory relief. Sixteen credit union leaders participated in the discussion.

Consumers CU To Stream Live Photos On Billboards

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KALAMZOO, Mich. (9/11/13)--Consumers CU, Kalamazoo, Mich., will stream live updates to digital billboards from an annual event welcoming back Western Michigan University students Friday.
 
The credit union has partnered with Adams Outdoor to stream live photos from the university's Bronco Bash throughout the Kalamazoo area. Each year, the Western Michigan University and Kalamazoo communities come together to welcome students back to campus with the bash.
 
"Consumers looks forward to participating in Bronco Bash each year," said Jennifer Knapp, Consumers CU events and education coordinator. "It's fun to get to know the students and welcome the freshmen to Kalamazoo."
 
Billboards will be updated via live stream throughout the event, and those who appear in the photos are invited to visit Consumers Credit Union's Facebook page after the event to view and share the billboard images.
 
As in past years, Consumers will take its Cash Car to the event. All who enter the Cash Car have the opportunity to leave a winner by answering financial trivia questions for prizes and surprises.

DuTrac Community Opens Iowa's First High School CU

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DAVENPORT, Iowa (9/11/13)--DuTrac Community CU in Dubuque, Iowa, and Davenport West High School have opened Iowa's first in-school credit union in a high school.

The collaborative project will provide students with opportunities to learn how to manage their money and work opportunities in the financial sector.

The Davenport West Falcons Branch, a division of DuTrac Community CU, offers "a career-development opportunity for students who may be interested in working in the financial sector in the future," said Andrew Hawkinson, president/CEO of DuTrac. "Students are working in a professional environment and are expected to meet real-world standards in terms of a dress code, customer service and compliance standards. The branch will also undergo an audit, just like any of our branches."

The branch opened on the first day of school, Aug. 12, with membership open to students and staff members only. A ribbon cutting and grand opening ceremony will be held Thursday. Branch hours are 11 a.m. to 1 p.m. Monday, Thursday and Friday. The branch has 120 members so far.

The branch is staffed by West High School students with the support of a full-time DuTrac employee and the business academy teachers at West High School. It offers a checking account that is accessible only through a debit card, and a savings account.

The credit union is a school-driven program with a focus on financial education for students. "It's important for everyone to learn good money management skills," said Steve Verdon, WHS Business Academy teacher. "It's important for students to learn the difference between the fund balance shown in their checking account and the actual funds available for them to use. For example, insufficient funds charges can mount up quickly."

Another tool that will be available is "Advance," an online budgeting tool that can help students set savings goals for items such as a prom dress, class ring or a yearbook.

Leadership Conference: CUs Tell What Keeps Them Up At Night

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SAN ANTONIO (9/11/13)--What keeps credit union execs up all night? Six Texas credit unions tackled that topic at the Cornerstone Credit Union League's Leadership Conference & Expo in San Antonio last week.
 
Compliance and tax issues, competition, an aging membership and growth, squeezed margins and emerging payment systems were among the answers from a panel facilitated by Shawn Bailey, president/CEO of Texas City, Texas-based AMOCO FCU, said the league (Leaguer Sept. 10).

The panel  included:
  • Lily Newfarmer, Tarrant County CU, Fort Worth;
  • David Frazier, Community Resource CU, Baytown;
  • Jackie Kapalski, CTECU, Bellaire;
  • Michael C. Engel, Chemcel FCU, Bishop; and
  • Christa Hollier, Golden Triangle FCU, Groves.
As CEO of a $306 million asset credit union, Frazier noted there isn't one thing alone that keeps him awake. His concern is about several threats coming together at once, including interest rates, compliance issues and taxation. "Having come from the banking side, I can say that it is a very different environment," he said. "Credit unions are altruistic and I really enjoy this environment. I'm concerned, however, that our philosophical values would change if we lost our tax-exemption," Frazier said.
 
Newfarmer agreed.  "I'm really good at dealing with the things I can control, but it's the things I cannot control that cause me to lose sleep."  She named squeezed margins and regulatory burdens as things she can't control.  Other areas of concern included emerging payment systems that mean members are using their debit cards less, and secondary capital.
 
Competing with larger financial institutions in the community is a real challenge, said Kapalski. CTECU has $57 million in assets.  "We're the little guy on the block," she said. "With an aging membership, we're really having to focus on how to grow our membership and attract a younger demographic."
 
The market is saturated with credit unions and financial institutions, which means "building relationships with our members is critical to our survival," agreed Hollier.
 
Competition comes from everywhere, said Engel, adding that it's important to know your market and understand where there is growth potential.
 
When asked if board terms should be limited, Engel noted that longevity has value.
 
Limits aren't necessary so long as the board member is productive and contributing to the overall growth of the credit union, said Newfarmer. "We have seasoned board members, and we have younger board members, and they all bring value to our organization."
 
