News Now Archive

Filed on August 22, 2005, published the first business day after.

• CUNA urges 'due process' on indirect lending exams
• Fed proposes loosening ATM disclosures
• Regulator liquidates New York CU
• Thrift earnings up 20% from a year ago
• Inside Washington
• Banker letter attacks CU’s new building
• CU's bylaw amendment makes converting harder
• Pennsylvania CUs aim ads to attract new members
• Senator asks Iowa CUs to provide fin-ed for victims
• Jersey proposes parity updates in regulations
• Rising interest rates sparks CU's creativity
• CU offering deals on hybrid-vehicle loans
• Graham elected to CUNA Board seat
• CU System briefs
• Market News
• News of the Competition
• What’s your score? Take the ID theft quiz
• Fiserv completes acquisition of BillMatrix
• Corillian's purchase of InteliData, qbt final
• Czech SEC opposes single regulator under bank

CUNA urges 'due process' on indirect lending exams

WASHINGTON (8/23/05)--The Credit Union National Association (CUNA) urged the National Credit Union Administration (NCUA) to ensure that "due process is afforded to all credit unions" when the agency enforces regulations governing third-party subprime indirect lending and participations.

CUNA President/CEO Dan Mica wrote to NCUA Chairman JoAnn Johnson about a June "Risk Alert" titled, "Specialized Lending Activities--Third-Party Subprime Indirect Lending and Participations (05-Risk-01)." It cautioned credit unions that "based on the volume of activity, engaging in this type of lending without effective controls and monitoring systems may pose a risk to your credit union's net worth."

The CUNA action followed credit unions' repeated complaints about the agency's procedures, according to Mica. He wrote that credit union concerns included but were not limited to:

• Requiring extraordinary due diligence activities be completed in an unreasonable amount of time;

• Virtually directing well-managed credit unions that have assessed the risk of their dealings with a third party vendor to stop all future activities pending compliance with the Risk Alert; and

• Imposing inappropriate requirements on credit unions that had once been involved with such activities but are no longer.

In his letter, Mica urged the NCUA "to take immediate action to instruct examiners that they must implement the ‘Risk Alert' consistent with their standard procedures of professionalism."

He pointed out while CUNA strongly supports due diligence, the association also maintains it is essential regulators ensure due process is afforded to all credit unions.

The CUNA leader requested NCUA to make available to CUNA and the state credit union leagues the summary findings of the agency's analysis following the on-site visits of the NCUA's examiners.

Mica added that while CUNA does not support or oppose any vendor in the matter, it encouraged vendors to "provide appropriate information to NCUA on their activities in the timeliest manner possible and to work within the credit union system to address all unresolved issues."

Resource Links

NCUA Risk Alert

Fed proposes loosening ATM disclosures

WASHINGTON (8/23/05)--A Federal Reserve Board proposal would give financial institutions the option to change automated teller machine (ATM) disclosures.

The proposed change would let an ATM operator notify users that it "may" charge certain fees if there are some transactions that do not incur a fee. The notices are currently required to say that the operator "will" charge these fees.

"This isn't a big issue for credit unions, since the proposal would give them an option to change their disclosures or leave them as is," according to Lilly Thomas, Credit Union National Association (CUNA) assistant general counsel.

She said the change might appeal to credit unions that do not charge non-members for some transactions--such as a balance inquiry--but charge for other transactions, like a withdrawal.

Thomas added that credit unions that don't charge nonmembers who carry cards issued under electronic benefit transfer (EBT) governmental programs--but charge other non-members for using the ATM--can also change their ATM disclosure to say it "may" charge certain fees.

Regulator liquidates New York CU

ALEXANDRIA, Va. (8/23/05)--The National Credit Union Administration (NCUA) on Friday liquidated Homesteaders FCU of New York, N.Y. The agency transferred the credit union's member accounts to the Lower East Side People's FCU of New York City.

NCUA said the $4.2 million asset Homesteaders FCU was insolvent.

