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CU System briefs (01/09/2012)

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  • GREENBURG, Pa. (1/10/12)--A Huntington, W.Va., man was convicted Thursday by a federal jury for his alleged role as the getaway driver in a 2010 armed robbery of Westmoreland Community FCU, Hempfield, Pa., in which four shots were fired and a teller was shot in the stomach. Lamont Laprade, 33, was found guilty on charges of bank robbery, armed robbery and conspiracy to commit both crimes with a firearm (Pittsburgh Post-Gazette Jan.6). He allegedly was the getaway driver for David Mathis, Crafton, Pa., in the Jan. 8, 2010 robbery. Mathis was sentenced in November to 25 years in prison for the robbery, in which he allegedly pistol-whipped one teller and shot another when the bullet ricocheted from a computer into the teller's stomach (News Now Nov. 1, 2011, and July 8, 2011.) Laprade faces at least 10 years in prison, said the Pittsburgh newspaper …

Mobile banking security tops 10 security threats for 2012

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MADISON, Wis. (1/10/12)--While credit unions gear up for what may be radical growth in mobile banking, they also must keep in mind that mobile security is the No. 1 security issue in the list of top 10 computer security threats for 2012, according to McAfee Labs.

Cyber criminals are hacking into all sorts of devices, breaking into to everything from cell phones to car systems, and security threats are escalating and becoming more malicious, said Adam Wosotowsky, senior anti-spam analyst with McAfee (The Motley Fool Jan. 3).

The No. 1 security threat is mobile threats that bypass personal computers, said McAfee. Attackers will launch mobile banking attacks, and consumers may start to see Trojan banking attacks such as SpyEye and Zeus spread to the smartphone. McAfee suggests consumers treat treat their smartphone like a computer. That means:

  • Don't click on unsolicited links or download software from sources whose origin aren't clear.
  • Use only apps from the credit union or bank, not third-party apps.
  • Don't mix money, work and fun.  Smartphones shouldn't be used for both visiting financial sites and visiting sites to download games. Often sites offering free games or porn contain viruses that harvest personal or financial information from a smartphone.
The other nine security threats looming in 2012 include:

  • Embedded hardware.  Digital cameras, medical devices, cars, and other items use embedded systems to control specific functions. An attacker can hijack control over the hardware to gain information. An example: A hardware hijacker can ask a car's GPS system where the victim lives.
  • Threats to virtual currency.  Hackers will increasingly target the growing use of cyber currency, which often isn't encrypted, as a means to steal money and install malware.
  • Alternative entry points by hackers. Advances in operating systems that direct them elsewhere will force hackers to find other entry points into a consumer's computer.
  • Blinking online traffic lights. Legislative issues may stall efforts to develop Internet traffic "rules of the road" that could aid in reducing instances where hackers steer unsuspecting users to another server.
  • Rogue certificates.  Expect an increase in fake digitally signed certificates, which are used to assure consumers and their security software that the website they are viewing is legitimate.
  • Cyberwar showoffs. Countries are expected to demonstrate their cyber-war abilities to send a message that their infrastructures such as utilities are not vulnerable to cyber attacks.
  • Hacktivism.  Online activists will join forces with physical demonstrators to target public figures, industry leaders and other entities. Already, certain hacker groups have raided accounts at certain institutions in an effort to "steal from the rich and give it to the poor."
  • Legalized spam.  Legitimate advertisers are purchasing e-mail lists of consumers who have authorized receipt of online ads. This move comes as global spam volume has decreased the past two years.
  • Increased industrial attacks.  Many industrial systems are not prepared for cyber attacks.  Attackers may engage in blackmail or extortion.

Lawsuit a reminder to CUs Be consistent on overdrafts

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BEAVERTON, Ore. (1/10/12)--The Northwest Credit Union Association (NWCUA) is warning credit unions that a new class action lawsuit against a Portland, Ore.-based bank, alleging misleading practices to charge unfair overdraft fees, serves as a reminder to be consistent and transparent on implementation of overdraft policies.

Umpqua Bank joins several other banks recently sued with similar allegations about overdraft policies. Wells Fargo & Co., Bank of Hawaii, Bank of Oklahoma, Union Bank and Westamerica all have repaid millions of dollars in overdraft fees in recent years.