Turnover isn't a good thing, said Frazier. "It takes a long time to develop the necessary skills, knowledge and understanding to serve on a credit union board. This is a complex businesses, so I think we need longevity on the board."
 
The panelists also discussed new products and services in the works, including electronic loan applications, personalized mobile apps, remote deposit capture, revamps of online loan applications. Bailey noted that "technology has to be a high priority. If you don't have your arms around technology, you are putting your credit union at a disadvantage."

Special Report: HealthCare First CU Helps Blind, Visually Impaired Students

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JOHNSTOWN, Pa. (9/11/13)--It's a story quite representative of the extra mile credit unions are willing to go to support their communities. For a second consecutive year, HealthCare First CU in Johnstown, Pa., has helped with a summer academy conducted by the Pennsylvania Department of Labor and Industry to teach financial education to blind or visually impaired students bound for college.
 
"HealthCare First CU developed the program, and it has been terrific for us," Shelley Faust-Jones, vocational rehabilitation specialist for special programs, Bureau of Blindness and Visual Services for the Pennsylvania Department of Labor and Industry, told News Now. "The partnership has been incredibly more than we imagined. Their financial expertise and enthusiasm to teach youth--especially youth with special needs--was overwhelming to us."
 
Just two summers ago the Pennsylvania agency asked the credit union to wade into the program, and the $57.5 million-asset credit union's started its assistance with the academy on a basic level--developing a program on how to use ATMs.
 
But after getting its feet wet, the credit union decided to plunge into the pool. Faust-Jones said HealthCare First "developed its own program for our blind and visually impaired youth. So they plan it and teach it, and execute the whole program. They've been terrific."
 
Knowing nothing about working with visually impaired students, HealthCare First FCU agreed when first contacted by the Pennsylvania Department of Labor and Industry to help students learn how to use the credit union's ATM in the Hiram G. Andrews Center in Johnstown. The mission of the center is to offer quality individualized post-secondary education, which provides career opportunities and independent life skills--including vocational rehabilitation and disability services.
 
From there, the credit union took a new look at its "Plastic Money 101" class for student financial education and made changes to better serve blind and visually impaired students, Nancy Urban, marketing director at HealthCare First CU, told News Now.  "The department was shocked we would even attempt this," she added. 
 
This summer, the class was about 50% low-vision students and 50% totally blind students.  There were 19 students in the class this year and 21 last year. Urban and Paula Nihoff, president/CEO of HealthCare First CU, conducted the presentations.
 
When presenting PowerPoint presentations to visually impaired students, the credit union used big graphics with extremely large type, bright colors and large illustrations so the students would be better able to see. HealthCare First also converted its PowerPoint presentations into Braille for blind students, Urban said.
 
As part of the effort, laptops with large screens and big numbers and letters also were supplied by the department at the Andrews Center, as well as iPads that could read to the students, she added. The credit union covered important financial matters in class, including college costs, plastic money, differences between credit and debit, and budgeting and how to write a check.
 
Also, this year, the department and credit union set up an account for the students and provided them with their own debit card with $35 on it to use during the two-week academy. 
 
"The students used it at the mall and at McDonalds," Urban said. "We showed them how to use a register and to keep it up to date. Those that could see somewhat were able to go online and check their registers."  
 
The credit union's financial education component was part of a broader curriculum in the two-week summer academy in which the Pennsylvania Department of Labor and Industry taught participants about computers, cooking, activities, getting on a bus, and how to pay at a fast-food restaurant and at stores.
 
"We were surprised by their great enthusiasm, insight and questions," Urban said. "These kids had great questions that even adults don't ask. One asked, 'If people overspend and get charged fees, how can people pay overdraft fees if they don't have money in the first place?'"
 
Urban and Nihoff were invited to the graduation ceremony for the summer academy. "It was the most moving thing I ever saw," Urban said. "The students in the program talked about how great it was making friends and learning to do things on their own. Their parents were there, and the students all sang a song."
 
This article is part of a News Now series of exclusive, special reports on credit unions' outreach efforts and innovative ideas. Fostering service excellence, removing barriers and raising awareness about the value credit unions provide their members and communities are the foundation for the Credit Union National Association's, state credit union leagues' and credit unions' Unite For Good campaign toward a vision in which Americans choose credit unions as their best financial provider.

Pennsylvania Foundation Officers Elected

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Michael Kaczenski (center) conducts his first meeting as chairman of the Pennsylvania Credit Union Foundation board. Dave Ackerman, vice chairman, is at right; Joe Wambach, executive director, is on the left. (Photo provided by the Pennsylvania Credit Union Association)
HARRISURG, Pa. (9/11/13)--The Pennsylvania Credit Union Foundation held its first meeting with new Board Chairman Michael Kaczenski, CEO of Sun East FCU in Aston, Pa., presiding.