Transferring the majority of the members' accounts to Lower East Side People's FCU would allow the members to continue to receive financial services through a federally insured credit union that is at a convenient location in Manhattan, said NCUA.

NCUA said, as of yesterday, members transferred to Lower East Side People's FCU had full access to their accounts.

Lower East Side People's FCU, with assets of $15.9 million, serves approximately 4,600 members in Metropolitan New York.

Thrift earnings up 20% from a year ago

WASHINGTON (8/23/05)--The nation's thrift industry again posted record levels of earnings and equity capital in the second quarter of 2005, even as the interest rate yield curve continued to flatten, according to financial results released by the Office of Thrift Supervision (OTS).

Profitability, loan growth and credit quality for the industry also continued to be strong, said the agency.

Net income for thrifts reached a record $4.03 billion, up 1% from the prior quarter and 20% from the second quarter 2004. This marked the third consecutive record quarter for the thrift industry.

Profitability, as measured by return on average assets (ROA), declined to 1.18% from 1.22% in the prior quarter, mostly as a result of lower net interest margin and mortgage loan servicing fee income, coupled with higher loan loss provisions and noninterest expense, said the OTS.

The number of thrifts stood at 870 as of June 30, with assets of $1.39 trillion, an increase of 17% for the year.

Inside Washington

• WASHINGTON (8/23/05)--Martin J. Gruenberg was sworn in yesterday as vice chairman of the Federal Deposit Insurance Corp. (FDIC) Board of Directors. Gruenberg joined the Board after broad congressional experience in the financial services and regulatory areas, most recently as senior counsel to Senate Banking Committee Ranking Member Paul Sarbanes (D-Md.) since 1995. Gruenberg is the only Democrat serving on the FDIC board. As one of his first orders of business, Gruenberg named Sandra L. Thompson as deputy to the vice chairman. Thompson is currently an FDIC deputy director in the Division of Supervision and Consumer Protection...

Banker letter attacks CU’s new building

INDIANAPOLIS (8/23/05)--The expansion of an Indianapolis credit union's headquarters drew a critical letter to the editor from the president of the Indiana Bankers Association.

The Indianapolis Star published an article detailing FORUM CU's $25 million expansion in Fishers (Aug. 13). The structure includes a conference center, fitness center, lunchroom and artworks by Indiana artists.

The president of the Indiana Bankers Association wasted no time in jumping on the expansion as a "tax subsidy." In the Aug. 20 edition, Jim Cousins used the tax-exempt status from federal income tax to attack the credit union and its improvements.

Gary Irvin, president/CEO of the $918 million asset credit union, said the expansion represents four years of planning and a dedication to meeting the needs of its members and employees for the next 20 years. It expects to grow the number of employees to 500 from 300 at the headquarters.

"It makes a statement that we're here to stay," he told the The Indianapolis Star.

CU's bylaw amendment makes converting harder

FARMERS BRANCH, Texas (8/23/05)--The board of directors of a credit union in Texas has unanimously adopted a bylaw amendment that would make it harder for its board members and senior management to initiate a conversion to a bank.

According to the Texas Credit Union League, Chocolate Bayou Community FCU, a $63.8 million asset credit union in Alvin, Texas, voted the amendment after an "enthusiastic discussion" (LoneStar Leaguer (Aug. 22).

"In the wake of the two conversion efforts in Texas, we believe this bylaw amendment sends a strong message to our members that we take seriously our commitment to our duty to protect their interests," said Ernest Dupuis, board chairman. "This reinforces the credit union philosophy that members truly are owners who have control of the destiny of their credit union."

The amendment states: "The Board of Directors shall not consider a conversion to a non-credit union without the request of its membership made at a special meeting of the membership called in accordance with the provisions set forth in these bylaws."

Texas league chairman and Chocolate Bayou CEO Gary Davis said he hopes other credit unions will follow suit.

