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CU System briefs (01/11/2010)

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* EAST HARTFORD, Conn. (1/12/10)--Two men were arrested Friday morning after a car chase and foot chase, and charged with attempting to rob East Hartford (Conn.) FCU. The would-be robbers were thwarted when a clerk saw two masked men approaching the credit union and locked the door before they could get inside. Police said the credit union was especially security conscious because it had been robbed before. In custody are two Hartford men, Quincy Soyini, 35, and Kunta Soyini, 31. Kunta Soyini was also charged with reckless driving, failure to stop a motor vehicle and driving with a suspended registration. The $10.5 million asset credit union serves East Hartford police and firefighters (The Hartford Courant Jan. 11 and Jan. 8) ... * FORT WORTH, Texas (1/12/10)--American Airlines FCU announced that $9.6 million in dividends was paid to its member -owners on Dec. 31. The board approved the dividend payout at its meeting Dec. 18. "Our sound lending decisions and efficient operation have kept us secure, strong and solid, which enables us to once again provide our member-owners with this bonus dividend," said President/CEO Angie Owens. To recognize the most active and loyal members, an additional $50 bonus was distributed to those who participated in three or more of the eight major account categories ... * HARTFORD, Conn. (1/12/10)--Federal prosecutors said they are seeking a five-year prison sentence for Melissa Laliberte, 39, of Wallingford, Conn., for embezzling more than $700,000 from Meriden Franco-American FCU, now defunct. The former credit union bookkeeper was scheduled to be sentenced today. She pleaded guilty in September in a Hartford, Conn., federal court to embezzlement and filing a false income tax return. She admitted she took cash from members' loan payments, made unauthorized withdrawals from their accounts, drew her salary several times a month and used member checks to pay personal expenses. The credit union was placed into liquidation last year (Associated Press Newswires Jan. 10) ... * FAIRFAX, Va. (1/12/10)--Apple FCU has expanded its field of membership to include employees and students of Prince William County Public Schools and their families, announced the $1.2 billion asset Fairfax, Va.-based credit union. The expansion will give Apple more than 80,000 potential new members, according to a filing with the National Credit Union Administration. Apple has 19 branches and 99,033 members. Its field of membership also includes the City of Winchester Public/Private Schools, George Mason University, Northern Virginia Community College, Fairfax County Public Schools, Loudoun County Public Schools, Stafford County Public Schools and about 300 other specific groups (Washington Business Journal Jan. 8) ... * BOULDER, Colo. (1/12/10)--Elevations CU, based in Boulder, Colo., has equipped an ATM with a voice guidance system to make it easier for visually impaired individuals to have full access to an ATM. The ATM is located near Elevation's on-campus branch at the University of Colorado at Boulder, in the University Memorial Center. The ATM provides instructions to the user through a built-in audio port. Members can plug in standard headphones into the ATM's headphone jack to hear instructions in either English or Spanish. Both audio and visual instructions are provided for any transaction. Elevations has more than $900 million in assets. Its eight branches serve Boulder and Broomfield Counties ...

