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CUNA notes phishing peaks and valleys in article

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MADISON, Wis. (9/10/08)--Credit unions and banks have seen an increase in the number of fraudulent phone calls, text messages and e-mail phishing scams, the Credit Union National Association (CUNA) told the Utica, N.Y. Observer-Dispatch (Sept. 7). Nationwide, phishing is kind of happening in peaks and valleys, but it is prevalent," said Dorothy Steffens, vice president of Web services at CUNA, in an article entitled "Consumer warning: 'Phishing' for your financial information." She noted some periods where phishing is higher, "such as tax time, when there are a lot more fraudulent e-mails trying to get people to click on a link." Scams also begin when college students return to school and use their credit and debit cards, she said. Consumers, when contacted by the scammers, tend to believe they are being contacted by a reliable source and they begin offering their personal data, she added. Phishing has been around for nearly four years, and con artists have moved from e-mail phishing to voice-mail "vishing, Steffens said. She provided tips for consumers to guard their information. To review them, use the resource link.

Survey 75 of consumers would use mobile banking

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BROOKFIELD, Wis. (9/10/08)--Seventy-five percent of consumers surveyed say they would consider using mobile banking services if offered. That's a dramatic increase from the 49% who said so in March 2006, says a new study commissioned by Fiserv Inc. "This research shows that consumer adoption of mobile banking services is poised for potential rapid growth," said Bob Homer, vice president of product management for Fiserv Electronic Banking Services. Heavy users of cell phones and other mobile devices--and younger consumers--had a greater need for mobile banking services that provide control over their finances and instant access to balance information (Business Wire Sept. 9). Among those 21 to 34 years old, 83% indicated they'd consider using mobile banking services if available. That compares with 75% among overall survey respondents. The most popular mobile banking activities among younger consumers include checking balances, locating an ATM or branch, and receiving and paying household bills. Other findings:
* Adoption of mobile banking and payment services is growing. In 2006, those using a cell phone for financial activities was non-existent. In 2008, 23% said they use their cell phone or other mobile device to check their account and credit card balances or contact customer service at a financial institution. * Among those who haven't adopted mobile banking yet, 72% said security was their top concern. However, 82% would sign up with their financial institution for mobile security text messages alerting them of password and other access changes, and 79% would sign up for account balance alerts. * Cost of services was a top concern for 48% of those surveyed who haven't adopted mobile banking. Consumers 35 and younger were less bothered about barriers such as not knowing how the services work and losing the paper trail. The under-34 market is a primary potential target for marketing campaigns launching mobile financial services, said Fiserv.
The survey was conducted in April for Fiserv by MQA Research and was based on findings from 1,007 U.S. consumers at least 18 years or older, who use a cell phone at least once each week.

CUbank plan merger league to discuss other options

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AUGUSTA, Maine (9/10/08)--KV FCU and Kennebec Savings Bank, both based in Augusta, Maine, Monday announced they are discussing a proposal to merge the credit union into the bank. The Maine Credit Union League is taking action to discuss other viable options first. "The Maine Credit Union League and our member credit unions are committed to the credit union charter and remain resolute in our belief that the credit union charter provides by far the best option for credit union members," John Murphy, president of the league, told News Now Tuesday. The league board Tuesday "unanimously voted to establish communications with KV FCU officials to consider other viable options available to the credit union and its membership," he said. "A meeting for this purpose has been scheduled for later this week, and it will determine the future direction we will take in this process," Murphy explained. The merger proposal was announced by Beverly W. Beaucage, president/CEO of KV FCU, and Mark L. Johnston, president/CEO of the bank. KV FCU's board is scheduled to vote Oct. 14 on a proposal to convert to a federal mutual savings bank. Immediately following the conversion, the credit union would merge into the bank, said the credit union's website. Kennebec Savings Bank is currently a state-chartered mutual savings bank; however, at the time of a merger it will have converted to a federal savings bank charter. The announcement begins a process of scrutiny, legal postings and comment periods, with votes by the directors and members of the credit union, the trustees and corporators of the bank, and regulators. The credit union noted that the conversion and merger would significantly expand its capacity to meet the current and future needs of members. "We've continued to grow steadily since 1962 while maintaining a strong capital base and steadfast focus on member service," said Beaucage in the press release. "Our board determined that the long-term goal for KV was to build and maintain a strong presence in the Kennebec Valley offering our members a wide variety of financial services," she said. To accomplish this, "it makes sense to consider combining our efforts with a local institution that has similar values." KV Board Chair Richard Tardiff said, "A union like this could allow us to capitalize on each others' strengths to make the best financial institution going forward." Kennebec Savings Bank was chartered in 1870, making it one of the oldest mutual savings banks in the state. KV FCU was chartered in 1962 as St. Augustine's FCU. Its county charter allows for membership in two counties--Kennebec and Somerset. It has more than $51 million in assets. Both institutions are familiar with the merger process, they said. KV acquired Messalonskee Regional FCU in 1992 and Kennebec Health Systems FCU in 1993. The bank combined with Waterville Savings and Loan in 1995. "With all the changes happening in the financial services industry, this union of two longstanding and respected local financial institutions could provide the greatest opportunity for improved services and choice for residents in the Greater Kennebec Valley," said Johnston. If the credit union board approves the conversion/merger proposal, the proposal will be submitted to KV FCU's membership for a vote following a notice period of at least 90 days, the credit union said.

