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CU System Briefs (09/27/2013)

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  • COLONIE, N.Y. (9/27/13)--Police in Colonie, N.Y., are seeking three people involved in multiple loan scams at credit union branches in Latham, Colonie and Niskayuna. The suspects use counterfeit New York State driver's licenses, forged pay stubs and stolen personal identification information to apply for loans, police said (The Daily Gazette Sept. 26). One theft on Sept. 17 involved a woman who stole $15,000 in a loan scam from the Latham branch of Albany-based Capital Communications FCU. Another man and woman attempted the same scam at the credit union's Colonie and Niskayuna branches on Sept. 19 and Sept. 24, but they did not succeed in getting money. The suspects are facing possible charges of identity theft, grand larceny, attempted grand larceny, and criminal possession of a forged instrument ...
  • ELMWOOD, La. (9/27/13)--Monique Gaines, 42, of Kenner, La., a teller at Harahan, La.-based ASI FCU's Elmwood branch, was arrested last week in the theft of a member's $11,000 deposit on Sept. 18.  A video surveillance camera allegedly caught footage of Gaines accepting the deposit, putting the money in the back of her drawer and later putting the money in her purse, said the Jefferson Parish Sheriff's Office (The Times-Picayune Sept. 23 and The Advocate Sept. 25). She is charged with bank fraud and theft of $1,500 or more and is out on bail, said the Sheriff's Office ...

CUs In Place To Assist Federal Employees

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MADISON, Wis. (9/27/13)--Credit unions, as they have done in the past, stand ready to help members and consumers who could be impacted by a possible federal government shutdown next week.
 
Although the shutdown is unlikely--and the economic impact would be small at first, according to a Thursday USA TODAY article--credit unions will be prepared should the situation escalate. Many federal employees are members of credit unions, and many other members receive government benefits.
 
"Credit unions always put members' needs first and this time is no different," John Bratsakis, president/CEO of the Maryland & DC Credit Union Association, told News Now. "We are proud that the majority of our credit unions serving government employees have products and services to assist in the event of a possible shutdown and are ready to help members cope with any financial hardships that could be a result of this.
 
"Many offer short term loans, will work with members to restructure loans if necessary and some offer a skip-a-payment option," he added. "Additionally, many offer free financial counseling to help members make informed decisions. Our credit unions will monitor the decision closely and will handle each situation individually to ensure the best care is given to their members."
 
If a shutdown were to last three to four weeks, it could do substantial harm to the economy, cutting its growth rate by half or more, Mark Zandi, chief economist for Moody's Analytics, told USA TODAY.
 
Some credit unions who serve government employees are already poised to take action.
 
"Many of our members were furloughed starting in May and we implemented 'Furlough Loans' back then and didn't start their payments until Sept. 16, which was after the last furlough date," Mike Funk, president/CEO of LibertyOne CU in Dallas, told News Now. "We also worked with our members on restructuring debt and helped advise them on things they could do to help them get through this time. We will be here for them if the government is shut down in much the same way."
 
Randolph-Brooks FCU (RBFCU) in Live Oak, Texas, is providing its members financial options to take care of their families in the event of government shutdown, the $5.6 billion asset credit union said in a release.
 
If a government shutdown occurs following the end of the government's fiscal year Sept. 30, some federal employees or benefit recipients might not be allowed to work or to receive pay until a compromise is reached. RBFCU said it will provide members with a one-time provisional credit if they are government employees or benefit payment recipients affected by the shutdown.
 
"These are uncertain times for our country, and we want to continue to provide our members with peace of mind when it comes to their finances," said Sonya McDonald, RBFCU senior vice president of planning and market development. "While we hope the government will resolve its budget issues, we are being proactive in providing solutions for our members in the event that a shutdown does occur."
 
Also, Service CU in Portsmouth, N.H., is offering a 0% loan, up to $6,000, for members who use the credit union for direct deposit of their government pay. And Belvoir FCU in Woodbridge, Va., is offering emergency loans, loan workouts, skip-a-pay and penalty-free share certificate withdrawals to members affected by a government shutdown (The Paycheck Chronicles Sept. 25). 
 
Providing service excellence is one of the tenets 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. The other tenets are removing barriers, and raising awareness about the value credit unions provide their members and communities.

Consumer Reports, USA TODAY Tout CUs, CUNA Survey

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Consumer Reports, USA TODAY Tout CUs, CUNA Survey
 
MADISON, Wis. (9/27/13)--The trend of switching to credit unions, the Credit Union National Association's Women's Financial Survey, and credit unions besting banks on certificates of deposit rates and minimum deposits are topics picked up recently by three prominent national media:  Consumer Reports, USA TODAY and GoBankingRates.com.
 
