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Mystery shopper scam victimizes Pa. CU member

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LANCASTER, Pa. (9/9/09)--A Lancaster (Pa.) Red Rose CU member became a victim of a mystery shopper scam that reportedly took his name from information provided to an online job search database. The individual received a letter from FreePayingSurvey.com of Wichita, Kan., which included a check for $2,960.50, and instructions to deposit the check into its account and get “trained in financial transaction by sending an international Western Union transfer (of $2,320) to our training agent: Rachel Thomas in Valencia, Spain.” A Western Union service fee was listed at $140 (Life is a Highway Sept. 8). The letter also instructed the recipient to spend $50 at two of the listed retail locations, and offered a rate of $100 per hour for four hours of evaluations (mystery shopping). It is unfortunate that the member--who is unemployed--fell for this scam, and as a result, now has a negative balance, Dave Kilby of Lancaster Red Rose CU, told the Pennsylvania Credit Union Association.

Half of parents confident about youths financial skills

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WASHINGTON (9/9/09)--About half of parents say their children will leave home knowing how to manage money, according to the results of a Consumer Federation of America (CFA) survey. During a press briefing Tuesday, CFA presented results of a survey it conducted Aug. 27-31 of 553 representative parents, or guardians, with children under age 18 living at home. About 53% of parents said they were “very confident” their children would leave home with personal financial skills. Nearly all parents surveyed--98%--said they felt “very” or “somewhat” responsible for teaching their children how to manage money and credit. Roughly 86% said they felt “very” responsible. However, only 73% said they felt capable of instructing their children how to manage money, CFA said. Jim Hanson, vice president of the Credit Union National Association’s (CUNA) Personal Finance department, said there is a disconnect between the fact that only half of parents surveyed are confident their children will leave home with money skills, yet almsot all parents think it is their responsibility to teach money management skills. “That’s why credit unions stepped to the forefront of financial education so long ago,” Hanson told News Now. “Teaching young people about the value of money, how to save, spend and borrow wisely can't start too young.” Phil Heckman, CUNA director of youth programs, agreed. “Parents have a unique opportunity to influence the lifetime money management habits of their children by intervening early,” Heckman said. For instance, it’s easier to guide preschoolers to make good decisions about small amounts of money than it is to correct bad spending habits and saving ignorance of teenagers. “By starting young, parents can learn with their children, and become personal finance experts in the process,” he added. Heckman suggested that credit unions should offer to help parents become good financial role models for their children. “Parents who might otherwise deny they need money-management help are willing to seek it for their children,” he said. “By training them to teach their own kids at home, credit unions can kill two financial literacy birds with one educational stone.” The CFA also released the top 10 myths held by 14- to 21-year olds:
* I don’t have to worry about credit at my age; * Bad credit can’t keep me from getting a job; * All loan companies have the same rates; * All credit cards are alike; * The job of financial advertising is to tell the truth; * It’s OK to bounce a few checks; * It’s OK to make minimum payments on a credit card; * Paying late occasionally can’t hurt my credit; * Fine print isn’t important; and * Young people don’t have credit scores.
CFA noted the struggles Rachel Silverman, 25, encountered when she attended music school at New York University. She racked up $130,000 in credit card and student loan debt, and is now struggling to keep her dream alive of being an opera singer, CFA said. “It was terrible,” Silverman told CFA. “I wasn’t sure what I was getting into.” No one, including her teachers and parents, prepared her how to manage credit and debt, she said. “I probably wouldn’t have been in this situation if I had simply known the basics about credit cards, student loans and interest calculations,” Silverman said. “In hindsight, I was like a lamb being led to slaughter.” Also at the press briefing Tuesday, CFA announced the resources available through FoolProofMe.com, a website that offers free online tutorials to high school and college-age individuals about money management. Will deHoo, 29, who founded FoolProofMe.com, said he recently spoke to a group of 60 seniors at the University of Colorado. One of four students said they knew poor credit could affect their job opportunities, and only three out of 60 knew their credit score. They said they had bounced checks and were borrowing on one credit card to pay another, he said. Many young individuals had missed out on financial education because the medium in which the education was offered did not engage them, deHoo said.

CU System brief (09/08/2009)

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* DENVER (9/9/09)--Two Colorado credit unions have announced plans to merge (Boulder Daily Camera Sept. 4). Premier Members FCU, Boulder, and Colorado United CU, Denver, plan to combine with an expected closing date of Jan. 1. The resulting credit union would be Premier Members CU with $400 million in assets and 11 branches, the newspaper said. All jobs will be protected for one year, and no locations are expected to close, Rhett Bartley Rowe, CEO of Premier Members, told the newspaper. The merger will help Premier Members expand to northern Denver. Colorado United members also will receive more services, Rowe said. Colorado United’s CEO Branda Abbott will remain as president/CEO ...

