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CU System briefs (01/25/2011)

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* DOVER, Del.(1/26/11)--Dion Williams has been selected as the new president/CEO of Del-One (Delaware FCU), announced the Dover, Del.-based credit union's board. Williams has more than 18 years credit union experience, including senior management positions with the Raleigh, N.C.-based Local Government FCU as vice president of financial services, and most recently as president/CEO of Central Sunbelt FCU, Laurel, Miss. Del-One has seven branches throughout Delaware serving more than 40,000 members … * GREENVILLE, S.C. (1/26/11)--LaFonzo J. Burnside, 17, was charged Friday in the armed robberies of a credit union and a bank within two hours of each other. The robbery of North Charleston, S.C.-based CPM FCU occurred Friday at about 4:45 p.m. when a man wearing a wig and sunglasses demanded money and fled. However, he tossed the cash after a dye pack activated. Later, at about 6 p.m. a man wearing a toboggan and a bandana covering his face robbed Palmetto Bank. Burnside was arrested Friday night. Authorities recovered a hat, red bandanna and a BBgun hidden in a vent over his bed (Greenville News Jan. 23) … * SPOKANE VALLEY, Wash. (1/26/11)--Numerica CU is offering mobile banking. Members enrolled in the Spokane Valley, Wash.-based credit union's Home Banking can access their accounts from their Web-enabled phone, smart phone, BlackBerry, Android, iPhone or iPad. The free service allows members to access account information, view transaction history, transfer funds, and find a branch location or ATM from their mobile device. Members can register up to five mobile devices with Numerica's mobile banking service. The service has SSL encryption and members go through a multi-factor authentication process when logging into the Home Banking for the first time through their mobile device … * WICHITA, Kan. (1/26/11)--Two Wichita, Kan., men pleaded guilty Monday to charges stemming from the Nov. 8, 2010 robbery of Kansas City, Mo.-based Catholic Family FCU (Associated Press Newswires Jan. 25). Deshane Gantt, 21, and Christopher Crabtree, 20, were arrested after their getaway car ran a red light in front of a police car. According to U.S. Attorney Barry Grissom, Gantt robbed the credit union and Crabtree was the driver. Police stopped the car and recovered money from the robbery. They will be sentenced April 11 …

ACH thieves embed job apps with malware

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WASHINGTON (1/26/11)--A new variant on automated clearinghouse (ACH)/wire transfer fraud is targeting businesses by responding via e-mail to job openings posted online and embedding malicious software, or malware, warned the FBI. Cyber criminals often target small businesses that use smaller financial institutions such as credit unions and regional banks ( Jan. 20). In ACH fraud, cyber criminals install malware on a small business' computer and use it to log into the business's online banking account. There, they set up fake fund transfers, add bogus employees or payees, and move the money offshore, sometimes several hundred thousand dollars in a matter of hours. Recently more than $150,000 was stolen from a U.S. business through unauthorized wire transfer as a result of a so-called job applicant's e-mail that contained malware, said the FBI (Internet Crime Complaint Center Jan. 19). The malware was embedded in an e-mail response to a job posting the business placed on an employment website. As a result, the criminal obtained the online banking credentials of a person authorized to conduct financial transactions within the company. The criminal changed the account settings to allow wire transfers--one to the Ukraine and the other two to domestic accounts in the U.S. The FBI identified the malware as a Bredolab variant, svrwsc.exe., which was connected to the ZeuS/Zbot Trojan commonly used by cyber criminals to defraud U.S. businesses. Potential employers should remain vigilant in opening e-mails of prospective employees, said the FBI. Run a virus scan before opening an e-mail attachment to provide an extra layer of security against this type of attack. Also , use separate computer systems to conduct financial transactions, said the FBI.

CDCU appeals for help to avoid merger

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SAN FRANCISCO (1/26/11)--Mission SF FCU, a community development credit union (CDCU) in San Francisco, is appealing for help to avoid a merger, according to a press release. The credit union, one of two independent CDCUs remaining in California serving a predominately Latino community, was hit hard by the economic downturn and it must raise $200,000. Half of that is due Feb. 15, and the second $100,000 is due March 15. "Mission SF is determined to avoid a merger and continue to offer the vital and unique services it has provided to its members and the community for over 40 years," said the credit union in a press release. Formed in the Mission District by Latino immigrants in 1971, Mission SF served as an entry point to the mainstream financial services for new immigrants with financial education, basic financial services and loans. It now serves the children and grandchildren of many of its founders. "Mission SF has a critical role to play in the Mission District's recovery from the hardest and longest economic downturn in our lifetimes," said board Chairman Leslie Chard. "Through credit-building loans, financial counseling, youth services, microloans for business, personal loans and auto loans, Mission SF offers a menu of services that can help bring new hope and opportunities for prosperity and cooperation," Chard said, adding the credit union "needs an angel, someone who believes in what we are doing and can offer us the hand we have offered so many families." In recent years, The $6.7 million asset Mission SF expanded its reach to include additional underserved and unbanked members. It responded to an increase in predatory fringe payday lender/check casher outlets during the 1990s by securing an Innovation Grant from the National Credit Union Foundation to launch a payday alternative loan program. Mission SF's program served as a blueprint for the city's PaydayPlusSF product, which received national attention. Its youth and child program provided young people with financial education and its youth model is a finalist in the Center for Financial Services Innovation's national Innovation Fund grant program. A grant would support its initiative to expand services to the Mayor's Youth Employment and Education Program and partner with researcher and field leader Michael Sherraden, who is interested in studying the youth model for its innovation and scalability to low-income youth across the country. For more information, contact Margaret Libby, executive director of the Mission SF Community Financial Center, a non-profit partner of the credit union, at 415-984-1799.