Teen credit tied to GPA quiz parent consent

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SWARTZ CREEK, Mich. (9/10/08)--Financial Plus FCU, Flint, Mich., is offering youth credit union accounts with cards based on grade point averages (GPAs), scores on a financial literacy quiz, and parental consent. The program, Fine Tune$, offers youth ages 16 to 18 the opportunity to open a savings account, free checking account, and have a Visa debit card and credit card with a minimum balance of $200 and maximum balance of $500. Annual percentage rate is 5%. Upon receiving the account, students will receive gift cards for free music downloads. “The response has been phenomenal,” Raul Alvarez, Financial Plus marketing director, told News Now. To qualify for Fine Tune$, students must complete a 45-minute Powerpoint-based “Dollars to Downloads” training course through the credit union’s website, have a 2.5 (GPA), and parental consent. “Dollars to Downloads” teaches students how to set savings and spending goals, learn money management and credit score facts, how to write checks and keep a check register, and how debit and credit cards work. The questions for the test are pulled from the course material. “We want to make sure teens understand the basics,” Alvarez said. If the students fail the test, they can re-take it until they pass. If they fail, they are still eligible to open a savings account. Financial Plus “doesn’t give out credit cards--youth have to earn them,” Alvarez said. “The innovative part is the educational piece,” he said. “It’s an added responsibility they can earn--it’s not automatic.” For the cards, the credit union uses a student’s GPA like a credit score. “It’s a good indicator,” Jeannette Van Dusen, Financial Plus teller operations manager, told News Now. “Kids under 18 don’t have a credit score, and we want to show them how important it is [to have a good score.]” Parents also must sign a consent form for students to receive a credit card. When students receive their first credit card statements, they are invited to the credit union to talk with their personal financial representatives about how to read the statements. “We’re finding that kids love fast food--especially that fast food restaurants take Visa,” he added. Financial Plus sends out text message reminders to students about the statements, and can also send out messages if a student’s account drops below a certain limit. “They’re notified immediately if something happens to their account,” Van Dusen said. Financial Plus also is appealing to students through music by allowing them to receive more free downloads referring friends. “Kids are defined by their music,” Alvarez said. “We’re trying to make sure we’re staying with them.” Alvarez recently went to a local school, Swartz Creek High school, to promote FineTune$ during orientation. The credit union handed out Krispy Kreme doughnuts to students and talked to them about the program. Financial Plus has received some comments about the risks involved with giving teens credit cards. But Alvarez said the teens are bombarded with credit cards at college campuses, so “we want to make sure they’re ready for that,” he said. The credit union also will transition youth members into full-fledged memberships once they turn 18, he added. The credit union partners with Swartz Creek High School to teach financial literacy and recently installed an ATM in the school’s cafeteria. The credit union also expanded its charter to two other counties, and expects FineTune$ and its financial literacy programs to grow, Alvarez said. “The parent, financial representative [from Financial Plus] and the teen--those pieces work well together,” he added.

