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CU applauds city council decision to cap payday loans

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SAN ANTONIO (9/26/12)--A credit union in San Antonio is applauding the adoption of a city ordinance that limits payday loans and auto title loans. 

The San Antonio City Council adopted the ordinance, which limits payday loans to 20% of the consumer's gross monthly income. It limits auto title loans to 3% of the consumer's gross annual income, or 70% of the vehicle's value, said the Texas Credit Union League (LoneStar Leaguer Sept. 25).

San Antonio joins two other Texas cities--Dallas and Austin--that have passed tighter restrictions on the loans, and that sets right with Ashley Harris, director of public relations at San Antonio-based Generations FCU.

"I couldn't be more pleased that our city council has taken this extra step to protect the most vulnerable members of our community," Harris told the league. "Predatory lenders, unfortunately, have a strong presence in our community. But I do think the council's action sends a valuable message to our community. It lets our citizens know that San Antonio is a community that cares about their financial well-being. And it sends a strong message to the payday lenders that times are changing."

Harris acknowledged that the ordinance likely will be tied up in litigation. She noted that credit unions, particularly credit unions participating in the REAL Solutions program, should seize every opportunity to get the message out there that credit unions--as not-for-profit financial cooperatives--exist to help the community.  "We need to continue our efforts to educate consumers on why it's in their best interest to avoid these fringe financial service providers," Harris added.

REAL Solutions is a financial education program of the National Credit Union Foundation. For more information, use the link.

NCUA adds Barclays to suits over corporate CU failures

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ALEXANDRIA, Va. (9/25/12)--The National Credit Union Administration (NCUA) Tuesday filed its seventh lawsuit against Wall Street investment firms--this time against Barclay's Capital Inc.--over investment losses that contributed to the failure of U.S. Central FCU and Western Corporate FCU.

NCUA's suit, filed in the U.S. District Court in Kansas, alleges Barclay's violated federal and state securities laws through misrepresentations made in the sale of mortgage-backed securities to U.S. Central and WesCorp.  Barclay's is the U.S. subsidiary of the British financial services firm.

NCUA alleges that the price paid for the securities sold by Barclay's exceeded $55 million.

"Trust and accountability are two cornerstones of our financial system," said NCUA Board Chairman Debbie Matz in an NCUA press release. "As clearly outlined in our complaint, Barclay's violated that trust by issuing faulty disclosures on securities underwritten by the firm. As a result, two corporate credit unions collapsed, and the entire credit union industry experienced a crisis.

"Since then, NCUA has successfully worked to restore stability to the credit union system. Now we are working to hold Barclay's, and other responsible parties, accountable for their actions," she added.

As in the other six lawsuits, NCUA's complaint alleges Barclay's made numerous misrepresentations and omissions of material facts in the offering documents of the securities sold to the failed corporates. It also alleges systemic disregard of the underwriting guidelines stated in the offering documents. The misrepresentations caused U.S. Central and WesCorp to believe the risk of loss was minimal, when in fact the risk was substantial.

NCUA has filed previous lawsuits against J.P. Morgan Securities LLC, RBS Securities, Goldman Sachs, Wachovia, and UBS Securities. The cases are working their way through court. Earlier this month a federal judge in Los Angeles said NCUA's lawsuit against Goldman Sachs can proceed (News Now Sept. 10), and in July a U.S. District Judge in Kansas ruled that the suit against RBS Securities Inc. and Wachovia Capital Markets Inc. could proceed (News Now July 27).

The agency has already settled claims worth more than $170 million with Citigroup, Deutsche Bank Securities and HSBC. It is the first federal regulatory agency for depository institutions to recover losses from investments in faulty securities on behalf of failed institutions, NCUA said.

As liquidating agent for the two corporates, NCUA said, it had a statutory duty to seek recoveries from responsible parties to minimize the cost of any failure to its share insurance funds and the credit union industry.  Recoveries from these seven additional legal actions would further reduce the total losses resulting from the failure of five corporate credit unions.

NCUA explained that losses from those failures are paid from the Temporary Corporate Credit Union Stabilization Fund, and expenditures from this fund must be repaid through assessments against all federally insured credit unions. Any recoveries would help to reduce the amount of future assessments on credit unions, said NCUA.