Kern Central now Community Trust CU says Self-Help

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BAKERSFIELD, Calif. (1/12/10)--Kern Central CU, the Bakersfield, Calif. credit union that was purchased Friday by Durham, N.C.-based Self-Help FCU, will be the second largest community development credit union in California and will be known as Community Trust CU. The combined credit union will have more than $150 million in assets and more than 23,000 members. The combination is the result of the National Credit Union Administration's decision to transfer Kern Central's member shares and certain assets to Self-Help in a purchase and assumption agreement (News Now Jan. 11). The decision followed more than two years of extremely challenging economic conditions in the area, said Self-Help FCU in a press release. "Self-Help is a great fit for us," said Kern Central CEO Carl Trejo. "We are extremely pleased to be continuing service from our three locations and our entire staff is eager to focus our attention on growth and expanding member services." Steve Zuckerman, managing director of Self-Help's California operations, noted that "Within this challenging economic environment, the need to preserve access to responsible financial services for underserved communities is critical." The fusion will result in a wider variety of services and products for Kern Central members and will help preserve and expand access to responsible credit for low-income communities in the Central Valley. Self-Help has merged four credit unions in California, expanding its ability to serve the Bay area and the Central Valley. It merged with People's Community Partnership FCU, West Oakland, in the fall of 2008; with Community Trust CU in June of 2009; and with El Futuro CU earlier this month. Kern Central will do business as Community Trust CU, a division of Self-Help FCU, which already includes branches in Porterville, Modesto, Riverbank, East Palo Alto and East San Jose." "We are humbled by the opportunity to carry the legacy of the former United Farm Workers CU, the first functioning credit union for farm workers, founded by the late Cesar Chavez," said Zuckerman. "We are committed to carrying forward that legacy of fair, responsible financial services to farm workers and other residents of the Central Valley."

Teller stable after shooting robbery suspects caught

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GREENSBURG, Pa. (1/12/10)--Police have taken into custody two suspects in the shooting of a teller and robbery at Westmoreland Community FCU in Hempfield, Pa. On Friday, a gunman entered the credit union and fired four shots. The first shattered a computer monitor and then hit a teller in the stomach. As of press time, the teller was in stable condition at a local hospital, President/CEO Maria LaVelle told the Pennsylvania Credit Union Association (PCUA). A second bullet appeared to target another teller’s head, but the teller ducked and the bullet hit the wall behind the teller. The other two shots were random, LaVelle said. Police arrested Lamont Laprade, 32, of Huntington, W. Va., Friday and David Louis Mathis, 45, Crafton, Pa. on Saturday (Life is a Highway Jan. 11). Mathis was arrested at a local mall. He allegedly coerced people to drive him to the mall, where he purchased clothing to replace the wet clothes he wore, according to PCUA. He had spent most of the night and morning outdoors in sub-freezing temperatures (Pittsburgh Post-Gazette Jan. 9). The gunman, who spent about seven minutes in the building, ordered two tellers--including the one who had been shot--to take him to the vault and open it. They were too nervous to do so. The robber managed to get cash from a teller window. Five other employees hid in LaVelle’s office and she barricaded her door with a chair. “We were scared,” she told PCUA. “I thought any moment he would discover other people were in the building.”

AVCUs indirect lending program had banner year

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SOUTH BURLINGTON, Vt. (1/12/10)--Consumers turned to Vermont credit unions for help with their finances during the economic downturn in 2009, and the data from the Association of Vermont Credit Unions’ (AVCU) 2009 indirect lending partnership with CUDL proves the point, AVCU said. Association Vice President Bryan Kent said this week that, on average, a very good year would be around $18 million in loan originations for the 10 credit unions and 140 vehicle dealers in the program (Newslines Express Jan 11). “In 2009, our member credit unions booked more than $45.5 million in originations via the indirect program with an average credit score of 707,” he said. “Those are absolutely incredible numbers given the economic climate.” Kent attributed the success of the program to: participating credit unions that realize the value of the indirect channel and have embraced it; outstanding support from endorsed business partner CUDL; and the energetic professionalism of CUDL’s Area Account Representative Shelley Facos.

CUNA names 27 as CCUEs

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MADISON, Wis. (1/12/10)--Certified Credit Union Executive (CCUE) designations were awarded to 27 individuals from 10 states, bringing the total nationwide to 2,665, said the Credit Union National Association (CUNA). CCUE, instituted in 1975, is the hallmark of professional credit union achievement. Designed for managers and those aspiring to credit union leadership, the program teaches advanced credit union management and operations techniques. Also, three individuals earned the Certified Financial Services Professional (CFSP) designation. The program began in 1999 as a designation targeted at educating credit union professionals specializing in financial services. The Certified Executive Program (CEP) awarded specialty certifications to 18 credit union professionals. These certifications require in-depth courses in a specialty area, including: compliance, lending, financial management, marketing and human resources. The CEP is the overall name for the self-study program for the above designations. Recommended for college credit by the American Council on Education (ACE), the classes and materials are tailored to those working within the Credit Union System. All new designations were awarded in November. Lisa Gray, Dow Chemical Employees’ CU, Midland, Mich., was awarded high honors. Cynthia Magliocca, State Employees; CU, Raleigh, N.C., was awarded honors. For the names and the credit unions of the new CCUE, CFSP, and specialty designees, use the link.

