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GCUA report Expect the year of the financial planner

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DULUTH, Ga. (1/6/12)--The recovery of the economy has been a slow process and many consumers now realize they can't wait forever to firm up their long-term financial goals. That's why credit unions can expect 2012 to be the year of the financial planner, said the Georgia Credit Union Affiliates (GCUA).

This year financial planners likely will broaden their appeal, said GCUA's newspage, "Consider This." Many people turn to financial planners to help them invest, while others don't because they assume financial planners help only people with substantial funds to invest. This year, even consumers with tight finances and the middle-class aspirations may turn to financial planners for assistance, said GCUA.

Everyone needs financial coaching, Phillip Lambing Jr., independent sales manager for Waverly, Iowa-based CUNA Brokerage Services Inc., told GCUA. Common areas he sees consumer seeking help with include retirement planning and college education planning, but he adds planners can also assist with things like life protection and long-term care.

A financial planner helps consumers determine the level of risk they are comfortable with when investing their money and can help clients establish specific goals. "Planning for college isn't specific enough," he said. "Do you need to save enough for a state university or an Ivy League education?"

According to CDC FCU Senior Vice President Australia Hoover, financial planning is an important part of the credit union's mission of promoting financial health. Many members seek financial planners in response to major life events such as a first job, first child, children leaving for college, retirement planning, estate planning or long-term care.

Individuals should contact a planner when they need a partner to help them navigate their financial roadmap, Hoover told the league. "There are so many options available to consumers today and without help, it can be confusing. No amount of money is too small to consider talking with a planner."

Equifax Auto financers outpace FIs in subprime loans

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ATLANTA (1/6/12)--Auto finance lenders  have increased lending by 47% the past two years, and outpaced credit union and bank lending to subprime borrowers, according to the latest Equifax National Credit Trends Report.

The auto finance companies originated 854,800 loans in July 2011, compared with 581,300 originated  two years earlier. Credit unions and banks originated 820,000 loans in July 2011, a decrease of less than 2% from the 832,000 they originated in July 2009.

Auto loans to subprime borrowers, defined as those with an Equifax credit score below 640, now account for 38.5% of all auto loan originations at the companies, compared with 17.6% for banks and credit unions. Equifax said the numbers are approaching pre-recession levels.

Delinquency rates also improved--to 1.63% for  60+-day delinquencies on auto loans, compared to a 3% peak earlier, reflecting a sustained credit retraction that the auto lending industry experienced earlier than other loans, said Michael Koukounas, senior vice president of special client services for Equifax in a press release.

"With unemployment rates remaining elevated for a prolonged period, auto lenders have proactively adopted more comprehensive data and verification tools for greater loan-level transparency in evaluating a winder band of consumers, which has helped enable the auto lending industry to recover more quickly than others," Koukounas added.

In July, roughly 1.7 million auto loans--worth a combined $32 billion--were originated. From January to July of last year, 11.3 million new auto loans were originated, a 13.2% increase over January to July 2010 totals. The accounted for $213.9 billion, a 14.8% increase in amounts loaned over the period.

Average monthly payments for auto finance companies were $407 in July 2011, up from $404 the previous year.  For credit unions and banks, the average monthly payments were $364  for July 2011, compared with $377 the previous year.

Justice Dept. answers hackers claim he was authorized by feds

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BOSTON (1/6/12)--The Justice Department has filed its response to allegations by convicted hacker Albert Gonzalez, who seeks to vacate his 20-year sentence for hacking into TJX Cos., Dave and Buster's, and Heartland Payment Systems with the arguments that he had ineffective counsel and the breaches were authorized by the U.S. Secret Service while he was an informant.

The Justice Department, in its filing on Dec. 6 in the U.S. District Court for the District of Massachusetts, Boston, argues the court should deny Gonzalez's motions without a hearing.

Gonzalez, under a plea agreement, was convicted of some of history's largest data breaches, which occurred between 2003 and 2008.  Court documents indicated he "committed computer crimes, identity thefts and wire frauds resulting in the theft of tens of millions of credit and debit card numbers, causing hundreds of millions of dollars in financial losses."

Many accounts compromised belonged to credit union members. Credit unions and members suffered losses from fraud and from the cost of reissuing cards. The cases and similar ones sparked a variety of lawsuits against the companies breached, as well as new laws and regulations designed to protect consumers and financial institutions that bore the brunt of the costs associated with the data breaches.

In November 2009, Gonzalez entered his plea agreements in the three cases, pleading guilty in exchange for shorter and concurrent sentences. He was sentenced to three concurrent sentences that effectively resulted in a sentence of 20 years in prison.

On March 24, 2011, Gonzalez filed petitions to vacate, set aside or correct the sentences, claiming his guilty plea was not knowingly and voluntarily entered, that he received ineffective assistance of counsel related to his plea bargain, and that counsel did not tell him he had a "public authority" defense.

