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Louisiana regulator re-accredited by NASCUS

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ARLINGTON, Va. (1/22/10)--The Louisiana Office of Financial Institutions (OFI), which oversees credit unions in the state, has been re-accredited by the National Association of State Credit Union Supervisors (NASCUS). This is the third consecutive re-accreditation for Louisiana, which was first accredited in 1995. OFI is responsible for the examination and supervision of 45 credit unions and one state-chartered corporate credit union with combined assets of $1.28 billion. NASCUS' 28 accredited states supervise more than 85% of the nation's state-chartered credit union assets. "This recognition validates the integrity of our examination process and provides an independent and comprehensive assessment of the strengths of the credit union division," said John Ducrest, commissioner of the Louisiana OFI. "The comprehensive critique also allows us to make improvements based on current regulatory standards and best practices." NASCUS accreditation is for a five-year period, subject to annual review. The annual review enables the agency and NASCUS' Performance Standards Committee to measure progress and improvement. To earn the accreditation, a state supervisory agency must meet standards in six areas: department administration and finance, personnel, training, examination, supervision and legislative powers.

CU CUSO in servicing dispute

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TAYLOR, Mich. (1/22/10)--First Catholic FCU, based in Taylor, Mich., confirmed it has filed a suit in a federal court in Michigan seeking to terminate its mortgage servicing contract with CUSO Mortgage, a Pasadena, Calif.-based credit union service organization (CUSO). The $142 million asset credit union's complaint alleges the CUSO violated its service agreement with the credit union by, among other things, failing to file Form 1098s with the Internal Revenue Service for its borrowers. Charles Holzman with Holzman Ritter & Corkery in Southfield, Mich., the credit union's attorney in the case, said that is only one of the allegations. The credit union maintains it should not have to pay a 2% of outstanding principal balance termination fee on the contract because the company failed to live up to the contract. The fee is being held in an escrow account. "We're still trying to resolve the dispute," Angela Millis, CEO, told News Now. She confirmed the suit's claims, that CUSO Mortgage failed to:
* Pay delinquent taxes for previous tax years; * Properly enter some mortgage modifications; * Timely post payments; * Monitor the existence of hazard insurance; and * File IRS Forms 1098 for all serviced loans for 2007 and provide proof of filing From 1098s for 2008. These represent a breach of its duties under the servicing contract, the complaint says.
As a result, First Catholic FCU's employees performed the duties. It is asking the court to release the 2% payment and to order transfer of the mortgages to a new servicer hired by the credit union. The suit was filed in Michigan Eastern Federal District Court in Detroit on Dec. 23. Millis said the credit union is waiting for the CUSO to respond to the complaint. CUSO Mortgage is a wholly owned subsidiary of Wescom Central CU, Pasadena, Calif. It services as many as 100 credit unions.

Virginia league opposes CUbank merger bills

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LYNCHBURG, Va. (1/22/10)--The Virginia Credit Union League is opposing two bills in the state legislature that would allow state banks to merge or consolidate with state-chartered credit unions, according to Rick Pillow, league president/CEO. The identical companion bills, House Bill 482 and Senate Bill 440, were introduced last week by Del. Mark Sickles (D-43) and Senate Commerce and Labor Committee Chairman Richard Saslaw (D-35), Pillow told News Now. The bills, as introduced, do two things, said Pillow: They would allow a state bank to merge or consolidate with a state-chartered credit unions, and would allow a federal credit union or state-chartered credit union to merge or consolidate with a state bank. "I have never had a credit union suggest that this was a strategy that they'd like to use," Pillow said, adding that banks don't try to become credit unions. "We view it as a one-way street, an effort by banks to make it easier to consolidate with credit unions." "The league board voted to oppose both bills as introduced," he said, adding that he was in meetings Wednesday with lawmakers and bankers emphasizing several points, namely that the bills don't protect the credit unions' members.. "The bills have no protections of members or of the rights of members who own credit unions or of their equity in credit unions. In non-stock to stock conversions, or for-profit to stock corporations--none of the scenarios adequately protect members and their rights." Among the bills' shortcomings: "They don't address members' notice requirements, financial disclosure requirements, member voting requirements, the enrichment of directors and executives, and how they would appraise members' equity in the credit union. What's the rush to judgment here?" he asked. "We will continue open discussions with bankers to see if there's common ground or compromise, but the league will aggressively let them know we don't support these bills as introduced." "We're gearing up for a battle ... but will stay open to discussions," he said. The bills must go through the House Commerce and Labor Committee, chaired by Del. Terry Kilgore (R-l) and Saslaw's Senate committee. The legislative session ends March 13. "We're asking for the bills, as introduced, to be defeated or carried over for future discussion."

