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CU System Archive

CU System

Money Center president pleads guilty to 50M theft

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NEW YORK (9/27/10)--A retired police officer who headed a company that provided cash to financial institutions and ATMs pleaded guilty conspiracy to commit bank and wire fraud by using the float on banks and credit unions' cash to pay his company's overhead and expenses (New York Daily News Sept. 16 and PaymentsSource.com Sept. 23). Robert Egan, 65, president of Mount Vernon Money Center in New York, faces up to 15 years in prison. He and the company's chief operating officer, Bernard McGarry, 50, were arrested in February for defrauding credit unions, banks, retailers, hospitals and universities out of $50 million. Instead of segregating cash for each client, they allegedly commingled the funds by taking cash in the vault, regardless of its source, to fill the next day's ATMs (News Now May 24). The company supplied cash to more than 5,300 ATMs, including those of Cardtronics, which reported in a filing with the Securities and Exchange Commission that the theft cost it $2.1 million and shut down nearly 4% of its ATMs. The fraud hit several credit unions, including New York Actors FCU, Northeast Alliance FCU, ADP FCU, and Atlanta's Delta Community CU. The credit unions lost a total of $5.8 million. New York-area banks and credit unions used the company to stock thousands of ATMs, while universities and hospitals employed it to help cash employees' paychecks.

Police say teller texted suspect before heist

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ARLINGTON, Texas (9/27/10)--A teller who appeared to be a victim in a robbery of an Arlington, Texas branch of Texas Trust CU is now a suspect. Police say the teller allegedly sent text messages to the robbery suspect just before the robbery. Kyle Lightner, the teller, is accused of aiding the robbery suspect, Tyce Von Franklin, in stealing $183,000 in a robbery of the credit union on Sept. 1 (NBCDFW.com and CNET News Sept. 23). The man who robbed the credit union hid in the bathroom and emerged after closing time. confronted startled employees and forced them into a vault. Four hours later, Franklin was stopped for speeding. Officers discovered marijuana, a large amount of cash, a gun and a surgical mask in his car. A surveillance camera caught Lightner texting just before the robbery, police said, adding they were suspicious because he stayed at work past his normal shift. A search of his cell phone found text messages had been sent to Franklin, urging him not to forget his sunglasses, referring to the arrival of an off-duty officer, and describing the credit union's layout. The messages also warned to stay calm so a co-worker wouldn't scream. Police are also investigating the two in relation to a $148,794 unsolved robbery at a bank where Lightner worked. In that case, he was "taken hostage" and forced into a vault by a man who, police alleged, resembled Franklin.

CU perspective on expanded hours in Maine newspaper

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PORTLAND, Maine (9/27/10)--The Maine Credit Union League provided the credit union perspective in a feature about expanding business hours to Sunday in The Maine Sunday Telegram's business section. League President John Murphy was one of three individuals from the financial sector interviewed for the article, which examined the impact and views on a recent decision by TD Bank to open some branches on Sunday, said the league newsletter Weekly Update (Sept. 24). "I am not hearing a strong call for Sunday hours," Murphy told the newspaper. "Roughly 75% of credit union transactions take place remotely now, through ATMs, debit cards, online or 24-hour call centers," he said. The article highlighted the Maine Shared Branch Network, noting it has 129 locations with Saturday access and expanded hours for members seeking the personal touch. "Convenience is the name of the game in financial services today," Murphy said. "It's every way you can respond to meeting the time needs of members." A banker interviewed in the article said Sunday hours are more expensive; to make it worthwhile, banks would need to offset the costs with growth in deposits, new accounts or other revenue, such as fees. The story praised credit unions for being especially tuned in to the desires of their members, said the league.

PCUA team heads to Haiti today to aid remittance

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HARRISBURG, Pa. (9/27/10)--A team of credit union representatives from the Pennsylvania Credit Union Association (PCUA) will leave for Haiti today to determine if PCUA and Mid-Atlantic Corporate FCU can help rebuild the country’s remittance system. The group wants to determine if Haitian credit unions can provide services to their members, and recruit new members employed in “Cash for Work” projects sponsored by American nonprofit organizations. The goal is to determine the potential for Pennsylvania credit unions to provide financial and technical resources to Haitian credit unions through partnerships that help Haiti’s credit unions rebuild and provide services for members (Life is a Highway Sept. 24). Joseph Wambach, executive director of the Pennsylvania Credit Union Foundation, will lead the PCUA team. Joining him will be Christine Woods, CEO of Keystone FCU in West Chester, and Wambach’s wife, Maryse, who is originally from Haiti. They will be joined by Dave Ackerman, CEO of USX FCU, Cranberry Township, who will be in the country to work on emergency projects through his church. The team will visit Port-au-Prince and rural areas to examine the state of Haiti’s credit unions and the effectiveness of the projects to attract new credit union members. It also will meet with staff from the World Council of Credit Unions, officials from Le Livier--a corporate credit union--and representatives from American non-government agencies. The team will return Oct. 9.