In moving to deny the motions, the Justice Department noted that a "guilty plea may be attacked on collateral review only in 'strictly limited' circumstances," and that "Gonzalez did not seek to set aside his plea in district court, nor did he challenge it on direct appeal."

As to his allegation that he did not know he could have a "public authority" defense and would not have pleaded guilty had he known, the Justice Department said: "Gonzalez's assertion that he believed that his Secret Service handlers had the authority to authorize him, and were authorizing him, to steal over 40 million credit and debit card numbers, sell blocks of victims' numbers through a Ukrainian fence, and bury over $1.1 million of the proceeds in his parents' back yard is inherently incredible."

It noted "Gonzalez admits concealing the crimes to which he pleaded from the Secret Service."

The government said in its brief that Gonzalez failed to satisfy a four-prong test for raising the "public authority defense":

  • Defendant must be requested to engage in covert activity by a government official;
  • The official must have actual authority to authorize such covert activity;
  • The defendant must have relied on the request; and
  • The reliance must have been reasonable.
The response also noted that Gonzalez waived his right to challenge his conviction and the sentences by knowing and voluntarily pleading guilty.

On Dec. 30, Gonzalez, who is acting as his own attorney from prison, requested a delay in filing his response, noting that  the government's brief and 400 pages of records in the case are lengthy  and because of limited resources in prison, he needed more time to prepare his reply. The court granted the extension on Wednesday until Jan. 17, according to the court docket.

Article notes Md.DC CUs growth hiring

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COLUMBIA, Md. (1/6/12)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) lists more than 50 job openings at area credit unions that are trying to keep up with their growth.

Because more consumers are seeing the benefits of credit union membership, MDDCCUA credit unions are seeing huge growth, John Bratsakis, association president/CEO, told (Dec. 30).

He attributed credit unions growth to Bank Transfer Day and a recent advertising push.

Openings include part-time and full-time tellers, member-service representatives and senior positions, such as Director of Human Resources, Controller, and Vice President of Mortgage Lending.

The number of job openings posted on MDDCCUA's website is only a portion of the credit union jobs available because many credit unions advertise their job openings through other media and means, Bratsakis told the publication.

In a weak economy, credit unions remain a viable option for those looking for a job and for consumers, Bratsakis added.

3Q strong for federally insured Calif. CUs

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SACRAMENTO, Calif. (1/6/12)--Federally insured California credit unions had a strong third quarter last year, with their assets increasing by $4.7 billion, or a 5.2% annualized rate, from Dec. 31, 2010.

Assets of federally insured California credit unions total $125.9 billion--which is 13.2% of the credit union industry, according to a report released to News Now by certified public accountants Richards & Associates.

Other third-quarter financial results for the state's federally insured credit unions are:

  • Net worth increased by an annualized rate of 9.04%. The net worth-to-assets ratio rose by 30 basis points to 9.95%.
  • Operating costs as a percentage of assets climbed to 3.01% from 2.84%.
  • Earnings, or return on assets, went up to 0.7% from 0.4% annualized. In the quarter, California credit unions paid $250.3 million in National Credit Union Share Insurance Fund premiums and Temporary Corporate Credit Union Stabilization expense--which consumed 29% of year-to-date earnings.
  • Loans decreased by 2.4% (annualized) to $1.27 billion. The loan-to share ratio declined to 63.6% from 67.5%, with all loan categories seeing a decline. Since the end of 2010, California credit unions decreased their allowance for loan losses by $223.8 million, or 10.7%.
  • Delinquent loans as a percentage of total loans dropped to 2.1% from 2.5%. However, overall loan delinquency continued to increase in the 12 months-and-over category, which could be an indication of delayed-loss recognition, said the accounting firm.
  • Net loan charge-offs to average loans fell to 1.34% from 1.77%. Loan losses peaked in 2009 and have gradually decreased since then.
  • Shares increased by $4.33 billion, or 5.6%. Core deposits--regular shares and share drafts--constituted 100% of all share growth. Declines occurred in nonmember deposits and share certificates.
  • Current members increased by 105,186--or 1.51% annualized. There are 9,396,614 members of federally insured credit unions based in California. That represents 10.2% of the industry, said the firm.
There are 423 credit unions based in California, with 410 federally insured and 13 privately insured through American Share Insurance. The state's federally insured credit unions operate out of 1,642 branches with 22,762 full-time employees and 2,573 part-time employees.

Mich. foundation supported CUs with 95K in 11

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LIVONIA, Mich. (1/6/12)--The Michigan Credit Union Foundation raised more than $95,000 in support of credit unions in 2011.

In 2011, more than half of MCUF's support activity was in the form of scholarships that benefitted 191 credit union employees from 71 credit unions. The scholarships were awarded for both educational support to small-asset-sized credit unions and for CUNA Management School scholarships. The MCUF also provided operational and Community Reinvestment Initiative (CRI) grants that assisted 34 credit unions.