CU System briefs (01/21/2010)

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* MADISON, Wis. (1/22/10)--This is the official legal notice to all members of the Credit Union National Association’s 76th Annual General Meeting (AGM), scheduled for Feb. 22, at 10:30 a.m., at the Washington Convention Center in Washington, D.C. It will be held in conjunction with the CUNA Governmental Affairs Conference. The AGM will update member credit unions and leagues on the actions of their association during the past year ... * MADISON, Wis. (1/22/10)--A burglar is suspected of taking numerous 2010 license plate stickers from the Westport branch of Madison, Wis.-based Summit CU Wednesday morning (The Capital Times Jan. 21). A credit union employee discovered early Wednesday morning that a back office door had been forced open. No money was missing. A surveillance camera at the credit union took a photo of a man at 12:50 a.m. Wednesday who is suspected of taking the stickers ... * CHICAGO (1/22/10)--A former Chicago police officer was convicted Wednesday of trying to deposit a phony $1 million check at the Chicago Patrolmen's FCU. Tiffany Brown, 38, was found guilty of forgery, attempted theft and official misconduct in a Cook County Circuit Court. She tried to deposit the check on Aug. 31, 2006, saying it was a windfall from a legal settlement involving Six Flags Great America in Gurnee, Ill. The credit union checked with Six Flags and found out the check was fraudulent (Chicago Sun-Times Jan. 21) ... * MADISON, Wis. (1/22/10)--Vera Croner, former CUNA CU (now Summit CU) staffer, died Monday at the age of 89. Born in what is now Poland, Croner spending years in hiding during World War II in Germany. She moved to Madison, Wis., after the war and beginning in 1959, she worked with CUNA CU and became an administrator and counselor of the office at the Credit Union National Association. In 1962, she helped reorganize internal operations of credit unions in Trinidad and conducted training seminars. She retired in the 1980s from CUNA (Summit) CU. A memorial service was held Thursday (Wisconsin State Journal Jan. 20) ...

Trinidad CU Societies bill in draft form

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TRINIDAD AND TOBAGO (1/22/10)--The Trindad and Tobago government will proceed with its plans to reform the financial services sector after the Cabinet approves draft legislation for credit unions. The Credit Union Societies Bill is in a draft form as is a policy document, which is the product of that level of consultation, and which has been approved by the Cabinet, according to Finance Minister Karen Nunez Tesheira (Guardian Jan 21). However, there are several steps left in the process and the document has to go to the legislative review committee, she said at the launch of the Credit Union League of Trinidad and Tobago’s 2010 developmental initiatives program in Port of Spain. The government’s recognition of the leading role of credit unions in the financial arena has prompted regulatory, supervisory and legislative reforms, Tesheira added. “Based on criteria developed by the Central Bank, this policy document now enables credit unions to adhere to international best practice,” she told the publication. “It also facilitates improvement in corporate governance and higher standards of oversight in the credit union movement.” For the bill to be passed, the Co-operative Societies Act of 1971 must be amended, she added. “The credit union bill will speak to the oversight and regulatory might in large part of the Central Bank,” Tesheira told Guardian.“But recognizing that, we don’t want to lose the co-operative ethics and philosophy, which really distinguishes credit unions from other financial institutions. In so doing, the intent is that both pieces of legislation will sit together and reflect that philosophy.”

