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CU System briefs (01/28/2011)

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* BRUNSWICK, Maine (1/31/11)--Marsha Richard, a long-time employee of Brunswick, Maine-based Atlantic Regional FCU in the cards department, has been sued in a civil court by the credit union for allegedly embezzling more than $519,000 by siphoning funds from checks returned for insufficient funds. She worked for the credit union for 23 years. The FBI is investigating and the amount is expected to be higher. The incidents allegedly went on for at least six years ( myfoxmaine.com Jan. 27 and Weekly Update Jan 28) … * ST. PETERSBURG, Fla. (1/31/11)--Credit union service organization (CUSO) PSCU Financial Service's headquarters was recognized as one of the first Green Business Partners in Pinellas County, Fla. The CUSO completed an assessment documenting its recycling, paper reduction, water conservation and energy conservation measures, and passed an on-site inspection by the University of Florida/Pinellas County Extension Office. Mike Yatros, interim CEO of the CUSO, noted, "we have implemented and documented dozens of ways that we reduce paper consumption, encourage recycling, and conserve energy and water in our headquarters building and its landscaping" … * RALEIGH, N.C. (1/31/11)--State Employees' CU (SECU), based in Raleigh, N.C., will for the fourth year offer the Internal Revenue Service's Volunteer Income Tax Assistance (VITA) program. It also, for the second year, will offer a low-cost tax preparation option of members who fall outside of the $49,000 VITA household income limit. Last year SECU tax preparers filed more than 36,000 returns through VITA and assisted 2,100 members with low-cost tax preparation services. It is providing the services in all 236 branches statewide. With the two programs, SECU helped members receive $52.8 million in tax refunds while saving them more than $5.4 million in tax preparation fees last year. Those members also claimed more than $26.2 million in tax credits, including $15.2 million in Earned Income Tax Credits … * JEFFERSON CITY, Mo. (1/31/11)--Jefferson City, Mo.-based Conservation Employees CU announced its members received an interest rebate of 6.2% of all interest paid on its loans during 2010 and a bonus dividend of 6.2% of all dividends earned during the year. The two rebates totaled nearly $250,000, reported the Missouri Credit Union Association (The Missouri difference Jan. 28) …

Apples new tech could create closed payment system

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NEW YORK (1/31/11)--Credit unions will want to monitor what is happening in the world of mobile phone technology and contactless payment technology. Computer giant Apple is planning new technology that would turn consumers' iPhones and iPads into wallets, with consumers waving the devices at payment terminals or paying for items through their iTunes accounts. If that caught on big time, it could have ramifications for credit card companies, financial institutions, and interchange, said an analyst featured in ComputerWorld article Friday. Various technical publications are reporting that Apple, based in Cupertino, Calif., plans to embed near-field communications (NFC) technology into its next generation iPads and iPhones. IBTIMES.com (Jan. 28) reported that Apple has job postings in the field, and consulting firm Envisioneering Group said unnamed engineers working on the project have said Apple will introduce the NFC chip in the devices. Apple has also filed for NFC-related patents, including a device that allows consumers to scan a ticket near their smartphone and get content related to that event. Apple's entry into the fray would disrupt the mobile payment industry, according to Avivah Litan, an analyst at Gartner research firm. Apple has a huge base of 160 million iTunes users, which gives Apple the ability to act as its own closed payment system, with little need to interface with credit card companies and financial institutions. It could shut out credit card companies in much the same way that PayPal does in its field, Litan told ComputerWorld (Jan. 28). iTunes users still could use credit cards and banking accounts to fill up their iTunes accounts, but that would be the extent of financial institutions' involvement in an Apple mobile payment system, said Litan. In another article, Litan noted that creating a new payment system would cut out middle men like Visa and MasterCard and said credit card associations should be concerned (The Red Tape Chronicles on MSNBC.com Jan. 21). "The thing about Apple is they could do a system like PayPal, but they also have a physical device in people's hands," Litan said. Others are attempting to get a head start on NFC technology. Last year, AT&T Mobility, Verizon Wireless and T-Mobile USA announced they were working with Discover Financial Services and Barclays on introducing an NFC-based mobile payment system in the U.S. Others working on NFC capabilities include Google and Samsung, and PayPal, the articles said. Visa and Mastercard are working to steer mobile phone transactions through their systems, and Bank of America last year tested an NFC-chip based purchasing system. While some believe a new payment system won't go very far without major changes in payments infrastructure and more security on mobile devices, 160 million consumers are ahead of the game, paying for small purchases on iTunes. And they're getting stronger: In second quarter 2010 alone, 42% of all consumer handsets sold in the U.S. were smart phones.

