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CU System briefs (09/14/2011)

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* WASHINGTON (9/15/11)--Credit unions can celebrate the richness and diversity of their communities by scheduling a special lineup of programs in observation of Hispanic Heritage Month (HHM), which kicks off today and continues through Oct. 15. The month celebrates citizens whose ancestors came from Spain, Mexico, the Caribbean and Central and South America. HHM was enacted into law on Aug. 17, 1988 (Public Law 100-402). It began in 1968 as Hispanic Heritage Week and was expanded in 1988 to cover the 30-day period, which includes independence days for several Latin American countries, Mexico and Chile,as well as Dia de la Raza (Columbus Day) on Oct. 12. According to the Texas Credit Union League, actions credit unions can take include: informing members and community of special events on their website; getting educated on different cultural celebrations and the makeup of their Hispanic community; partnering with a local organization or event to support an HHM activity, and informing the Hispanic community of the credit union's efforts to meet their financial needs (LoneStar Leaguer Sept. 14) … * LIVERMORE, Calif. (9/15/11)--Harold Roundtree has been named president/CEO of UNCLE CU, a $235 million asset credit union based in Livermore, Calif., effective Sept. 6. Roundtree brings more than 22 years of senior executive management experience in the financial services industry. He most recently served as the senior vice president of the retail banking division of Technology CU, San Jose, Calif. There he administrated and managed enterprise-wide projects consisting of 10 financial centers; mortgage originations; commercial, real estate and consumer lending; private banking; business banking; business development; and call centers. He also served in various leadership roles such as director in the loan services division at World Savings and vice president of First Interstate Bank …

Mentor program inspires second round at CUANY

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ALBANY, N.Y. (9/15/11)--A mentorship program partnership between the Credit Union Association of New York's (CUANY) Young Professionals Commission (YPC) and the Filene Research Institute's Crash Network has proved so successful that CUANY announced it will return for a second round in the program. The partnership was launched earlier this year with New York being the first state to adopt the mentorship project as an association-sponsored program, said CUANY. The program paired 10 seasoned industry leaders and young protégés from various sized credit unions. The mentorship process was conducted through weekly e-mails and twice-monthly in-person meetings or phone calls for six months. "Mentoring is the most rewarding part of my job," said Michelle McCourt, executive vice president and chief financial officer of $72 million asset Bridgeway FCU, Poughkeepsie, N.Y. "The Crash mentor program caught my interest since it involved working with up-and-coming young credit union professionals who really want to develop the skills necessary to advance," she said. Both mentors and mentees benefitted from the partnership. Mentors gleaned insights needed to engage and cultivate tomorrow's credit union leaders. Young professionals gained insights as well as skills and tricks of the trade that otherwise would take years to obtain, said CUANY. "The mentorship program provided me the opportunity to see my career through a different set of eyes," said Jo-Anne Harvey, a junior financial analyst with $1.69 billion asset NEFCU, Westbury, N.Y. Harvey is a member of YPC and McCourt's mentee. "Having been paired with a successful mentor who worked her way through the ranks was inspiring. She was able to offer me an unbiased opinion of what I needed to do both professionally and personally to continue growing within the credit union family." CUANY created the program to respond to career development needs of the state's young credit union professionals. Filene's Crash Network facilitated the program by hosting the initial introductory webinar, supplying a timeline and offering support during the program. "The mentorship program has proven to be a great vehicle to promote learning, build knowledge and connect people within the credit union industry," said Allison Barna, CUANY's community development coordinator. "It's also a way for credit unions to look to the future." She said the program will start a second six-month round of mentorships shortly.