The latest complaint filed is on NCUA's website. To access it, use the link.

Landmark CU applies to buy savings bank

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NEW BERLIN, Wis. (9/26/12)--Wisconsin's largest credit union, Landmark CU, has filed applications with federal and state regulators to acquire Hartford Savings Bank, a state-chartered mutual savings bank headquartered in Hartford.

Pending regulators' approval, the $2 billion asset, New Berlin-based Landmark CU expects to  add the bank's more than $190 million in assets, 10,000 customers and branch locations in Hartford, Juneau and Hubertus by the end of the year.

Although Landmark has completed 10 credit union mergers in the past three years, this is its first such transaction with a bank.

"Our institutions are strikingly similar in our mutual memberships, shared beliefs in excellent customer service and focus on employee satisfaction and community involvement," said Ron Kase, Landmark CU CEO, in a press release.  He noted that Landmark's "broader offering of products and services will bring a variety of benefits to the area." The credit union is a leading mortgage lender in Waukesha and Milwaukee counties and the largest auto lender in southeastern Wisconsin.

Discussions between the two institutions began in June and each CEO and board agreed quickly to the acquisition. Landmark is completing the paperwork required by the National Credit Union Administration, Federal Deposit Insurance Corp., and Wisconsin Department of Financial Institutions' Office of Credit Unions and Banking Division.

Landmark said it intends to keep all three bank branch locations and will add Hartford Savings Bank's 40 employees to its staff. Although the bank CEO and Chairman of the Board Ken Braun had planned to retire from active management in January, he will stay on a community board of directors to be established in the acquisition and will maintain an office at the bank's Hartford headquarters.

Tom Haley, the bank's president and chief operating officer, will become Landmark's regional resident/chief risk officer and continue to work from the bank's headquarters.  His position is new to Landmark and reflects its increased size.

The credit union is also evaluating Hartford as a location for a future regional center to handle a range of administration functions. Landmark will continue the bank's community commitments with the Schauer Arts & Activities Center, Medical Center Foundation of Hartford, The Hartford Area Foundation and other organizations.

Landmark is not the first credit union to propose acquiring a bank.  In March, GFA FCU in Gardner, Mass., announced it would acquire New Hampshire-based Monadnock Community Bank's assets and liability after the bank reported a $1.8 million loss in 2011 (News Now March 5). That bank, however, had been initially chartered as AWANE CU.

Last year, United FCU, St. Joseph, Mich., and Griffith Savings Bank, Griffith, Ind., announced they had agreed to the bank's purchase by the credit union (News Now July 29, 2011).

Landmark's acquisition of Hartford Savings Bank "allows us to strategically expand our branch locations and better serve all customers within our charter area," said Kase. Landmark currently serves members in Washington and Dodge counties from branches in Germantown, West Bend and Watertown.

"One of the many positives of this acquisition is that we're a strong, successful Wisconsin financial institutions that's keeping jobs in the area. We also have a track record of involvement and commitment to the communities we serve," said Kase.

Landmark has 489 employees serving more than 195,000 members at 24 locations throughout southeastern Wisconsin.

Free Online Discovery Conference registration opens

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MADISON, Wis. (9/26/12)--CUNA Mutual Group's third annual, daylong Online Discovery Conference on Oct. 9 is offering 13 free credit union-focused sessions from the convenience of participants' desks.

Online Discovery is the Web-based equivalent of a face-to-face conference without the associated expenses, or time away from the office. Nearly 1,000 credit union industry professionals have already registered to attend the event, said CUNA Mutual.

This year's agenda features networking opportunities, including chat rooms and message boards; an exhibit hall and prizes. Registration guarantees access to conference materials after the event is over.

John Lass, CUNA Mutual senior vice president, strategy and business development, is the keynote speaker. Lass will build upon the sustainable growth framework, with a particular focus on the competitive challenges posed by financial convergence, technology and consumer channel preferences.