Click to view larger image Click for larger view
The September issue of Consumer Reports, in its article "Dump your big bank and save," reported that many consumers were reluctant to switch from their banks because they were entrenched with the banks' online and mobile-banking services during the original Bank Transfer Day two years ago.  However, credit unions have "caught up" in mobile banking, with many having added or working to add smart-phone banking, and "now may be the time for you to stage your own Bank Transfer Day," the publication said.
 
It listed credit unions as the first of four alternative financial institutions that consumers fed up with big banks could turn to. Credit unions "offer all of the services of a bank (and federal deposit insurance) but tend to charge considerably less for checking accounts and loans. And they generally pay higher interest rates on savings," said Consumer Reports. It also noted credit unions scored 82 on the American Consumer Satisfaction Index--outscoring Chase (74), Citibank (70) and Bank of America (66).
 
USA TODAY Money earlier this month tweeted about CUNA's Women's Financial Survey, which scored a major media hit when the national publication featured the survey in its "USA Snapshot" on the front page of its Money section.
 
The tweet, pictured here, repeated the graphic used in the Sept. 9 edition, with the statement "52% of women surveyed say they have enough savings to cover six months' worth of expenses. Do you? pic.twitter.com/C7TN72UyCd."
 
In the article, "Credit Unions 'Destroy' Banks with Higher CD Rates, Lower Deposit Requirements," GoBankingRates.com (Sept. 25) said it "surveyed current CD rates to determine where high-yield opportunities exist, finding credit unions outperform for-profit banks.
 
"The fact is credit unions destroy banks with higher rates and lower deposit requirements," said Casey Bond, the publication's managing editor, in the article.  "There are definitely better deals on the local level in general, but right now, even community banks can't keep up with the savings credit unions are providing members." 
 
The publication reported what it found in average minimum deposits required and average rates (annual percentage yield) for CDs with three different maturity terms. They were:
  • Six-month CD:  $2,435 (0.28%) at credit unions and $3,678 (0.17%) at banks;
  • Twelve-month CD:  $2,401 (0.42%) at credit unions and $3,572 (o.27%) at banks; and
  • Twenty-four month CD: $2,499 (0.62%) at credit unions and $3,592 (0.43%) at banks.
Use the links to access each article.

In Kentucky, CUs' Loan Growth Up 7.2%

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LOUISVILLE, Ky. (9/27/13)--Kentucky credit unions increased their lending by 7.2% in the past fiscal year, reported a Louisville, Ky.-based publication bizjournals.com (Sept. 25). 
 
That's better than the national average for credit unions of 5.5%, according to the most recent National Credit Union Administration data.
 
Louisville's five biggest credit unions--by total assets--increased their outstanding loans by 13.8% from July 1, 2012, to June 30, NCUA said.
 
The five credit unions are: L&N FCU, Park Community FCU, Kentucky Telco FCU, Class Act FCU and Jefferson County FCU.
 
Collectively, those five credit unions expanded their membership by 6.6%--besting the national credit union average of 2.2%.

Global Cybercrime Costs Near $400B, Councils Told

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HOLLYWOOD, Calif. (9/27/13)--Global cybercrime costs about $114 billion annually with another $274 billion thrown in to allow for the costs of staff time in tracking and fixing the damage done, Randy Romes, principal of information security at CliftonLarsonAllen, told attendees Wednesday, the final day of the CUNA Technology Council and CUNA Operations, Sales & Service Council joint meeting in Hollywood, Calif.
 
Click to view larger image Once cybercriminals penetrate computer systems, 80% of the internal propagation is the result of weak administrative credentials,  Randy Romes, principal of information security at CliftonLarsonAllen, told attendees Wednesday, at the CUNA Technology Council and CUNA Operations, Sales & Service Council joint meeting in Hollywood, Calif. Next year's joint conference is scheduled for Las Vegas. (Photo provided by CUNA)
"Cybercrime costs the world significantly more that the global black market in marijuana, cocaine, and heroin combined, which is estimated at $288 billion," he said.
 
"Hackers tend to go for the easy money, and credit union members are much easier targets than credit unions themselves," he said. "In instances of cybercrime, the weakest link is the end user."
 
Nearly 62% of illegal intrusions in 2012 were completed by exploiting remote access applications,  Romes said, citing a 2013 research report published by TrustWave. Once cybercriminals find their way into computer systems, 80% of the internal propagation is the result of weak administrative credentials. And once hackers make their way into a system's stored data, it takes an average of 1.5 years for them to be detected, according to the TrustWave report.
 