"So many of us in the credit union movement have been upset by the recent credit union-to-bank conversions and the lack of regard for the members," Davis said. "This is an easy way to help ensure that any effort to convert to a bank is initiated by the members, not a handful of individuals who stand to benefit financially if a conversion were to take place."

The National Credit Union Administration (NCUA) recently gave the credit union permission to consider the nonstandard bylaw amendment (News Now Aug. 22).

Last week a U.S. District Court magistrate in the Eastern Division of Texas ruled that Community CU, Plano, Texas, could proceed with its plans to convert to a mutual savings bank and found that NCUA's invalidation of its membership vote was "arbitrary and capricious."

Another Texas credit union trying to convert to a mutual savings bank, OmniAmerican CU of Fort Worth, Texas, has a court hearing Aug. 30 on its conversion process, which used the same process as Community CU.

Resource Links

CUNA's Principles on CU Conversions

Pennsylvania CUs aim ads to attract new members

HARRISBURG, Pa. (8/23/05)--Pennsylvania credit unions are hitting the airwaves and billboards as part of expanded advertising campaigns, and a Harrisburg newspaper noticed the effort.

The Aug. 21 article in the Patriot-News was a result of a roundtable meeting with business reporter Aparna Kumar, according to the Pennsylvania Credit Union Association's Life is a Highway (Aug. 22).

As credit unions have expanded their memberships beyond select employee groups, they have a need to get their message out in front of the general public, said Mike Wishnow, senior vice president, Pennsylvania Credit Union Association (PCUA).

The article detailed advertising and marketing efforts by Members 1st FCU, Mechanicsburg; Pennsylvania State Employees CU, Harrisburg; Hershey (Pa.) FCU; and Belco Community CU, Harrisburg.

Both Members 1st FCU and Hershey FCU are launching new campaigns--"It pays to belong" and "WOW," respectively.

During the roundtable, the credit union representatives explained the need to grow to better serve members. The Patriot-News article did mention bankers' complaints about the nonprofit tax-exempt status of credit unions and member business lending efforts.

Overall, it "was largely favorable in explaining the credit union difference and membership," according to PCUA

Senator asks Iowa CUs to provide fin-ed for victims

DES MOINES, Iowa (8/23/05)--U.S. Sen. Tom Harkin (D-Iowa) invited the Iowa Credit Union Foundation and the Iowa Credit Union League to provide financial planning and education to former workers of the Iowa Army Ammunition Plant.

The consumer-protection event was aimed at former employees who are set to receive $150,000 payments because they have developed cancer as a result of working at the plant, which built components for nuclear weapons.

"We're honored to have Sen. Harkin recognize the Iowa Credit Union Foundation's and Iowa Credit Union League's commitment to financial education by inviting us to participate in this event," said Wendy Wicks, director of community development for both organizations.

The Iowa securities bureau, Iowa attorney general's office, Iowa State University Extension and Iowa Bar Association also provided advice for personal investing.

"Hopefully, these individuals walked away from this event with new knowledge that will empower them to make informed decisions on how to manage and protect their money," said Dianne Taylor, league management consultant.

The Department of Energy and Atomic Energy Commission built nuclear weapons components at the Burlington, Iowa, plant. Men and women who developed one of 22 cancers after working at the plant are eligible for the $150,000 payments.

Jersey proposes parity updates in regulations

HIGHTSTOWN, N.J. (8/23/05)--The New Jersey Division of Banking is proposing an amendment to update credit union regulations and provide state-chartered credit unions parity with federally chartered credit unions.

The housekeeping rule allows the Department of Banking to say it has the same parity rules to apply to all banks, credit unions, mutuals and stock institutions, according to Scott Rekant, vice president of government affairs, New Jersey Credit Union League.

The proposed amendment says, "The treatment of the phrase ‘power, right, benefit or privilege' for credit unions is identical to that in the new rules adopted for state banks and savings banks" in 2004 and 2005 (RegAlert Aug. 1).