FBI warns small bizzes about banking Trojans

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WASHINGTON (1/12/10)--So many small businesses are being targeted by cybercriminals that the Federal Bureau of Investigation (FBI) and banking organizations have issued warnings advising small businesses to dedicate a separate computer for online banking. Credit unions setting up online banking for their member business lending should note that FBI does not consider online banking safe if the business's computer used for the online banking tasks also performs e-mail and Web browsing tasks. According to the USA Today (Dec. 30), cybergangs have flooded the Internet with "banking Trojans," malicious software programs that enable criminals to sneak into the victim's PC and manipulate online accounts. The Trojans use two older banking technologies: Automated Clearing House (ACH) transfers and wire transfers to rob small firms, local governments, school districts, churches and non-profits. The victims are mostly small to mid-sized organizations using online banking accounts supplied by local credit unions and community banks. The robberies have increased so much that the FBI, the Federal Deposit Insurance Corp. (FDIC) and the Federal Reserve have all issued alerts in the past two months, said the newspaper. The FBI, which usually stays mum about what it's probing, said it has investigated more than 200 cases mostly in 2008 and 2009 where cybercriminals made fraudulent transactions of about $100 million and succeeded in stealing $40 million. Avivah Litan, banking security analyst at Gartner, a technology consulting firm, told USA Today that the firm advises anyone running small businesses to switch from commercial online accounts to individual consumer account. Consumer protection laws require banks to fully reimburse individual account holders who report fraud quickly. However, banks are invoking the Uniform Commerical Code when dealing with business account holders experiencing stolen accounts. Banks maintain the code absolves them of liability when an agreed-upon security procedure is in place and a theft is traced to a compromised PC controlled by the small business. Litan said it is not realistic for the banks to promote Internet banking as safe based on their expectation that account holders will continually secure their PCs against intrusions. Banks and others should "at least put a large disclaimer on their home Web pages advising customers that they bank online at their own risk."

Fraudsters still testing cards from Heartland breach

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MADISON, Wis. (1/12/10)--Fraudsters are still testing and successfully accessing credit and debit card numbers not blocked or canceled in last year's Heartland Payment Systems data breach. CUNA Mutual's Risk Protection Center Friday reported to its policyholder credit unions that cards not blocked or canceled during the breach continue to be hit with card fraud, reported the New Jersey Credit Union League (Daily Exchange Jan. 11). During the holidays several credit unions experienced card fraud on accounts that were compromised by the Heartland breach but not blocked or reissued. Last week two scenarios occurred:
* The fraud management system of a credit union that didn't block or reissue cards noticed a fraud trend on the monitored cards, with cards on a specific BIN targeted. Initially, the fraud was focused in the Midwest but migrated to the West and to some international locations. The fraud appeared to be concentrated at superstores, supermarkets and gas stations. The credit union is taking action to block and reissue the cards. * A credit union that did block and reissue cards from the breach noticed an increase in card "testing," with fraudsters testing cards for an authorization within seconds of each other. Because the cards were blocked, they were not authorized and the credit union did not experience any further fraud.
CUNA Mutual also alerted both Visa and MasterCard about the increase in activity and the scenarios. The insurer "strongly recommends" that credit unions that opted to monitor their members' cards instead of block and reissuing the cards after the breach go ahead and block and reissue any active cards that have not expired from Visa CAMS and MasterCard alerts. It anticipates that the "extremely active" fraud ring will continue to target the cards until they no longer provide approved authorizations. Even if a credit union has seen little or no fraud, it should stay alert to the fact that fraudsters may find a BIN of card numbers that provide an approved magnetic stripe authorization. Credit unions that blocked and reissued cards won't likely see subsequent magnetic stripe fraud from the breach because the reissued cards have new CVV/CVC values and card expiration dates.

