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CU System briefs (01/06/2011)

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* SMYRNA, Tenn. (1/7/11)-- The Smyrna, Tenn.-branch of Tullahoma-based Ascend FCU was robbed Wednesday morning for the third time since Dec. 21. The suspect entered the credit union just after 10 a.m., approached a teller and implied he had a gun and told her to "give me the money. Hurry up," according to Smyrna Police. He fled to a getaway vehicle driven by a second suspect. The credit union was also robbed on Dec. 21 and Dec. 29. According to Smyrna Police, the robber in each robbery said he had a weapon but did not display it (Daily News Jan. 5) … * DECATUR, Ill. (1/7/11)-Tina Finn, a former personal banker at Earthmover CU's Forsyth, Ill., branch, pleaded guilty Monday to stealing more than $350,000 from about 20 accounts, most of them belonging to elderly, sick or deceased members. Macon County Associate Judge Timothy Steadman sentenced her to three years of probation and ordered her to repay the stolen funds. She pleaded guilty to misappropriation of financial property, which could have carried a five year prison sentence. Instead she was recommended for probation so she could work to repay the funds (Associated Press Newswires Jan. 5) … * REDWOOD CITY, Calif. (1/7/11)--A former teller of a San Mateo CU branch in Redwood City, was sentenced Wednesday to one year in jail and five years probation for stealing $40,000 from her elderly aunt's account and a $33,000 inheritance from the account of a 16-year-old whose mother had died. Arcelia Barajas Aguilar, 29, allegedly obtained her teller position by using her mother's Social Security number on her job application. The thefts occurred during the summer of 2009. Most of the money was used to pay off credit card debt. In August, she pleaded no contest to felony grand theft and felony elder fiscal abuse in a plea bargain to avoid state prison. The credit union reimbursed the victims' money, and San Mateo County Superior Court Judge Lisa Novak ordered Aguilar to pay restitution to the credit union (The Mercury News Jan. 5) … * PHOENIX (1/7/11)--Phoenix Police say a suspect they arrested Saturday is a serial robber known as the 'Manila Bandit,' named for the large Manila envelope he stashes money in from the robberies. Walter Furrh, 51, of Phoenix, was arrested and charged with robbing three Tucson financial institutions: a US Bank in July, a Wells Fargo branch in October, and Pyramid CU in October (Arizona Daily Star Jan. 3) … * DETROIT (1/7/11)--Detroit Metropolitan CU says its "Easy Money" loan program is so popular with members that they will stand in line for hours to get an application. It offers the program twice a year and makes up to 1,000 of the loans each time, but has considered increasing it because it's so popular with members. There is no credit check for the $500, six-month loan, said CEO Kathie Trembath (Michigan Monitor Jan. 3). The rate is 18%. The loans are available to members in good standing who have been members for at least six months, have five years continuous employment with the same employer, and are on a payroll deduction or direct deposit plan. The credit union simplifies the process by not allowing exceptions to the loan. Staff work on Saturday to process all the loans in the same day. Trembath told the Michigan Credit Union League that it is not a huge profit generator after labor is paid, but members look forward to the program each year … * NEWARK, Del. (1/7/11)--DPL FCU is now Community Powered FCU to reflect its expanding field of membership. The credit union changed its name Jan. 2, reported the Delaware Credit Union League (Together Dec. 30). According to credit union CEO Anthony Hinds, the change tells people in the New Castle community that they can "enjoy the benefits traditionally experienced by Delmarva Power, Hercules and News Journal employees, retirees and their families" and honors "our original and core members who are still very important to us. It is a way of embracing our legacy while reaching out to serve the community at large." In December, the credit union opened a new branch in the league's building to prove a more centric location for members living in the New Castle area. Last year the credit union expanded its charter to include all persons living, working, worshipping or attending school in, and business and other legal entities located in New Castle County, north of the C & D Canal, and their families … * PORT OF SPAIN, Trinidad and Tobago (1/7/11)--Hyder Ali, manager of the Trinidad and Tobago Credit Union Deposit Insurance Fund Cooperative Society Ltd. and secretary to the board of directors at the fund, died Dec. 18. The credit union movement leader managed what was previously the Trinidad and Tobago Stabilization Fund after he retired in 2005 as Commissioner of Cooperatives in the Ministry of Labour in 2005. A lecturer in cooperative studies at the Cipriani Labour College, he also was a founding member and former secretary of The Caribbean Association of Regulators of Cooperatives (Newsday Dec. 19) …