Brazilians wrap up CU partnership visit in Texas

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DALLAS (9/27/10)--Credit union executives from SICREDI, a financial cooperative group in Brazil, wrapped up their three-week tour in Texas Friday as part of a partnership program with the Texas Credit Union League. The group of 13 mid- and upper-management staff was chosen to participate in the learning experience--a key initiative of the new World Council of Credit Unions (WOCCU) international partnership program between the league and SICREDI, the league said. “This is our 26th international partnership,” said Victor Miguel Corro, WOCCU senior manager of international partnerships. “Typically our partnerships are between developed and emerging movements, but this one is between two very strong and developed credit union systems.” During the visit, the group “shadowed” staff at credit unions in Houston, Dallas and Fort Worth to garner a deeper and expansive knowledge of how credit unions in the U.S. operate. The SICREDI executives focused learning on leveraging technology, enhancing financial education outreach, improving operational efficiencies, and using new and innovative tools to spur membership development. Also, the SICREDI group received English language instruction. Language is one of the key aspects of that development. Texas credit unions that participated in the immersion program are:
* Energy Capital CU, Houston; * Smart Financial CU, Houston; * PrimeWay FCU, Houston; * People’s Trust FCU, Houston; * InTouch CU, Dallas; * American Airlines CU, Fort Worth; * Resource One CU, Dallas; * Neighborhood CU, Dallas; * Unity One CU, Fort Worth; and * EECU, Fort Worth.
“During our visit we had the opportunity to share best practices between our organizations, and as we began our dialogue, we found that many parallels exist between our organizations,” said Randall Dixon, president/CEO of Energy Capital CU. “Many of the similarities related to internal and external services, as well as board governance and organization development.” “Although we're in different countries, using different systems, and serving different cultures, the process of delivering service excellence is the same for everyone,” said Kent Lugrand, president/CEO of InTouch CU. SICREDI is one of the major cooperative systems in Latin America, with 12,000 employees, 1.6 million members and more than 1,000 service centers. It has a unified brand and standard policies, procedures and bylaws. Despite their shared identity, SICREDI cooperatives are still unique and local, just like credit unions in the U.S. The leaders of both entities, Dick Ensweiler, league president/CEO, and Manfred Dasenbrock, chair of SICREDI’s holding company, say they are confident that the success of this first joint initiative will set the stage for a fruitful and long-lasting partnership. Both understand the significance of the international partnerships program because each plays a role in international development, the league said. Ensweiler chairs the Credit Union National Association’s World Leadership Development Committee, and Dasenbrock serves on the World Council’s board of directors.

Card portfolio balances grew for CUs in Q2

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PORTLAND, Ore. (9/27/10)--Balances grew at U.S. credit unions in the second quarter, according to AssetExchange, a credit union credit card portfolio advisory and brokerage firm in Portland, Ore., that has analyzed second quarter 2010 credit union credit card portfolio trends. Data provided in the analysis are for credit card portfolios larger than $1 million in each time period and are based on National Credit Union Administration call report data. For the roughly 2,150 credit unions with credit card portfolios of $1 million and larger:
* Outstanding balances grew at an annual rate of 7.4% between June 2009 and June 2010 to $34 billion, continuing the trend of mid-single digit growth. Total assets at the credit unions grew at an annual rate of 6.8% during the same period. * Card accounts grew at a 3.1% annual rate to 12.6 million. * Cards as a percentage of total assets increased to 4.6% in the second quarter of 2010, up from 4.5% in the second quarter of 2009. * Credit card penetration continued to trend near 18%. * Credit card delinquencies fell to 1.7% from 1.9% between June 2009 and June 2010. Credit card charge-offs rose to 4.5% from 4.2% during the same period.