The term "power, right, benefit or privilege" will be clarified to apply to state-chartered credit unions as it applies to federally chartered credit unions.

The Department of Banking and Insurance also is proposing to recognize the name change of the credit union league to the New Jersey Credit Union League from the Credit Union Affiliates of New Jersey.

Rising interest rates sparks CU's creativity

DES MOINES, Iowa (8/23/05)--Iowa's credit unions and banks are getting more creative in offering certificates, thanks largely to the increasing interest rates.

John Deere Community CU, Waterloo, for example, is helping members squeeze a little more out of their money with certificates of deposits (CDs) that offer "add ons," "bump-ups," and "jumbos" (The Des Moines Register Aug. 10).

An add-on CD works like this: The member opens the CD with as little as $100, but can add money to it any time during its duration. That differs from earlier days when CDs were available only to those with $10,000 or more and the amount was locked in.

Angi Fangman, marketing manager at the credit union, told the Register that add-on CDs is a way for members to start in the savings habit.

Another offering, the "ABCD" is an add-on CD with an interest rate that changes on the monthly anniversary date. It has a flexible term.

The $1 billion asset credit union's "jumbo CDs," launched on Aug. 1, are for "supersized" accounts--CDs of $100,000 and above. Fangman said there has been some interest in the jumbos, which offer higher rates (4.77% on a 39-month CD). Although jumbos aren't new, targeting members is.

Bump-ups allow the member to ask that the rate paid on the money be raised if overall interest rates increase during the CD's duration.

According to Greg McBride, senior financial analyst at Bankrate.com, the changes have come with the increase in interest rates. It was hard for savers to get excited about a CD when interest rates were at 1% or less. However, rates are increasing and generating a second look at CDs by consumers.

CU offering deals on hybrid-vehicle loans

TINTON FALLS, N.J. (8/23/05)--Gas price hikes are causing consumers to look at hybrid vehicles. One New Jersey credit union is thinking green with its special rates and tax breaks for members who make a difference in the environment.

United Teletech Financial FCU, Tinton Falls, is offering special loan rates to members who purchase hybrid vehicles. It also is encouraging members to take advantage of federal clean-fuel tax deductions available through 2006.

"Reducing loan rates for hybrid vehicles is a small way to make a difference in the quality of life in Monmouth, Ocean and Middlesex counties," says Leo R. Ardine, president/CEO of the $255.9 million credit union.

Under current law, a one-time, $2,000 clean-fuel deduction is available for hybrid vehicle purchases made by Dec. 31. The deduction will be limited next year--to $500.

United Teletech Financial's special loan rates for hybrids include a 4.19% APR for qualified buyers with a 66-month term. Extra incentives include a 90-day payment deferral and a $50 gift card for buying gas.

"With the escalating price of gas, buying a fuel-efficient car not only makes a lot of sense, but it's good for the environment as well," said Ardine. "As a responsible corporate neighbor, we believe it's more important to do whatever we can to help make hybrids more affordable in our communities."

For more information, use the resource link.

Resource Links

United Teletech Financial FCU

Graham elected to CUNA Board seat

MADISON, Wis. (8/23/04)--John A. Graham, president/CEO of Kentucky Employees CU, Frankfort, was elected to the Credit Union National Association (CUNA) Board of Directors in a special election.

Graham was the successful candidate in the special election for the District 2, Class A CUNA board seat. The position was vacated by Jim Oliva when he became ineligible after taking a position with a Class B credit union (News Now July 29).

Graham ran against Stephen B. Sharp, president/CEO of Owensboro (Ky.) FCU, and Cynthia Prestandrea, CEO/secretary of the board at Prince George Employees FCU, Upper Marlboro, Md.

Graham's term will begin immediately and will expire at the adjournment of CUNA's 2006 Annual General Meeting, held in September in conjunction with the CUNA 2005 Future Forum in San Francisco.