SECU CU of Ohio expand scholarship programs

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RALEIGH, N.C., and HILLIARD, Ohio (1/7/11)--Credit unions looking for good ideas for their scholarship programs can note two successful programs offered by the Credit Union of Ohio, based in Hilliard, Ohio, and Raleigh, N.C.-based State Employees' CU. Credit Union of Ohio launched a contest Monday where students can receive up to $7,500 in college scholarship money this winter by making a short video revealing the impacts of positive and negative financial choices. The contest is open to all undergraduates enrolled or officially accepted at The Ohio State University, Columbus, as well as members who are undergraduates at any accredited university. Deadline for entries is Feb. 28. This year's contest theme is "The Good, The Bad, and The Money." The competition's goal is to prompt students to reflect on daily spending choices, saving money, managing finances and sharing their wisdom with their peers. "This scholarship opportunity is meant to help students discover and share tips for financial responsibility, while taking a stab at earning some real money in the process," said Kim Hudson, vice president of marketing at the $115 million asset credit union. Five thousand dollars will be awarded to the first place video selected by a panel of judges, and $2,500 will be awarded to the video receiving the votes in an online "people's choice." Details for online voting will be disclosed on the credit union's Facebook page at In North Carolina, SECU's members renewed the member-funded SECU Foundation "People Helping People" High School Scholarship program. Originally approved in 2004, it provides a $10,000 four-year college scholarship to a graduating senior from each of the traditional public high schools and two charter high schools in the state. It is awarded for study at one of the 16 constituent campuses in the University of North Carolina system. The 2011 renewal brings the total educational funding commitment in North Carolina by SECU members to $28.5 million. Scholarship recipients are chosen by each high school's scholarship committee, based on the student's embodiment of the "People Helping People" spirit and grade point average of 2.5 or higher. The graduation rate of SECU Foundation scholarship recipients is more than 85%. "The need for the SECU Foundation Scholarship program continues to grow as college expenses increase and our state's economy struggles," said foundation Board Chair Shirley Bell, who added the scholarships "benefit the economy and help secure a bright educational future for North Carolina's young adults."

Board education being revved up at leagues CUNA

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MADISON, Wis. (1/7/11)--Credit union boards of directors will have plenty of opportunity to beef up their training and address regulations coming their way this year. State leagues and associations, as well as the Credit Union National Association (CUNA), already are announcing training schedules for boards during 2011, including a free audio conference next week. This year, board members will need to know more, get serious with stricter fiduciary duties in a more complex and almost overwhelming regulatory environment. To top that off, they specifically must comply with the National Credit Union Administration's (NCUA's) new financial literacy rule, which goes into effect in July. CUNA has already announced its training opportunities for boards. CUNA and the leagues will offer a free audio conference at 2-3:30 p.m. CT on Jan. 13, which is entitled "Implications of the New NCUA Requirements for Directors." It will cover key requirements of the new rule, limits on indemnification and how it relates to directors' and officers' insurance purchase decisions, what areas in the rule to focus attention, and more. Use the resource link for more information. The literacy requirement also has resulted in CUNA's new Board Financial Literacy Certificate, where directors can opt to fill one of four options to be certified as financially literate. The options include:
* Attend CUNA's CU Finance for Non-Financial Managers & Volunteers eSchool, May 4-June 15; * Attend CUNA's CU Finance for Non-Financial Managers & Volunteers School, April 3-6, Nashville, Tenn.; * Complete six self-study CUNA Volunteer Achievement Program (VAP) courses; * Book an in-house training session, where a subject matter expert will travel to credit unions for a two-day presentation of targeted financial literacy curriculum, by e-mailing or calling 800-356-9655, ext. 4261.
At least three leagues are providing programs of their own. In Michigan, the Michigan Credit Union League will offer financial Volunteer Achievement Programs at its Spring Leadership Development Conference March 25-27--three of the six VAP programs in CUNA's certificate program. The other three VAP programs will be featured at the league's Fall Leadership Development Conference on Sept. 16-18 (Michigan Monitor Jan. 3). The Texas Credit Union League is offering webinars, workshops and conferences throughout the year for volunteers. "The league is committed to providing quality training programs for our dedicated credit union volunteers who so unselfishly serve this movement," said Tonya Farmer, vice president of training and events at the league. "Providing board of directors and other credit union volunteers with access to the educational programs they need to competently lead their institutions is critical," she added. It will offer "Required Financial Literacy Training for Directors under NCUA Guidelines" events, which include a webinar on Feb. 15 about what regulators want and what directors should know; a webinar on March 3 about ratios, concentrations and investment valuations and more; a new volunteer workshop and advanced volunteer workshop on March 26 in Dallas; and special sessions for boards at the league's Annual Meeting and Expo in Austin April 26-28. It also will have a Volunteers Forum June 4-5 in San Antonio. The New Jersey Credit Union League added a special director education session on March 23 at its Credit Union Reality Check 2011 conference, which meets March 21-23. "We thought it was vital to add this special session so our director attendees can get this important education as they attend" the conference, said league President/CEO Paul Gentile. Those attending the dinner-hour session will receive a complimentary meal, he said (The Daily Exchange Jan. 5).