Two candidates vie for CUNA Board position

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MADISON, Wis. (1/22/10)--Wednesday was the deadline to file nominations for the District 6, Class C Special Election for a position on the Credit Union National Association’s (CUNA) board of directors. CUNA has received two candidates:
* Steve Dahlstrom, Spokane Teachers CU, Spokane, Wash., and * Dave Rhamy, Silver State Schools CU, Las Vegas.
Ballots were sent Thursday to the affiliated credit unions in that district/class. In order to have someone seated by the time of the CUNA Government Affairs Conference in February, the voting timeline has been condensed from what a regular election timeline would include. The deadline for ballots to be returned to the independent auditing firm is Feb. 12.

Keep your eyes on Haiti--plea for CUs future

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JIMANI, Dominican Republic (1/22/10)--The future of Haiti's credit unions lies not only in recovery from the devastating Jan. 12 earthquake, but in the global credit union movement's ability to help Haiti's 175 financial cooperatives rise to higher levels of member service. That was the message from Greta Greathouse, head of the World Council of Credit Unions (WOCCU) operations in Haiti, during a phone interview Wednesday.
Click to view larger image World Council of Credit Unions (WOCCU) staffers Brian Branch, left, and Dave Richardson load critical supplies that Greta Greathouse, center, will take back to WOCCU's project staff in earthquake-devastated Port-au-Prince, Haiti. (Photo provided by the World Council of Credit Unions).
"Keep your eyes on Haiti," said Greathouse, chief of party for the Haiti Integrated Financing for Value Chains and Enterprises (HIFIVE) program, a $34.4 million multipartner program funded by the U.S. Agency for International Development. "There will be a lot of opportunities for credit unions around the world to participate in rebuilding Haiti's financial services sectors," she said. Greathouse had driven to Jimani on the Haiti/Dominican Republic border to meet WOCCU executives and collect much-needed supplies for her staff of 16, all of whom had survived the earthquake. Brian Branch, WOCCU executive vice president and chief operating officer, and Dave Richardson, WOCCU senior manager in charge of the Haiti program, met Greathouse at COOPRENE credit union at the border, thanks to the assistance of the Asociación de Instituciones Rurales de Ahorro y Crédito (AIRAC), WOCCU's member organization in the Dominican Republic. “The images you see on TV are surreal, but they do not do justice to Haiti’s devastation,” said Virginio Rafael Gerardo, executive director of AIRAC. “Even though the Dominican Republic is a poor country, we will do all that we can to help.” AIRAC provided logistical support, transportation, security and US$1,000 worth of critical supplies to WOCCU's Haiti staff. The Credit Union National Association provided the satellite phones that Branch and Richardson brought with them to the Dominican Republic. Haiti's credit unions were already reaching out to provide financial services to the country's rural poor, said Greathouse. Those efforts will become even more critical in light of the earthquake's devastation. "Credit unions play an incredibly important role, particularly in rural areas," said Greathouse. "It's always been our goal to extend those services, and that's something that WOCCU members have been very good at supporting." To hear the entire audio interview with Greathouse, use the resource link. Also, on Thursday, WOCCU's international charitable arm, Worldwide Foundation for Credit Unions, in conjunction with its U.S. counterpart, the National Credit Union Foundation (NCUF), said the movement is continuing to send funds to aid credit unions in Haiti. U.S. credit unions can contribute online through NCUF's CUAid disaster relief fund at www.CUAid.coop. A total of $324,166 had been raised by 3 p.m. CT Thursday, said Valerie Breunig, executive director of the Worldwide Foundation. That includes $170,156 from U.S. credit unions contributing via CUAid.coop. Jill Stevenson, communications and marketing coordinator at NCUF, said U.S. credit unions can post the CUAid.coop on their own websites to facilitate donations. Members would need only to click the link. "We're getting all kinds of questions from credit unions about how they can raise money," she told News Now. To support Haiti's credit unions and members through the international credit union disaster fund, make payments, via check, credit card or wire to:

Worldwide Foundation for Credit Unions Inc.