Former CU exec commits suicide during arrest

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MACON, Ga. (9/9/09)--A former manager of a Georgia credit union committed suicide when local authorities tried to arrest her on charges of embezzlement. Linda Rice, 57, was accused of embezzling more than $354,000 from Brosnan Yard FCU from June 2007 to December 2008. She worked at Brosnan Yard CU as a director, loan officer and manager. The missing funds were discovered during an audit (Macon.com Sept. 5). The money had been taken through fraudulent loans, misplaced credit union assets and check fraud, the newspaper said. Rice shot herself after Jones County Sherriff’s deputies entered her Gray, Ga., home Aug. 20. A deputy had been following her as she went to get a pair of shoes, but she ran away from him and locked herself in a room where she killed herself, the newspaper said. Brosnan Yard FCU, Macon, has $4.4 million in assets.

Texans CUSO Insurance Group files for bankruptcy

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RICHARDSON, Texas (9/9/09)--Texans CUSO Insurance Group, a subsidiary of Texans CU, filed for bankruptcy protection under Chapter 11 on Saturday in the U.S. Bankruptcy Court for the Northern District of Texas. The group filed its case to resolve temporary operational and liquidity issues, according to a press release. “The policyholders of Texans CUSO Insurance Group will not be affected by the filing,” said Michael Sauer, president/CEO of Texans CU. “The filing will not impact any credit union member accounts or services.” Texans CU, based in Richardson, Texas, has more than $1.7 billion in assets.

National publications say get credit cards at CUs

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MADISON, Wis. (9/9/09)--The Los Angeles Times and USA Today mentioned credit unions as a good place for consumers to obtain credit cards. Credit unions are a potential source for low-interest-rate credit cards because they made “fewer costly mistakes in the credit heyday and now have money to lend,” said personal finance writer Kathy M. Kristof in the Sunday Los Angeles Times. Kristof also directed readers to check the Credit Union National Association’s site, www.creditunion.coop, to locate a credit union in their area. In an article about how college students can build a credit history amidst new federal legislation that restricts marketing of credit cards to those under the age of 21, USA Today financial columnist Sandra Block told readers Tuesday that “many credit unions offer secured credit cards with lower interest rates and fees.” To read the stories in their entirety, use the links.

Hamburger stand built with CU financing

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PLYMOUTH, Mich. (9/9/09)--After years of crossing the U.S. in search of a diner, long-time restaurateur Alex (Vinnie) Altier located a 1955 Kullman diner for sale in Atlantic Highlands, N.J. His next challenge was finding the right piece of property to build his hamburger stand. That’s when Community Financial Members FCU stepped up to help.
Click to view larger image Dave Sanctorum of Community Financial Members FCU Business Services, Plymouth, Mich., congratulates Alex (Vinnie) Altier, at right, on his 1955 Kullman diner that will be refurbished and renamed “Vinnie’s Hamburger Stand” when it is moved to its new location in Canton, Mich. (Photo provided by Community Financial Members FCU)
The land Altier wanted was in Canton, Mich., only a few blocks from a former Vinnie’s Italian Sub Shop. The site was owned by Community Financial, the $54.5 million asset, Plymouth, Mich.-based credit union that had opened a new Canton branch office. When Altier met with Community Financial to inquire about purchasing the adjacent acreage, he was unfamiliar with credit unions or the services they offer. One of Altier’s first questions was, “Do you make commercial loans?” When he learned that credit unions can finance members’ commercial mortgage and business loans as well as personal loans, Altier decided to become a member. “When we learned about Vinnie’s dream of purchasing the land and building a hamburger stand that included the stainless steel diner, we were intrigued,” said David Sanctorum, Community Financial director of business services “We help a lot of members who are small business owners, but this was not your conventional transaction.” Sanctorum and other credit union team members assisted Altier with the necessary paperwork to finance the purchase of property and building construction, and to also obtain a personal home equity loan on his house in Livonia, Mich. Altier described the entire financing process as very smooth and without all the red tape he had experienced in past years with other financial institutions. “When I walk into the credit union’s offices, I can immediately tell that people enjoy their jobs, and I always receive exceptional service,” added Altier. “In my business, I hire an attitude, because I can teach the rest.” Since the ground for “Vinnie’s Hamburger Stand” was broken in July, Community Financial members and employees of the nearby branch have been watching the construction progress. The diner, which remains in storage at another location, is scheduled to be moved to the site in the fall and added to the front of the building after construction is completed. Altier, a lifelong Michigan resident, has been asked what prompted him to open a new business in such a tough economy and quickly responds, “You can’t wait for your ship to come in. You have to swim out to it. I’m not participating in this economy." “Community Financial is well-positioned to arrange financing for small business owners like Altier,” Sanctorum said. “We do our best to provide personalized service and find a way to help them achieve their goals.”