Barks appointed to St. Louis Fed district council

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CHESTERFIELD, Mo. (1/31/11)--Glenn D. Barks, president/CEO of First Community CU in Chesterfield, Mo., has been selected to serve on the Federal Reserve Bank of St. Louis’ Community Depository Institutions Advisory Council. The council is composed of 12 executives from financial institutions across the Fed’s Eighth District. The council meets twice a year to advise St. Louis Fed President James Bullard on the credit, banking and economic conditions facing their institutions and their communities. Council members are senior executives of banks, thrift institutions and credit unions, and serve staggered terms. Barks has nearly 40 years of experience in the financial services industry. He was named CEO of First Community in 2001. He joined the credit union 25 years ago as executive vice president, following a 12-year career in the savings and loan industry, where he held various management positions.

Clean slate promo results in 4000 loans

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ANCHORAGE, Alaska (1/31/11)--Credit Union 1, a $711 million-asset institution in Anchorage, Alaska, recently offered members the chance to start the year off with a “clean slate” on their loan payments--and saw a corresponding increase of nearly 70% in new-loan volume over the same time last year. During the credit union’s “Clean Slate Giveaway,” members who closed on a loan were automatically entered into a drawing to have all of their loans at the credit union paid off, up to $25,000. The credit union launched the campaign as a way to differentiate itself from the competition, said Rachel Ramsey, vice president of marketing and communications. The $25 gift card drawings were incorporated into the Clean Slate Giveaway to keep motivation and enthusiasm alive throughout the three-month promotion, Ramsey added. She said the key behind any successful promotion is to get employees behind it so they the feel comfortable talking about it with people.

First American saves members 90k in Great Rate Challenge

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BELOIT, Wis. (1/31/11)--First American CU in Beloit, Wis., helped save members $90,698 in loan interest payments during its first Great Rate Challenge, a program developed to create awareness about the unnecessary costs of high-interest rates. On average, members who participated in the challenge were rewarded with $1,445 in interest savings.
Click to view larger image Jody Gearhart, a Janesville, Wis., branch member of First American CU in Beloit, Wis., won the grand prize--loan interest payments for one year--as part of the credit union’s Great Rate Challenge, developed to create awareness about the unnecessary cost of high-interest rates for loans. (Photo provided by First American CU)
Everyone who qualified for the program could expect to see least a 2% reduction of their high- interest-rate vehicle loans, credit cards and other personal loans transferred from other financial institutions, First American said. “We encouraged area residents to bring in their high-interest loans to the credit union for a consolidated and reduced rate,” explained Ariel Bilskey, First American director of market development. Participating members were able to lock in a rate as low as 3.99% annual percentage rate, which translates into thousands of dollars in anticipated interest payments, the credit union said. Jody Gearhart, a Janesville, Wis., branch member of First American CU, won the grand prize--loan interest payments for one year, along with her anticipated interest savings of nearly $1,500. First American CU is a part of First Community FCU, based in Parchment, Mich.

Interchange cap hurts consumers warns league

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ST. PAUL, Minn. (1/31/11)--The proposed cap on interchange fees will ultimately hurt consumers’ pocketbooks, Minnesota Credit Union Network President/CEO Mark D. Cummins warned readers of Finance & Commerce newspaper last week. A regular columnist in the Twin Cities publication, Cummins explained how reducing debit card interchange fees would hurt credit unions’ debit card programs. The Jan. 24 article, “Interchange Cap Will Ultimately Hurt Minnesota Consumers,” outlined the benefits that debit card programs offer to consumers and retailers. Cummins explained that these benefits come at a price to financial institutions, and retailers are asked to pay their “fair share” of this cost through interchange fees. A reduction in these fees would significantly impact the debit card features credit unions will be able to offer. “So what does this mean for your local credit union or bank? Reduced interchange fees will ultimately hurt small, locally based financial institutions and make it harder for them to meet the needs of their members, consumers and communities,” Cummins wrote. “For credit unions, this issue is not about making a profit; rather it’s about protecting the pocketbooks of Minnesota credit union members.” Cummins noted that market forces would likely erode the two-tiered pricing structure proposed by the Federal Reserve Board. He explained that merchants would eventually migrate to debit cards that offer the mandated lower-cost fees, which would ultimately force local financial institutions to reduce their interchange fees to remain competitive. The Credit Union National Association (CUNA) has estimated that up to 67% of credit unions would lose money on their debit card programs if the interchange regulations reduced interchange-related revenues by 40%. CUNA and credit unions have put out a call to scrap the Federal Reserve Board's plan to implement government restrictions on interchange fees. To read the column, use the link.