Registration opens for Serving UnderservedLatino CU conference

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NEW YORK (1/12/10)--Early bird registration is open for the National Federation of Community Development Credit Unions’ 36th Annual Conference on Serving the Underserved and its Sixth Latino Credit Union Conference. The conference, in collaboration with the Network of Latino Credit Unions and Professionals, will be held June 9-12 in Pittsburgh. Early registration offers a discount of 15% on final conference registration fees. Confirmed keynote speakers include:
* Debbie Matz, National Credit Union Administration (NCUA) board chairman; * Gigi Hyland, NCUA board member; * Bill Hampel, Credit Union National Association senior vice president of research and policy, and chief economist; * Jose Cisneros, treasurer, City of San Francisco; and * Bill Strickland, founder, Manchester Craftsmen’s Guild and Bidwell Training Center in Pittsburgh.

Jury elected to CUNA Board Dist. 6 nominations due

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MADISON, Wis. (1/12/10)--Patrick Jury, president/CEO of the Iowa Credit Union League, has been elected by acclamation to the District 4, Class D position on the Credit Union National Association (CUNA) board of directors. He is filling an unexpired term and will serve through the 2012 Annual General Meeting. Brett Thompson previously held the position, but stepped down shortly after he was appointed chairman of the American Association of Credit Union Leagues. The deadline for nominations to be received for another board election--the District 6, Class C special election--is Jan. 20. Voting will occur from Jan. 21 through Feb. 12. Class C credit unions are those with at least 74,000 natural person credit union members. The special election was created when Dave Rhamy announced his resignation from the board in December. Questions can be directed to CUNA’s Corporate Secretary at, or call 608-231-4010.

Social media guidelines offered by CUNA councils

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MADISON, Wis. (1/12/10)--The CUNA HR/TD Council and the CUNA Marketing and Business Development Council have published a new white paper, “Social Media Guidelines and Policies,” which includes about having a credit union social media policies and what they should include. The white paper is a result of conversations by participants at the CUNA Marketing & Business Development Council’s webinar series on social media last fall. Many participants saw the need for a social media policy, but they didn’t have a policy in place and didn’t know where to start. The two councils commissioned the white paper afterward. “A lot of credit unions used to think that having a social media policy meant having something in place that says whether employees could access social media websites on company time,” said Christopher Morris, CUNA Councils Web manager and the first speaker in the social media webinar series. “That’s not enough anymore--credit unions need to have guidelines in place to ensure that employees don’t inadvertently harm their brand online. For example, what do you do if a staff member posts negative comments about work on their personal Twitter account or blog?” he said. Social media experts counsel against having a separate social media strategy. Rather, they advise making it a subset of an overall business strategy, according to the paper. They emphasize that social media is another set of tools that serve a variety of purposes. A vibrant social media effort can help build community, engage workers, identify in-house expertise and eventually drive business. Developing guidelines and policies requires a delicate balance for an organizational culture that allows social media to flourish while protecting the credit union’s assets--its reputation in the community--the paper said.