5710 Mineral Point Road

Madison, WI 53705, USA

Donations also can be made online with a credit card at www.woccu.org/give. For wire transfer information, contact Valerie Breunig, Worldwide Foundation for Credit Unions at 608-395-2055 or via e-mail vbreunig@woccu.org. Please indicate the donation is designated for the Haiti Disaster Relief Fund.

N.Y. Mayor Bloomberg backs CUs depository choice

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ALBANY, N.Y. (1/22/10)--New York Mayor Michael Bloomberg expressed his support for the deposit of public funds into credit unions during his State of New York City address Wednesday afternoon. Currently, only commercial banks in New York can accept municipal deposits. “With Albany’s approval, we’ll also strengthen neighborhood-friendly credit unions, which reach out to customers who may have never had a bank account,” Bloomberg said. “We’ll seek to deposit $25 million in city tax dollars in federally insured and regulated credit unions. It’s a relatively small amount of city resources, but it will have a big impact by allowing credit unions to make more loans to more low-income families.” The Credit Union Association of New York applauded the mayor’s support. “We applaud Mayor Bloomberg for his support of credit unions and recognize his leadership to achieve enactment of the necessary state legislation that will allow municipalities to have depository choice,” said William J. Mellin, association president/CEO. “Credit unions are well-positioned to play a more prominent role in the economic revitalization in New York City and to provide enhanced services to New Yorkers, especially low-income families,” he added. “As New York City works toward the goals and vision outlined by Mayor Bloomberg, we will explore every opportunity to partner with him to achieve those goals.” Allowing credit unions to accept municipal deposits would increase competition for the funds, and produce lower fees, better loan terms and higher deposit rates for local governments, the association said. Bloomberg also indirectly mentioned five community development credit unions that will be offering “NYC Safe Start” accounts, which aim to prevent overdrafts, according to the National Federation of Community Development Credit Unions. The credit unions are: Bethex FCU, Bronx; Lower East Side People’s FCU, Manhattan; Brooklyn Cooperative FCU; Neighborhood Trust FCU, Manhattan; and Union Settlement FCU, Manhattan. The mayor also noted a recently chartered credit union in Queens, sponsored by the East River Development Alliance--one of two new federal charters in 2009. The federation helped charter the credit union, which will serve thousands of public housing residents. National media, including The Wall Street Journal and The New York Times, also have covered Bloomberg’s speech. The Huffington Post proclaimed that New York had “moved its money,” a reference to the Post’s campaign for consumers to move money from big banks to credit unions and community banks. Last week, New York Gov. David Paterson called for action to expand municipal depository choice as part of his mandate reform agenda. City groups, including the Association of Towns, New York State Association of Counties, New York Council of Mayors, Firemen’s Association of the State of New York, Albany Common Council and the New York City Common Council, are submitting resolutions in favor of depository choice.

Ohio league to governor Help small biz support CUs

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COLUMBUS, Ohio (1/22/10)--The Ohio Credit Union League has asked Ohio Gov. Ted Strickland to support credit unions’ inclusion in federal programs that provide funds for smaller businesses, federal legislation lifting the cap on member business lending and state legislation that would allow credit unions to be eligible depositories for public funds in Ohio. League President Paul Mercer sent a letter to Strickland Jan. 11 asking him to support the initiatives. Mercer also commended Strickland for an op-ed piece he wrote for the Columbus Dispatch Dec. 20 that said the federal government should help stimulate capital lending by giving federal funds to small and medium-sized businesses. States could serve as an intermediary, identifying lenders that want to participate and ensure that federal funds reach manufacturers who can retain and create jobs, Strickland said. “Because they would be allocating federal funds alongside their own funds, banks and credit unions could make lending decisions without the overwhelming reluctance that guides many of their decisions now,” he added. “And as businesses repay these loans, the funds would be rolled back to provide capital to other manufacturers and create even more jobs.” Ohio credit unions are seeing an increase in their small business lending, Mercer told Strickland. Business loans at credit unions in the year ending June 2009 increased 13.6%, versus an 8.4% decrease in business lending by banks during the same period. If credit unions become eligible depositories for public funds, Ohio businesses and consumers also could participate in programs such as GrowNow, SaveNow, EcoLink and AgLink through the state treasurer’s office, Mercer said. “As a state, Ohio should make more effort to provide additional options and accessibility to credit and capital, and not restrict or limit other sources of capital as is currently done today,” he added. To read Mercer’s letter and Strickland’s article, use the links.