It was the first meeting for new board members Amy Lichwa, Norwin Teachers FCU, Irwin, and Jeff Albert, People First FCU, Allentown (Life Is a Highway Sept. 10).

The board also elected these table officers:
  • Dave Ackerman, USX FCU, Cranberry Township, re-elected as vice chairman;
  • Jeff DeBree, Penn East FCU, Scranton, re-elected as treasurer; and
  • Barb Bowker, PSECU, Harrisburg, secretary.
Also, George Nahodil, Members 1st FCU, Mechanicsburg, presented a report on Junior Achievement of Central Pennsylvania's Young Men's/Young Women's Futures Symposium program, which the foundation has supported with grants for the past 10 years.

Minn. Social Studies Standards Change, Opportunity For CUs

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ST. PAUL, Minn. (9/11/13)--Changes to Minnesota's academic standards in social studies mean credit unions have more opportunity to provide personal finance educations to students of all ages in the state, said the Minnesota Credit Union Foundation.
 
As the 2013-2014 school year ramps up, the foundation is encouraging credit unions to expand their personal finance education efforts.
 
"Credit unions are well-positioned to educate their members, their communities and today's young people on the basics of personal financial management," said Pat Brekken, chair of the foundation. "Through forming relationships with schools--including teachers, administrators and students--we can have a tremendous impact on our state's financial future."
 
The changes to the Minnesota K-12 Academic Standards in Social Studies, which became effective in May after a year-long revision process, include additional requirements in financial education for students of all ages. All state academic standards are revised on a schedule approved by Minnesota's legislature. Districts are required to put state standards into place to ensure "all students have access to high-quality content and instruction," said the Minnesota Department of Education's website.
 
"As educators get acquainted with the new standards, credit unions have a great opportunity to use their financial expertise to help meet the needs of teachers," said University of Minnesota Extension Educator and Extension Professor Lori Hendrickson. "Whether it's a one-time guest-speaking arrangement or an ongoing relationship, students appreciate the real-world perspective that outside experts can provide."
 
The new standards include these fundamental concepts of economics and personal finance:
  • Distinguishing between wants and needs, and understanding income and expenses;
  • Creating a budget, establishing savings goals and tracking success;
  • Evaluating investment options using criteria such as risk, return, liquidity and time horizon; and
  • Understanding the benefits and costs of credit and how it impacts an individual's ability to borrow, rent, get a job and achieve other financial goals.

CUNA Council White Paper Explores Fraud And Technology

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MADISON, Wis. (9/11/13)--The increased sophistication of technology behind fraud and fraud prevention is the topic of a new white paper from the CUNA Operations Sales & Service Council. 

"Fraud Trends: New and Repurposed Scams and Schemes" examines some of the trends and forces behind the continued uptick in fraud--including the ease of online access, the "new mafia" and economic factors.

"People are storing more of their sensitive information on remote devices," says Jim Fuher, fraud prevention manager at Spokane (Wash.) Teachers CU. Online fraud, remote deposit capture and mobile scams will continue to increase during the next decade, he predicts.
 
By the same token, the tools to combat fraud--behavioral analytics, online fraud monitoring reports and automatic member alerts--are quite effective, and didn't exist until recently.
 
Technology tools under development and consideration include:
  • Anti-malware software for mobile devices. At the March 2013 BAI Payments Connect conference, Al Pascual, senior analyst for security risk and fraud, at Javelin Research and Strategy, urged the development of this software--particularly for iOS mobile devices, which are more vulnerable to attacks.
  • Geo-location tracking. Through surveys, consumers have shown their acceptance of this technology, which would help financial institutions track member and customer account activity and report suspicious transactions, the paper said.
  • Voice biometrics. This is the only biometric measurement that works across all channels, including the call center--which can be particularly vulnerable during distributed denial of service attacks, the paper said.
  • Malware and/or account takeover detection software. Some financial institutions are beginning to offer this free to their members and customers. Many find that the cost of providing it is mitigated by the fraud prevention and detection protection it provides, the paper noted.
  • Positive pay via online banking. This program prevents check fraud and strengthens internal controls by comparing checks presented on accounts against checks that members issue daily notes Smart Business Network Inc. (SBN).
  • ACH blocking service. The member decides which companies are authorized to post automated clearinghouse transactions--blocking those that are not authorized, according to SBN.
  • Automated alerts. Members can set limits for such things as maximum balance, minimum balance, daily transactions and others, and receive alerts if their account exceeds set parameters.
  • Multifactor authentication. These systems require members to authenticate their identities using more than one method--for example, a personal identification number and a security question. Federal Financial Institution Examination guidelines and other industry regulations call for this, so most financial institutions now have it in place.
  • Enterprise-wide fraud detection and management systems. Many vendors offer these systems and services--helping financial institutions manage the anti-money laundering and fraud challenges from a global perspective, covering the entire organization's needs.