"The research shows that most of the compromised systems were managed by third parties--63% were managed by third parties; 37% were managed in-house," he said.
 
Romes has seen a sharp increase in losses due to "social engineering," which he defines as the use of nontechnical attacks to gain information or access to technical systems, such as pre-texting phone calls or unauthorized entry into a building. "The best defense against social engineering is to constantly be creating awareness among your staff to the types of threats they might be subject to," Romes told credit unions.

Credit Card Study: Gen X, Millennials Drive Interest In Mobile Wallets

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NATICK, Mass. (9/27/13)--Seventy percent of smartphone owners are aware of mobile wallets, but only 20% show much interest in using one at this time, says a new study. However, the group that shows the most interest are the Millennials and Generation X--the groups of young folks that are in the bull's eye of credit unions' growth hopes.
 
Millennials and Generation X are driving today's interest in mobile wallets, said based Phoenix Marketing International. The Natick, Mass.-based marketing research firm conducted  its Credit Card Monitor Study with 3,013 credit cardholders during second quarter.
 
Other findings:
  • PIN-based authentication with a mobile wallet has substantially greater appeal than near field communication (NFC) and QR code scans.  "Although the market is in early stages of development, consumers clearly prefer to enter a PIN at the merchant terminal or on their smartphone," said Greg Weed, director of card research. Cardholders surveyed preferred PINs by a 3 to 1 margin. He attributed that result to cardholders likely having greater familiarity with the PIN-based technology.
  • Seventy-two percent of cardholders surveyed gave first preference for providing mobile wallet services to the financial institution that provides their checking account, debit or credit card.  However, 40% said they would also consider PayPal or Amazon.
CU Wallet, a credit union-centric mobile payments/mobile wallet initiative, was launched in Los Angeles on Monday. It will combine technology with direct credit union ownership, for a mobile payments infrastructure for credit unions (See related story in Monday's News Now: 'CU Centric' Mobile Wallet Firm Launched).

Javelin To FIs: Boost Bill Pay On Websites

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SAN FRANCISCO (9/27/13)--Financial institutions, including credit unions, can increase household adoption of online banking by 22% by increasing bill payment adoption rates, according to Javelin Strategy and Research's 2013 Online Banking and Bill-Payment Forecast.
 
Without the increase in bill payment penetration, online banking adoption rates are expected to remain flat through 2018, the report said.
 
"Mobility is rapidly rewiring the way consumers think," said Mark Schwanhausser, Javelin Strategy & Research director of omnichannel financial services. "Mobile-toting Americans demand simplicity, any-time convenience, immediate answers, pre-emptive alerts, personally relevant information and advice, an attitude of transparency, and time-saving options--all done safely and securely.
 
"To win converts, bill paying services must satisfy those broad expectations and also offer specific bill-payment capabilities that clearly outperform the methods consumers use today," Schwanhausser added.
 
The report identifies a new segment of nearly 11 million consumers--Digital Drifters, who bank online and use mobile banking but do not pay bills at their financial institution. Most pay bills online through biller websites.
 
More than half of the Digital Drifters perceive that paying bills at the biller's site provides more control over their payments, vs. 39% who say this statement applies to bill payments at a financial institution.
 
Credit unions can reposition their services by emphasizing their legitimate strengths, which Digital Drifters' currently downgrade paying bills at a financial institution in comparison with paying at the biller websites, the report said.

Calif., Nevada Leagues To Recognize Leaders

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ONTARIO, Calif. (9/27/13)--Six credit union leaders and volunteers--including 2013 Leo H. Shapiro Lifetime Achievement Award recipient Patsy Van Ouwerkerk, CEO of Vacaville, Calif.-based Travis CU--will be honored at this year's California and Nevada Credit Union Leagues' Annual Meeting and Convention.
 
The recipients of the Shapiro, Distinguished Service, Outstanding Volunteer, Tomorrow's Star and Kim Bannan Eternal Flame awards are among those to be recognized during the event, Oct. 28-30, in San Francisco.
 
Award recipients include:
  • Distinguished Service Award:  Teresa Freeborn, president/CEO, Xceed Financial FCU, El Segundo, Calif.;
  • Outstanding Volunteer Award: Roxanne Ostrem, board chairman, Ventura (Calif.) County CU;
  • Tomorrow's Star Award: Annice Kim, president/CEO L.A. Healthcare FCU, Los Angeles;
  • Kim Bannan Eternal Flame Award (individual): Randy Thompson, president, TCT Inc.; and
  • Kim Bannan Eternal Flame Award (organization): Catalyst Corporate FCU, El Plano, Texas.