The conference also will feature these industry thought leaders and presentations:

  • Mark Arnold, president, On the Mark Strategies, "Strengthen Your Bottom Line with Advanced Sales Techniques";
  • Tracy Ashfield, president, Ashfield & Associates, "The Regulators are Coming: How to Prepare for Your Next Real Estate Exam";
  • Alan Bergstrom, director, Brand & Creative Services, CUNA Mutual Group, "How to Build a Brand that Sticks";
  • Bill Klewin and Lauren Calhoun, compliance managers, CUNA Mutual Group, "Lending in Today's Regulatory Environment";
  • Ann Davidson, senior risk consultant, CUNA Mutual Group, "Card Chip Technology: Why You Should Act Now, Not Later";
  • Pablo DeFilippi, director of membership, National Federation of Community Development Credit Unions, "Create a Community Development Strategy and Tap into 70 million Prospective Members";
  • Patrick McElhenie, sales planner, CUNA Mutual Group, "Translating Lending Trends into Strategies to Fuel Growth";
  • Michael Ogden, media relations manager, CUNA Mutual Group, "Stop Missing the Mark with Social Media";
  • Ben Rogers, research director, Filene Research Institute, "New Insights to Grow Your Credit Union and Finding Member-Friendly Non-Interest Income";
  • Andy Sernovitz, CEO, WordOfMouth.org, "How to Get People Talking About Your Credit Union"; and
  • Howie Wu, vice president of virtual banking, Boeing Employees CU in Tukwila, Wash., "Solid Strategies to Gain Mobile Users in Our Always-On World."
Each conference session will feature video and audio--new features this year. The revamped scheduled chats also will feature live video streaming.

The online event is designed for CEOs, senior leadership and management teams of credit unions. However, all credit union and league employees are welcome, CUNA Mutual said.

For more information use the link.

Calif.Nevada leagues realign hire management team

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ONTARIO, Calf. (9/26/12)--The California and Nevada Credit Union Leagues introduced new members to its management team as part of its recent realignment.

Tony Kitt, former chief operating officer at Western Bridge Corporate FCU (formerly Western Corporate FCU), San Dimas, Calif., is the leagues' new senior vice president of strategic innovation and planning. He will oversee the areas of planning and project management, digital media, and information technology/facilities. Kitt served as a board member for Procura LLC, Pacific Processing Partners, Ensenta Inc. and DigitalMailer Inc.  

Business Solutions. Prior to joining Alta Vista CU, Palochik was president/CEO of South Bay CU, Redondo Beach, Calif. He was first vice chairman for the leagues' board of directors and served on the board of directors for CURoots, a credit union-owned credit union service organization launched in 2010 by the leagues.

Lynn Athens, former CEO of Spectrum FCU, San Francisco, has joined the leagues as vice president of human resources and collaborative office solutions.

Joe Keller is the new vice president of digital media and C-Sun Studios. For 20 years, Keller held positions at Western Bridge Corporate/WesCorp, including director of Web technology from 2004 to 2011.

The leagues also announced internal promotions. Leagues' Senior Vice President of Credit Union Growth and Development Lucy Ito has been promoted to executive vice president and chief operations officer.

Others promoted include:

  • Cindy Cavanaugh, to senior vice president and chief financial officer;
  • Melissa Ameluxen, vice president, state governmental affairs;
  • Jeremy Empol, vice president, federal governmental affairs;
  • Rita Fillingane, vice president, research and collaboration;
  • Chris Collver, manager of research and information;
  • Deanne Figueras, manager of meetings and conventions;
  • Natalie Moreno, senior graphic designer;
  • Tracy Vasilia, manager of distance learning and CU support; and
  • Matt Wrye, manager of publications.
 

Also, Rodney Wilson has joined the leagues as state legislative and regulatory lobbyist. Wilson served as legislative director for California Assemblywoman Betsy Butler, (D-Los Angeles). He is working in the Sacramento office.

Autoland had 25 hike in sales last year

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CHATSWORTH, Calif. (9/26/12)--Boosted by sustained new car demand and growth of new partnerships, Autoland Inc. reported a 25% sales increase through August over the same period last year.

Net profits for the auto buying credit union service organization have surpassed those of 2011 by 99%, the company reports.

"The sustained health of the new car market has allowed us to demonstrate how well we drive quality direct loans to our partners by providing an exceptional auto buying experience to their members," said Jeffry Martin, Autoland Inc. president. "Meeting the car buying demands of members has allowed us to surpass our 2012 sales projections with new-car volume outpacing the industry sales rate."