CU System briefs

• MEMPHIS, Tenn. (8/23/05)--Ken Newberry, vice president, Memphis (Tenn.) Area Teachers' CU, left, presents a $500 door prize to Brenda Crater, Westwood High School. Judie Crawford, Holmes Road Elementary, and Rebecca McMahon, Raineshaven Elementary, also received $500. The $524 million asset credit union sponsored the Memphis City Schools Districtwide Assembly Aug. 10. About 16,000 employees and guests attended, including Mayor W.W. Herenton, U.S. Rep. Harold Ford Jr. (D-Ninth) and Carol Johnson, Memphis City Schools superintendent. Newberry announced a new educator account that is free for all area school employees. (Photo provided by Memphis Area Teachers' CU) ...

• COLUMBUS, Ohio (8/23/05)--Women from the Ohio credit union movement came together at a July 22 golf outing to raise more than $2,500 for the Columbus Children's Hospital. More than 60 women attended the third annual "Girls Just Wanna Have Fun" golf outing, sponsored by Corporate One FCU and Telhio CU, both based in Columbus ...

• MADISON, Wis. (8/23/05)--A Massachusetts credit union is suing a former administrator of the University of Wisconsin-Madison for failing to make payments on his credit card. U-Mass/Five College FCU, Hadley, Mass., is suing former vice chancellor of student affairs Paul Barrows for maxing out his $25,000 Visa card and not making a payment since March, according to a suit filed July 22 in Dane County Circuit Court. He owes $24,804.18 in purchases and cash advances and $303.70 in interest, according to the complaint. The credit union confirmed the filing, and Barrows has 45 days from the July 18 summons to respond (Wisconsin State Journal Aug. 19) ...
• PHOENIX (8/23/05)--One of the co-founders of Tempe (Ariz.) Schools FCU has died. Tom Graham, 79, died Aug. 13 in Tempe. Graham was a teacher at four elementary schools and the assistant principal and principal of another. He helped found the credit union, which now has assets of $154 million. He is survived by his wife, five children and 14 grandchildren (The Arizona Republic Aug. 17) ...

• TOLEDO, Ohio (8/23/05)--The co-founder and former president of Ford Motor CU, Sandusky, Ohio, died Aug. 20. Joe Nesbitt was 81. He co-founded the credit union in 1958 to help co-workers at the Ford plant with auto and home loans. It later became Erie Community FCU, which currently has $18 million in assets. Nesbitt served more than 20 years as president and on the board. Survivors include a daughter, a son, five grandchildren and three great-grandchildren (The Toledo Blade Aug. 22) ...

Market News

MADISON, Wis. (8/23/05)

• Manufacturing is recovering from its slump, according to a Federal Reserve Bank of Philadelphia manufacturing index, which in August showed mid-Atlantic factory activity at its highest level since April. Shipments, new orders and general business conditions drove the increase. However, some analysts say the rebound may not mean more jobs (USA Today Aug. 22). Mark Zandi, chief economist, Economy.com, expects that additional hiring might not occur. Daniel Meckstroth, chief economist, Manufacturers Alliance/MAPI, said factory production, which grew at a 1% annual rate during second quarter, may increase to a 4.7% growth rate for July through September. He predicts a 4% growth rate for the remainder of the year. Meckstroth noted that the high-tech sector's double-digit growth may pad the overall figures. Manufacturers, particularly petrochemical and paper producers, are being pinched by foreign competition and higher energy costs ...

• Investor confidence during August increased for the third consecutive month to 61--a five-month high, according to the UBS index of investor confidence Economy.com (Aug. 22). The figure is up three points from July and seven points from June. The August figure was boosted by a five-point increase in the economic index, which was up to seven points; however, the personal index component fell two points, to 54. Of the investors surveyed in August, 65% said their portfolios have moderate risk while 10% say their portfolios have high risk. That is consistent with the past eight years. The modest gain means the index is stabilizing, said analysts ...