The foundation will present certificates to 74 credit unions and chapters that provided support through an annual donation or from part of their income from investments in the Community Investment Fund. Award plaques will be presented in appreciation to 10 credit unions that made a donation at the gold level of $1,000 or more, according to the Michigan Credit Union League (Michigan Monitor Jan. 3).

With the donations, the MCUF can provide grants and scholarships to Michigan credit unions and their employees for community outreach and employee educational development.

In 2012, the MCUF is looking to increase the grant funding provided to credit unions and chapters for CRI activities targeted to financial education initiatives. Suggested activities for CRI grants include the Biz Kid$ public television program, financial education enhancements such as community and school events, Money Smart Week activities and financial counseling community outreach activities, said MCUF.

Volunteer Corp. teams up with correspondence services provider

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WICHITA, Kan. (1/6/12)--Volunteer Corporate CU (VolCorp), based in Nashville, Tenn., Thursday announced it has entered into an agreement with (LT), a provider of third-party correspondent financial service solutions, to implement LT's Private Correspondent Gateway.

VolCorp will transition its members from U.S. Central Bridge's APEX Automatic Clearing House (ACH) platform to LT's ACH solution. The corporate anticipates the conversion will begin early this year, said Karla Knisley, VolCorp senior vice president and chief operations officer.

Outside of the Federal Reserve, the only third-party vendors to operate a wholesale ACH platform to this scale are U.S. Central and LT, said the two companies.

VolCorp also has secured the opportunity for member credit unions to offer their own branded LT cash management systems for ACH origination services to business members (select employee groups).

LT is headquartered in Wichita, Kan.

Poll 94 of consumers rely on credit cards

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WASHINGTON (1/6/12)--Consumers remain very connected to their credit cards, according to the National Foundation of Credit Counseling (NFCC). When asked to rank their 2012 financial resolutions, only 6% of more than 2,300 respondents indicated that decreasing dependence on credit cards was their No. 1 goal.

"At first glance, that statistic could appear to be a warning sign of future trouble.  However, credit is not the problem," said Gail Cunningham, NFCC spokesperson.  "Instead, it is the misuse of credit that leads people into financial distress."

Balancing the continuing reliance upon credit, 62% of poll respondents selected decreasing debt as their focus for 2012. "If consumers are able to decrease their debt load, continuing to use credit responsibly will help them meet the goal selected by 24% of respondents, that of increasing their credit score," said Cunningham.

About 8% of respondents ranked saving as their most important resolution, an indication that most of consumers are not setting aside funds for an emergency.

Credit unions can educate members with newsletter articles on how to use credit cards wisely, addressing the issue in their financial seminars with consumers and educate youth. For available resources from the Credit Union National Association, use the links.

Top 25 stolen passwords for 2011 announced

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LOS GATOS, Calif. (1/6/12)--What was the most stolen online password of 2011? "Password." Computer users who think switching the "o" to a zero to make it "passw0rd" didn't fare much better. Both are on the list of the 25 most common passwords used on the Internet this year, according to SplashData, a provider of password management applications.

Other common passwords include simple numerical choices like "123456," common names like "Ashley" and "michael," and patterns based on the layout of the keyboard like "qwerty" and "qazwsx."

According to SplashData, the most common passwords on the Web are:

  1. Password;
  2. 123456;
  3. 12345678;
  4. Qwerty;
  5. abc123;
  1. monkey;
  2. 1234567;
  3. letmein;
  4. trustno1;
  5. dragon;
  1. baseball;
  2. 111111;
  3. iloveyou;
  4. master;
  5. sunshine;
  1. ashley;
  2. bailey;
  3. passw0rd;
  4. shadow;
  5. 123123;
  1. 654321;
  2. superman;
  3. qazwsx;
  4. michael; and
  5. football.
SplashData suggests making passwords more secure with these tips:

  • Use passwords of eight characters or more with mixed types of characters. One way to create longer, more secure passwords that are easy to remember is to use short words with spaces or other characters separating them. For example, "eat cake at 8!" or "car_park_city?"
  • Avoid using the same username/password combination for multiple websites. Especially risky is using the same password for entertainment sites for online email, social networking and financial services.
  • Use a password management application that organizes and protects passwords and can automatically log into websites. There are numerous applications available, but choose one with a strong track record of reliability and security.

CU System briefs (01/05/2012)

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  • WAUSAU, Wis. (1/6/12)--J. David Christenson, president/CEO of Wausau, Wis.-based Connexus CU, has been appointed to the Wisconsin Credit Union Review Board by Gov. Scott Walker, the $340 million asset credit union announced Wednesday.  Christenson  will serve as a credit union experience representative on the board until his term is up in May of 2016. Christenson said he is pleased to serve the governor, credit unions and citizens of Wisconsin.  "I look forward to utilizing my experience from both the private and public sector in helping credit unions and their members achieve their financial objectives," he said …