During the past nine months Autoland has added 15 new credit union partners and will be expanding to 50 in-house offices by the end of the year.

The most recent partnerships include:

  • CU of Southern California, Whittier, Calif.;
  • Community CU of Southern Humboldt, Garberville, Calif.;
  • UNCLE CU, Livermore, Calif.; and
  • Eagle CU, Lodi, Calif.

CU hosts business summit in New Jersey

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Recognizing that strategic partnerships lead to growth, North Jersey Federal CU in Totowa, N.J., brought together informative resources for small businesses seeking opportunities to grow their business. More than 100 attendees networked with other businesses, ate lunch and learned about North Jersey Federal products and services. (Photo provided by North Jersey FCU)

TOTOWA, N.J. (9/26/12)--More than 100 local owners of small- to- medium-size businesses attended the Second Annual Passaic County Small Business Summit hosted by North Jersey FCU to network and learn about the credit union's products and services, as well as network with other businesses that attended.

The summit, held Sept. 12 at the $224 million asset North Jersey FCU, provided information on financing, protecting and growing a business, increasing profitability, planning trends, networking opportunities and more.

Based on a survey conducted by Totowa, N.J.-based North Jersey FCU, many small-businesses owners expressed the need to network so they could learn about new trends in best practices and products that could make their operations easier.

Small-business owners often struggle with keeping up with trends in business planning and resources that could help them grow, the credit union said.  

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' member business lending (MBL) cap to 27.5% of assets from 12.25% so that more loans could be made to small businesses, considered a staple for economic growth. CUNA and credit unions say that increasing credit unions' MBL cap would provide more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

N.J. league announces board election results

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HIGHTSTOWN, N.J. (9/26/12)--The New Jersey Credit Union League's (NJCUL) 2012 board elections ended Sept. 17, and the results are tallied.

In 2012 there were three seats up for election, one in each tier (The Daily Exchange Sept. 25 and Sept. 17).

Incumbent Michael G. Reilly, president/CEO, Central Jersey FCU, Woodbridge, was elected in Tier B (credit unions with more than $33,875,000 in assets). Incumbent Robert D. Steeves, CEO, Essex County Teachers FCU, Bloomfield, was elected in Tier C (at large).

Incumbent NJCUL Director and Elizabeth (N.J.) Firemen's FCU President/CEO Jay Flanagan was awarded the three-year term in Tier A (credit unions under $33,875,000 in assets) in an uncontested election.

Reilly ran against Ann South, president/CEO, Novartis FCU, East Hanover.

Steeves ran against Eddie Daniels, CEO, Newark (N.J.) Board of Education Employees CU.

All directors elected during this balloting will begin serving in January.

The election drew strong participation from the membership, with 47% of eligible credit unions voting, NJCUL said.

CUBAEC collaboration spreads in Calif.s Bay area

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SAN FRANCISCO (9/26/12)--The Credit Union Bay Area Executive Coalition (CUBAEC), a group of 60 credit union CEOs from the San Francisco Bay area, is the latest initiative added to the Credit Union National Association's (CUNA) new collaboration website.

CUBAEC was formed in 2004 by 11 small credit unions to network, discuss issues and find common solutions by sharing experiences and resources. CUBAEC membership includes CEOs from credit unions with up to $250 million in assets from Monterey, California's Central Valley, Northern California and San Francisco. 

The group's primary objectives are:

  • To provide networking opportunities (problem solving and information exchange);
  • To provide effective educational opportunities on topics of interest to group members; and
  • To facilitate the generation and exchange of ideas related to the business of running a credit union.
Linda White, CEO of United Health CU, Burlingame, Calif., said CUBAEC has greatly enhanced her credit union's operations--giving her the ability to more easily delve into and discuss important business strategies and tactics. One example that's been especially helpful in today's low-margin environment: "Being able to find out how others approach the decision to implement fees and service charges has been very helpful" she says.

Her interest is "not so much in the specific dollar amount of fees other credit unions are charging--but in the thought process and the methodology others use when exploring this issue," White said.