CUANY backs regulator consolidation if CUs represented

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ALBANY, N.Y. (1/7/11)--William J. Mellin, Credit Union Association of New York (CUANY) president/CEO, has commended New York Gov. Andrew Cuomo on his goal of creating efficiency and streamlining state government. As part of this goal, Cuomo is looking to consolidate the state’s Banking and Insurance departments and the Consumer Protection Board. While the proposed consolidation poses potential challenges, the association said it believes that if executed properly, it would streamline the state’s oversight of the financial services industry. It also could create a structure that is more responsive to consumers’ needs and legitimate concerns of all financial service providers, Mellin said. “Creating the new department should not be undertaken as consolidation for its own sake, however. The state needs to seize this opportunity to ensure that financial oversight not only becomes more cost effective, but also fosters greater accountability,” he said. “New York’s credit unions feel it’s essential to maintain credit union representation on the governing body of this new department. Just as vital is that any consolidated department includes an office specifically dedicated to credit unions to preserve the unique and vital role they play in communities statewide. Such an office would guarantee appropriate expertise and a clear line of communication for credit unions at the highest level of the new governing structure,” Mellin said. He noted credit unions have traditionally found ways to provide financial opportunity for those who stood little chance of gaining credit elsewhere. Credit union mortgages, car loans and credit cards provide cost-effective alternatives to millions of New Yorkers. Also, the money members invest in their credit unions is reinvested in New York, he said. While there are no quick fixes to address the state’s budget challenges, CUANY said it believes Cuomo’s proposal, which could create greater efficiencies and a stronger regulatory body, is a step in the right direction. CUANY said it looks forward to working with Cuomo and his administration to bring his concept of consolidation to fruition.

CUNA to IInvestors Biz DailyI Jobs to improve slowly

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MADISON, Wis. (1/7/11)--The U.S. labor market will improve in 2001, albeit slowly, a Credit Union National Association (CUNA) economist told Investor’s Business Daily Wednesday. U.S. private firms hired 297,000 employees in December--the most since record-keeping began in 2000--according to ADP Employer Services. “It remains to be seen whether big jumps like that (in the ADP report) are the rule or the exception,” Mike Schenk, CUNA vice president of economics and statistics, told Investor’s Business Daily. “Our view is that labor markets will be improving, but doing so slowly.” Despite his forecast for 3% economic growth, Schenk said the jobless rate will remain above 9% through 2011. That’s partially because of a skills disconnect between jobs that are available and people who are looking for work, he said. Unskilled former construction and manufacturing workers confront a particularly tough job search, Schenk told the publication. To read the article, use the link.