The Umpqua lawsuit focuses on allegations that the bank  processed debit card transactions unfairly by reordering them from highest dollar amount to lowest, resulting in accounts that were depleted, said a press release from NWCUA.  Other institutions process transactions in the order received, in real-time, or the smallest transactions first.

All financial institutions must choose a method by which they process debit card transactions, and the highest to lowest dollar amount method, meant to assure that consumers' most important payments are made first, is not uncommon, even though it may cause low-balance accounts to go negative more quickly, said NWCUA.

"No matter which method is selected," said NWCUA CEO John Annaloro, "someone is likely to complain. The key is to make sure members have easy access to all the necessary information and that fee assessments are done in a manner that is consistent and fair."

For credit unions, the issue is covered partly by Regulation E. As of July 2010, credit unions were no longer allowed to charge an overdraft fee on non-recurring debit card transactions unless members opted in to the overdraft program. 

As a result, some members opt in to have transactions in excess of their balances approved and then pay a fee. Those who opt out either have transactions in excess of their balance declined or in some cases due to the electronic payments system, still get those transactions approved and pay no fee.

NWCUA has addressed the issue in the past and continues to work with its credit unions to develop strategies and policies that are fair to members without putting the credit union at risk, said Mary Sroufe, director of compliance services for the NWCUA. She noted that many credit unions in the association's compliance council already are moving to real time processing or planning to do so.

Southeast Corp. CUSO reaches 1B in assets managed

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TALLAHASSEE, Fla. (1/10/12)--Accolade Investment Advisory, a credit union service organization (CUSO) owned by Southeast Corporate FCU, continued to experience appreciable growth during 2011.

The Tallahassee, Fla.-based company ended 2011 with nearly $1.2 billion in assets under management--an increase from the $900 million under management at the end of 2010.

The increase comes from credit unions' growing awareness of the firm and the assistance it offers, said the CUSO's President Peter Gibson. "Credit unions increasingly are recognizing that partnering with an unbiased advisor adds tremendous value in guiding their portfolios through the constantly changing world of complex, fixed-income instruments," he added.

Despite the challenges of ongoing economic turmoil and the low interest-rate environment, Accolade transacted nearly $800 million in trades in 2011, an increase of nearly 30% from 2010.

"Accolade continues to provide a more price-efficient alternative for individual securities transactions by accessing the firms that own and originate the securities, as opposed to using regional broker dealers," Gibson said. "By actively seeking this best execution, we conservatively estimate that Accolade has saved client credit unions in excess of $1million during the year."

The company is a Securities and Exchange Commission-registered investment advisor.

2012 CUNA schools conferences lineup set

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MADISON, Wis. (1/10/12)--The Credit Union National Association (CUNA) has set its lineup of schools and conferences for the new year.

It annually hosts educational events that cover every aspect of the credit union movement. The 2012 slate of CUNA events ranges from large signature events that draw thousands of credit union professionals each year, to smaller, more topic-specific conferences.

This year's schools include:

  • CUNA Governnmental Affairs Conference, March 18-22 in Washington, D.C.;
  • CUNA Consumer & Residential Mortgage Lending School, April 2-5 in Orlando, Fla.;
  • CUNA CU Finance for Non-Financial Managers & Volunteers, April 22-25 in Orlando, Fla.;
  • CUNA Regulatory Compliance Schools, April 22-27 in Orlando, Fla.; and
  • CUNA Marketing Management Schools, April 30-May 3 in Las Vegas.
CUNA schools and conferences provide credit union professionals nationwide with updates on pressing industry topics and regulations. From compliance and collections, to marketing departments and board volunteers, the 2012 CUNA schools and conferences offer credit union-specific education for every position.

Programs are designed to showcase leading experts in their field and provide attendees with take-away strategies to use at their credit unions to boost membership, streamline efficiency and strengthen their organizations. Attendees also can network with other credit union professionals from around the country

Many 2012 CUNA conferences also offer opportunities for educational advancement such as Continuing Professional Education credits, certifications, designations, graduate degrees and awards for credit union excellence. These titles are recognized throughout the credit union movement as distinctions for both job competence and career

professionalism, CUNA said.