• The Department of Labor says it will propose a regulation to encourage companies to automatically enroll their workers in 401(k) plans, affecting millions of workers in 450,000 retirement plans. According to Ann Combs, assistant secretary at the Labor Department's Employee Benefits Security Administration, automatic enrollment addresses one problem people face in trying to save for retirement: Being overwhelmed with the responsibility (USA Today Aug. 22). The department plans to have the proposal ready for public comment before the end of the year. Typically a 401(k) plan means employees decide whether to invest, and how much and where. But 19% of large employers already automatically enroll workers at an average rate of 3% of annual pay. That compares with only 7% of employers in 1999, reports Hewitt Associates. The regulation would give employers some protection against lawsuits if the investment options are reasonable. The 401(k) plans will increasingly become more important as companies drop pension plans. Private-sector pension plans dropped by 50% in the past 10 years--to 31,238 in 2004, says Pension Benefit Guaranty Corp. ...

• Businesses worldwide remain generally positive about the economy and their own business, with the index remaining at 32% on a four-week moving average for the week ended Aug. 19. According to Economy.com's Survey of Business Confidence, confidence has remained in a narrow range since the beginning of 2005. Surveys with readings of greater than 40% are consistent with a booming economy; those below 10% are consistent with recession. Sentiment is consistent with global real Gross Domestic Product (GDP) growth, equal to at least 3%. Defense and construction firms are the most optimistic, and retailers are the most pessimistic. The most notable improvement is in pricing power, with pricing near a record high on a weekly basis. Almost half of businesses surveyed said they've increased their prices during the past three months. Sales were sturdy and businesses seem to be rebuilding their inventories. Business were most confident in Asia, followed closely by businesses in North America. Least optimistic were businesses in Europe and South America (Economy.com Aug. 22) ...

• Northwest Airlines kept flying through the weekend with temporary workers who replaced striking mechanics and aircraft cleaners, who walked off the jobs early Saturday. The carrier's on-time performance suffered and it cancelled more flights than usual, but said its two regional airline affiliates operated without incident (The Wall Street Journal Aug. 22). According to Bloomberg.com (Aug. 22), 98% of the nation's fourth-largest carrier's flights were completed during the weekend. The carrier's Aircraft Mechanics Fraternal Association, which represents 4,200 mechanics, aircraft cleaners and building custodians, began picketing at 35 U.S. airports. After five months, negotiations broke down last week over the airline's proposal to terminate all 600 of its cleaners and custodians, and cut mechanic positions from 3,600 to 2,350 ...

• China's largest state-owned oil company Monday agreed to pay $4.18 billion for a Canadian oil company that has substantial reserves in Kazakhstan, reports The New York Times (Aug. 22). In China's largest acquisition, the China National Petroleum Corp. outbid India's state-owned Oil and Natural Gas Corp. to acquire PetroKazakhstan. The bidding shows the growing competition for oil resources by the two most-populated countries in the world. Both countries are rapidly increasing their oil imports. The transaction overshadows what had been the largest acquisition by China so far: Lenovo's purchase in May of I.B.M.'s personal computer unit for $1.25 billion ...

News of the Competition

MADISON, Wis. (8/23/05)

• SLM Corp. (Sallie Mae), the student loan originator, announced Friday it will buy GRP Financial Services, a specialty mortgage finance company that buys and services distressed mortgages. GRP was formed six years ago by its management team and investment firm--Angelo, Gordon & Co. in White Plains, N.Y. GRP will become a wholly owned subsidiary of Sallie Mae and will keep its brand and senior management team. The deal, which Sallie Mae expects to finalize in two weeks, won't affect its 2005 financial results. Instead, Sallie Mae says it will add two to three cents to its diluted earnings per share during 2006 (Reuters Aug. 22) ...