CUBAEC maintains resources of recommended service providers and credit union professionals available to provide assistance. The group has collaborated on commonly needed policies, risk assessments, marketing projects and business resumption plans.

The need to reduce back-office redundancy through more cooperation and collaboration is one of the top strategic issues facing credit unions. "Credit union professionals repeatedly tell us this but, when asked, indicate that they don't cooperate or collaborate more because they aren't aware of successful efforts," said Mike Schenk, CUNA vice president of economics and statistics. 

The CUNA collaboration website addresses these issues, Schenk said. It provides a repository of successful initiatives, policies and procedures, and a vehicle for credit unions, leagues and credit union service organizations (CUSOs) to share their stories. "Our goal with the site is to improve the cross-pollination of good ideas, enable credit unions to replicate successful initiatives and ultimately to produce substantial financial and operational benefits that help credit unions thrive," Schenk said.

Site visitors can join a collaboration list serve, share information about initiatives, and explore cooperative efforts. The site includes links to additional resources such as Credit Union Magazine articles and several Filene Research Institute studies. For more information, use the link.

CU System briefs (09/25/2012)

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  • GREENWICH, Conn. 9/26/12)--A Greenwich, Conn., woman has been charged with the theft of more than $62,000 from a trust account for a teenage relative who had received more than $90,000 as a result of an auto accident for medical care (Greenwich Time.com Sept. 24). Gail D. Citron, 51, was charged Thursday with first-degree larceny and conspiracy in the theft of the relative's account at Greenwich Municipal Employees CU. Her husband, Robert, 47, pleaded guilty in April to fourth-degree larceny and received a one-year suspended sentence and two years of probation. The thefts allegedly occurred between Jan. 25, 2009, and Sept. 1, 2009. The money was used for household expenses, including rent, groceries and an Xbox Live video game subscription, said the arrest warrant for Robert Citron …
  • HUNTINGTON, W.Va. (9/26/12)--Andrew Davis, 32, of Detroit has been charged with attempted armed robbery of the First Priority CU, a Huntington, W.Va.-based credit union after a tip with a 12-hour lead enabled police to set up SWAT teams inside and outside the credit union. When he entered the credit union shortly after 8:30 a.m. Monday, they were ready (WSAZ-TV Sept. 24). Davis allegedly entered the credit union wearing a mask, shades and a hoodie, but fled. He was caught two blocks away, still wearing the disguise. Police said Davis allegedly tried to divert them with phony 911 calls, but the ruse didn't work. He also was charged with fleeing the scene …
  • HARRISBURG, Pa. (9/26/12)--The September issue of the La Voz Latina Central  is in circulation with an advertorial promoting financial literacy and credit unions, according to the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Sept. 24). The advertorial campaign is a result of a grant the publication obtained from PCUA through the Latino Hispanic American Community Center to impact Latino Hispanic American communities in the Lancaster, Reading, Allentown, York and Harrisburg areas. The publication has the potential to reach 147,000 readers in Central Pennsylvania by mid-2013, said PCUA.  The grant consists of 10 advertorial articles beginning this month and ending in July 2013. Use the link to access the information …
  • NAPERVILLE, Ill. (9/26/12)--Illinois State Sen. William R. Haine (D-26, Alton) toured several credit unions in the Metro east area to learn first-hand about their business operations and ways they serve their member-owners.  He toured 1st MidAmerica CU, East Alton; GCS CU, Granite City; Laclede Community CU, Alton; Scott CU, Collinsville; and Shell Community FCU, Wood River. During the tours Haine affirmed his on-going support of preserving credit unions' tax exempt status and encouraged credit unions to serve their members by providing a valuable financial choice for consumers. Credit unions thanked Haine for his championing of credit union legislative issues in Springfield and will work with him on future issues pending before the Illinois General Assembly, said the Illinois Credit Union League. Pictured at 1st MidAmerica CU are, from left: Keith Sias, league vice president, state governmental affairs; Haine; and 1st MidAmerica CU's Robert Blacklock, vice president/chief financial officer; Alan Meyer, executive vice president/chief operating officer and a league director, Class C, District 1; and CEO Don Reedy. (Photo provided by the Illinois Credit Union League) …