For more information, use the links.

CUNA Mutual investment process recertified

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MADISON, Wis. (1/10/12)--Mesirow Financial's Investment Strategies department has recertified CUNA Mutual's Group's Retirement Plan Services' investment selection and monitoring processes as diligent and consistent with industry standards and the Employee Income Retirement Security Act's (ERISA) fiduciary prudence standard.

"We take our responsibilities as a service provider seriously. At the top of our priority list is enablement of our plan sponsors to meet their obligations as fiduciaries,"  said Scott Knapp, CUNA Mutual's director of investment strategy. "Our investment process recertification with Mesirow Financial takes us a long way down that path."

CUNA Mutual provides investment options and administrative services to employer-sponsored retirement plans.

The company applies an initial screening and ongoing monitoring process to the investment options within in its standard investment program available to plans.

Cheney State fin lit award points to CUs core principles

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MADISON, Wis. (1/10/12)--Bill Cheney, president/CEO of the Credit Union National  Association (CUNA), said the Wisconsin Governor's Council on Financial Literacy's naming of  CUNA's  Money Mission LLC as a recipient of the 2011 Wisconsin Financial Literacy Award points to the essence of credit unions' core principles.

"Financial education is a core operating principle of credit unions, and one that state and federal lawmakers pay close attention to," Cheney said. "Projects like Money Mission increase awareness of credit unions and their values, and demonstrate credit unions' commitment to the community and long-term financial health of their members."

Money Mission, the Wisconsin Credit Union League and Madison, Wis.-based UW CU were recognized for efforts to improve the collective knowledge of personal finance among Wisconsin citizens. See News Now articles on the awards on Dec. 21 and Dec. 27 by using the links.

Money Mission is an interactive, Web-based simulation designed to educate young adults about the fundamentals of personal finance. It is not a series of tutorials, but rather a journey built from the most basic concepts of value and money through complex issues such as taxes, inflation and globalism.

Money Mission and the other recipients were selected from 45 nominations submitted for consideration. Criteria used in the screening process included innovative implementation, demonstrated measureable results, collaboration with partners, whether the effort was statewide or had the potential to be statewide and whether the effort was focused on needs-based groups.

"The recipients of the Wisconsin Financial Literacy Award are helping Wisconsinites of all ages improve their personal finance skills in our schools, in the workplace and in communities across the state," said Wisconsin Gov. Scott Walker. "These citizen leaders equip students, parents, peers and consumers with the necessary tools to make informed decisions about their own money, which improves individual quality of life, as well as the Wisconsin economy."

The results of Money Mission have been measured by the degree of participation and engagement. Almost 30 credit unions in Wisconsin participate, and nearly 4,000 students in more than 40 states have signed on for Money Mission in about a year of operation. The program is available through credit unions nationwide and is accessible to any interested participants. The initiative has helped several students realize their college dreams through its scholarship awards, CUNA said.

CUNA tells iWSJi Self-employed can consider CUs for mortgages

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MADISON, Wis. (1/10/11)--The Credit Union National Association provided information to two prominent newspapers--The Wall Street Journal and the Washington Post--for recent articles.

In an article about how small-business owners may have difficulty obtaining mortgages in the current market, Steve Rick, CUNA senior economist, told The Wall Street Journal (Jan. 8) that self-employed borrowers may want to consider credit unions for mortgage loans. Many credit unions keep mortgages on their books, Rick added.

CUNA also provided statistics to the Capital Business, a weekly local journal published by the Washington Post (Jan. 8) for an article about how credit unions in the Washington, D.C. area are hiring more employees.

"According to the Credit Union National Association, full-time employment at local credit unions dropped to 2,864 in September 2011 from 2,878 a year earlier as investments in information technology eliminated the need for some staffers," said the article, headlined "Credit unions adding more employees after surge" and written by Danielle Douglas "Yet industry observers say hiring picked up as credit unions experienced growth in membership throughout 2011."

State Employees CU of Maryland, Linthicum, Md., Educational Systems FCU, Greenbelt, Md., and NASA FCU, Upper Marlboro, Md., were among the credit unions named in the article

To read the articles use, the links.