CU reissued 3000 cards after third-party breach

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BATH, Maine (1/31/11)--A data breach involving a third-party--not a credit union--has prompted a Bath, Maine-based credit union to reissue about 3,000 debit and credit cards as a precaution, according to local news reports. Five County CU, a $181.4 million asset credit union, issued the cards after electronic security breaches involved an unnamed retailer and a processing center. It is not known whether other financial institutions were affected (Associated Press Newswires and WGME-TV Jan. 28). Several debit cards had suspicious transactions out of Florida, leading the credit union to shut down and reissue about 2,500 debit cards (myfoxmaine.com Jan. 28). Although there was no suspicious activity involving credit cards, the credit union relished about 500 Visa credit cards as a precaution. The credit union told WGME-TV that no personal data or money is at risk. The credit union said the attack is another sign of how aggressive hackers have become and how aggressive credit unions and banks must be to respond to such threats.

Robins FCU Flint Energies to offer energy-efficiency loans

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WARNER ROBINS, Ga. (1/31/11)--Robins FCU has joined with Flint Energies to offer a 4.99% annual percentage rate (APR) on energy efficiency loans to their joint members. The reduced-rate loan can be used to pay for floor/wall/attic insulation, heating and cooling equipment that is Energy Star qualified, Energy Star windows and doors, envelope sealing, duct sealing, duct insulation, the new GE GeoSpring heat pump water heaters and other Energy Star Appliances like dishwashers, clothes washers and refrigerators. The loan is available to residential homeowners who qualify. Members of Flint Energies can start the loan process by calling Flint Energies to schedule a free home-energy audit. The member then decides on home improvements and gets a contractor quote for the upgrades. The member then completes and submits a Robins FCU loan application. Applicants don’t have to be members of the credit union, but can join when they apply. Robins FCU expects to process loan applications within 48 hours. Once the loan is approved and the home improvements have been completed, Flint Energies will inspect the work. The member will sign the loan documents at a Robins FCU office, and the credit union will issue a check, payable to the member and the contractor. Generally, the loan terms will be for a 4.99% APR between $1,000 and $7,500 for five years or less. The interest rate buy-down program is made available through the Energy Efficiency and Conservation Block Grant Program and Georgia Environmental Finance Authority in conjunction with the American Recovery and Reinvestment Act of 2009.

New Jersey league board officers named

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HIGHTSTOWN, N.J. (1/31/11)--The New Jersey Credit Union League has named its board officers for 2011. Shawn Gilfedder, president/CEO, McGraw-Hill FCU, East Windsor, remains chairman; Leo Ardine, president/CEO, United Teletech Financial FCU, Tinton Falls, holds his seat as vice chairman; and Lou Vetere, president/CEO, Garden Savings FCU, Parsippany holds his seat as secretary/treasurer. Source (The Daily Exchange Jan. 28)

Trial lawyer is Montanas new banking commissioner

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BILLINGS, Mont. (1/31/11)--The Montana Credit Union Network (MCUN) is welcoming the state's new banking commissioner, Melanie S. Griggs, a trial lawyer from Louisiana. "We welcome Melanie to Big Sky Country and look forward to working with her on the important issues facing today's credit union movement," Tracie Kenyon, MCUN president/CEO, told News Now. Griggs will head a 39-employee division that regulates state-chartered and licensed financial institutions, including state chartered credit unions, banks, licensed mortgage brokers, mortgage lenders and nondepository institutions, according to the Billings Gazette (Jan. 25). Until December, Griggs was an attorney with St. Martin & Bourque of Houma, La. She has a law degree from Tulane Law School and a bachelor's degree in economics from Eckerd College, St. Petersburg, Fla. She succeeds Annie Goodwin, the state's long-time banking commission, who retired.