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Two CUs awarded affordable housing grants

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BOSTON (1/28/13)--The Federal Home Loan Bank of Boston announced Thursday it had awarded two credit unions, Coventry (R.I.) CU and Leominster (Mass.) CU, affordable housing grants to help the underserved in their communities.

Coventry CU, with $229 million in assets, received a $400,000 grant to help fund new construction of single-family homes targeting first-time homebuyers with incomes less than 80% of the area median income. It will provide homebuyers with financial planning services and homebuyer education. The homes will be designed to maximize energy-efficiency. Coventry CU will provide a construction loan and permanent financing to homebuyers.

"We applied on behalf of the Coventry Housing District--we are a partner--to fund affordable housing," David Root, president/CEO of Coventry CU, told News Now. "We're committed to $2 million in construction. It's a public policy issue for us. As homes are built, we come up with about two-thirds of the funding. The project is planned for 40 to 50 homes."

The project likely will take about three to four years, he added. Eleven people must apply for the loans before construction can begin on the homes, and so far three have applied, Root explained.

Leominster (Mass.) CU, with $620 million in assets, was awarded $30,000 to help in the rehabilitation of an 80-year-old home, using the traditional Habitat for Humanity model for a family earning less than 50% of area median income. The sponsor is providing 0% mortgage financing. Leominster CU will provide a construction line of credit and the town of Acton, Mass., will provide a grant.

"The credit union is committed to working with the communities we are in, and Habitat for Humanity is an excellent partner," John O'Brien, Leominster CU senior vice president of lending, told News Now. "This was good opportunity to work with them to help the community. We've worked with them on several projects over the years and are very happy to partner with them."

Credit union employees recently went out to work sites of two separate projects in which the credit union collaborated with Habitat for Humanity. "It was very rewarding and they got to meet the owners at the end of the visit," he added.

The Federal Home Loan Bank of Boston awarded $30.3 million to support 48 affordable housing initiatives in six New England states. Of this amount, $14.2 million was awarded as Affordable Housing Program (AHP) grants and subsidies, with the balance coming as subsidized advances or loans. The funds were awarded through member financial institutions to projects that will create or preserve 1,004 units of affordable rental and ownership housing for households earning at or below 80% of area median income.

AHP funds are used to help pay construction, acquisition, or rehabilitation costs. Member financial institutions work with local developers to apply for AHP funding, which is awarded through a competitive scoring process.

CU System briefs (01/28/2013)

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  • MONTPELIER, Vt. (1/28/13)--Jim St. Peter, senior information technology and operations executive at Williston, Vt.-based New England FCU, has been appointed to the Board of Directors of the Association of Vermont Credit Unions (AVCU). St. Peter will fill a board seat vacancy created by Matt Levandowski of Heritage Family FCU, who resigned for personal reasons (Newslines Express Jan. 25). St. Peter has been with NEFCU for 16 years. The seat's three-year-term will expire in May during AVCU's 66th Annual Meeting and Convention …

Va, Md CUs use 'exec profiles' to tout CUs

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RICHMOND, Va., and GERMANTOWN, Md. (1/28/13)--Two credit unions used local newspaper "executive profile" interviews of their president/CEOs to tout the values and benefits of credit unions.

Jane Watkins, president/CEO of Virginia CU in Richmond with $2.33 billion in assets, was profiled Jan. 21 in the Richmond Times-Dispatch

Watkins told the paper that nine out of 10 members surveyed rated the credit union's service quality as very good or excellent. She also described its passion for financial education and how it has set a record for attendance at its financial education program.

When Watkins first encountered the credit union in the 1970s as an auditor at an accounting firm, she was struck by Virginia CU's "warm, teamwork feel," the lack of an oppressive hierarchy and the focus of the happy staff on serving members, she told the paper.

The credit union views itself as a consumer lending organization, and provides not only car loans, but financial services such as credit cards, equity lines, mortgages and unsecured personal loans, Watkins added. This year, Virginia CU intends to add business loans, she told the paper.

James H. Norris III, president/CEO of the $90.1 million asset Montgomery County Employees FCU in Germantown, Md., was profiled online Friday in Gazette.net, which features Maryland community news online.     

With more members going online for their financial needs, there are more questions to be answered and his credit union has the employees to provide the answers, Norris told the publication. 

He also touted the credit union's state-of-the-art teller stations, upgraded drive-through system and spacious, modern lobby at its Germantown branch.

Members are given a voice in running Montgomery County Employees FCU, and they deal with fewer and lower fees than they would at banks, Norris added.

To read the articles, use the links.

Generations FCU hosts Japanese researchers

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SAN ANTONIO (1/28/13)--Generations FCU in San Antonio saw its achievements in branch design recognized Wednesday when it hosted researchers from The Center for Financial Industry Information Systems (FISC), a non-profit research organization based in Tokyo, Japan.

Researchers from The Center for Financial Industry Information Systems, a non-profit research organization based in Tokyo, Japan, visited Generations FCU in San Antonio, Wednesday. The visit recognized the credit union's achievements in branch layout, design and use of space. (Photo provided by Generations FCU)

FISC seeks out financial-institution best-practice leaders worldwide, and provides reports and recommendations on how those practices can be incorporated into the Japanese industry. Generations participated in a research study that determined best practices for branch layout, design and use of space, said the Texas Credit Union League (LoneStar Leaguer Jan. 24).

