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CU System Archive

CU System

Programmer charged in Treasury-software theft at N.Y. Fed

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NEW YORK (1/23/12)--A Chinese computer programmer working as a contract employee on part of a source code for the U.S. Treasury's software system at the Federal Reserve Bank of New York has been charged with stealing the code.

Bo Zhang, 32, of Queens, N.Y., worked from May until August in an access controlled electronic environment at the central bank. He is charged with stealing the source code from the Treasury's Government-Wide Accounting and Reporting Program (GWA), which manages central accounting and reporting functions and processes associated with budget execution, accountability and asset management (Security Week and Bloomberg.com Jan. 19).

GWA provides federal agencies with a statement of their balances with the Treasury Department.  Although some credit unions use the bank to process items, it is not known whether any credit unions' account information would have been compromised through this type of theft.

Zhang is charged with accessing and coping the code onto a hard drive at the Federal Reserve Bank of New York, then copying it to a bank-owned external hard drive, which he allegedly connected to his private office computer, his home computer and his laptop.  He allegedly used the code in training individuals in computer programming in his private business.

The case is different from an incident that occurred in November 2010, when a Malaysian computer expert was arrested for hacking into the Federal Reserve Bank in Cleveland and breaching the computer servers of a number of major financial institutions (finextra.com Nov. 19, 2010).  In that case, Lin Mun Poo, 32, was arrested with a laptop holding more than 400,000 stolen credit and debit card numbers, authorities said. He allegedly hacked into FedComp, a data processor for federal credit unions, said authorities.

New York man files more ATM disclosure lawsuits

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DALLAS (1/23/12)--A New York man who had already filed 13 lawsuits against credit unions and banks in Texas and Louisiana, alleging violations of the ATM fee disclosure provisions of the Electronic Funds Transfer Act (EFTA), has added three more lawsuits to the court dockets with the same allegations.

Don Anderson filed the latest barrage of actions in federal courts in Texas  against Coastal Community FCU, Galveston, Texas, on Jan. 12;  and The People's FCU, Amarillo, Texas, on Jan. 18, and against Interstate Bank, according to court records.

The lawsuit documents are all identical, except for relevant dates and the locations  of the ATMs and the names of the institutions owning them. Anderson alleges he used an ATM belonging to The People's FCU on June 25 in Amarillo and one belonging to Coastal Community FCU on July 1 in Galveston. The ATMs had no notices disclosed about the fees for a nonmember using the ATM, according to the complaints filed in the courts.

Anderson is one of several litigants who have filed multiple lawsuits against credit unions and banks charging nondisclosure of ATM fees. 

During the week of Dec. 12, Anderson filed EFTA suits against FirstLight FCU, El Paso, Texas; Firestone Community FCU, Bridge City, Texas; Centric FCU, West Monroe, La.; Monroe Telco FCU, West Monroe, La.; and Capital One Bank.  The week of Dec. 5, he filed EFTA suits against eight other banks (News Now Dec. 20).

Other cases have been filed by a Minnesota man, Adam Johnson, and a Michigan couple, Nancy Kinder and Ray Harrison, who traveled in several states and took photos of ATMs without disclosure notices. Kinder and Harrison filed suits against at least 36 credit unions and banks within two years.

The rash of lawsuits sparked several institutions to offer settlements and prompting warnings about ATM disclosures from the Credit Union National Association, CUNA Mutual Group and the Consumer Financial Protection Bureau  (News Now Jan. 3 and April 25). Some credit unions have discovered that notices on their ATMs have been removed by others, and the national organizations have warned credit unions to develop and write procedures for regularly inspecting their ATMs.

DieboldDirect, a CUNA Strategic Services provider, is offering ATM surcharge notification decals to help credit unions with the disclosure requirements, said CSS. (For more information, use the link).

Anderson filed the recent complaints as original class action lawsuits.  In a similar ATM disclosure case, a U.S. District Court in Minnesota earlier this month denied a motion by Johnson to certify his suit as a class action lawsuit (News Now Jan. 9).