Former OmniAmerican CU offers IPO

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FORT WORTH, Texas (1/22/10)--OmniAmerican Bancorp, a newly created holding company for Omni-American Bank in Fort Worth, Texas--and a former credit union-- opened stock trading on NASDAQ Thursday following an initial public offering (IPO) that raised more than $119 million. Members of OmniAmerican Bank approved a conversion plan Jan. 15, which allowed the bank to proceed with a conversion and stock offering. The IPO sold 11.9 million shares of common stock at $10 per share to eligible account holders--depositors as of March 31, 2008, according to Globe Newswire (via CNN Jan. 21). In 2007, OmniAmerican Bank’s board of directors voted to convert to a publicly traded, mutual holding company. OmniAmerican was formerly the second-largest credit union in Fort Worth. The credit union changed its name on Jan. 1, 2006, after members voted 3-to-1 in July 2005 to convert to a bank (News Now Feb. 13, 2007).

PIMA FCU sending 8 to The 1 CU Conference

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TUCSON, Ariz. (1/22/10)--A team of eight young credit union employees and two high school youth advisers from PIMA FCU (PFCU) will be rewarded with an all-expense-paid trip to The 1 Credit Union Conference in Las Vegas, July 11-14.
Click to view larger image Pima FCU CEO Nathanael Tarwasokono (top left) will send eight young staff members and high school youth advisers to World Council of Credit Unions' Young Credit Union People Scholarship Program. The decision was based on Tina Slachta’s (front row, on right) experiences attending the same program in 2008. They are, from left: front row, Caroline Barragan and Rosie Ley. Back row, from left: Beatrice Vidal, Raul Munguia, Kathie Lorenz, Kristina Lopez, Gabriel Campbell and Sergio Leyva. (Photo provided by World Council of Credit Unions)
The team--who did everything from teaching students financial literacy to feeding needy families Thanksgiving dinner--will participate in the 2010 World Council of Credit Unions (WOCCU) Young Credit Union People (WYCUP) Scholarship Program. Tina Slachta, director of risk management for PFCU, Tucson, Ariz., attended WOCCU’s 2008 World Credit Union Conference in Hong Kong, and said she came away transformed. “It was life-changing,” said Slachta, who had participated in the WYCUP Scholarship Program at the international event. “It sparked a fire in my professional life for my organization and for the credit union movement.” PFCU CEO Nathanael Tarwasokono noticed WYCUP’s impact on Slachta, which inspired him to reward top performers in the credit union's Individuals Making Pima a Community Tool (IMPACT) program. WOCCU is calling for nominations for this year's WYCUP program. The deadline for all nominations is June 7. The WYCUP Scholarship Program seeks individuals who have made significant contributions to the development of their own credit unions, regional or national credit union systems and have demonstrated the potential to employ their talents at the international level. Credit unions and credit union organizations that are WOCCU members can nominate their next generation of leaders to compete for the WYCUP Scholarship. To be eligible for the scholarship, nominees must:
* Be sponsored by their credit union or credit union organization to attend The 1 Credit Union Conference--a combination of WOCCU's World Credit Union Conference and CUNA's America's Credit Union Conference--in Las Vegas, July 11-14; * Be 35 years of age or younger on Jan 1; and * Submit a completed nomination form with supporting materials to WOCCU by June 7.
The WYCUP Scholarship, which consists of an all-expense-paid trip to the 2011 World Credit Union Conference in Glasgow, Scotland, will be awarded to five recipients at this year’s conference in Las Vegas. For more information, use the link.