• The Federal Home Loan Bank of Indianapolis (FHLBI) announced Friday it will restate its annual financial statements for the years ended Dec. 31, 2001 through 2004 (PrimeZone Media Aug. 19). It also will restate its quarterly statements for 2003 and 2004, and for the quarter ended March 31, 2005. While preparing to register its stock with the Securities and Exchange Commission (SEC), the bank determined it needed to correct the way it had applied Statement of Financial Accounting Standard No. 133 (SFAS 133), Accounting for Derivative Instruments and Hedging Activities. "We do not believe this correction detracts from FHLBI's core strengths or its progress toward achieving FHLBI's strategic plan," said President/CEO Martin L. Heger. SFAS 133 requires derivatives be carried on the balance sheet at fair value and that periodic changes in fair value be recorded in earnings. FHLBI said it couldn't determine when the restatement will be complete because it's continuing to evaluate its previous application of SFAS 133 to other transactions ...

• Cleveland, Ohio-based KeyCorp increased its profit 22% during second quarter--at a time when the yield curve was flattening and competition for loans and deposits was greater--by slashing the amount it set aside for loans that might go bad, says The Wall Street Journal (Aug. 22). The bank added only $20 million to its loan-loss reserves, instead of $74 million in second-quarter 2004, and boosted its bottom line by about $39 million. Without that, KeyCorp would have fallen roughly two cents short of Wall Street profit targets. It was one of more than a dozen major banks that took lower loan-loss provisions last quarter, compared with the same period in 2004. The industry's loan-loss reserves as a percentage of total loans and leases are at a 19-year low, reports the Federal Deposit Insurance Corp. Other banks lowering the amounts set aside included Detroit-based Comerica, which cut $18 million from its loan-loss provision, and Cleveland-based National City, which slashed $35 million ...

• Hedge fund assets were down 2%--to $1.06 trillion--during second quarter, but managed futures grew 0.08% to $121 billion, says Barclay Group, which tracks more than 4,600 hedge funds and managed futures programs (American Banker Aug. 22). Despite the decline, the Fairfield, Iowa, group noted that hedge fund assets increased 1.63% during the first half of 2005. Fund of fund assets for the quarter also increased--11.64% to $564 billion. According to Barclay President Sol Waksman, the data supports anecdotal evidence that high-net-worth investors, who typically have shorter-term time horizons and higher absolute return targets, have been selling--while risk-averse institutional investors with longer-term horizons have been buying ...

• HSBC Bank and Bank of America Corp. are neck-in-neck in aggressively marketing to Hispanic consumers via remittances. HSBC just announced it is offering account holders free money transfers to anywhere in the world--in direct competition with B of A's free money transfers to Mexico, which will roll out by yearend. But both banks' offerings have strings attached--they require senders to have checking accounts with them. HSBC also requires senders to maintain a balance of at least $1,500. Those who don't are charged an $8 fee each month. Some analysts say the minimum balance requirement is prohibitive, but HSBC spokesman Stephen Cohen says that even $8 is cheaper than using traditional money transmitters such as Western Union Financial Services Inc. and MoneyGram International Inc. The Federal Reserve Bank of Boston says traditional remitters charge an average of $17.85 for every $200 sent. Gwenn Bezard, research director for Aite Group LLC, a Boston market research firm, said HSBC may be forced to get rid of the minimum balance requirement or the penalty fees within a year to compete with B of A's program. Price isn't the only factor, say analysts. According to Western Union, speed and convenience and having 233,000 locations are also factors. And Celent Communications said customer preferences for remittances are driven by trust and convenience, not price (American Banker Aug. 22) ...

What’s your score? Take the ID theft quiz

WEST LAFAYETTE, Ind. (8/23/05)—A Purdue University cybercrime expert has a simple message: Don't make it easy for thieves to steal your identity. And he's using a simple quiz to help people assess their risk of becoming a victim (Purdue News Service Aug. 16).