Illinois brings back Real Solutions FiCEP program

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NAPERVILE, Ill. (1/23/12)--The REAL Solutions Enhanced Financial Counseling Certification Program (FiCEP) has been brought back to Illinois for a second year with two modifications to allow as many Illinois credit unions as possible to participate in the program, said the Illinois Credit Union League.

The enhancements include a reduction in cost and an increase in number and locations of proctored test sites. The Illinois Credit Union Foundation board will cover the cost of the REAL Solutions enhancement, so the only cost to Illinois credit unions is the purchase of FiCEP books and exams from the Credit Union National Association (CUNA).

In the first year of the Illinois program, 23 individuals from 11 credit unions graduated as Certified Credit Union Financial Counselors.

According to the league, there are several benefits to the program:

  • Participants attain financial counseling skills that become part of the credit union's culture;
  • The program is written for all staff so anyone can offer financial counseling during every member interaction;
  • Certification satisfies members' needs for value in their credit union;
  • The credit union can differentiate itself by having certified financial counselors for each team; and
  • Staff can help members transform the way they deal with money through real-world counseling.
As CUNA's financial counseling certification self-study program, FiCEP enables all credit union staff to become more confident in helping members build a stronger financial future. FiCEP is designed for credit union staff members who work in the financial counseling, collections and loan departments, or any others who are committed to helping members gain control of their financial futures.

CUNA releases model bylaws for state-chartered CUs

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WASHINGTON (1/23/12)--The Credit Union National Association (CUNA) has developed model bylaws to serve as a guideline for state-chartered credit unions. Because requirements for bylaws vary from state to state, the model bylaws are intended to provide options of what may be included in them, said CUNA.

"The model bylaws have been designed to provide maximum flexibility to credit unions, drafted in a broad manner to allow discretion and not restrict a credit union's operations," said Lynn Coard, director of state advocacy and an attorney with CUNA's State Government Affairs, which developed the model bylaws.

CUNA advises credit unions to ensure their bylaws are consistent with their state credit union act, as well as with any other applicable laws and regulations. These model bylaws will be a useful resource to assist state-chartered-credit unions in enhancing their governing documents and provide better service to their members, said CUNA.

A group of league attorneys who worked last year on updating the Model Credit Union Act had suggested that model bylaws be developed to provide a tool for state-chartered credit unions to assess and, when appropriate, modify their bylaws to facilitate effective credit union management and operation.

CUNA's State Credit Union Subcommittee, which comprises 12 credit union executives and three representatives from state leagues, also was involved in drafting the bylaws and provided input based on credit unions' experiences.

The bylaws include sections on, among others:

  • Membership;
  • Elections;
  • Committees; and
  • Amendment of bylaws.
To access the model bylaws, use the link.

CU mergers announced in several states

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MADISON, Wis. (1/23/12)--At least seven credit union mergers were announced in several states this month.

They include:

  • Northwest Hills CU, a $300 million asset credit union in Torrington, Conn., announced the completion of a merger with CHH CU Inc. in Torrington, a $3.3 million asset credit union previously serving the employees of the Charlotte Hungerford Hospital along with the healthcare facilities in northwestern Connecticut. Now everyone in Connecticut's Litchfield County can join Northwest Hills CU.
  • Henrietta FCU, Rochester, N.Y., with $4 million in assets, has merged into the $122 million asset Family First CU in Rochester, N.Y. The combined credit union will operate under the Family First name with four branches and 12,000 members (Rochester Business Journal Jan. 17). During the past year, credit union mergers in the state have slowed, said William Mellin,  president/CEO of the Credit Union Association of New York (democratandchronicle.com Jan. 19). Many small credit unions are continuing to add more sponsor employee groups to maintain market share or to grow, Mellin added.
  • Campus FCU, a $448 million asset credit union based in Baton Rouge, La., will take over Our Lady of the Lake Regional FCU, Baton Rouge, with $5 million in assets under a proposed merger. The latter credit union serves hospital employees at Our Lady of the Lake Regional Medical Center. Both boards have approved the merger, but the Lady of the Lake's 2,000-plus members and the National Credit Union Administration must still approve it (theadvocate.com Jan. 9).
  • Pocatello (Idaho) Teachers' FCU, a $17.3 million asset credit union, will merge Feb. 1 into the $114 million asset Idaho State University (ISU) FCU, based in Pocatello. It will become ISU FCU's sixth branch location in the area (kpvi.com Jan. 19).
  • First Ohio CU, Fostoria, Ohio, with $8.4 million in assets, will soon merge into Southeast Financial CU, a $425 million asset credit union based in Franklin, Tenn. First Ohio members approved the merger Dec. 22 (fostoriareviewtimes.com Jan. 7).
  • Members First CU, a $191 million asset credit union in Midland, Mich., has applied with state regulators to merge with the $110 million asset Central Michigan Community FCU, based in Clare, Mich.
  • United Community Bay CU in Bay City, Mich., with $162.4 million in assets, has applied to merge with Mattawan, Mich.-based Access First CU, with $32.8 million in assets.   