ALM forum notes shifts in market member dynamics

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DALLAS (9/10/08)--Credit unions need to be unique and bring value to their members, according to one of several speakers at the ALM First Financial Advisors Financial Forum Aug. 11-13. The forum presented speakers who discussed the current economic state and the dynamics of credit union members. Diana Dykstra, president/CEO, San Francisco Firefighters CU, said banks have “wised up” and taken a cue from credit unions that they need to focus on their customers. “Customer intimacy doesn’t just belong to credit unions anymore,” she told the group. “We can’t just be marginally better. The world has changed on us--and we must pay attention and be willing to shift with it.” On average, 20% of a credit union’s members will generate 150% of its earnings, said Joseph Prunty, founder/president of CorePROFIT Solutions Inc. “These members are your franchise--they add value every day. No credit union today should not know who its members are. If members leave, it is very hard and expensive to replace them,” he said. Other highlights addressed included:
* Credit unions’ survival in the current market woes. ALM First partner Tom Manley said the Bear Stearns failure has set in place “different mechanisms and oversight” by the Federal Reserve. “How this will impact credit unions, I don’t know. But credit unions have managed very well, with very few realized losses. We’re an industry that doesn’t have nearly as many problems as the rest of the financial community,” he said. * Consumer confidence, which has plunged to a 40-year low. People fear that their income is declining, said Chris Low, chief economist, FTN Financial. “Not just unemployment, but underemployment, where they work below their skill and income levels. People aren’t finding jobs with income growth,” he added. * Shifts in consumer wealth. Wealth isn’t linked to consumer saving, said Torsten Slok, director, US economics for Deutsche Bank Securities. “U.S. households have just started to save again--a little bit, at 2%--but we have to save more,” headded.
The forum also featured a panel of credit union leaders addressing the challenges, opportunities and risks that credit unions face. New Jersey Credit Union League President/CEO Paul Gentile moderated the discussion. The panel presentation is free to credit union professionals through ALM First’s website (use the resource link). Panelists included:
* Jim Blaine, president/CEO, State Employees’ CU, Raleigh, N.C.; * Dykstra; and * John Tippets, retired Dallas-based American Airlines FCU president/CEO.

TraceSecurity 95 of FIs tested still vulnerable to theft

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BATON ROUGE, La. (9/10/08)--About 95% of U.S. financial institutions’ sensitive data, including account records and social security numbers, could have been robbed in 30 minutes or less on average, said TraceSecurity, a CUNA Strategic Services provider. Between 2003 and 2008, TraceSecurity’s engineering team compromised the security of 1,000 financial institutions. Had the attempts been legitimate, the personal identity of tens of millions of consumers could have been stolen, the company said. The statistics are based on a group of TraceSecurity’s clients, including credit unions, with asset sizes ranging up to $2.7 billion in 48 states. “I’ve been able to bypass security policies, procedures and technology of any bank or credit union where I’ve performed social engineering engagements 100% of the time,” said Jim Stickley, TraceSecurity co-founder and chief technology officer. The tests were based on penetration testing, remote social engineering and onsite social engineering. Penetration testing employs hacking into a company’s network through the Internet to check for vulnerabilities. Social Engineering tests include phishing, pharming, pre-text calling and onsite impersonation of a third party. For onsite social engineering tests, TraceSecurity engineers disguise themselves as fire marshals or pest inspectors. They gain entry 95% of the time to areas in financial institutions with sensitive data, the company said. Backup tapes storing sensitive data were the easiest target to steal while being undetected by employees. Other items stolen in the test heists include loan applications, laptops, cell phones, personal digital assistants, and keyboard data. “It takes only one branch location for all [members’] sensitive data to be at risk, and recent data breaches have shown these losses can amount to billions of dollars--a huge cost for what’s usually a small, avoidable error,” Stickley said. TraceSecurity provides security risk and compliance solutions.

Economy is topic of two CUNA webinars

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MADISON, Wis. (9/10/08)--Two Credit Union National Association (CUNA) webinars scheduled during the fourth quarter will focus on the economy. “Economic Update” on Oct. 16 will analyze the global economy’s impact on the U.S. economy and future trends. It also will evaluate credit union balance sheets and earning performance, as well as savings and loan activity trends, to help with the forecasting process. On Oct. 20, “Economic Forecast for Collectors” will help participants better understand how the economy is impacting the consumer’s ability to meet financial obligations. The webinar will discuss trends driving loan delinquencies and charge-offs and how the Federal Reserve is helping financial institutions deal with heightened liquidity concerns. Other webinars highlighted during the fourth quarter include:
* “Boost Your Bottom Line Through Financial Education,” Dec. 5, which offers research and case studies that demonstrate how financial education can be used to help credit unions build effective sales and service cultures, and attract, train, and retain employees and members; * “Credit Union Savings Bonds,” Nov. 18 and 20, which explains the features, benefits and processing procedures for U.S. Savings Bonds. It also explores TreasuryDirect, along with additional resource materials and Internet tools; and * “Your Disaster Recovery Plan and Your IT Department,” Dec. 9, offered in cooperation with the CUNA Technology Council. It will discuss the role a credit union’s information technology department plays in the planning process.
CUNA will offer about 45 webinars will take place during the fourth quarter on finance and economics; human resources and training; security; lending; management and leadership; boards and volunteers; marketing and business development; operations, sales and service; and regulatory compliance. Archived versions of many recent webinars are also available. For more information, use the links.