Scott L. Ksander, a senior forensics analyst with the Center for Education and Research in Information Assurance and Security, says thieves don't need high-tech access to computer data to steal our identities--we make our personal information available in many other ways. He uses, with permission from the Privacy Rights Clearinghouse, this quiz at standing-room-only public forums:

• I receive several offers of pre-approved credit every week. (5 points) Add 5 points if you don't shred them.
• I carry my Social Security card in my wallet. (10 points)
• My driver's license has my Social Security number on it. (10 points)
• I don't have a post office box or a locked, secured mailbox. (5 points)
• I use an unlocked, open box at work or at home to mail my bills. (10 points)
• I carry my military ID in my wallet at all times. (10 points)
• I provide my Social Security number whenever asked, without asking questions about how that information will be safeguarded. (10 points) Add 5 points if you provide your number orally without checking to see who might be listening.
• I'm required to use my Social Security number at work as an employee ID or at school as a student ID number. (5 points)
• My Social Security number is printed on various documents frequently seen in the workplace, such as on time cards. (10 points)
• I have my Social Security number and/or driver's license number printed on my personal checks. (10 points)
• I carry my insurance card in my wallet, and either my Social Security number or that of my spouse is on that card. (10 points)
• I haven't ordered a copy of my credit report for at least two years. (20 points)
• I don't protect my discarded personal, credit, and financial information from thieves by shredding them prior to putting them in the trash. (10 points)

Add your score. If it's 100 points or more, you are at high risk for identity theft. If your score is 50-100, you're at average risk, but your risk is higher if you have good credit. If your score is 0-50 points, you have a low risk of being an identity theft victim.

Resource Links

Statement Stuffer: ID Theft: How to Prevent It and How to Get Over It

Fiserv completes acquisition of BillMatrix

BROOKFIELD, Wis. (8/23/05)--Fiserv Inc. says it has completed its acquisition of Dallas-based BillMatrix Corp., which provides expedited electronic bill payment services.

BillMatrix provides billers an outsourced payment solution, allowing their customers to get immediate credit for bills paid online or over the phone with electronic checks, debit cards or credit cards. Its clients include utilities, telecommunications providers, insurance companies and lenders.

Fiserv provides transaction processing, business process outsourcing, and software and systems solutions services to the financial and health benefits industries, including credit unions. It is based in Brookfield, Wis.

Corillian's purchase of InteliData, qbt final

PORTLAND, Ore. (8/23/05)--Corillian Corp.'s acquisitions of InteliData Technologies Corp. and qbt Systems have been finalized.

The Portland, Ore.-based Corillian provides online banking, bill payment and anti-fraud solutions to financial institutions. InteliData provides online banking, bill payment and credit card services, while privately held qbt Systems offers real-time integration software.

To clinch the deal, Corillian issued about 4.9 million shares of common stocks and about $4.3 million in cash to InteliData shareholders. In its qbt Systems acquisition, Corillian issued 649,785 shares of common stock and about $3.2 million in cash to qbt shareholders.

Czech SEC opposes single regulator under bank

PRAGUE (8/23/05)--A spokesperson for the Czech Republic's Securities Commission (SEC) says the SEC opposes a proposal to combine four financial regulators--including that of credit unions--into a single regulator under the country's central bank (Executive Briefing Aug. 16).

The proposal, by Finance Minister Bohuslav Sobotka, would establish a unified financial-market supervisory authority within the Czech National Bank (CNB) by next spring to increase efficiencies in regulation.

The existing regulatory agencies scheduled to merge are the SEC, the CNB, finance ministry's supervisory body for the insurance sector and private pension plans, and the credit union regulator.

The SEC prefers establishing an independent supervisory body, according to Ivana Sedlackova, SEC spokeswoman. SEC says the proposal was drafted without analyses and debates. It also fails to take into account additional changes planned in the financial regulatory framework. SEC says there is a potential for conflicts of interest among CNB actions and SEC's activities.

The government has already approved the gradual integration of the four agencies but in two states. The current proposal is scheduled for discussion by the Cabinet on Aug. 24.