Seven CUs added to Indianas 2012 ignite venture

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INDIANAPOLIS (1/23/12)--Seven Indiana credit union representatives have been selected to be part of ignite, an initiative of the Indiana Credit Union League focused on developing innovations that aim to help credit unions better the financial lives of their members.

At the group's meeting later this month, the igniters will form small working groups and begin developing their 2012 innovations.

Sixteen innovations have been developed by ignite to date and several have been adopted by credit unions. To promote them, members of the working groups make presentations during the league convention and at several chapter meetings around the state.

Newly selected individuals who will serve two-year terms are:

  • Elaine Rinehart, Eli Lilly FCU, Indianapolis;
  • Courtney Keeler, FORUM CU, Fishers;
  • Mike Pence, KEMBA CU, Indianapolis;
  • Craig Dauksas, Members Choice FCU, Bloomington;
  • Karen Houser, Natco CU, Richmond;
  • Catrina Tate, Teachers CU, South Bend; and
  • Raine Lee, Vigo County FCU, Terra Haute.
These individuals are in the second year of their two-year terms:

  • Stacy Lengacher, Crane FCU, Odon;
  • Amanda Middleton, Finance Center FCU, Indianapolis;
  • Bridgetta Bullock, Finance Center FCU;
  • Clinton Miller, General CU, Fort Wayne;
  • Cindy Crowley, Heritage FCU, Newburgh;
  • Lynette McClusky, Heritage FCU;
  • Brett Rinker, Industrial Centre FCU, Muncie;
  • Chris Smith, Interra CU, Goshen;
  • Jackie Hofman, Purdue FCU, West Lafayette;
  • Tara Holloway, Teachers CU, South Bend.
The project's three-member leadership team includes Director Doug True, FORUM CU, Fishers; Bob Falk, Purdue FCU, West Lafayette; and Nan Morrow, Centra CU, Columbus.

New Jersey league board elects officers

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HIGHTSTOWN, N.J. (1/23/12)--The New Jersey Credit Union League (NJCUL) board last week elected new officers at its regular January meeting.

They were:

  • Lou Vetere, president/CEO of Garden Savings FCU, Parsippany, was elected chairman;
  • Ray Del Nero, president/CEO of Merck Employees FCU, Rahway, was elected vice chairman; and
  • Michael Reilly, president/CEO of Central Jersey FCU, Woodbridge, was elected secretary/treasurer. Table officers are elected to one-year terms.
Linda McFadden, president/CEO of XCEL FCU, Bloomfield, and Jay Flanagan, CEO of Elizabeth (N.J.) Firemen's FCU, elected to the board last year, joined the NJCUL board for its first meeting of 2012.

The 2012 NJCUL board also includes:

  • Leo Ardine, president/CEO, United Teletech Financial FCU, Tinton Falls;
  • Bob Steeves, CEO, Essex County Teachers FCU, Bloomfield;
  • Christina Olender, CEO, Parlin (N.J.) DuPont Employees FCU; and
  • Tracy Sussmann, president/CEO, MidState FCU, Carteret. 