"In Japan, space is at a premium, but we wanted to show them that it should never be a restriction on your growth potential," said Schipull. "Our HEB-Tezel location is a great example of what you can do with motivated staff. This is one of our smallest branches, but working with our architects and staff we were able to make the space work for us."

Al-Qassam DDoS attack targets CU in Texas

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AUSTIN, Texas (1/28/13)--Hacktivists say the Izz ad-Din Al Qassam Group is behind a distributed denial of service (DDoS)  attack that shut down the website and online banking access of Austin, Texas-based University FCU (UFCU) for nearly 2 1/2 hours Thursday.

The attack lasted from 11:40 a.m. to 2 p.m., said Sheila Wojcik, senior vice president of communications and corporate affairs at UFCU. "This was not a security event. Our members' data were not at risk at any time.

"Our system was not down or compromised in any way," Wojcik told News Now. "Our Internet Service Provider (ISP) noticed a high number of megahits to the site that created a bottleneck and disabled the connection" until the matter was fixed.

The credit union learned the site was down from members' chatter on Facebook and Twitter.  Its social media manager noticed the chatter and let members know the site was unavailable and provided links to alternate access.

"We redirected members on Social Media with links and access to our mobile apps. We got a lot of positive response from members for enabling them to use the mobile channel."

Beyond the social media channels, the credit union did not  issue further communications to members because "the event is over. ISP did what it should have done to provide protection," she said. "Our forensics team is reviewing the firewall protections and determining solutions to prevent another attack.

A website frequented by hacktivists boasted about the attack, and said, "Izz ad-Din al-Qassam Cyber Fighters hit three more American banks including People's United Bank, UMB Bank and University FCU and simply made them completely out of reach."  The group has claimed responsibility for several high profile DDoS attacks recently against big banks.

"We believe it was the Al-Oassam group that initiated the attack, but why UFCU? We don't know," said Wojcik. "We're small ($1.5 billion in assets) compared to the banks" that the group has hit."This was a big event. Credit unions thought that we're not vulnerable because the groups prefer to attack larger fish. This a surprise, that we are on the radar screen," she said. "All credit unions need to be on the alert. We're fortunate that our ISP worked so quickly" to stop the attack.

Former Borinquen FCU manager sentenced to 7 1/2 years

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NORTH PHILADELPHIA (1/28/13)--The former manager of a now defunct credit union in North Philadelphia was sentenced to 7 1/2 years of  prison for allegedly embezzling more than $2.3 million from the credit union through schemes such as laundering Internal Revenue Service (IRS) refund checks.

Ignacia "Nacho" Morales, 50,  pleaded guilty in September to charges of conspiracy to defraud the government in a case that led to the shuttering of Borinquen FCU (Philadelphia Business Journal Online and Philadelphia Inquirer Jan. 25).

The charges stemmed from activities between 2006 and June 2011 that included laundering more  than 1,000 IRS refund checks from a New York fraud ring that filed bogus tax returns. Morales allegedly kept 20% of the refunds.

He also pleaded guilty to misapplication and embezzlement, false reports on federal credit institution entries, engaging in monetary transactions in property derived from specified unlawful activity, filing false federal income tax returns, and attempted possession with intent to distribute more than five kilograms of cocaine.

Morales was also ordered to pay restitution totaling $2.3 million to the National Credit Union Administration, $7.3 million to the IRS and a special assessment of $800, and undergo five years of supervised release.

NCUA closed the credit union in July 2011. At the time, Borinquen served 8,600 members, many of them low-income Hispanics, and had deposits totaling $6 million.

Turnaround: Altura CU reports best financials in its history

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RIVERSIDE, Calif. (1/28/13)--Altura CU reported its net income has more than doubled since the end of 2011, and it ended 2012 with the best financials in the organization's history.

"This is without question the best year in Altura's history," said Mark Hawkins, CEO of the Riverside, Calif.-based credit union. "Historically, Altura has had many good years, but that was not the case during the Great Recession. So, it is very exciting to be able to report such positive results after that period of difficulty," he added.

The $665.3 million asset Altura reported a net income of $17.49 million for the year ended Dec. 31. That's more than double the $8.43 million reported at the end of 2011, when assets totaled $642.9 million. Assets increased 1.9%--the first increase since 2007. The credit union is on target with its 2012 goal, a 2% asset increase, said Hawkins.

The credit union attributed its turnaround to ongoing expense reduction, reductions in set-asides for loan losses and increased auto lending. However, the good news is tempered by the continued slow job growth in the area and ongoing lack of consumer confidence, Hawkins said.

"Consumers continue to be concerned about what is happening in the marketplace. Their focus remains on paying down debt, so our lending growth still has a ways to go. Yet, we clearly see improvement, particularly in auto lending," he said.

Altura also announced that it has developed Reliance Checking tol assist individuals with unpaid accounts and negative credit history. The account offers a regular Visa Debit Card, online banking, mobile banking and eStatements. After six months of positive account activity and paying off any checking account debits, account holders are eligible to move up to the next level in financial recovery, the Renew Checking Account. After six months of positive activity, members then become eligible for any of Altura's checking accounts.