Sixteen 2011 GAC crashers named

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MADISON, Wis. (1/26/11)--Sixteen up-and-coming credit union professionals will become the second annual young-adult group to participate in the credit union system’s biggest event--the Government Affairs Conference (GAC) in Washington, D.C., Feb. 27-March 2. There were more than 50 applicants to “Crash the GAC.” Last year, a group of about 20 credit union professionals from the under-30 age group received special scholarships from the Credit Union National Association (CUNA) to attend its 2010 GAC. The group called itself “Crash the GAC,” but intended to work cooperatively with CUNA to accommodate the interest younger professionals had in attending major credit union movement meetings such as the GAC. The group was organized by Brent Dixon, a young-adult adviser at the Filene Research Institute and a consultant with REAL Solutions. PSCU Financial Services and CUNA’s Center for Personal Development helped make the event happen. This year’s crashers are:
* Brandon Michaels, chief financial officer, Mazuma CU, Kansas City; * Kelly Griego, executive benefits sales and service representative, CUNA Mutual Group; * Amber Renick, member service officer, First Capital FCU, York, Pa.; * Amanda Thomas, marketing and business development manager, Members First CU, Columbus, Ohio; * Robert Lefkowicz, service center manager II, Suncoast Schools FCU, Tampa, Fla.; * Shannon Maloney, director of marketing, Seasons FCU, Middletown, Conn.; * Ronaldo Hardy, branch coordinator, La Capitol FCU, Baton Rouge, La.; * Sasha Kemble, trainer and silver-lining specialist, Verity CU, Seattle; * Whitney Thompson, member service officer, American Heritage FCU, Philadelphia; * Melissa Polley, member communications specialist, Wisconsin Credit Union League; * Lisa Totaro, marketing associate, Sunmark FCU, Latham, N.Y.; * Chris Wolgamott, community development liaison, Meritrust CU, Wichita, Kan.; * Sean Caploff-Jones, manager of member outreach, UMassFive College FCU, Hadley, Mass.; * Alexia Mavrakes, senior marketing associate, Aspire FCU, Clark, N.J.; * Michael Langhorst, assistant vice president/branch manager, CFE FCU, Lake Mary, Fla.; and * Jennifer Jenkins, lead marketing manager, PSECU, Harrisburg, Pa.

Neb. Fin. Ed Coalition lists CUNA league for free help

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MADISON, Wis. (1/26/11)--The president of the Nebraska Financial Education Coalition recently recommended the Credit Union National Association (CUNA) and the Iowa Credit Union League as resources for free financial literacy education. Jennifer Clark, who is also public affairs manager for a seven-state region of the Federal Reserve Bank, said consumers should learn about money management when there isn’t a crisis, so they’re better prepared when one hits (Omaha World-Herald Jan. 24). Jim Niederhauser, director of credit union growth at the Iowa Credit Union League, told the newspaper 41% of Iowa’s credit union members are baby boomers whose top concerns are current economic conditions and income and health care during retirement. Among Iowa’s 13 largest credit unions--those with assets of more than $100 million--at least half offer some kind of financial planning services. Those services may be someone on staff, a third-party relationship or even a virtual financial planner. The league’s website also offers a Financial Resource Center that takes consumers to a site sponsored by CUNA, which contains information on topics such as insurance, retirement, credit and saving/investing, the article said.