Registration open for Fall DE training

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MADISON, Wis. (1/23/12)--Registration is open for the Fall 2012 Credit Union Development Education (DE) training class taking place Sept. 6-13 in Madison, Wis.

Attendees of the six-day immersion experience will learn about credit unions' social responsibility, and domestic and international development, said the National Credit Union Foundation (NCUF), which sponsors the event.

NCUF said participants cite several benefits of attending DE training, including:

  • Acquisition of skills in credit union outreach initiatives, problem solving, technical assistance, team building and public presentations.
  • Certification as Credit Union Development Educators (CUDEs).  Graduates join a networking group of more than 1,000 in more than 30 countries;
  • A realization that local issues are global--and that global issues are local;
  • An understanding that credit unions grow stronger by working cooperatively; and
  • An understanding of how to promote cooperative principles and credit union values as advantages in today's competitive financial services marketplace.
The training will take place at The Lowell Center, part of the University of Wisconsin-Extension on the UW-Madison campus.

Registration is limited to 42 attendees. For more information, use the link.

North Jerseys service to unbanked Muslims spotlighted

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TOTOWA, N.J. (1/23/12)--An article appearing last week in NJBIZ magazine highlights North Jersey FCU's development of unique products based on  an Islamic religious law's prohibitions on earning and paying interest.

North Jersey FCU, Totowa, N.J., has developed products to serve New Jersey's unbanked Muslim community. Pictured is Lourdes Cortez, North Jersey FCU president/CEO. (Photo provided by the New Jersey Credit Union League.)
North Jersey FCU, with $198 million assets, Totowa, N.J., is the first credit union to offer products based on Islamic religious law, or Sharia law. It serves an unbanked population of Muslims in North Jersey, said the New Jersey Credit Union League (The Daily Exchange Jan. 20).

About two years ago, Muslims and local religious leaders in Paterson asked New Jersey FCU to provide lending and savings products that comply with their religious beliefs, according to the article.

Interpretations of Islamic law differ from congregation to congregation, making it difficult to design products that are in compliance with law, the article said. However, North Jersey FCU developed products that complied with a variety of Sharia interpretations.

Lourdes Cortez, North Jersey FCU president/CEO, said it has been a challenge to serve the Muslim community it is difficult to have programs that can calculate the interest on the consumer loans in a way that can be reflected on notes and disclosures.

CU System briefs (01/20/2012)

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  • ATLANTA (1/23/12)--A Lithonia, Ga., man was sentenced Wednesday to 22.5 years in prison for the March 9 robbery of Georgia's Own CU by a U.S. District judge in Atlanta. Cepeda Broughton, 41, pleaded guilty in September to charges of armed bank robbery, use of a firearm during a crime of violence and possession of a firearm by a convicted felon. The incident occurred at about 3 p.m. when a robber pulled a member attempting to leave the credit union back inside and ordered the member and four employees into a back room, according to a press release from the U.S. Attorney's office (7thspace.com Jan. 20). One employee was told to bind the others with duct tape, open the vault and place all the money in a bag. The robber then forced her to go to the teller stations and give him that money.  They returned to the back room and he bound her with duct tape before fleeing with $140,276, said the attorney's office.  The suspect's getaway car was blocked by a police car, but he jumped a curb and allegedly led police on a high speed chase that resulted in multiple accidents and damage to police and citizens' vehicles.  Broughton surrendered to police after running behind an apartment complex …
  • SANTA ROSA, Calif.  (1/23/12)--Redwood CU (RCU) President/CEO Brett Martinez has been named chairman of the board of the Santa Rosa (Calif.) Chamber of Commerce. As chairman, Martinez  will work with the chamber's board and CEO to help support and guide its mission to promote and advocate for local businesses and create a viable, sustainable economy in the region. Martinez has been RCU's president/CEO since 2004. He is active on several non-profit, community and industry boards and committees.  RCU, a $2 billion asset credit union, serves 210,000 members in the North Bay and San Francisco areas with 19 locations …