ABC features Switch to CUs

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NEW YORK (1/12/10)--The media kudos for credit unions continues this time with ABC’s Diane Sawyer Friday noting on ABC’s World News Tonight that many consumers are trading their financial institutions on Wall Street to the ones on Main Street. The ABC news piece, “Switch to CU, Avoid Bank Fees,” featured two consumers who switched from their big banks to smaller financial institutions. It also noted the “Move Your Money project,” which was created by Arianna Huffington, owner of The Huffington Post. The project encourages consumers to take their money out of big banks and move it to smaller financial institutions such as credit unions and community banks. “When big banks see real competition from the community banks and credit unions, they will change their behavior,” Huffington told ABC’s David Muir. The project’s Facebook group, “Move Your Money,” has nearly 20,000 fans. The “Move Your Money” campaign on YouTube also has received more than 300,000 views (Newsline Express Jan. 8). Credit Union National Association President/CEO Dan Mica also wrote a column for The Huffington Post, saying that credit unions are experiencing record membership growth and that “disenchantment” with banks may be part of the reason. His column generated many reader comments, many of them about the positive experiences consumers have had with credit unions. An editorial in The Brattleboro Reformer and an audio blog that aired on WKVT in Brattleboro, Vt., identified credit unions as good local options for consumers. In other news, The Washington Post Thursday recommended that homeowners looking to refinance a mortgage talk to several lenders--including a credit union. A blog, the Red, White and Blue Press also recommended (Jan. 11) that consumers seek credit unions instead of banks to improve their finances.

CU coffee shop shield students from budget cuts

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EL SERENO, Calif. (1/12/10)--A California credit union combined forces with a coffee shop to open a branch to meet several needs of students in area schools.
Cal State L.A. FCU, Los Angeles, combined forces with a coffee shop to open a branch to meet the needs of students in area schools. (Photo provided by Cal Sate L.A. FCU)
After months of searching for the right location to open a new branch in El Sereno, Calif., Cal State L.A. FCU found the ideal location. But the site was larger than the branch required. It needed another business for the location, one with the same ideals the credit union: people helping people and a business that would also benefit the community. Meanwhile, Semillas Community Charter Schools faced state budget cutbacks and began thinking creatively about how to raise revenue and give back to the community. A coffee shop could generate additional income, and the schools use the facilities to teach students and prepare nutritious lunches. A credit line and parents’ support would be needed to open the coffee shop. Cal State L.A. FCU set out to develop a business line of credit and a charter school loan program tailored to meet the needs of the school. The credit union said it considered the venture as an investment in the community--a community that it added to its field of membership as an underserved community. The relationship between the school and credit union has been mutually beneficial, the credit union said. The coffee shop helps offset the cost of the rent for the new branch as it builds membership. Many parents, students, teachers and community members have opened accounts. Several news organizations picked up the story and gave the credit union some favorable press. See the links. “We developed a relationship with the Cal State L.A. CU, which is providing us a huge line of credit at an affordable price,” said Marcos Aguilar, executive director, Semillas Community Charter Schools. “Last year, we had to pay exorbitant amounts to borrow money to deal with the state's cash flow crisis on the academic year and its impact on us. So we've already made a huge success there.” The Xocolatl Cacao Tea and Coffeehouse provides jobs in the community; and many staff are parents or grandparents of the school’s students. In addition to shielding the school from state budget cutbacks, students can learn about supply and demand, and marketing and profit. Kitchen space is available for school lunches. The credit union also is working with the school to provide opportunities for financial education. Cal State L.A. FCU is based in Los Angeles and has $41.7 million in assets.

NASCUS continues regional regulators meeting

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ARLINGTON, Va. (1/12/10)--The National Association of State Credit Union Supervisors (NASCUS) continues its regional regulator meeting series this week in Atlanta and San Francisco. The series, which began in November in Northeastern states, involves small group discussion on critical issues affecting state-chartered credit unions. NASCUS met Monday in Atlanta, and will meet Wednesday in San Francisco. Regulators from 12 Southeast, West and Northwest states will attend. “Given the complexity of the regulatory and legislative landscape, providing opportunities for our members to gather in small group settings is incredibly valuable to our state regulators, but also for NASCUS as we represent state regulators’ interests in Washington, D.C.,” said NASCUS President/CEO Mary Martha Fortney. The series started in 2005. State regulators also will meet at the National Credit Union Administration/NASCUS State Regulators National Meeting March 7-9 and at the NASCUS System State Summit Sept. 30-Oct. 2.