What CUs should do in 2011--CUNA economist

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MADISON, Wis. (1/7/11)--The Credit Union National Association’s (CUNA) 2011 Economic and Credit Union Forecast reflects expectations that the economy will improve, but the level of growth associated with the rebound will be lower than what is typically seen in an economic recovery. This has implications for credit unions’ actions, says a CUNA economist. The underpinnings of the CUNA forecast are that that the job market will continue to recover slowly and the unemployment rate will remain elevated. Credit union savings balance growth is expected to remain at 5% this year, while loans are expected to increase to 4%. To see CUNA’s complete 2011 economic forecast and how it will affect the 2011 financial results at credit unions, use the link below. Given the forecast, what should credit unions do in 2011? “One thing that should definitely be on credit unions’ to-do list is to stay involved in the political process,” Mike Schenk, CUNA vice president of economic and statistics, told News Now. “There were a boatload of laws and regulations introduced last year. Those laws and regulations come at a cost. Credit unions can either pass costs along to their members or eat them--but then credit unions can’t grow as fast, and members will suffer down the road. So continue lobbying lawmakers and regulators to soften the blow of the new regulations.” Another area that will require credit union involvement will be capital reform. At the beginning of the recession, 91% of credit unions had net worth/asset ratios exceeding 9% (e.g., well-capitalized with a two-percentage-point buffer). Today, only 75% of credit unions have this level of capital, Schenk said. “Most of those institutions that saw the decline in capital saw that decline through no fault of their own,” Schenk explained. “They were collateral damage--suffering simply because local real estate markets imploded. It’s important for all credit unions that those affected credit unions be given the chance to restore net worth quickly through access to alternative forms of capital. “Don’t forget, Congress painted all financial institutions with a broad brush, and credit unions--while not contributing to the mess--are being saddled with many of the same laws and regulations that were imposed on the bad actors,” he added. Helping CUNA ensure that the two-tier interchange system is effective will be an especially important undertaking in 2011, Schenk said. Credit union members should go to the top of the home page of the CUNA website under “Operation Comment” to submit comments to the Federal Reserve Board regarding its interchange proposal, he said. Savings growth at credit unions has been very strong, and loan growth has been weak--which means that investment portfolios have been growing rapidly, Schenk said. “In the current environment, investment yields are close to zero, which indicates that the changing mix of credit unions assets has put significant pressure on credit union bottom lines,” he said. “Credit unions should--if they haven’t already done so--re-evaluate deposit pricing to ensure that they can afford the growth.” “On the other side of the balance sheet, it makes sense to redouble efforts to steal loans from other financial institutions,” Schenk said. “While members’ appetites for new debt are low, it may be possible to entice those burdened with higher-rate bank loans to come to credit unions.” While CUNA expects the economy and labor markets to improve, there definitely will be unusually high levels of bankruptcy filings in 2011. So proactively helping members to avoid that situation and/or managing that process will be especially important, Schenk said. A final key action is collaboration. “It would probably make sense--given the financial challenges--for credit unions to begin steps to redouble efforts to engage in more cooperative endeavors, and collaborate to reduce costs and eliminate redundancies,” Schenk said.

MCUA looks to work with new CU Division chief Bonnot

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ST. LOUIS (1/7/11)--Missouri Gov. Jay Nixon Tuesday appointed Kenneth J. Bonnot as director of the Missouri Division of Credit Unions, and the Missouri Credit Union Association (MCUA) told News Now Thursday it will work with Bonnot on credit union issues. "I look forward to working with Ken on issues affecting Missouri's state-chartered credit unions and congratulate him on his appointment by Gov. Nixon," said Mike Beall, MCUA president/CEO. According to the governor's press release, Bonnot, a 15-year veteran of the division, has served as acting director since June 2009. From 2005 to 2009, he served as the division's deputy director. The division, which regulates Missouri's 129 state-chartered credit unions, is an agency within the Missouri Department of Insurance, Financial Institutions and Professional Registration. "Missouri's credit unions are financially strong, having weathered our challenging economy very well, and I have assured Gov. Nixon that our division will maintain our commitment to a healthy industry that best serves Missouri consumers," Bonnot said. In making the appointment, Gov. Nixon said Bonnot "is a tough but fair regulator and the right choice to lead the Division of Credit Unions. My No. 1 priority as governor has always been and remains transforming Missouri's economy, and having healthy and well-regulated financial institutions in our state is a key part of that transformation."

Man indicted for fraud related to CUs demise

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CLEVELAND, Ohio (1/7/11)--An Eastlake, Ohio, man has been indicted and charged with bank fraud and money laundering stemming from the collapse last April of St. Paul Croatian FCU, based in Eastlake. Koljo Nikolovski, 48, who has residences in Eastlake and in Skopje, Macedonia, was indicted by a federal grand jury Wednesday for fraudulently obtaining $2.5 million in loans and placing the money in a personal bank account before wiring about $2.3 million of the proceeds to a bank in Skopje (Cleveland Plain Dealer via Jan. 5). The newspaper reported that the indictment said Nikolovski was not eligible for the loan because he previously defaulted on more than $1 million in loans. It alleged he paid cash bribes and kickbacks to the credit union's CEO in influence him to issue the fraudulent loans. It also said that the CEO--who has not been charged with any crime--reset the loans when they defaulted. The National Credit Union Administration (NCUA) Office of the Inspector General (IG) revealed in October that the fraudulent loans catapulted the credit union into liquidation, with losses to the National Credit Union Share Insurance Fund totaling $170 million (News Now Oct. 14). The IG report also noted that the CEO "manipulated loan records and masked the suspected loan fraud by constantly refinancing certain loans or making advance payment on those loans." St. Paul Croatian FCU was placed into conservatorship April 23 and closed May 1. At the time of its closing, it held $238.8 million in funds from 5,400 members (News Now May 4).