Minnesota senator addresses MnCUN fall conference

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BRAINERD, Minn. (9/10/08)--Minnesota Sen. Tom Bakk (DFL-Cook) attended the Minnesota Credit Union Network's(MnCUN) Fall Conference, held Sept. 5-7, and spoke to attendees Saturday evening. Bakk, who chairs the state Senate Taxes Committee, is a strong supporter of credit unions and has been a frequent guest at chapter meetings and other MnCUN events, said the network.
Minnesota Sen. Tom Bakk tells attendees at the Minnesota Credit Union Network's Fall Conference to get involved in the upcoming elections. (Photo provided by the Minnesota Credit Union Network)
He is a member of the Virginia Co-op CU, Va., Minn. He discussed workforce development, unemployment and future challenges facing Minnesota, as well as credit unions' involvement in political advocacy. Bakk challenged credit unions to get involved in the November elections and gave "homework" during this election cycle. "I encourage you to introduce yourself to the candidates [running for election]--nothing is more valuable to your organizations than developing these relationships," he said. He acknowledged credit unions' high level of involvement in this area and their participation in MnCUN's annual Credit Union Day at the Capitol. "Thank you for the time you put in to make your credit unions a better place," he said. Bakk also informed the audience of his intention to run for governor in 2010. MnCUN President/CEO Mark D. Cummins said the network appreciated Bakk's presence and support. More than 300 individuals from 49 credit unions, and 65 vendors representing 32 service organizations attended the conference.

CU System briefs (09/09/2008)

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* LENEXA, Kan. (9/10/08)--Members of two Kansas credit unions voted this week in favor of merging. The merger--between Free State CU, a $9 million asset credit union in Lawrence, and the $215 million asset Credit Union of Johnson County (CUJC), Lenexa--is expected to be concluded Sept. 15. Regulators had already given their approval. Free State has nearly 4,500 members served by two branches in Lawrence and one in Lenexa that it shares with CUJC. Michael Amick, Free State CU chairman, said it chose CUJC as its merger partner because the two share a member-focused approach to business. "This will give us a broader, stronger financial footing from which to operate while offering our members immediate opportunities for greater service and savings," he said. Dr. Jack Chalender, chairman of CUJC, said Free State's two Lawrence branches will remain open. Data integration of the two credit unions' core processors is expected to be complete by November … * DES MOINES, Iowa (9/10/08)--The Iowa Credit Union League (ICUL) announced the promotion of Murray Williams to chief operating officer (COO). During the past 12 years, Williams has worked in various leadership capacities for the league, including as director of public affairs and strategic alliances, and most recently as vice president. Williams was instrumental in developing the league's newer operating companies, such as Community Business Lenders and Coopera Consulting. He has led legislative grassroots and media efforts and helped ICUL fully integrate its online communications. As COO, Williams will manage the league's operations while overseeing dues and fee-based services, and providing integration with ICUL operating companies and partners … * CEDAR FALLS, Iowa (9/10/08)--Marshall Dean McKinney, 70, died at a hospice center in Springdale, Ark., Aug. 20. He served as manager of the University of Northern Iowa CU, Cedar Falls, Iowa, from 1974 until his retirement in 2002. Survivors include a daughter, a son, two granddaughters, two sisters, and a longtime companion (Waterloo Courier Sept. 8) … * WILKES-BARRE, Pa. (9/10/08)--Donald R. Schwartz, past president of Bellco FCU in Wyomissing, Pa., died at his home Friday afternoon. He was 79. He is survived by his wife; four children; two granddaughters and one sister. Funeral services are today at 10 a.m. in Hazleton, Pa. (The Wilkes-Barre Times Leader Sept. 8) …