Missouri CUs to Congress We stand ready to help small biz

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ST. LOUIS (9/15/11)--After a summer of meetings with federal lawmakers around the state, the Missouri Credit Union Association (MCUA) hand delivered to the Missouri delegation on Capitol Hill letters that pointed out banker hypocrisy and highlighted a recent Forbes editorial in favor of member business lending (MBL) legislation. The Forbes editorial endorses credit unions' efforts to raise their MBL cap to 27.5% of assets from 12.25% and explains how banks are standing in the way of giving entrepreneurs choices in financing their businesses. At the same time, Missouri banks are receiving millions of taxpayer dollars to encourage small business lending, said MCUA (The Missouri difference Sept. 13). During the last week of August, four Missouri banks received $117.1 million out of the $767 million disbursed from the U.S. Treasury Department. This includes $57.9 million for Great Southern Bancorp Inc., Springfield; $23 million for Liberty Bancshares Inc., Springfield; $20 million for The Landrum Co., Columbia; and $16.2 million for Liberty Bancorp Inc., Liberty. The funds are from the $30 billion Troubled Asset Relief Program II earmarked in Congress in 2010 to spur lending to small businesses. "In contrast, Missouri credit unions stand ready to use their own money to do the same thing," pointed out MCUA President/CEO Mike Beall. Beall's letter urges Missouri's members of Congress to support S. 509 and H.R. 1408--the Small Business Lending Enhancement Act, which would raise the cap to 27.5%. "Please help us provide stimulus with private sector funding by empowering credit unions to make more MBLs," Beall said. Missouri credit unions continue to met with the entire Missouri federal delegation to surge support for raising the cap. The Credit Union National Association (CUNA) continues to advocate lifting the MBL cap, most recently as a small provision that could be added to President Barack Obama's larger plan to reinvigorate the ailing economy via the American Jobs Act (News Now Sept. 14). CUNA says that lifting the cap will enable credit unions to inject $13 billion in loans to small businesses, helping generate as much as 140,000 new jobs the first year, without cost to the taxpayer. CUNA-sponsored ads touting the economic promise and bipartisan appeal of lifting the MBL cap will begin running next week in Capitol Hill newspapers and the Washington , D.C., regional edition of The Wall Street Journal. They will run into October. Also, credit union delegations and their leagues will be in Washington the next six or seven weeks for "Hike the Hill" visits to discuss the measures with their lawmakers.

Minnesota foundation sets free fin ed webinars

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ST. PAUL, Minn. (9/15/11)--The Minnesota Credit Union Foundation--in conjunction with the University of Minnesota Extension--will host free webinars this fall to help make financial education efforts more effective. Webinars are available to anyone who works to improve the financial literacy levels of students. Entitled “Connecting the Dots: Financial Education … Financial Capability,” the webinar series is intended to increase educators’ knowledge and competency in financial topics, making them better equipped to teach the subjects and improve the financial management skills of young adults. Webinars will be offered in “live” format and archived online for future use in training organizations and school districts. Registered participants gain access to the archive and all online resources used during the webinar. All webinars are 3:30 p.m. to 5:30 p.m. (CT) Wednesdays. Registration deadlines are one week prior to the scheduled date. Session dates and topics include:
* Oct. 12: Pedagogy, culture, poverty, National Endowment for Financial Education High School Financial Planning Program curriculum, introduction to competencies; * Oct. 19: Financial planning, budgeting; * Oct. 26: Investing, credit and debt; and * Nov. 2: Keeping your money safe and secure, insurance, careers.

Wisconsins Nicolet CU to merge into Ripco CU

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RHINELANDER, Wis. (9/15/11)--Ripco CU, a $77.8 million asset credit union in Rhinelander, Wis., said on its website it has been granted approval from the National Credit Union Administration (NCUA) and the Wisconsin Department of Financial Institutions/Office of Credit Unions to acquire the assets of Nicolet CU, a $20 million asset credit union in Eagle River, Wis. The merger is scheduled to occur Sept. 30. In the period prior to that date, Nicolet has a formal management agreement allowing Ripco executives to manage the operations of Nicolet. Ripco management staff is at the Eagle River location, working with existing Nicolet staff to ensure a smooth transition once the merger is finalized. As of Oct. 1, the Nicolet CU will operate as Ripco CU. Nicolet members will see no interruption in service, and their account numbers, checks and plastic cards will remain unchanged for the time being, Ripco said. Deposits at Nicolet will continue to be federally insured for at least $250,000 by NCUA.

CU cross-sells with alternative to banner ads

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YORKTOWN, Va. (9/15/11)--1st Advantage CU of Yorktown, Va., decided to try a different approach to cross-sell products after it realized no one was clicking on the banner ads it displays within online banking sessions. 1st Advantage boosted conversion rates for one of its products to nearly 10% in a test after it began presenting targeted questionnaires to members as they finish their online banking sessions (The Daily Exchange Sept. 13 and American Banker Sept. 12). The $537.5 million asset credit union saw a large rise in conversions once it made the application a pop-up upon log out, Jim Craig, vice president of marketing, told the Banker. The credit union tested KulaX, a product that presents three questions targeted to a specific user and designed around a specific product. The questions only are presented when a user logs out. 1st Advantage tested KulaX for several products in April and May, including auto loans, debit cards and mortgages. It plans to officially launch KulaX by the end of the month. During the test period, 22,000 of the credit union's 57,000 members visited its online banking site. 1st Advantage identified 275 who had the debit card but were not using it. Using KulaX, the credit union created a three-question online form and paired it with a cash incentive of $10 if the member agreed to use the card for 10 transactions. Of the members who received the offer, 154 viewed the survey and 25 completed it. Fourteen agreed to take the offer. The credit union’s debit card showed the most improvement in conversions. By knowing who accepted an offer and who didn’t, the credit union could retarget it, and avoid saturating users with offers they repeatedly turn down, Craig said.