WesCorp directors file response in NCUA amended complaint

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LOS ANGELES (1/26/11)--Former directors of Western Corporate FCU (WesCorp) Monday filed a response arguing that the National Credit Union Administration's (NCUA) amended complaint in its lawsuit against them "raises nothing new" to the case and fails to meet a key standard set by the court. The directors filed the response Monday to the amended complaint filed earlier this month in NCUA's $6.8 billion lawsuit in a U.S. District Court in Los Angeles. In addition to raising "nothing new," the response said, NCUA's amended offer fails to meet the standards for overcoming the business judgment rule articulated by U.S. District Judge George Wu in his temporary decision in December, which favored the directors. That decision dismissed NCUA's complaints of breach of fiduciary duty and gross negligence against the directors as "glaringly absent" from NCUA's allegations. However, it was not final because Wu also allowed NCUA one more chance to amend its complaint and proffer what it would argue, if given the chance to do so (News Now Dec. 28). In the tentative decision, Wu said the directors fall under the Business Judgment Rule in decisions that do not involve fraud or breach of trust. The rule provides directors "broad discretion in making corporate decisions and [allows] these decisions to be made without judicial second-guessing in hindsight," he wrote. NCUA's amended offer, filed Jan. 10, proposed allegations in three categories related to WesCorp's budget and interest-rate spreads; concentration limits and Option Adjustable Rate Mortgages (ARMs); and damages. "None [of the allegations] adds any substance," said the directors' response. "The offer's legal discussion is a (barely) disguised motion for reconsideration that fails to comply with the local rules. It raises nothing new, and the points it makes remain demonstrably wrong," the court document said. "The court has been liberal with the NCUA by giving it this opportunity to make a written offer of proposed allegations. But that policy has its limits," said the directors' response. "It is one thing to treat liberally a private plaintiff who has been forced to plead a claim against corporations or their directors without any access to the corporation's records. But it is another thing to extend the same liberality to a government agency that has controlled WesCorp for the last year and a half, with complete access to all its books and records." The directors are seeking dismissal of the case without leave to amend. The next hearing in the case is Jan. 31.

Fitch withdraws 3 corporate commercial paper ratings

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CHICAGO (1/26/11)--Fitch Ratings has withdrawn the commercial paper ratings of Central Corporate CU (Cencorp), Eastern Corporate FCU (EasCorp) and Southeast Corporate FCU (Southeast). The withdrawal of the commercial paper ratings are due to the elimination, suspension or lack of activity under the corporate credit unions’ respective commercial paper programs (BusinessWire Jan. 24). Although the rating on the commercial paper programs have been withdrawn, Fitch still maintains its short-term Issuer Default Rating of “F1+” on all three institutions. Fitch has withdrawn the following ratings:
* Central Corporate CU, Southfield, Mich.,--Commercial paper “F1+”; * Eastern Corporate FCU, Burlington, Mass.,--Commercial paper “F1+”; and * Southeast Corporate FCU, Tallahassee, Fla.,--Commercial paper “F1+”.
For more information on Fitch Ratings, use the link.

Consumers Union Move money to CU

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MADISON, Wis. (1/26/11)--Two recent articles steered consumers to credit unions for free checking as big banks looked for more ways to add fees. Kirk Kordeleski, CEO of $3.8 billion Bethpage (N.Y.) Credit Union, Bethpage, N.Y., said he expects credit unions to benefit from large banks restricting free checking in an article from ConsumersUnion(via NewsdayJan 25). Kordeleski, who noted credit unions have always offered free checking while banks didn’t until about 10 years ago, said Bethpage CU will aggressively promote its free checking. Consumers were advised to “take the money and run” to a credit union as one way to dodge bank fees in a recent Houston Chronicle article (Jan. 23). The article said credit unions typically offer more favorable terms and a more intimate level of service than big banks.

Guadalupes Rivera wins best member story

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MADISON, Wis. (1/26/11)--Oscar Rivera, who shared his story of becoming a homeowner and small business owner with help from Guadalupe CU in Santa Fe, N.M., is the grand prize winner in the National Credit Union Foundation’s (NCUF) REAL Member Solutions Video Contest. More than 2,700 votes for the five finalists were cast over a two-week period. Rivera, along with one representative from the credit union and state league, won a free trip to Washington, D.C. As guests of NCUF, Rivera will share the stage at a VIP event held prior to the Wegner Awards Dinner, which will be held during the Credit Union National Association’s Governmental Affairs Conference, Feb. 27 to March 3. Rivera also will receive a savings account deposit of $500. The members featured in the four remaining videos will each receive a savings account deposit of $250. After a call for entries late last year, NCUF narrowed the field from 30 video entries to 10 of the most compelling examples of credit unions in action. Then an external committee representing credit unions and credit union organizations narrowed the field to five. The four additional finalists were:
* Tamika Anderson, who shared how her spending habits, especially relating to her car and home, got back on track thanks to financial consultations and budgeting help from ELGA CU, Burton, Mich.; * Andrew Gaines, who talked about how Lakeside CU in Milwaukee saved him from buying a home he couldn’t afford; * Robin Pharo, who explained how Summit CU in Madison, Wis., put people before profit and granted her a small business loan; and * Saundra Marie Ramirez, who discussed how SchoolsFirst CU in Santa Ana, Calif., has helped her repeatedly with honest financial advice and support.