FBI reports 74 CU robberies in second quarter

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WASHINGTON (9/15/11)--The Federal Bureau of Investigation (FBI) recorded 1,023 federal crimes such as robberies and burglaries in U.S. financial institutions during second quarter 2011, according to FBI's Bank Crime Statistics report. Among them: 1,007 robberies, including 74 reported at credit unions. In addition to the credit unions, 909 commercial banks, four mutual savings banks, and 20 savings and loan associations were robbed during the quarter. Burglaries for the period totaled 15, including two at credit unions. One larceny was reported at a bank. Loot totaling $7.82 million--including $7.8 million in cash--was taken in 91% of the incidents. More than $1.8 million was recovered in 23% of the incidents and returned to the financial institutions robbed, said the report. The crimes occurred most frequently on Friday, and the most frequent time frame was between 9 a.m. and 11 a.m. Four percent of the incidents involved acts of violence such as discharging firearms, assaults and hostage situations. They resulted in 31 injuries, one death and three persons taken hostage. Fifteen employees and four customers were among those injured. The person killed was a robbery suspect. Those statistics were not broken down by type of financial institution. Demand notes were the most common method of robbery. Most of the incidents occurred in the Southern U.S., which reported 373 incidents. Not all crimes are reported to the FBI. The statistics, recorded as of Aug. 2, involve only financial institution crimes reported to the bureau.

Pa.s small-dollar loans save consumers nearly 17M

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HARRISBURG, Pa. (9/15/11)--Nearly 50,000 Credit Union Better Choice loans have been issued to Pennsylvania credit union members for short-term cash needs since the program launched in 2006, according to the Pennsylvania Credit Union Association (PCUA). The 81 participating credit unions statewide have issued 49,971 loans, totaling more than $23 million since the program’s inception. It has saved borrowers nearly $17 million over using a traditional payday lending product. The Credit Union Better Choice loan is a payday lending alternative product where credit unions offer borrowers a 90-day loan with a $500 limit. Reasons cited for the loan’s purpose have included Christmas gifts, taxes, school clothes and funeral expenses. Credit Union Better Choice was developed through a collaboration of PCUA, the Pennsylvania Treasury Department and the Pennsylvania Department of Banking. During the first six-month cycle (Jan. 1 through June 30), 6,780 loans totaling $2.9 million dollars were issued. Borrowers could also place $290,000 into savings accounts during the period. “The continued increase in loans shows that consumers still need cash quick,” said Jim McCormack, PCUA president/CEO, adding that “every Pennsylvanian should be afforded access to loans at reasonable fees and rates." A typical $500 payday loan costs consumers $15 for every $100 borrowed for two weeks, or roughly $450 over 90 days, said PCUA. A $500 Credit Union Better Choice loan costs consumers about $42.50 for the same 90 days and at the end of the loan term, the consumer has $50 in a savings account. Also, the program builds upon this new wealth-building component by providing financial education to consumers to help them make better informed financial decisions. Pennsylvania consumers saved an average of 80 cents in loan fees and costs for every dollar borrowed through Credit Union Better Choice rather than through a typical loan from a payday lender, PCUA said. That translates into nearly $17 million that consumers kept in their own pockets by using credit unions that offer the loans.

CU duo records ICU Day song

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MADISON, Wis. (9/15/11)--The credit union music duo The Disclosures have released a new single, “Building a Better World,” for International Credit Union (ICU) Day on Oct. 20. The song title mirrors this year’s ICU Day theme, “Credit Unions Build a Better World.” The song spotlights aspects of both credit unions and the cooperative movement as a whole. The first verse points out the worldwide connection that cooperatives share. The lyrics then call attention to the benefits of credit unions, from volunteering for the board of directors to loans that help businesses and farms grow. “It captures the spirit of the day and should excite credit union staff and members alike about being a part of this movement of building a better world.” said Joanne Sepich, CUNA’s ICU Day coordinator. The ICU Day musical endeavor is not a Disclosures-exclusive effort. Credit unions worldwide can submit videos of their members and staff singing “Building a Better World.” Cuts from the submissions will be compiled into a music video for the song that will be posted on YouTube. To submit a video, use the link. The deadline for video submissions is Sept. 21. The finished video and song will be announced in the ICU Day Update e-newsletter. The Disclosures are an acoustic thrift-rock duo based in Madison, Wis., consisting of Chad Helminak and Christopher Morris. Helminak is the Web and member development strategist at the Wisconsin Credit Union League. Morris is director of communications for the National Credit Union Foundation. The duo performs classic rock n’ roll covers in addition to their original tunes that delve into topics of life, love and the cooperative spirit.

Data breaches place vacationers cards at risk

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MADISON, Wis. (9/15/11)--Two recent hacking incidents underscore the need for credit unions and their vacationing members to monitor their accounts for suspicious activity. Hackers accessed two computer stations owned by Vacationland Vendors of Wisconsin Dells, Wis., putting about 40,000 credit or debit card users at risk (WISCNEWS.com Sept. 14). The computers were at arcades in Wilderness Resorts in popular resort towns Lake Delton, Wis., and Sevierville, Tenn. The company owns and operates 11 arcades. “Based upon its investigation to date, Vacationland Vendors reasonably believes that a computer hacker improperly acquired credit card and debit information,” a message on Vacationland Vendors website states. “This incident did not involve an internal security issue within the Wilderness Resort. Vacationland Vendors has learned that other businesses just like its own have been affected by this computer hacker.” The company was alerted to the breach, which occurred March 22, as a result of calls from one or two customers, according to Evan Zeppos, a spokesman for Vacationland Vendors. Although 40,000 credit or debit card users’ data were stored on the terminals, fewer than 20 individuals were believed to be impacted, Zeppos said. The Vacationland Vendors website advised consumers who have used their credit card or debit card at the Wilderness Resort locations in Wisconsin or Tennessee from Dec. 12, 2008 through May 25, 2011 to watch for any unusual activity on statements or accounts or suspicious items on their bills. Card issuers should be informed of the incident and consumers should place a fraud alert on their consumer credit file, the website said.

Study Small biz hit by fraud change finance behavior

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PLEASANTON, Calif. (9/15/11)--Small businesses are experiencing more identity fraud, which can affect credit unions serving them in two ways: through losses stolen from the business owner's accounts with the credit union, and through lost revenue after the business owners adjust their financial habits as a result of the fraud, said a recent study. Small businesses are attractive to fraudsters because they conduct a myriad of transactions that often span both business and personal accounts, said Javelin Strategy & Research in a report issued recently on how small business fraud impacts financial institutions' revenues and retention of business. Last year, 4.1% of small businesses were hit with $8 billion in fraud. That compares with 3.5% of consumers hit by identity theft fraud. Financial institutions, merchants and other providers absorbed at least $5.42 billion of that loss, while the cost to the business-owner victims totaled $2.61 billion, said Javelin. The mean amount of the small business fraud--the total dollar amount divided by the number of victims--was $4,851 for small businesses, with the mean out-of-pocket expense for the victim at $1,574. Identity fraud cost consumers $631 out of pocket during the same time. Small business owners "face significant financial losses as well as other issues as a result of fraud," said Philip Blank, senior analyst risk, fraud and security at Javelin. They have "higher legal costs and longer timeframes for resolution of fraud than consumers." They also do not have the same zero liability fraud guarantees that online banking consumers receive from their financial institutions. Credit unions, banks and credit card companies who partner with small businesses that become victims of fraud not only absorb billions of dollars in financial losses, but also lose the small business as clients, the Javelin report said. As a direct result of a fraud, more than 20% of small business owners switched credit card issuers, and nearly the same percentage switched financial institutions. Javelin also reported that about 32% refused to bank online and reverted back to writing checks, which drove up financial institutions' costs. "These changes create a significant amount of churn and lost revenues for financial institutions and issuers, as small business owners tend to have a higher transaction rate than the general consumer and often generate significantly more fees and charges for the financial institution or issuer," said Javelin. Because credit unions and card issuers have a vested amount, Javelin recommended that financial institutions and card issuers offer more real-time and comprehensive alerts for the business's credit, debit and demand deposit accounts, as well as fraud avoidance software, identity theft protection and credit monitoring services. "Selling anti-fraud and security services not only helps small business owners prevent fraud, but also generates revenue for the financial institutions and issuers," said James Van Dyke, president and founder of Javelin. Here are some of the schemes that recently targeted small businesses, according to The Salt Lake City Tribune (Sept. 12):
* Con artists rented an office in the same building as a California law firm and used the firm's address, but with a different suite number, to buy $70,000 worth of computers and office furniture delivered on the law firm's line of credit. The thieves simply reloaded the furniture into a truck and disappeared. * Thieves use or alter information from business registrations with state governments to open lines of credit so they can buy goods that can be easily resold for cash. In Colorado, scam artists from California revived the Secretary of State registration of a defunct company and used the name of the former owner as an officer, then took out lines of credit, ordered goods, and disappeared with what they bought on the stolen credit. * Thieves targeted "big box" stores and computer companies to buy goods with stolen credit card numbers or lines of credit. In the case of a cell phone company, they bought phones on credit. * In Pennsylvania, thieves placed malicious software on a school district's computer system and used information from the breach to steal $700,000 from the district's bank accounts in 74 transactions over two days.